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Rule

Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; New Categories for Hospital Outpatient Department Prior Authorization Process; Clinical Laboratory Fee Schedule: Laboratory Date of Service Policy; Overall Hospital Quality Star Rating Methodology; Physician-Owned Hospitals; Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots, Radiation Oncology Model; and Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19)

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Start Preamble Start Printed Page 85866

AGENCY:

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

ACTION:

Final rule with comment period and interim 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 Calendar Year (CY) 2021 based on our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In addition, this final rule with comment period establishes and updates the Overall Hospital Quality Star Rating beginning with the CY 2021; removes certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities,” and clarifies that certain beds are counted toward a hospital's baseline number of operating rooms, procedure rooms, and beds; adds two new service categories to the Hospital Outpatient Department (OPD) Prior Authorization Process; provides notice of the closure of two teaching hospitals and the opportunity to apply for available slots for purposes of indirect medical education (IME) and direct graduate medical education (DGME) payments; and revises the Clinical Laboratory Date of Service (DOS) policy. This interim final rule with comment period modifies the Radiation Oncology Model (RO Model) Model performance period for CY 2021, and establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking of COVID-19 therapeutic inventory and usage and for tracking of the incidence and impact of Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) during the ongoing COVID-19 public health emergency (PHE).

DATES:

Effective date: This rule is effective January 1, 2021, with the exceptions of amendatory instructions 21 and 23 (amending 42 CFR 482.42 and 485.640) and 25 through 31 (amending 42 CFR 512.205, 512.210, 512.217, 512.220, 512.245, 512.255, and 512.285), which are effective on December 4, 2021.

Comment period: To be assured consideration, comments on the payment classifications assigned to the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes in this final rule with comment period (CMS-1736-FC) must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on January 4, 2021.

To be assured consideration, comments on the Reporting Requirements for Hospitals and CAHs to Report Acute Respiratory Illness During the PHE for COVID-19, instructions 21 and 23 amending §§ 482.42 and 485.640, and the Radiation Oncology (RO) Model, instructions 25 through 31 amending 42 CFR 512.205, 512.210, 512.217, 512.220, 512.245, 512.255, and 512.285 in this interim final rule with comment period (CMS-1736-IFC) must be received at one of the addresses provided below, no later than 5 p.m. on February 2, 2021.

Applicability dates: The provisions related to the Radiation Oncology (RO) Model contained in section XXI of this interim final rule with comment period are applicable beginning July 1, 2021.

ADDRESSES:

In commenting, please refer to file code CMS-1736-FC or CMS-1736-IFC as appropriate, when commenting on the issues in this final rule with comment period and interim final rule with comment period. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

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-1736-FC or CMS-1736-IFC, P.O. Box 8010, 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-1736-FC or CMS-1736-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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

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

Start Further Info

FOR FURTHER INFORMATION CONTACT:

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

Ambulatory Surgical Center (ASC) Payment System, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or Mitali Dayal via email Mitali.Dayal2@cms.hhs.gov.

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

Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Cyra Duncan via email Cyra.Duncan@cms.hhs.gov.

Blood and Blood Products, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov. Cancer Start Printed Page 85867Hospital Payments, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov.

CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email Chuck.Braver@cms.hhs.gov.

Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Au'Sha Washington via email AuSha.Washington@cms.hhs.gov.

Comprehensive APCs (C-APCs), contact Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov, or Mitali Dayal via email Mitali.Dayal2@cms.hhs.gov.

Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Shaili Patel via email Shaili.Patel@cms.hhs.gov.

Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Nicole P. Crenshaw via email PNicole.Crenshaw@cms.hhs.gov.

Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Elise Barringer via email Elise.Barringer@cms.hhs.gov.

Hospital Quality Star Rating Methodology, contact Annese Abdullah-Mclaughlin via email Annese.Abdullah-Mclaughlin@cms.hhs.gov.

Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via email Ausha.Washington@cms.hhs.gov, or Allison Bramlett via email Allison.Bramlett@cms.hhs.gov, or Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov.

Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule), contact Elise Barringer via email Elise.Barringer@cms.hhs.gov.

New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email Scott.Talaga@cms.hhs.gov.

No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov.

OPPS Brachytherapy, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov.

OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email Erick.Chuang@cms.hhs.gov, or Scott Talaga via email Scott.Talaga@cms.hhs.gov, or Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov.

OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov, or Gil Ngan via email at Gil.Ngan@cms.hhs.gov or, or Cory Duke via email at Cory.Duke@cms.hhs.gov.

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

OPPS Packaged Items/Services, contact Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov, or Mitali Dayal via email at Mitali.Dayal2@cms.hhs.gov.

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

OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email Marina.Kushnirova@cms.hhs.gov.

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

Prior Authorization Process and Requirements for Certain Covered Outpatient Department Services, contact Thomas Kessler via email at Thomas.Kessler@cms.hhs.gov.

Rural Hospital Payments, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov.

Skin Substitutes, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov.

Supervision of Outpatient Therapeutic Services in Hospitals and CAHs, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov.

All Other Issues Related to Hospital Outpatient and Ambulatory Surgical Center Payments Not Previously Identified, contact Elise Barringer via email Elise.Barringer@cms.hhs.gov or at 410-786-9222.

RO Model, contact RadiationTherapy@cms.hhs.gov or at 844-711-2664, Option 5.

CAPT Scott Cooper, USPHS, (410) 786-9465, for the hospital and CAH COVID-19 Therapeutic Inventory and Usage reporting requirements and for the Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) reporting requirements.

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 website as soon as possible after they have been received: http://www.regulations.gov/​. Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

Addenda Available Only Through the Internet on the CMS Website

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

The Addenda relating to the ASC payment system are available at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​ASCPayment/​ASC-Regulations-and-Notices.

Current Procedural Terminology (CPT) Copyright Notice

Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2019 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR and Defense Federal Acquisition Regulations (DFAR) apply.

Table of Contents

I. Summary and Background

A. Executive Summary of This Document

B. Legislative and Regulatory Authority for the Hospital OPPS

C. Excluded OPPS Services and Hospitals

D. Prior Rulemaking

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

F. Public Comments Received in Response to the CY 2021 OPPS/ASC Proposed RuleStart Printed Page 85868

G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With Comment Period

II. Updates Affecting OPPS Payments

A. Recalibration of APC Relative Payment Weights

B. Conversion Factor Update

C. Wage Index Changes

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

E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2021

F. Payment Adjustment for Certain Cancer Hospitals for CY 2021

G. Hospital Outpatient Outlier Payments

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

I. Beneficiary Copayments

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New and Revised HCPCS Codes

B. OPPS Changes—Variations Within APCs

C. New Technology APCs

D. OPPS APC-Specific Policies

IV. OPPS Payment for Devices

A. Pass-Through Payments for Devices

B. Device-Intensive Procedures

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

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

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

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

A. Background

B. Estimate of Pass-Through Spending

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

VIII. Payment for Partial Hospitalization Services

A. Background

B. PHP APC Update for CY 2021

C. Outlier Policy for CMHCs

IX. Services That Will Be Paid Only as Inpatient Services

A. Background

B. Changes to the Inpatient Only (IPO) List

X. Nonrecurring Policy Changes

A. Changes in the Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals (CAHs)

B. Medical Review of Certain Inpatient Hospital Admissions Under Medicare Part A for CY 2021 and Subsequent Years

XI. CY 2021 OPPS Payment Status and Comment Indicators

A. CY 2021 OPPS Payment Status Indicator Definitions

B. CY 2021 Comment Indicator Definitions

XII. MedPAC Recommendations

A. OPPS Payment Rates Update

B. ASC Conversion Factor Update

C. ASC Cost Data

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

A. Background

B. ASC Treatment of New and Revised Codes

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

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

E. New Technology Intraocular Lenses (NTIOLs)

F. ASC Payment and Comment Indicators

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

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

A. Background

B. Hospital OQR Program Quality Measures

C. Administrative Requirements

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

E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2021 Payment Determination

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

A. Background

B. ASCQR Program Quality Measures

C. Administrative Requirements

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

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

XVI. Overall Hospital Quality Star Rating Methodology for Public Release in CY 2021 and Subsequent Years

A. Background

B. Critical Access Hospitals in the Overall Star Rating

C. Veterans Health Administration Hospitals in the Overall Star Rating

D. History of the Overall Hospital Quality Star Rating

E. Current and Proposed Overall Star Rating Methodology

F. Preview Period

G. Overall Star Rating Suppressions

XVII. Addition of New Service Categories for Hospital Outpatient Department (OPD) Prior Authorization Process

A. Background

B. Controlling Unnecessary Increases in the Volume of Covered OPD Services

XVIII. Clinical Laboratory Fee Schedule: Revisions to the Laboratory Date of Service Policy

A. Background on the Medicare Part B Laboratory Date of Service Policy

B. Medicare DOS Policy and the “14-Day Rule”

C. Billing and Payment for Laboratory Services Under the OPPS

D. ADLTs Under the New Private Payor Rate-Based CLFS

E. Additional Laboratory DOS Policy Exception for the Hospital Outpatient Setting

F. Revision to the Laboratory DOS Policy for Cancer-Related Protein-Based MAAAs

XIX. Physician-Owned Hospitals

A. Background

B. Prohibition on Facility Expansion

C. Deference to State Law for Purposes of Determining the Number of Beds for Which a Hospital Is Licensed

XX. Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots

A. Background Section

B. Notice of Closure of Westlake Community Hospital, Located in Melrose Park, IL, and the Application Process—Round 18

C. Notice of Closure of Astria Regional Medical Center, Located in Yakima, WA, and the Application Process—Round 19

D. Application Process for Available Resident Slots

XXI. Radiation Oncology (RO) Model

A. Model Performance Period for the Radiation Oncology Model

B. Waiver of Proposed Rulemaking

XXII. Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19)

XXIII. Files Available to the Public via the Internet

XXIV. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

B. ICRs for the Hospital OQR Program

C. ICRs for the ASCQR Program

D. ICRs for Addition of New Service Categories for Hospital Outpatient Department (OPD) Prior Authorization Process

E. ICRs for the Overall Hospital Quality Star Ratings

F. ICRs for Physician-Owned Hospitals

XXV. Waiver of the 30-Day and 60-Day Delayed Effective Dates for the Final Rule With Comment Period and Waiver of Proposed Rulemaking for Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and to Report Acute Respiratory Illness During the PHE for COVID-19 Interim Final Rule With Comment Period (IFC)

A. Waiver of the 30-Day and 60-Day Delayed Effective Dates for the Final Rule With Comment Period

B. Waiver of Proposed Rulemaking for Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report Acute Respiratory Illness During the PHE for COVID-19 Interim Final Rule With Comment Period (IFC)

XXVI. Response to Comments

XXVII. Economic Analyses

A. Statement of Need

B. Overall Impact for the Provisions of This Final Rule With Comment Period

C. Detailed Economic Analyses

D. Regulatory Review Costs

E. Regulatory Flexibility Act (RFA) Analysis

F. Unfunded Mandates Reform Act Analysis

G. Reducing Regulation and Controlling Regulatory CostsStart Printed Page 85869

H. Conclusion

XXVIII. Federalism Analysis

I. Summary and Background

A. Executive Summary of This Document

1. Purpose

In this final rule with comment period and interim final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs), beginning January 1, 2021. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the payment rates for services payable under the Hospital Outpatient Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS not less often than annually, and to revise the groups, the relative payment weights, and the wage and other adjustments that take into account changes in medical practices, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i)(D)(v) of the Act, we annually review and update the ASC payment rates. This final rule with comment period also includes additional policy changes made in accordance with our experience with the OPPS and the ASC payment system and recent changes in our statutory authority. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

2. Summary of the Major Provisions

  • OPPS Update: For CY 2021, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.4 percent. This increase factor is based on the final hospital inpatient market basket percentage increase of 2.4 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS). Based on this update, we estimate that total payments to OPPS providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for calendar year (CY) 2021 would be approximately $83.888 billion, an increase of approximately $7.541 billion compared to estimated CY 2020 OPPS payments.

We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals that fail to meet the hospital outpatient quality reporting requirements by applying a reporting factor of 0.9805 to the OPPS payments and copayments for all applicable services.

  • Partial Hospitalization Update: For CY 2021 OPPS/ASC final rule with comment period, CMS is maintaining the unified rate structure established in CY 2017, with a single PHP APC for each provider type for days with 3 or more services per day. We are using the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs, consistent with existing policy, using updated data for each provider type. Accordingly, we are calculating the CY 2021 PHP APC per diem rates for HB PHPs and CMHC PHPs based on updated cost and claims data. Given that the final calculated geometric mean per diem costs are much higher than the proposed cost floors, we are not extending the cost floors to CY 2021 and subsequent years.
  • Changes to the Inpatient Only (IPO) List: For CY 2021, we are eliminating the IPO list over the course of 3 calendar years beginning with the removal of 266 musculoskeletal-related services. We are also removing 32 additional HCPCS codes from the IPO list for CY 2021 based on public comments.
  • Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule): For CY 2021, we are finalizing a policy to exempt procedures that are removed from the inpatient only (IPO) list under the OPPS beginning on January 1, 2021 from site-of-service claim denials, Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO) referrals to Recovery Audit Contractor (RAC) for persistent noncompliance with the 2-midnight rule, and RAC reviews for “patient status” (that is, site-of-service) until such procedures are more commonly billed in the outpatient setting.
  • 340B —Acquired Drugs: We are continuing our current policy of paying an adjusted amount of ASP minus 22.5 percent for drugs and biologicals acquired under the 340B program. We are continuing to exempt Rural SCHs, PPS-exempt cancer hospitals and children's hospitals from our 340B payment policy.
  • Comprehensive APCs: For CY 2021, we are creating two new comprehensive APCs (C-APCs): C-APC 5378 (Level 8 Urology and Related Services) and C-APC 5465 (Level 5 Neurostimulator and Related Procedures). Adding these C-APCs increases the total number of C-APCs to 69.
  • Device Pass-Through Payment Applications: For CY 2021, we evaluated five applications for device pass-through payments. Two of these applications (CUSTOMFLEX® ARTIFICIALIRIS and EXALTTM Model D Single-Use Duodenoscope) received preliminary approval for pass-through payment status through our quarterly review process. Based on our review and public comments received, we are continuing the pass-through payment status for CUSTOMFLEX® ARTIFICIALIRIS and EXALTTM Model D Single-Use Duodenoscope and approving the remaining three applications for device pass-through payment status.
  • Changes to the Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals: For CY 2021 and subsequent years, we are changing the minimum default level of supervision for non-surgical extended duration therapeutic services (NSEDTS) to general supervision for the entire service, including the initiation portion of the service, for which we had previously required direct supervision. This is consistent with the minimum required level of general supervision that currently applies for most outpatient hospital therapeutic services. We are finalizing our proposed policy to permit direct supervision of pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation services using virtual presence of the physician through audio/video real-time communications technology subject to the clinical judgment of the supervising physician until the later of the end of the calendar year in which the PHE ends or December 31, 2021.
  • Cancer Hospital Payment Adjustment: For CY 2021, we are continuing to provide additional payments to cancer hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. However, section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. Based on the data and the required 1.0 percentage point reduction, a target PCR of 0.89 will be used to determine the CY 2021 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 Start Printed Page 85870a PCR equal to 0.89 for each cancer hospital.
  • ASC Payment Update: For CYs 2019 through 2023, we adopted a policy to update the ASC payment system using the hospital market basket update. Using the hospital market basket methodology, for CY 2021, we are increasing payment rates under the ASC payment system by 2.4 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a hospital market basket percentage increase of 2.4 percent minus a multifactor productivity adjustment of 0.0 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 2021 would be approximately 5.42 billion, an increase of approximately 120 million compared to estimated CY 2020 Medicare payments.
  • Changes to the List of ASC Covered Surgical Procedures: For CY 2021, we are adding eleven procedures to the ASC covered procedures list (CPL), including total hip arthroplasty (CPT 27130). Additionally, we are revising the criteria we use to add covered surgical procedures to the ASC CPL, providing that certain criteria we used to add covered surgical procedures to the ASC CPL in the past will now be factors for physicians to consider in deciding whether a specific beneficiary should receive a covered surgical procedure in an ASC, and adopting a notification process for surgical procedures the public believes can be added to the ASC CPL under the criteria we are retaining. Using our revised criteria, we are adding an additional 267 surgical procedures to the ASC CPL beginning in CY 2021.
  • Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs: For the Hospital OQR and ASCQR Programs, we are updating and refining requirements to further meaningful measurement and reporting for quality of care provided in these outpatient settings while limiting compliance burden. We are revising and codifying previously finalized administrative procedures and are codifying an expanded review and corrections process to further the programs' alignment while clarifying program requirements. We are not making any measure additions or removals for either program.
  • Overall Hospital Quality Star Ratings: We are establishing and updating the methodology that will be used to calculate the Overall Hospital Quality Star Ratings beginning with 2021 and for subsequent years. We are updating and simplifying how the ratings are calculated, with policies such as adopting a simple average of measure scores instead of the latent variable model and reducing the total number of measure groups from seven to five measure groups due to the removal of measures through the Meaningful Measure Initiative. Additionally, we are increasing the comparability of star ratings by peer grouping hospitals by the number of measure groups. These changes will simplify the methodology, and therefore, reduce provider burden, improve the predictability of the star ratings, and increase the comparability between hospital star ratings. We did not finalize our proposals related to stratification of the Readmissions group by dual-eligible patients.
  • Addition of New Service Categories for Hospital Outpatient Department Prior Authorization Process: We are adding the following two categories of services to the prior authorization process for hospital outpatient departments beginning for dates of service on or after July 1, 2021: (1) Cervical fusion with disc removal and (2) implanted spinal neurostimulators.
  • Clinical Laboratory Date of Service (DOS) Policy: We are excluding certain protein-based Multianalyte Assays with Algorithmic Analyses (MAAAs), which are not generally performed in the HOPD setting, from the OPPS packaging policy and adding them to the laboratory DOS exception at 42 CFR 414.510(b)(5).
  • Physician-Owned Hospitals: We are removing unnecessary regulatory restrictions on high Medicaid facilities and including beds in a physician-owned hospital's baseline consistent with state law.
  • Radiation Oncology Model (RO Model): On September 29, 2020, we published a final rule in the Federal Register (85 FR 61114) entitled “Specialty Care Models to Improve Quality of Care and Reduce Expenditures” that finalized the Radiation Oncology Model (RO Model). To ensure that participation in the RO Model during the public health emergency (PHE) for the Coronavirus disease 2019 (COVID-19) pandemic does not further strain RO participants' capacity, we are revising the RO Model's Model performance period to begin on July 1, 2021 and end December 31, 2025 in this interim final rule with comment period. We are requesting comments on this change.
  • Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage and to Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19): This interim final rule with comment period establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking COVID-19 therapeutic inventory and usage and for tracking the incidence and impact of Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) during the ongoing COVID-19 PHE; and for providing this information and data to the Secretary of Health and Human Services (Secretary) in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the Public Health Emergency (PHE).

3. Summary of Costs and Benefit

In section XXVII and XXVIII of this final rule with comment period and interim final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts are described below.

a. Impacts of All OPPS Changes

Table 79 in section XXVII.C of the CY 2021 OPPS/ASC final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2021 compared to all estimated OPPS payments in CY 2020. We estimate that the policies in the CY 2021 OPPS/ASC final rule with comment period will result in a 2.4 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2021, including beneficiary cost-sharing, to the approximately 3,665 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will increase by approximately $1.61 billion compared to CY 2020 payments, excluding our estimated changes in enrollment, utilization, and case-mix.

We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs are only paid for partial hospitalization services under the OPPS. Continuing the provider-specific structure we adopted beginning in CY 2011, and basing payment fully on the type of provider furnishing the service, we estimate an 11.9 percent increase in CY 2021 payments to CMHCs relative to their CY 2020 payments.Start Printed Page 85871

b. Impacts of the Updated Wage Indexes

We estimate that our update of the wage indexes based on the FY 2021 IPPS final rule wage indexes will result in an estimated increase in payments of 0.2 percent for urban hospitals under the OPPS and an estimated increase in payments of 0.4 percent for rural hospitals. These wage indexes include the continued implementation of the OMB labor market area delineations based on 2010 Decennial Census data, with updates, as discussed in section II.C. of this final rule with comment period.

c. Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment

There are no significant impacts of our CY 2021 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not making any change in policies for determining the rural hospital payment adjustments. While we are implementing the reduction to the cancer hospital payment adjustment for CY 2021 required by section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act, the target payment-to-cost ratio (PCR) for CY 2021 is 0.89, equivalent to the 0.89 target PCR for CY 2020, and therefore has no budget neutrality adjustment.

d. Impacts of the OPD Fee Schedule Increase Factor

For the CY 2021 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 2.4 percent and applying that increase factor to the conversion factor for CY 2021. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that urban hospitals will experience an increase in payments of approximately 2.6 percent and that rural hospitals would experience an increase in payments of 2.9 percent. Classifying hospitals by teaching status, we estimate nonteaching hospitals will experience an increase in payments of 2.9 percent, minor teaching hospitals will experience an increase in payments of 3.0 percent, and major teaching hospitals will experience an increase in payments of 2.0 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 2.6 percent in payments, while hospitals with government ownership will experience an increase of 2.2 percent in payments. We estimate that hospitals with proprietary ownership will experience an increase of 3.5 percent in payments.

e. Impacts of the ASC Payment Update

For impact purposes, the surgical procedures on the ASC covered surgical procedure list are aggregated into surgical specialty groups using CPT and HCPCS code range definitions. The percentage change in estimated total payments by specialty groups under the CY 2021 payment rates, compared to estimated CY 2020 payment rates, generally ranges between an increase of 2 and 5 percent, depending on the service, with some exceptions. We estimate the impact of applying the hospital market basket update to ASC payment rates will be an increase in payments of $120 million under the ASC payment system in CY 2021.

B. Legislative and Regulatory Authority for the Hospital OPPS

When Title XVIII of the Act was enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section 1833(t) to the Act, authorizing implementation of a PPS for hospital outpatient services. The OPPS was first implemented for services furnished on or after August 1, 2000. Implementing regulations for the OPPS are located at 42 CFR parts 410 and 419.

The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. The following Acts made additional changes to the OPPS: The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554); The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 2006; the Medicare Improvements and Extension Act under Division B of Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) (Pub. L. 109-432), enacted on December 20, 2006; the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), enacted on December 29, 2007; the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July 15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-148), enacted on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on March 30, 2010 (these two public laws are collectively known as the Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010 (MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L. 112-96), enacted on February 22, 2012; the American Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016; the Consolidated Appropriations Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271), enacted on October 24, 2018.

Under the OPPS, we generally pay for hospital Part B services on a rate-per-service basis that varies according to the APC group to which the service is assigned. We use the Healthcare Common Procedure Coding System (HCPCS) (which includes certain Current Procedural Terminology (CPT) codes) to identify and group the services within each APC. The OPPS includes payment for most hospital outpatient services, except those identified in section I.C. of the CY 2021 OPPS/ASC final rule. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B.

The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage Start Printed Page 85872differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located.

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

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

C. Excluded OPPS Services and Hospitals

Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services. The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS); services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system; and services and procedures that require an inpatient stay that are paid under the hospital IPPS. In addition, section 1833(t)(1)(B)(v) of the Act does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017 by an off-campus outpatient department of a provider (as defined in subparagraph (B) of paragraph (21)). We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22.

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

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

D. Prior Rulemaking

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

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

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

1. Authority of the Panel

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

2. Establishment of the Panel

On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and, at that time, named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) who review clinical data and advise CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The Start Printed Page 85873current charter specifies, among other requirements, that the Panel—

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

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

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

3. Panel Meetings and Organizational Structure

The Panel has held many meetings, with the last meeting taking place on August 31, 2020. Prior to each meeting, we publish a notice in the Federal Register to announce the meeting, new members, and any other changes of which the public should be aware. Beginning in CY 2017, we have transitioned to one meeting per year (81 FR 31941). In CY 2018, we published a Federal Register notice requesting nominations to fill vacancies on the Panel (83 FR 3715). As published in this notice, CMS is accepting nominations on a continuous basis.

In addition, the Panel has established an administrative structure that, in part, currently includes the use of three subcommittee workgroups to provide preparatory meeting and subject support to the larger panel. The three current subcommittees include the following:

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

Each of these workgroup subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 31, 2020, meeting that the subcommittees continue. We accepted this recommendation.

For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS website mentioned earlier in this section, and the FACA database at http://facadatabase.gov.

F. Public Comments Received in Response to the CY 2021 OPPS/ASC Proposed Rule

We received approximately 1,350 timely pieces of correspondence on the CY 2021 OPPS/ASC proposed rule that appeared in the Federal Register on August 12, 2020 (85 FR 48772). We note that we received some public comments that were outside the scope of the CY 2021 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2021 OPPS/ASC final rule with comment period. Summaries of those public comments that are within the scope of the proposed rule and our responses are set forth in the various sections of this final rule with comment period under the appropriate headings.

G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With Comment Period

We received approximately 22 timely pieces of correspondence on the CY 2020 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 12, 2019 (84 FR 61142), most of which were outside of the scope of the final rule. In-scope comments related to the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes (identified with comment indicator “NI” in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule). Summaries of the public comments on topics that were open to comment and our responses to them are set forth in various sections of this final rule with comment period under the appropriate subject-matter headings. Summaries of the public comments on new or replacement Level II HCPCS codes are set forth in the CY 2021 OPPS/ASC proposed rule and this final rule with comment period under the appropriate subject matter headings.

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.

For the CY 2021 OPPS/ASC proposed rule (85 FR 48779), we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2021, and before January 1, 2022 (CY 2021), using the same basic methodology that we described in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61149), using updated CY 2019 claims data. That is, as we proposed, 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 proposed APC relative payment weights for CY 2021, we began with approximately 167 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2019, and before January 1, 2020, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 87 million final action claims to develop the proposed CY 2021 OPPS payment weights. For exact numbers of claims used and additional details on the Start Printed Page 85874claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for the CY 2021 OPPS/ASC proposed rule on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

Addendum N to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) included the proposed list of bypass codes for CY 2021. The proposed list of bypass codes contained codes that were reported on claims for services in CY 2019 and, therefore, included codes that were in effect in CY 2019 and used for billing, but were deleted for CY 2020. We retained these deleted bypass codes on the proposed CY 2021 bypass list because these codes existed in CY 2019 and were covered OPD services in that period, and CY 2019 claims data were used to calculate proposed CY 2021 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the proposed multiple imaging composite APCs were identified by asterisks (*) in the third column of Addendum N to the proposed rule. HCPCS codes that we proposed to add for CY 2021 were identified by asterisks (*) in the fourth column of Addendum N.

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

For CY 2021, in the CY 2020 OPPS/ASC proposed rule (85 FR 48779), we proposed to continue to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the CY 2021 APC payment rates are based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2019 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2018. For the proposed CY 2021 OPPS payment rates, we used the set of claims processed during CY 2019. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2019 (the year of claims data we used to calculate the proposed CY 2021 OPPS payment rates) and updates to the NUBC 2019 Data Specifications Manual. That crosswalk is available for review and continuous comment on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

In accordance with our longstanding policy, we calculate CCRs for the standard and nonstandard cost centers accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital-specific departmental level. For a discussion of the hospital-specific overall ancillary CCR calculation, we refer readers to the CY 2007 OPPS/ASC final rule with comment period (71 FR 67983 through 67985). The calculation of blood costs is a longstanding exception (since the CY 2005 OPPS) to this general methodology for calculation of CCRs used for converting charges to costs on each claim. This exception is discussed in detail in the CY 2007 OPPS/ASC final rule with comment period and discussed further in section II.A.2.a.(1) of the proposed rule and 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, magnetic resonance imaging (MRIs), computed tomography (CT) scans, and cardiac catheterization. However, in response to the CY 2014 OPPS/ASC proposed rule, commenters reported that some hospitals used a less precise “square feet” allocation methodology for the costs of large moveable equipment like CT scan and MRI machines. They indicated that while we 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/ASC final rule with comment period (78 FR 74847) to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the APCs for CT and MRI. Further, we finalized a transitional policy to estimate the 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 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 in CY 2018 with the sunset of the transition policy, we would estimate the imaging APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed. However, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228 and 59229) and in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58831), we finalized a policy to extend the transition policy for 1 additional year and we continued 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 and the CY 2019 OPPS.

As we discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228), 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 the imaging APC payment rates.

Table 1 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 2 provides statistical values based on the CT and MRI standard cost center CCRs using the different cost allocation methods.

Start Printed Page 85875

Our analysis shows that since the CY 2014 OPPS in which we established the transition policy, the number of valid MRI CCRs has increased by 18.7 percent to 2,199 providers and the number of valid CT CCRs has increased by 16.5 percent to 2,280 providers. Table 1 displays the impact on OPPS payment rates for CY 2021 if claims from providers that report using the “square feet” cost allocation method were removed. This can be attributed to the generally lower CCR values from providers that use a “square feet” cost allocation method as shown in Table 1.

We note that the CT and MRI cost center CCRs have been available for ratesetting since the CY 2014 OPPS in which we established the transition policy. Since the initial 4-year transition, we had extended the transition an additional 2 years to offer providers flexibility in applying cost allocation methodologies for CT and MRI cost centers other than “square feet.” In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), we finalized a 2-year phased-in approach, as suggested by some commenters, that applied 50 percent of the payment impact from ending the transition in CY 2020 and 100 percent of the payment impact from ending the transition in CY 2021.

We believe we have provided sufficient time for providers to adopt an alternative cost allocation methodology for CT and MRI cost centers if they intended to do so and many providers continue to use the “square feet” cost allocation methodology, which we believe indicates that these providers believe this methodology is a sufficient method for attributing costs to this cost center. Additionally, we generally believe that increasing the amount of claims data available for use in ratesetting improves our ratesetting process. Therefore, as finalized in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), in the CY 2021 OPPS we are using all claims with valid CT and MRI cost center CCRs, including those that use a “square feet” cost allocation method, to estimate costs for the APCs for CT and MRI identified in Table 1.

The Deficit Reduction Act (DRA) of 2005 requires Medicare to limit Medicare payment for certain imaging services covered by the Physician Fee Schedule (PFS) to not exceed what Medicare pays for these services under the OPPS. As required by law, for certain imaging services paid for under the PFS, we cap the technical component of the PFS payment amount for the applicable year at the OPPS payment amount (71 FR 69659 through Start Printed Page 8587669661). As we stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74845), we have noted the potential impact the CT and MRI CCRs may have on other payment systems. We understand that payment reductions for imaging services under the OPPS could have significant payment impacts under the PFS where the technical component payment for many imaging services is capped at the OPPS amount. We will continue to monitor OPPS imaging payments in the future and consider potential impacts of payment changes on the PFS and the ASC payment system.

Comment: Several commenters requested that CMS not use the CT and MRI-specific cost centers and instead estimate cost using the single diagnostic radiology cost center, believing that this will solve the inaccurate reporting of costs for CT and MR services. Commenters stated that many hospitals have “near zero” CT and MRI CCRs and the existing cost centers are inaccurate, too low, and depressing the valuation of APCs that include CT and MRI services. One commenter recommended that CMS establish detailed instructions for nonstandard cost centers to improve the accuracy of the cost center data used to calculate CT and MRI CCRs. Commenters also noted that the impact of our proposal may diminish beneficiary access to medical imaging services for beneficiaries, specifically noting low OPPS payments for cardiac computed tomography angiography (CCTA). Several commenters noted that the use of separate CT and MRI CCRs creates unintended consequences on the technical component of CT and MRI codes in the Medicare Physician Fee Schedule and on the payment rate under the ASC payment system for these codes.

Response: We appreciate the thoughtful comments and analysis regarding the use of the CT and MRI cost center CCRs. However, as discussed in the CY 2020 OPPS/ASC final rule (84 FR 61152), we finalized a policy to end the transition policy and use all data submitted (including all providers, regardless of cost allocation method) in the CY 2021 OPPS. We did not propose to make any changes in the CY 2021 OPPS and are not modifying the policy at this time.

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

In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2021. The Hospital OPPS page on the CMS website 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 final payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, later in this section we discuss the file of claims that comprises the data set that is available upon payment of an administrative fee under a CMS data use agreement. The CMS website, http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html, includes information about obtaining the “OPPS Limited Data Set,” which now includes the additional variables previously available only in the OPPS Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue code payment amounts. This file is derived from the CY 2019 claims that were used to calculate the final payment rates for this CY 2021 OPPS/ASC final rule with comment period.

Previously, the OPPS established the scaled relative weights, on which payments are based using APC median costs, a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based. While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same, under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. For CY 2021, we are finalizing our proposal to continue to use geometric mean costs to calculate the relative weights on which the final CY 2021 OPPS payment rates are based.

We used the methodology described in sections II.A.2.a. through II.A.2.c. of the CY 2021 OPPS/ASC 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 2021 shown in Addenda A and B to the CY 2021 OPPS/ASC final rule with comment period (which are available via the internet on the CMS website). We referred readers to section II.A.4. of the CY 2021 OPPS/ASC final rule with comment period for a discussion of the conversion of APC costs to scaled payment weights.

We note that under the OPPS, CY 2019 was the first year in which the claims data used for setting payment rates (CY 2017 data) contained lines with the modifier “PN”, which indicates nonexcepted items and services furnished and billed by off-campus provider-based departments (PBDs) of hospitals. Because nonexcepted services are not paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58832), we finalized a policy to remove those claim lines reported with modifier “PN” from the claims data used in ratesetting for the CY 2019 OPPS and subsequent years. For the CY 2021 OPPS, we will continue to remove these claim lines with modifier “PN” from the ratesetting process.

For details of the claims accounting process used in the CY 2021 OPPS/ASC final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this CY 2021 OPPS/ASC final rule with comment period on the CMS website at: http://www.cms .gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.

a. Calculation of Single Procedure APC Criteria-Based Costs

(1) Blood and Blood Products

(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.

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-Start Printed Page 85877specific cost center often resulted in an underestimation of the true hospital costs for blood and blood products. Specifically, to address the differences in CCRs and to better reflect hospitals' costs, we proposed to continue to simulate blood CCRs for each hospital that does not report a blood cost center by calculating the ratio of the blood-specific CCRs to hospitals' overall CCRs for those hospitals that do report costs and charges for blood cost centers. We also proposed to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports to simulate blood-specific CCRs for those hospitals. We proposed to calculate the costs upon which the proposed CY 2021 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 2021 will result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general.

We note that we defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Under this policy, we include the costs of blood and blood products when calculating the overall costs of these C-APCs. We proposed to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products will be reflected in the overall costs of the C-APCs (and, as a result, in the proposed payment rates of the C-APCs), we proposed not to make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)). We refer readers to Addendum B the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) for the proposed CY 2021 payment rates for blood and blood products (which are generally identified with status indicator “R”). For a more detailed discussion of the blood-specific CCR methodology, we refer readers to the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full history of OPPS payment for blood and blood products, we refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810).

For CY 2021, we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology. We did not receive any comments on our proposal to establish payment rates for blood and blood products using our blood-specific CCR methodology and we are finalizing this policy as proposed.

(b) Payment for Blood Not Otherwise Classified (NOC) Code

Recently, providers and stakeholders in the blood products field have reported that product development for new blood products has accelerated. There may be several additional new blood products entering the market by the end of CY 2021, compared to only one or two new products entering the market over the previous 15 to 20 years. To encourage providers to use these new products, providers and stakeholders requested that we establish a new HCPCS code to allow for payment for unclassified blood products prior to these products receiving their own HCPCS code. Under the OPPS, unclassified procedures are generally assigned to the lowest APC payment level of an APC family. However, since blood products are each assigned to their own unique APC, the concept of a lowest APC payment level does not apply in this context.

Starting January 1, 2020, we established a new HCPCS code, P9099 (Blood component or product not otherwise classified) which allows providers to report unclassified blood products. We assigned HCPCS code P9099 to status indicator “E2” (Not payable by Medicare when submitted on an outpatient claim) for CY 2020. We took this action because HCPCS code P9099 potentially could be reported for multiple products with different costs during the same period of time. Therefore, we could not identify an individual blood product HCPCS code that would have a similar cost to HCPCS code P9099, and were not able to crosswalk a payment rate from an established blood product HCPCS code to HCPCS code P9099. Some stakeholders expressed concerns that assigning HCPCS code P9099 to a non-payable status in the OPPS meant that hospitals would receive no payment when they used unclassified blood products. Also, claim lines billed with P9099 are rejected by Medicare, which prevents providers from tracking the utilization of unclassified blood products.

Because of the challenges of determining an appropriate payment rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC proposed rule that we were considering packaging the cost of unclassified blood products into their affiliated primary medical procedure. Although we typically do not package blood products under the OPPS, for unclassified blood products, we stated that we do not believe it is possible to accurately determine an appropriate rate that would apply for all of the products (potentially several, with varying costs) that may be reported using HCPCS code P9099. Packaging the cost of unclassified blood products into the payment for the primary medical service by assigning HCPCS code P9099 a status indicator of “N” would allow providers to report the cost of unclassified blood products to Medicare. Over time, the costs of unspecified blood products would be reflected in the payment rate for the primary medical service if the blood product remains unclassified. However, we stated that we expect that most blood products would seek and be granted more specific coding such that the unclassified HCPCS code P9099 would no longer be applicable. We also explained that we believe that packaging the costs of unclassified blood products would be an improvement over the current non-payable status for HCPCS code P9099 as it would allow for tracking of the costs and utilization of unclassified blood products.

Another option we considered for the CY 2021 OPPS/ASC proposed rule, but ultimately rejected was similar to our policy under the OPPS to assign NOC codes to the lowest APC within the appropriate clinical family. We stated that we could have cross-walked and assigned the same payment rate for HCPCS code P9099 as HCPCS code P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml), which is the lowest cost blood product with a Start Printed Page 85878proposed CY 2021 payment rate of $8.02 per unit. This option would have provided a small, separate payment for each unclassified blood product service, and, similar to our proposal to package the costs of HCPCS code P9099 into their primary procedure, would have allowed for tracking of the cost and utilization for unclassified blood products. However, given that the cross-walked payment rate is potentially significantly lower than the cost of the product, we concluded that providers may find that packaging the cost of unclassified blood products into another medical service may generate more payment for the products over time.

Thus, for CY 2021, we proposed to package the cost of unclassified blood products reported by HCPCS code P9099 into the cost of the associated primary procedure. We proposed to change the status indicator for HCPCS code P9099 from “E2” (not payable by Medicare in the OPPS) to “N” (payment is packaged into other services in the OPPS). In addition, we also sought comment on the alternative proposal to make HCPCS code P9099 separately payable with a payment rate equivalent to the payment rate for the lowest cost blood product, HCPCS code P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml), with a proposed CY 2021 payment rate of $8.02 per unit. We stated that if we were to adopt this option as our final policy, we would also change the status indicator for HCPCS code P9099 from “E2” (not payable by Medicare in the OPPS) to “R” (blood and blood products, paid under OPPS).

Comment: Multiple commenters opposed our proposal to reassign HCPCS code P9099 to status indicator “N” and package the payment for unclassified blood products into the associated primary procedure. Commenters were concerned that because blood products are usually separately paid in the OPPS, APC payment rates for the associated procedures would not reflect the cost of the unclassified blood products, and that it would take a long time before providers would see any changes in payments that would include the cost of unclassified blood products. One commenter was also concerned that packaging the cost of unclassified blood products would make providers less likely to report HCPCS code P9099, making it harder to track the utilization of unclassified blood products, and reluctant to use blood products that would not receive separate payment.

Response: We agree with the concerns expressed by the commenters, and we have considered these concerns in determining the payment policy for the blood NOC code.

Comment: One commenter supported our proposal to reassign HCPCS code P9099 to status indicator “N” and package the payment for unclassified blood products into the associated primary procedure. The commenter also encouraged us to work with manufacturers and blood product stakeholders to move quickly to establish individual HCPCS codes for these new blood products.

Response: We appreciate the commenter's support for our proposal and we also support the request that codes be established in a timely manner for unclassified blood products.

Comment: Multiple commenters opposed our alternative proposal to pay services billed with HCPCS code P9099 at the lowest payment rate for a blood product in the OPPS, which is $7.79 per unit. The commenters believe the payment rate will be too low for new, unclassified blood products and may discourage manufacturers from pursuing new innovations in the blood products field.

Response: We understand the concerns of the commenters who believe paying for unclassified blood products at the lowest payment rate for a separately payable blood product in the OPPS does not provide adequate payment for new, unclassified blood products. However, our goal is to limit the time it is necessary for providers to report HCPCS code P9099 until a new blood product has an individual HCPCS code established for the product. Once a new blood product has an individual HCPCS code, it will allow for a payment for the new service that is better aligned with its costs and make it easier to track utilization for the service. Establishing a payment rate for the blood NOC code that is equal to the payment rate for the lowest payment rate for a separately payable blood product is consistent with OPPS policy for other major categories of medical care where the payment rate for the unclassified service is equal to the lowest-paying APC in an APC series for that category of service.

Comment: The CMS HOP Panel and multiple commenters requested that unclassified blood products be separately paid using a weighted average of the payment rates of all separately payable blood products in the OPPS. The average payment rate would be weighted by the number of units billed for each service in the OPPS. Commenters believe a weighted average would be consistent with OPPS policy to provide separate payment for all blood products and would encourage the use of HCPCS code P9099 to track the utilization of unclassified blood products until the new products could receive individual HCPCS codes. The weighted average also would provide a higher payment for services billed with HCPCS code P9099 than the alternative proposal of assigning the lowest payment rate for a separately payable blood product as payment for unclassified blood products. Other commenters suggested that unclassified blood products be paid either at charges reduced to cost or at reasonable cost to appropriately compensate providers billing unclassified blood products.

Response: Providing payment for HCPCS code P9099 through a weighted average payment, charges reduced to cost, or reasonable cost could provide incentives to discourage manufacturers of new blood products from seeking individual HCPCS codes for their products. A weighted average payment would encourage manufacturers of relatively inexpensive unclassified blood products not to seek a HCPCS code for their products because the payment using P9099 for the products would be substantially higher than payment the products would receive once an individual code is established for the blood products. In addition, the level of payment from a weighted average payment may reduce the urgency of manufacturers to seek an individual HCPCS cost even for higher-cost products, which would delay our ability to track payment for individual blood products. We have similar concerns about paying unclassified blood products using either charges reduced to cost or reasonable cost. Although these payment methods would accurately reflect the cost of unclassified blood products to providers, there would be no incentive for providers to manage their costs when using unclassified blood products, and no incentives for the manufacturers to seek individual HCPCS codes for the unclassified blood products. The OPPS is a prospective payment system, and we want to limit rather than expand the types of services within the OPPS that do not receive prospective payment.

After reviewing the public comments, we are not finalizing our original proposal to package HCPCS code P9099 into the associated primary procedure. Instead, we are finalizing our alternative proposal to make HCPCS code P9099 separately payable, assign it a status indicator of “R”, and pay the code at a rate equal to the lowest paid separately payable blood product in the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per unit. Our alternative proposal aligns Start Printed Page 85879with our general policy in the OPPS to pay NOC codes at the lowest available APC rate for a service category, while providing a payment for unclassified blood products when a service is reported on the claim. We believe our alternative proposal is superior to our original proposal, which would not have provided any separate payment for blood products reported using HCPCS code P9099. Our alternative proposal also provides incentives for manufacturers to seek individual HCPCS codes for new blood products, which helps us to track the utilization of these new blood products and establish a payment rate for these new products that better reflects their cost.

We decided to finalize our alternative proposal, as it gives providers some payment for unclassified blood products, is consistent with OPPS policy for other major categories of medical care where the payment rate for the unclassified service is based on the lowest-paying APC in an APC series for that category of service, while maintaining incentives for manufacturers to establish individual HCPCS codes for their new blood products in a timely manner.

(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.

For CY 2021, except where otherwise indicated, we proposed to use the costs derived from CY 2019 claims data to set the proposed CY 2021 payment rates for brachytherapy sources because CY 2019 is the year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2021 OPPS. With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter), we proposed to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we proposed for other items and services paid under the OPPS, as discussed in section II.A.2. of the CY 2021 OPPS/ASC proposed rule. We also proposed to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not otherwise specified, per source) and C2699 (Brachytherapy source, non-stranded, not otherwise specified, per source), at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per source basis (as opposed to, for example, a per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). We also proposed to continue the policy we first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding payment for new brachytherapy sources for which we have no claims data, based on the same reasons we discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66786; which was delayed until January 1, 2010 by section 142 of Pub. L. 110-275). Specifically, this policy is intended to enable us to assign new HCPCS codes for new brachytherapy sources to their own APCs, with prospective payment rates set based on our consideration of external data and other relevant information regarding the expected costs of the sources to hospitals. The proposed CY 2021 payment rates for brachytherapy sources are included in Addendum B to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and identified with status indicator “U”.

For CY 2018, we assigned status indicator “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) in the absence of claims data and established a payment rate using external data (invoice price) at $4.69 per mm2. For CY 2019, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm2. Our CY 2018 claims data available for the final CY 2020 OPPS/ASC final rule with comment period, included two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per mm2. In response to comments from stakeholders, we agreed with commenters that given the limited claims data available and a new outpatient indication for C2645, a payment rate for HCPCS code C2645 based on the geometric mean cost of 1.02 per mm2 may not adequately reflect the cost of HCPCS code C2645. In the CY 2020 OPPS/ASC final rule with comment period, we finalized our policy to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to maintain the CY 2019 payment rate of $4.69 per mm2 for HCPCS code C2645 for CY 2020.

For CY 2021, we proposed to continue to assign status indicator “U” to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter). For CY 2020, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm2. Our CY 2019 claims data available for the proposed CY 2021 rule included one claim with over 4,000 units of HCPCS code C2645. The geometric mean cost of HCPCS code C2645 from this one claim is $1.07 per mm2 for CY 2019. We do not believe that this one claim is adequate to establish an APC payment rate for HCPCS code C2645 and to discontinue our use of external data for this brachytherapy source. Therefore, for CY 2021, we proposed to continue assigning the brachytherapy source described by HCPCS code C2645 a payment rate of $4.69 mm2 for CY 2021 Start Printed Page 85880through use of our equitable adjustment authority.

Comment: One commenter recommended that we should review outpatient claims data for low-volume brachytherapy sources and consider removing outliers to ensure appropriate and stable brachytherapy source reimbursement in future years. The commenter contends that brachytherapy source payments have fluctuated significantly since 2013 and may create barriers to access for individual cancer patients.

Response: We thank the commenter for their recommendation. As we have stated in past rulemaking, the OPPS relies on the concept of averaging, where the payment may be more or less than the estimated cost of providing a service for a particular patient; however, with the exception of outlier cases, we believe that such a prospective payment is adequate to ensure access to appropriate care. We acknowledge that payment for brachytherapy sources based on geometric mean costs from a small set of claims may be more variable on a year-to-year basis when compared to the geometric mean costs for brachytherapy sources from a larger claims set. We will take the commenter's recommendation into consideration in future rulemaking.

Comment: One commenter recommended that we exclude erroneous claims data for C2642 (Brachytherapy source, stranded, cesium-131, per source) from a particular hospital. The commenter stated the hospital reported costs per source of $42.59 for C2642. Further, the commenter argued the proposed payment rate for C2642 as a result of including the hospital's claims information would threaten access to cancer therapy and would be less than the actual amount paid by any hospital for this source over the past decade.

Response: In our review of CY 2019 brachytherapy claims used for CY 2021 OPPS ratesetting, we did not find any erroneous billing of C2642 with respect to the particular hospital mentioned by the commenter. OPPS relative payment weights based on geometric mean costs capture the range of costs associated with services that are introduced slowly into the system on a case-by-case or hospital-by-hospital basis. For these reasons we believe it would be inappropriate to remove any outliers when determining brachytherapy geometric mean costs and payment rates for C2642.

After consideration of the public comments we received, we are finalizing our proposal to assign the brachytherapy source described by HCPCS code C2645 a payment rate of $4.69 per mm2 for CY 2021 through use of our equitable adjustment authority.

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

b. Comprehensive APCs (C-APCs) for CY 2021

(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 1 additional level to both the Orthopedic Surgery and Vascular Procedures clinical families, which increased the total number of C-APCs to 37 for CY 2016. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 through 79585), we finalized another 25 C-APCs for a total of 62 C-APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC final rule with comment period, we created 3 new C-APCs, increasing the total number to 65 (83 FR 58844 through 58846). Most recently in the CY 2020 OPPS/ASC final rule with comment period, we created two new C-APCs, increasing the total number to 67 C-APCs (84 FR 61158 through 61166).

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

Services excluded from the C-APC policy under the OPPS include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which also require separate payment under section 1833(t)(6) of the Act; self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act; and certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

In the interim final with request for comments (IFC) entitled, “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency”, published on November 6, 2020, we stated that effective for services furnished on or Start Printed Page 85881after the effective date of the IFC and until the end of the PHE for COVID-19, there is an exception to the OPPS C-APC policy to ensure separate payment for new COVID-19 treatments that meet certain criteria (85 FR 71158 through 71160). Under this exception, any new COVID-19 treatment that meets the two following criteria will, for the remainder of the PHE for COVID-19, always be separately paid and will not be packaged into a C-APC when it is provided on the same claim as the primary C-APC service. First, the treatment must be a drug or biological product (which could include a blood product) authorized to treat COVID-19, as indicated in section “I. Criteria for Issuance of Authorization” of the letter of authorization for the drug or biological product, or the drug or biological product must be approved by the FDA for treating COVID-19. Second, the emergency use authorization (EUA) for the drug or biological product (which could include a blood product) must authorize the use of the product in the outpatient setting or not limit its use to the inpatient setting, or the product must be approved by the FDA to treat COVID-19 disease and not limit its use to the inpatient setting. For further information regarding the exception to the C-APC policy for COVID-19 treatments, please refer to the IFC (85 FR 71158 through 71160).

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

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

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

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

The assignment of status indicator “J2” to a specific 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. 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 Start Printed Page 8588250.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies.

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

The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity.

Complexity Adjustments. We use complexity adjustments to provide increased payment for certain comprehensive services. We apply a complexity adjustment by promoting qualifying paired “J1” service code combinations or paired code combinations of “J1” services and certain add-on codes (as described further below) from the originating C-APC (the C-APC to which the designated primary service is first assigned) to the next higher paying C-APC in the same clinical family of C-APCs. We apply this type of complexity adjustment when the paired code combination represents a complex, costly form or version of the primary service according to the following criteria:

  • Frequency of 25 or more claims reporting the code combination (frequency threshold); and
  • Violation of the 2 times rule, as stated in section 1833(t)(2) of the Act and section III.B.2. of the CY 2021 OPPS/ASC proposed rule, in the originating C-APC (cost threshold).

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

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

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

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

To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2021, we proposed to apply the frequency and cost criteria thresholds discussed above, testing claims reporting one unit of a single primary service assigned to status indicator “J1” and any number of units of a single add-on code for the primary “J1” service. If the frequency and cost criteria thresholds for a complexity adjustment are met and reassignment to the next higher cost APC in the clinical family is appropriate (based on meeting the criteria outlined above), we make a complexity adjustment for the code combination; that is, we reassign the primary service code reported in conjunction with the add-on code to the next higher cost C-APC within the same clinical family of C-APCs. As previously stated, we package payment for add-on codes into the C-APC payment rate. If any add-on code reported in conjunction with the “J1” primary service code does not qualify for a complexity adjustment, payment for the add-on service continues to be packaged into the payment for the Start Printed Page 85883primary service and is not reassigned to the next higher cost C-APC. We listed the complexity adjustments for “J1” and add-on code combinations for CY 2021, along with all of the other proposed complexity adjustments, in Addendum J to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

Addendum J to the CY 2021 OPPS/ASC proposed rule includes the cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to the CY 2021 OPPS/ASC proposed rule also contains summary cost statistics for each of the paired code combinations that describe a complex code combination that would qualify for a complexity adjustment and are proposed to be reassigned to the next higher cost C-APC within the clinical family. The combined statistics for all proposed reassigned complex code combinations are represented by an alphanumeric code with the first 4 digits of the designated primary service followed by a letter. For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all paired code combinations that are proposed to be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to the CY 2021 OPPS/ASC proposed rule allows stakeholders the opportunity to better assess the impact associated with the proposed reassignment of claims with each of the paired code combinations eligible for a complexity adjustment.

Comment: A commenter stated that CMS should not use claims data from complexity adjustment code pairs in calculating the geometric mean cost for the next higher paying APC to which the complexity adjusted code pair is assigned and that doing so can decrease the geometric mean cost of APCs with a low number of claims, specifically C-APC 5493—Level 3 Intraocular Procedures. The commenter stated that CMS did not intend to include the costs of complexity-adjusted code pairs in calculating the geometric mean cost for the higher-paying APCs to which the complexity-adjustment code pair is assigned when the C-APC complexity adjustment policy was initially established and that complexity adjustments were intended as payment adjustments for complex versions of the comprehensive service only. To further support their claim that CMS intended for complexity adjustments to only provide higher payment for claims including complex comprehensive services, the commenter noted that, unlike other HCPCS codes with a significant number of claims assigned to an APC, complexity adjusted code pairs are not evaluated for a 2 times rule violation in the higher-paying APC to which they are promoted.

Response: We disagree with the commenter's assertion regarding the policy of including the costs of a complexity adjusted code pair in the calculation of the geometric mean costs of the next higher paying C-APC to which the code pair is assigned. The current C-APC complexity adjustment policy, including the calculation of the geometric mean cost of APCs that include complexity-adjusted code pairs, was initially described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74887). In that rule, we stated the following: “We then considered reassigning complex subsets of claims for each primary service HCPCS code. All claims reporting more than one procedure described by HCPCS codes assigned to status indicator “J1” are evaluated for the existence of commonly occurring combinations of procedure codes reported on claims that exhibit a materially greater comprehensive geometric mean cost relative to the geometric mean cost of the claims reporting that primary HCPCS code. This indicates that the subset of procedures identified by the secondary HCPCS code has increased resource requirements relative to less complex subsets of that procedure. If a combination of procedure codes reported on claims is identified that meets these requirements, that is, commonly occurring and exhibiting materially greater resource requirements, it is further evaluated to confirm clinical validity as a complex subset of the primary procedure and the combination of procedure codes is then identified as complex, and primary service claims with that combination of procedure codes are subsequently reassigned as appropriate. If a combination of procedure codes does not meet the requirement for a materially different cost or does not occur commonly, it is not considered to be a complex, and primary service claims with that combination of procedure codes are not reassigned. All combinations of procedures described by HCPCS codes assigned to status indicator “J1” for each primary HCPCS code are similarly evaluated.

Once all combinations of procedures described by HCPCS codes assigned to status indicator “J1” have been evaluated, all claims identified for reassignment for each primary service are combined and the group is assigned to a higher level comprehensive APC within a clinical family of comprehensive APCs, that is, an APC with greater estimated resource requirements than the initially assigned comprehensive APC and with appropriate clinical homogeneity. We assessed resource variation for reassigned claims within the receiving APC using the geometric mean cost for all reassigned claims for the primary service relative to other services assigned to that APC using the 2 times rule criteria. For new HCPCS codes and codes without data, we will use the best data available to us to identify combinations of procedures that represent a more complex form of the primary procedure and warrant reassignment to a higher level APC. We will reevaluate our APC assignments, and identification and APC placement of complex claims once claims data become available. We then recalculate all APC comprehensive geometric mean costs and ensure clinical and resource homogeneity.”

We believe that the final statement clearly communicates our policy of including the costs of the complexity-adjusted codes pairs in calculating the geometric mean cost for the higher-paying APCs to which the complexity-adjustment code pairs are assigned. While the commenter is correct that we no longer require that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described above) not create a 2 times rule violation in the higher level or receiving APC, this change was based on our belief that the requirement was not useful because most code combinations fall below our established frequency threshold for considering 2 times rule violations (81 FR 79582). In summary, we do not believe it is necessary to change the current policy that includes the costs of the paired code combinations in the next higher-paying APC at this time.

Comment: Several commenters requested that CMS alter the established C-APC complexity adjustment eligibility criteria to allow additional code combinations to qualify for complexity adjustments. We also received several comments requesting that CMS modify its complexity adjustment criteria by eliminating the claims frequency requirement to determine eligibility for the complexity adjustment and expanding the eligibility for a complexity adjustment to other APCs besides C-APCs to apply the Start Printed Page 85884complexity adjustment to all blue light cystoscopy with Cysview procedures in the HOPD, even those assigned to clinical APCs.

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 a very low threshold for a national payment system. Lowering the minimum of 25 claims further could lead to unnecessary complexity adjustments for service combinations that are rarely performed.

With regard to the requests for complexity adjustments for blue light cystoscopy procedures involving the use of Cysview, in CY 2018 we created a HCPCS C-code (C9738—Adjunctive blue light cystoscopy with fluorescent imaging agent (list separately in addition to code for primary procedure)) to describe blue light cystoscopy with fluorescent imaging agent and allowed this code to be eligible for complexity adjustments when billed with procedure codes used to describe white light cystoscopy of the bladder, although this code is not a “J1” service or an add-on code for the primary “J1” service. For CY 2021, there is one code combination, of the six total available combinations involving C9738 and procedure codes used to describe white light cystoscopy, that qualifies for a complexity adjustment (HCPCS code 52204 Cystourethroscopy, with biopsy(s) + C9738 Adjunctive blue light cystoscopy with fluorescent imaging agent (list separately in addition to code for primary procedure)). The remaining five code combinations do not meet the cost and frequency criteria to qualify for a complexity adjustment. At this time, we do not believe that further modifications to the C-APC complexity adjustment policy, including allowing services assigned to clinical APCs to qualify for complexity adjustments, are necessary to allow for complexity adjustments for these procedures.

After consideration of the public comments we received on the proposed complexity adjustment policy, we are finalizing the C-APC complexity adjustment policy for CY 2021, as proposed, without modification.

(2) Exclusion of Procedures Assigned to New Technology APCs From the C-APC Policy

Services that are assigned to New Technology APCs are typically new procedures that do not have sufficient claims history to establish an accurate payment for the procedures. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected (82 FR 59277).

The C-APC payment policy packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. Prior to CY 2019, when a procedure assigned to a New Technology APC was included on the claim with a primary procedure, identified by OPPS status indicator “J1”, payment for the new technology service was typically packaged into the payment for the primary procedure. Because the new technology service was not separately paid in this scenario, the overall number of single claims available to determine an appropriate clinical APC for the new service was reduced. This was contrary to the objective of the New Technology APC payment policy, which is to gather sufficient claims data to enable us to assign the service to an appropriate clinical APC.

To address this issue and ensure that there is sufficient claims data for services assigned to New Technology APCs, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58847), we finalized excluding payment for any procedure that is assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged when included on a claim with a “J1” service assigned to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we finalized that payment for services assigned to a New Technology APC would be excluded from being packaged into the payment for comprehensive observation services assigned status indicator “J2” when they are included on a claim with a “J2” service starting in CY 2020 (84 FR 61167).

(3) Additional C-APCs for CY 2021

For CY 2021 and subsequent years, we proposed to continue to apply the C-APC payment policy methodology. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583) for a discussion of the C-APC payment policy methodology and revisions.

Each year, in accordance with section 1833(t)(9)(A) of the Act, we review and revise the services within each APC group and the APC assignments under the OPPS. As a result of our annual review of the services and the APC assignments under the OPPS, we did not propose to convert any conventional APCs to C-APCs in CY 2021. However, as discussed in section III.D.7, we proposed to create an additional level in the “Urology and Related Services” APC series and, as discussed in section III.D.1, we proposed to create an additional level in the “Neurostimulator and Related Procedures” APC series. Table 3 lists the proposed C-APCs for CY 2021, all of which were established in past rules.

Comment: Commenters supported the creation of the two new proposed C-APCs, based on resource cost and clinical characteristics.

Response: We appreciate the commenters' support.

Comment: Several commenters expressed concern that the C-APC payment rates may not adequately reflect the costs associated with services. These comments stated that the C-APC methodology does not account for the complexity of certain care processes, fails to capture the necessary claims, and the resulting data may lead to inaccurate payment rates that will negatively impact access to services.

Commenters also had concerns around the claims data used for ratesetting, due to variations in clinical practice and billing patterns across the hospitals that submit these claims, and urged CMS to consider alternatives to the current methodology. Some commenters were concerned that hospitals are not correctly charging for procedures assigned to C-APCs and urged CMS to invest in policies and education for hospitals regarding correct Start Printed Page 85885billing patterns. These commenters also requested that CMS provide an analysis of the impact of the C-APC policy on affected procedures and patient access to services. One commenter requested that CMS review and use Part B claims data in order to estimate costs for the appropriate C-APCs for CY 2021 ratesetting.

Response: We appreciate the comments. We continue to believe that the current C-APC methodology is appropriate. We also note that, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59246), we conducted an analysis of the effects of the C-APC policy. The analysis used claims data for the CY 2016 OPPS/ASC final rule with comment period, the CY 2017 OPPS/ASC final rule with comment period, and the CY 2018 OPPS/ASC proposed rule, which were for the period from CY 2014 (before C-APCs became effective) to CY 2016. We looked at separately payable codes that were then assigned to C-APCs and, overall, we observed an increase in claim line frequency, units billed, and Medicare payment for those procedures, which suggest that the C-APC payment policy did not adversely affect access to care or reduce payments to hospitals and is working as intended.

Comment: Several commenters requested that CMS discontinue the C-APC payment policy for all surgical insertion codes required for brachytherapy treatment. The commenters stated concerns about how the C-APC methodology impacts radiation oncology, particularly the delivery of brachytherapy for the treatment of cervical cancer. They also stated that they oppose C-APC payment for cancer care given the complexity of coding, serial billing for cancer care, and potentially different sites of service for the initial surgical device insertion and subsequent treatment delivery or other supportive services. These commenters suggested that CMS allow brachytherapy to be reported through the traditional APC methodology, move procedures to a higher C-APC, or separately pay for preparation and planning services to fully account for accurate reflection of the costs associated with these procedures.

Response: While we continue to believe that the C-APC policy is appropriately applied to these surgical procedures, we will continue to examine these concerns and will determine if any modifications to this policy are warranted in future rulemaking.

Comment: One commenter urged CMS to eliminate the C-APC policy for single-session stereotactic radiosurgery codes (77371 and 77372). The commenter requested that CMS continue to make separate payments for the 10 planning and preparation codes related to SRS and include the HCPCS code for IMRT planning (77301) on the list of planning and preparation codes, stating that the service has become more common in single fraction radiosurgery treatment planning.

Response: At this time, we do not believe that it is necessary to discontinue the C-APCs that include single session SRS procedures. We continue to believe that the C-APC policy is appropriately applied to these surgical procedures for the reasons cited when this policy was first adopted and note that the commenters did not provide any empirical evidence to support their claims that the existing C-APC policy does not adequately pay for these procedures. Also, we will continue in CY 2021 to pay separately for the 10 planning and preparation services (HCPCS codes 70551, 70552, 70553, 77011, 77014, 77280, 77285, 77290, 77295, and 77336) 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 for CY 2021.

Comment: We received one comment requesting that CMS carefully consider the proper location of care before establishing a C-APC for autologous hematopoietic stem cell transplant.

Response: We thank the commenter for this comment. This comment relates to a recommendation from last year's Advisory Panel on Hospital Outpatient Payment (HOP Panel), which recommended that CMS consider creating a C-APC for autologous stem cell transplantation and that CMS provide a rationale if it decides not to create such an APC. In the CY 2020 OPPS/ASC final rule with comment period, we evaluated the possibility of creating this C-APC and found that it was not appropriate to create a C-APC for autologous hematopoietic stem cell transplant at that time for the reasons discussed in that rule (84 FR 61162).

After consideration of the public comments we received, we are finalizing the proposed C-APCs for CY 2021. Table 3 below lists the final C-APCs for CY 2021. All C-APCs are displayed in Addendum J to this final rule with comment period (which is available via the internet on the CMS website). Addendum J to this final rule with comment period also contains all of the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information for CY 2021.

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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. Start Printed Page 85888Combining payment for multiple, independent services into a single OPPS payment in this way enables hospitals to manage their resources with maximum flexibility by monitoring and adjusting the volume and efficiency of services themselves. An additional advantage to the composite APC model is that we can use data from correctly coded multiple procedure claims to calculate payment rates for the specified combinations of services, rather than relying upon single procedure claims which may be low in volume and/or incorrectly coded. Under the OPPS, we currently have composite policies for mental health services and multiple imaging services. (We note that, in the CY 2018 OPPS/ASC final rule with comment period, we finalized a policy to delete the composite APC 8001 (LDR Prostate Brachytherapy Composite) for CY 2018 and subsequent years.) We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66611 through 66614 and 66650 through 66652) for a full discussion of the development of the composite APC methodology, and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241 through 59242 and 59246 through 52950) for more recent background.

(1) Mental Health Services Composite APC

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

In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588 through 79589), we finalized a policy to combine the existing Level 1 and Level 2 hospital-based PHP APCs into a single hospital-based PHP APC, and thereby discontinue APCs 5861 (Level 1—Partial Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level—2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs) and replace them with APC 5863 (Partial Hospitalization (3 or more services per day)).

In the CY 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33580 through 33581 and 59246 through 59247, respectively), we proposed and finalized the policy for CY 2018 and subsequent years that, when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services will be paid through composite APC 8010 (Mental Health Services Composite). In addition, we set the payment rate for composite APC 8010 for CY 2018 at the same payment rate that will be paid for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and finalized a policy that the hospital will continue to be paid the payment rate for composite APC 8010. Under this policy, the I/OCE will continue to determine whether to pay for these specified mental health services individually, or to make a single payment at the same payment rate established for APC 5863 for all of the specified mental health services furnished by the hospital on that single date of service. We continue to believe that the costs associated with administering a partial hospitalization program at a hospital represent the most resource intensive of all outpatient mental health services. Therefore, we do not believe that we should pay more for mental health services under the OPPS than the highest partial hospitalization per diem payment rate for hospitals.

We proposed that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be paid through composite APC 8010 for CY 2021. In addition, we proposed to set the proposed payment rate for composite APC 8010 at the same payment rate that we proposed for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the proposed payment rate for composite APC 8010.

We did not receive any public comment on these proposals. Therefore, we are finalizing our proposal, without modification, that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be paid through composite APC 8010 for CY 2021. In addition, we are finalizing our proposal to set the payment rate for composite APC 8010 for CY 2021 at the same payment rate that we set for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital.

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

Effective January 1, 2009, we provide a single payment each time a hospital submits a claim for more than one imaging procedure within an imaging family on the same date of service, to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session (73 FR 41448 through 41450). We utilize three imaging families based on imaging modality for purposes of this methodology: (1) 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 Start Printed Page 85889as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC.

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

For CY 2021, we proposed to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology. We continue to believe that this policy would reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.

The proposed CY 2021 payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on proposed geometric mean costs calculated from CY 2019 claims available for the CY 2021 OPPS/ASC proposed rule that qualified for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we have used to calculate the geometric mean costs for these composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), are identified by asterisks in Addendum N to this CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and are discussed in more detail in section II.A.1.b. of this CY 2021 OPPS/ASC proposed rule.

For the CY 2021 OPPS/ASC proposed rule, we were able to identify approximately 964,000 “single session” claims out of an estimated 4.9 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 14 percent of all eligible claims, to calculate the proposed CY 2021 geometric mean costs for the multiple imaging composite APCs. Table 4 of the CY 2021 OPPS/ASC proposed rule lists the proposed HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2021.

We did not receive any public comments on this proposal. Therefore, 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 4 lists the HCPCS codes that will be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC final geometric mean costs for CY 2021.

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3. Changes to Packaged Items and Services

a. Background and Rationale for Packaging in the OPPS

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

Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC final rule with comment period (82 FR 59250), the CY 2019 OPPS/ASC final rule with comment period (83 FR 58854), and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173). As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, categories of items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make payments for all services under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule, which pays separately for each coded item. As a part of this effort, we have continued to examine the payment for items and services provided under the OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system.

For CY 2021, we examined the items and services currently provided under the OPPS, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment would be appropriately packaged into payment for the primary service that they support. Specifically, we examined the HCPCS code definitions (including CPT code descriptors) and 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 CY 2021, we proposed no changes to this policy. We will continue to conditionally package the costs of selected newly identified ancillary services into payment for a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. Below we discuss the proposed changes to the packaging policies in CY 2021.

Comment: We received one comment asking CMS for an update regarding a comment solicitation from the CY 2018 OPPS/ASC Proposed Rule regarding the “Comment Solicitation on Packaging of Start Printed Page 85895Items and Services Under the OPPS” (82 FR 33588).

Response: We thank the commenter for their inquiry. As noted in our response in the CY 2018 OPPS/ASC final rule with comment period, we appreciated the comments we received in response to this comment solicitation and will take them into consideration as we continue to explore and evaluate packaging policies that apply under the OPPS (82 FR 59254).

Comment: We received a comment on balancing packaging policy with market access concerns after pass-through status expires. The commenter noted that some packaging policies create incentives that could limit patient access to certain items, services, and care. They requested that CMS reconsider packaging policies, especially in the ASC and HOPD setting, and review packaging decisions on a case-by-case basis upon pass-through status expiration and not via the “integral to” policy, applying a holistic separate payment policy for innovations. Specifically, this commenter asked CMS to evaluate drugs and devices on a case-by-case basis in order to determine the item's packaging status after pass-through expires. This commenter also stated CMS should take into consideration the drug or device's clinical value when determining packaging status.

Response: We thank the commenter for their input. We continue to believe our packaging policies support our strategic goal of using larger payment bundles to maximize incentives to provide care in the most efficient manner. However, we will take this comment into consideration for future rulemaking.

Comment: We received several comments from patient advocates, physicians, drug manufacturers, and professional medical societies regarding payment for blue light cystoscopy procedures involving Cysview® (hexaminolevulinate HCl) (described by HCPCS code C9275). Cysview® is a drug that functions as a supply in a diagnostic test or procedure and therefore payment for this product is packaged with payment for the primary procedure in the OPPS and ASC settings. Commenters stated that utilization of Cysview® is low in the HOPD and ASC settings, which they attributed to the fact that Cysview is packaged as a drug that functions as a supply in a diagnostic test or procedure. Commenters indicated that packaged payment does not adequately pay for the blue light cystoscopy procedures, particularly in the ASC setting where payment is generally approximately 55 percent of the HOPD payment. Commenters believe that providers have been deterred from the use of this technology, especially in the ASC setting, and as a result, a significant percentage of beneficiaries are not able to access the procedure.

Commenters also stated that there has been literature published showing that Blue Light Cystoscopy with Cysview® is more effective than white light cystoscopy alone at detecting and eliminating nonmuscle invasive bladder cancer tumors, leading to a reduction in bladder cancer recurrence.

Commenters made various recommendations for payment for blue light cystoscopy procedures involving Cysview®, including to pay separately for Cysview® when it is used with blue light cystoscopy in the HOPD and ASC settings, similar to the policy finalized for Exparel® in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58860), or to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to provide an “add-on” or “drug intensive” payment to ASCs when using Cysview® in blue light cystoscopy procedures. Other commenters requested separate payment for all diagnostic imaging drugs (radiopharmaceuticals and contrast agents).

Response: We acknowledge the concerns of the numerous stakeholders who commented on this issue and understand the importance of blue light cystoscopy procedures involving Cysview®. Cysview has been packaged as a drug, biological, or radiopharmaceutical that functions as a supply in a diagnostic test or procedure since CY 2014 (78 FR 74930). As we stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59244), we recognize 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, in CY 2018, we created a new HCPCS C-code to describe blue light cystoscopy and since CY 2018 have allowed for complexity adjustments to higher paying C-APCs for qualifying white light and blue light cystoscopy code combinations. At this time, we continue to believe that Cysview® is a drug that functions as a supply in a diagnostic test or procedure, and therefore, payment for this drug should be packaged with payment for the diagnostic procedure. Therefore, we do not believe it is necessary to pay separately for Cysview® when it is used with blue light cystoscopy in either the HOPD or ASC setting. We also do not believe that it would be appropriate to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to provide an “add-on” or “drug intensive” payment to ASCs when using Cysview® in blue light cystoscopy procedures, as our equitable adjustment authority at section (t)(2)(E) only authorizes adjustments under the OPPS, not the ASC payment system. We do not have any evidence to show that separate payment for blue light cystoscopy procedures involving Cysview is required, based on commenter concerns regarding utilization and access issues for Cysview. However, we will continue to examine payment for blue light cystoscopy procedures involving Cysview to determine if any changes to this policy would be appropriate in future rulemaking.

Comment: Some commenters requested that we eliminate the packaging policy for drugs that function as a supply when used in a diagnostic test or procedure.

Response: In the CY 2014 OPPS/ASC final rule with comment period, we established a policy to package drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure. In particular, we referred to drugs, biologicals, and radiopharmaceuticals that function as supplies as a part of a larger, more encompassing service or procedure, namely, the diagnostic test or procedure in which the drug, biological, or radiopharmaceutical is employed (78 FR 74927). At this time, we do not believe it is necessary to eliminate this policy. As previously noted, 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.

Comment: One commenter requested separate payment for add-on codes for Fractional Flow Reserve Studies (FFR/iFR) and Intravascular Ultrasound (IVUS). The commenter stated that they believe the packaging of these codes will disincentivize physicians to perform these adjunct procedures because of cost. The codes are:Start Printed Page 85896

  • 93571—Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; initial vessel (list separately in addition to code for primary procedure);
  • 93572—Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel (list separately in addition to code for primary procedure));
  • 92978—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; initial vessel (list separately in addition to code for primary procedure); and
  • 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)).

Response: As stated in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66630), we continue to believe that IVUS and FFR are dependent services that are always provided in association with a primary service. Add-on codes represent services that are integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment is appropriately packaged into payment for the primary service that they support. As we have noted in past rules, add-on codes do not represent standalone procedures and are inclusive to other procedures performed at the same time (79 FR 66818). We continue to believe it is unnecessary to provide separate payment for the previously mentioned add-on codes at this time.

b. Packaging Policy for Non-Opioid Pain Management Therapies

(1) Background on OPPS/ASC Non-Opioid Pain Management Packaging Policies

In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the framework of existing packaging categories, such as drugs that function as supplies in a surgical procedure or diagnostic test or procedure, we requested stakeholder feedback on common clinical scenarios involving currently packaged items and services described by HCPCS codes that stakeholders believe should not be packaged under the OPPS. We also expressed interest in stakeholder feedback on common clinical scenarios involving separately payable HCPCS codes for which payment would be most appropriately packaged under the OPPS. Commenters who responded to the CY 2018 OPPS/ASC proposed rule expressed a variety of views on packaging under the OPPS. The public comments ranged from requests to unpackage most items and services that are unconditionally packaged under the OPPS, including drugs and devices, to specific requests for separate payment for a specific drug or device.

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 52485), we reiterated our position with regard to payment for Exparel®, a non-opioid analgesic that functions as a surgical supply, stating that we believed that payment for this drug is appropriately packaged with the primary surgical procedure. We also stated in the CY 2018 OPPS/ASC final rule with comment period that we would continue to explore and evaluate packaging policies under the OPPS and consider these policies in future rulemaking.

In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855 through 58860), we finalized a policy to unpackage and pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2019, due to decreased utilization in the ASC setting.

For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), as required by section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a) of the SUPPORT Act, we reviewed payments under the OPPS for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. We used currently available data to analyze the payment and utilization patterns associated with specific non-opioid alternatives, including drugs that function as a supply, nerve blocks, and neuromodulation products, to determine whether our packaging policies have reduced the use of non-opioid alternatives. For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), we proposed to continue our policy to pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting for CY 2020. In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173 through 61180), after reviewing data from stakeholders and Medicare claims data, we did not find compelling evidence to suggest that revisions to our OPPS payment policies for non-opioid pain management alternatives were necessary for CY 2020. We finalized our proposal to continue to unpackage and pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies when furnished in the ASC setting for CY 2020. Under this policy, the only drug that met these criteria in CY 2020 was Exparel.

(2) Evaluation and CY 2021 Payment for Non-Opioid Alternatives

Section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a) of the SUPPORT Act, states that the Secretary must review payments under the OPPS for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. As part of this review, under section 1833(t)(22)(A)(iii) of the Act, the Secretary must consider the extent to which revisions to such payments (such as the creation of additional groups of covered OPD services to separately classify those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce the payment incentives for using opioids instead of non-opioid alternatives for pain management. In conducting this review and considering any revisions, the Secretary must focus on covered OPD services (or groups of services) assigned to C-APCs, APCs that include surgical services, or services determined by the Secretary that generally involve treatment for pain management. If the Secretary identifies revisions to payments pursuant to section 1833(t)(22)(A)(iii) of the Act, section Start Printed Page 858971833(t)(22)(C) of the Act requires the Secretary to, as determined appropriate, begin making revisions for services furnished on or after January 1, 2020. Any revisions under this paragraph are required to be treated as adjustments for purposes of paragraph (9)(B), which requires any adjustments to be made in a budget neutral manner.

As noted in the background section above, we conducted an evaluation to determine whether there are payment incentives for using opioids instead of non-opioid alternatives in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61176 through 61180). The results of our review and evaluation of our claims data did not provide evidence to indicate that the OPPS packaging policy had the unintended consequence of discouraging the use of non-opioid treatments for postsurgical pain management in the hospital outpatient department. Higher utilization may be a potential indicator that the packaged payment is not causing an access to care issue and that the payment rate for the primary procedure adequately reflects the cost of the drug. Our updated review of claims data showed a continued decline in the utilization of Exparel® in the ASC setting, which supported our proposal to continue paying separately for Exparel® in the ASC setting. Decreased utilization could potentially indicate that the packaging policy is discouraging use of that treatment and that providers are choosing less expensive treatments. However, it is difficult to attribute causality of changes in utilization to Medicare packaging payment policy only. We believe that unpackaging and paying separately for Exparel addresses decreased utilization because it eliminates any potential Medicare payment disincentive for the use of this non-opioid alternative, rather than prescription opioids.

We believe we fulfilled the statutory requirement to review payments for opioids and evidence-based non-opioid alternatives to ensure that there are not financial incentives to use opioids instead of non-opioid alternatives in CY 2020 OPPS/ASC rulemaking. We are committed to evaluating our current policies to adjust payment methodologies, if necessary, in order to ensure appropriate access for beneficiaries amid the current opioid epidemic. However, we did not believe conducting a similar CY 2021 review would yield significantly different outcomes or new evidence that would prompt us to change our payment policies under the OPPS or ASC payment system.

Therefore, for CY 2021, we proposed to continue our policy to pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting for CY 2021.

Comment: Multiple commenters, including medical specialty societies and drug manufacturers, requested that we pay separately for Exparel and other drugs that may function as surgical supplies in the hospital outpatient setting. Some of these commenters noted that Exparel is more frequently used in this setting and the use of non-opioid pain management treatments should also be encouraged in the hospital outpatient department. Commenters believed that separate payment in the hospital outpatient department would significantly increase utilization, which would be beneficial in reducing opioid use.

Response: As we stated in the CY 2019 and CY 2020 OPPS/ASC final rules with comment period (83 FR 58856 and 84 FR 61177, respectively), we do not believe that there is sufficient evidence that non-opioid pain management drugs should be paid separately in the hospital outpatient setting at this time. The commenters did not provide convincing evidence that the OPPS packaging policy for Exparel (or other non-opioid drugs) creates a barrier to use of Exparel in the hospital setting. Further, while we received some public comments suggesting that, as a result of using Exparel in the OPPS setting, providers may prescribe fewer opioids for Medicare beneficiaries, we do not believe that the OPPS payment policy presents a barrier to use of Exparel or affects the likelihood that providers will prescribe fewer opioids in the HOPD setting. Several drugs are packaged under the OPPS and payment for such drugs is included in the payment for the associated primary procedure. We were not persuaded by the information supplied by commenters suggesting that some providers avoid use of non-opioid alternatives in the outpatient hospital setting (including Exparel) solely because of the OPPS packaged payment policy, as there was no evidence in our review and evaluation of claims data in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61176 through 61180) to indicate that the OPPS packaging policy had the unintended consequence of discouraging the use of non-opioid treatments for postsurgical pain management in the hospital outpatient department. As noted above, we do not believe conducting a similar CY 2021 review would yield significantly different outcomes or new evidence that would prompt us to change our payment policy. Based on previously conducted analysis, we observed increasing Exparel utilization in the HOPD setting with the total units increasing from 14.8 million in 2018 to 19.5 million in 2019, despite the drug payment being packaged into the procedure payment in the OPPS setting. This upward trend has been consistent since 2015, as the data shows approximately 6.5 million total units in 2015 and 8.1 million total units in 2016. Therefore, we do not believe that the current OPPS payment methodology for Exparel or other non-opioid pain management drugs presents a widespread barrier to their use.

In addition, increased use in the hospital outpatient setting not only supports the notion that the packaged payment for Exparel is not causing an access to care issue, but also that the payment rate for primary procedures in the HOPD using Exparel adequately reflects the cost of the drug. That is, because Exparel is commonly used and billed under the OPPS, the APC rates for the primary procedures reflect such utilization. Therefore, the increased utilization in the OPPS setting seems to indicate that the payment amount is sufficient for hospitals to furnish the drug. We remind readers that the OPPS is a prospective payment system, not a cost-based system and, by design, is based on a system of averages under which payment for certain cases may exceed the costs incurred, while for others, it may not. 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. We continue to invite stakeholders to share evidence, such as published peer-reviewed literature, on these non-opioid alternatives. We also intend to continue to analyze the evidence and monitor utilization of non-opioid alternatives in the HOPD setting for potential future rulemaking.

Comment: Some commenters encouraged CMS to establish permanent separate payment for drugs that are currently on drug pass-through status in Start Printed Page 85898the OPPS and ASC settings, such as Dexycu (HCPCS code J1095). Regarding Dexycu specifically, the commenters stated they were conducting a new, comprehensive study of a longitudinal claim dataset that will provide deeper insights into the association between cataract surgery and opioid utilization, as well as the role of Dexycu in reducing the prescribing of opioids.

Response: We refer readers to section V.A., “OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals” of this final rule with comment period regarding pass-through payments under the OPPS. Dexycu will receive separate payment due to its drug pass-through status through CY 2021. We will determine whether separate payment for this drug should be applied under the policy to pay separately for non-opioid pain management drugs that function as a surgical supply when furnished in the ASC setting when Dexycu's pass-through status expires. We thank commenters for conducting studies regarding their specific products and look forward to reviewing the results.

Comment: Several commenters requested that the drug Omidria, CPT J1097, (phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml), be excluded from the OPPS policy to package drugs that function as surgical supplies once its pass-through status expires on September 30, 2020. Omidria is indicated for maintaining pupil size by preventing intraoperative miosis and reducing postoperative ocular pain in cataract or intraocular surgeries. The commenters stated that there is extensive clinical evidence and medical literature which supports their claims that Omidria reduces dependence on opioids for patients undergoing cataract surgery and postoperative prescription opioids. The commenters asserted that Omidria meets all of the requirements in regulation to qualify for separate payment in the ASC setting, as Omidria is FDA-approved for intraocular use in cataract procedures, a pain management drug, a non-opioid, and functions as a surgical supply during cataract surgery according to CMS' definition of a surgical supply. Commenters asserted that the use of Omidria decreases patients' need for fentanyl during surgeries and provided a manuscript stating that Omidria reduces opioid use based on pill counts after surgery.

Response: We thank commenters for their feedback on Omidria. Omidria received pass-through status for a 3-year period from 2015 to 2017. After expiration of its pass-through status, payment for Omidria was packaged under both the OPPS and the ASC payment system. Subsequently, Omidria's pass-through status under the OPPS was reinstated beginning on October 1, 2018 through September 30, 2020, as required by section 1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the Consolidated Appropriations Act of 2018 (Pub. L. 115-141), which means that Omidria continued to be paid separately under the ASC payment system through September 30, 2020.

Our previous review of the clinical evidence submitted indicated that the studies the commenter supplied were not sufficient to demonstrate that Omidria reduces opioid use. Moreover, the results of a CMS analysis of cataract procedures performed on Medicare beneficiaries in HOPDs and ASCs between January 2015 and July 2019, which compared procedures performed with Omidria to procedures performed without Omidria, did not demonstrate a significant decrease in fentanyl utilization during the cataract surgeries in the HOPDs and ASCs when Omidria was used. Our findings also did not suggest any decrease in opioid utilization post-surgery for procedures involving Omidria.

However, we will continue to apply separate payment for non-opioid pain management drugs that function as surgical supplies when furnished in the ASC setting for CY 2021, as discussed in section XIII.D.3, and as we have described in regulation at 42 CFR 416.164 and 416.171(b)(1). After careful consideration of the commenters' assertion that Omidria meets this definition, we believe that Omidria does qualify as a non-opioid pain management drug that functions as a surgical supply and are excluding Omidria from packaging under the ASC payment system beginning October 1, 2020 and in CY 2021, in accordance with this policy.

Comment: Two commenters briefly mentioned the drug IV acetaminophen (CPT code J0131), which they believe may reduce opioid usage if CMS paid separately for the drug. These commenters believed IV acetaminophen decreases use of post-operative opioids.

Response: We thank commenters for their comments. We do not find it appropriate to pay separately for IV acetaminophen as suggested by the commenters due to our drug packaging threshold policies. We remind stakeholders of our drug packaging threshold policies, as described in section V.B.1.a to this final rule with comment period. In accordance with section 1833(t)(16)(B) of the Act, we finalized our proposal to set the drug packaging threshold for CY 2021 to $130. To the extent that the items and services mentioned by the commenters are effective alternatives to opioid prescriptions, we encourage providers to use them when medically necessary. Additionally, please see section XIII.D.3 for a full discussion on our policies in the ASC setting.

Comment: Commenters suggested modified payment for “pain block” CPT codes 64415, 64416, 64417, 64445, 64446, 64447, 64448, and 64450. Two commenters stated that providers use these pain blocks to mitigate the post-operative pain that is otherwise typically addressed with short-term opioid use. Additionally, a few commenters stated that CPT code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg) used for treatment of ocular inflammation and pain following ophthalmic surgery is administered through CPT code 0356T (Insertion of drug-eluting implant (including punctal dilation and implant removal when performed) into lacrimal canaliculus, each). These commenters felt CPT code 0356T, which describes the administration of the drug, should also receive separate or additional payment due to the purported clinical benefits of the drug, including treatment of pain.

Response: We thank the commenters for their suggestions. At this time, we have not found compelling evidence for the non-opioid pain management alternatives described above to warrant separate or modified payment under the OPPS or ASC payment systems for CY 2021. Additionally, we do not believe that the “pain blocks” described by stakeholders qualify as non-opioid pain management drugs that function as a surgical supply as the codes provided by stakeholders are used to describe procedures under the OPPS and not drugs. To the extent that the items and services mentioned by the commenters are effective alternatives to opioid prescriptions, we encourage providers to use them when medically necessary. For a greater discussion of CPT code 0356T, please see section III. D. (Administration of Lacrimal Ophthalmic Insert Into Lacrimal Canaliculus (APC 5692)) of this final rule with comment period.

Comment: Commenters also requested separate payments for various non-opioid pain management treatments, such as ERAS® protocols or spinal cord stimulators (SCS), that they believe decrease the number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure. For SCS, several commenters noted that this therapy may lead to a reduction in the use of opioids Start Printed Page 85899for chronic pain patients. They noted that neurostimulation is a key alternative to opioid prescription for pain management and recommended that CMS increase access to SCS.

Response: We appreciate the commenters' information on this topic. At this time, we have not found compelling evidence for the non-opioid pain management alternatives described above to warrant separate payment under the OPPS or ASC payment systems for CY 2021. However, we plan to take these comments and suggestions into consideration for future rulemaking. We agree that providing incentives to avoid or reduce opioid prescriptions may be one of several strategies for addressing the opioid epidemic. To the extent that the items and services mentioned by the commenters are effective alternatives to opioid drugs, we encourage providers to use them when medically appropriate.

We look forward to working with stakeholders as we further consider suggested refinements to the OPPS and the ASC payment system that will encourage use of medically necessary items and services that have demonstrated efficacy in decreasing opioid prescriptions and/or opioid abuse or misuse during or after an outpatient visit or procedure.

After consideration of the public comments we received, we are finalizing the proposed policy, without modification, to unpackage and pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2021. We will continue to analyze the issue of access to non-opioid pain management alternatives in the OPPS and the ASC settings as part of any subsequent reviews we conduct under section 1833(t)(22)(A)(ii). We are continuing to examine whether there are other non-opioid pain management alternatives for which our payment policy should be revised to allow separate payment. We will be reviewing evidence-based support, such as published peer-reviewed literature, that we could use to determine whether these products help to deter or avoid prescription opioid use and addiction as well as evidence that the current packaged payment for such non-opioid alternatives presents a barrier to access to care and therefore warrants revised, including possibly separate, payment under the OPPS. This policy is also discussed in section XIII.D.3 of this final rule with comment period.

c. Clinical Diagnostic Laboratory Tests Packaging Policy

(1) Background

Prior to CY 2014, clinical diagnostic laboratory tests were excluded from payment under the hospital OPPS because they were paid separately under the Clinical Laboratory Fee Schedule (CLFS). Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. Under this authority, the Secretary excluded from the OPPS those services that are paid under fee schedules or other payment systems. Because laboratory services are paid separately under the CLFS, laboratory tests were excluded from separate payment under the OPPS. We codified this policy at 42 CFR 419.22(l).

However, in CY 2014, we revised the categories of packaged items and services under the OPPS to include certain laboratory tests. We stated that certain laboratory tests, similar to other covered outpatient services that are packaged under the OPPS, are typically integral, ancillary, supportive, dependent, or adjunctive to a primary hospital outpatient service and should be packaged under the hospital OPPS. We stated that laboratory tests and their results support clinical decision making for a broad spectrum of primary services provided in the hospital outpatient setting, including surgery and diagnostic evaluations (78 FR 74939). Consequently, we finalized the policy to package payment for most laboratory tests in the OPPS when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service or services provided in the hospital outpatient setting (78 FR 74939 through 74942 and 42 CFR 419.2(b)(17)). In the same final rule, we clarified that certain laboratory tests would be excluded from packaging. Specifically, we stated that laboratory tests would be paid separately under the CLFS when the laboratory test is the only service provided to a beneficiary or when a laboratory test is conducted on the same date of service (DOS) as the primary service but is ordered for a different purpose than the primary service by a practitioner different than the practitioner who ordered the primary service or when the laboratory test is a molecular pathology test (78 FR 74942). As explained in the CY 2014 OPPS/ASC final rule, we excluded molecular pathology tests from packaging because we believe these tests are relatively new and may have a different pattern of clinical use, which may make them generally less tied to a primary service in the hospital outpatient setting than the more common and routine laboratory tests that we package (78 FR 74939). Based on these changes, we revised the regulation text at §§  419.2(b) and 419.22(l) to reflect this laboratory test packaging policy.

In CY 2016, we made some modifications to this policy (80 FR 70348 through 70350). First, we clarified that all molecular pathology tests would be excluded from our packaging policy, including any new codes that also describe molecular pathology tests. In the CY 2014 OPPS/ASC final rule, we stated that only those molecular pathology codes described by CPT codes in the ranges of 81200 through 81383, 81400 through 81408, and 81479 were excluded from OPPS packaging (78 FR 74939 through 74942). However, in 2016, we expanded this policy to include not only the original code range but also all new molecular pathology test codes (80 FR 70348). Secondly, we excluded preventive laboratory tests from OPPS packaging and provided that they would be paid separately under the CLFS. Laboratory tests that are considered preventive are listed in Section 1.2, Chapter 18 of the Medicare Claims Processing Manual (Pub. L. 100-04). As stated in the CY 2016 OPPS/ASC final rule, we make an exception to conditional packaging of ancillary services for ancillary services that are also preventive services (80 FR 70348). For consistency, we excluded from OPPS packaging those laboratory tests that are classified as preventive services. In addition, we modified our conditional packaging policy so that laboratory tests provided during the same outpatient stay (rather than specifically provided on the same DOS as the primary service) are considered as integral, ancillary, supportive, dependent, or adjunctive to a primary service or services, except when a laboratory test is ordered for a different diagnosis and by a different practitioner than the practitioner who ordered the other hospital outpatient services. We explained in the CY 2016 OPPS/ASC final rule that this modification did not affect our policy to provide separate payment for laboratory tests: (1) If they are the only services furnished to an outpatient and are the only services on a claim and have a payment rate on the CLFS; or (2) if they are ordered for a different diagnosis than another hospital outpatient service by a practitioner different than the practitioner who ordered the other hospital outpatient service (80 FR 70349 through 70350).

In CY 2017, we modified the policy to remove the “unrelated” laboratory test exclusion and to expand the laboratory Start Printed Page 85900test packaging exclusion to apply to laboratory tests designated as advanced diagnostic laboratory tests (ADLTs) under the CLFS. We clarified that the exception would only apply to those ADLTs that meet the criteria of section 1834A(d)(5)(A) of the Act, which are defined as tests that provide an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result (81 FR 79592 through 79594).

(2) Current Categories of Clinical Diagnostic Laboratory Tests Excluded From OPPS Packaging

As we discussed in the CY 2021 OPPS/ASC proposed rule (85 FR 48798), under our current policy, certain clinical diagnostic laboratory tests (CDLTs) that are listed on the CLFS are packaged as integral, ancillary, supportive, dependent, or adjunctive to the primary service or services provided in the hospital outpatient setting during the same outpatient encounter and billed on the same claim. While we package most CDLTs under the OPPS, when a CDLT is listed on the CLFS and meets one of the following four criteria, we do not pay for the test under the OPPS, but rather, we pay for it under the CLFS when it is: (1) The only service provided to a beneficiary on a claim; (2) considered a preventive service; (3) a molecular pathology test; or (4) an ADLT that meets the criteria of section 1834A(d)(5)(A) of the Act. Generally, when laboratory tests are not packaged under the OPPS and are listed on the CLFS, they are paid under the CLFS instead of the OPPS.

(3) New Category of Laboratory Tests Excluded From OPPS Packaging

(a) Background on Protein-Based MAAAs

As part of recent rulemaking cycles, stakeholders have suggested that some protein-based Multianalyte Assays with Algorithmic Analyses tests (MAAAs) may have a pattern of clinical use that makes them relatively unconnected to the primary hospital outpatient service (84 FR 61439). In the CY 2018 OPPS/ASC final rule (82 FR 59299), we stated that stakeholders indicated that certain protein-based MAAAs, specifically those described by CPT codes 81490, 81503, 81535, 81536, 81538, and 81539, are generally not performed in the HOPD setting and have similar clinical patterns of use as the DNA and RNA-based MAAA tests that are assigned to status indicator “A” under the OPPS and are paid separately under the CLFS. Notably, all of the tests described by these CPT codes (with the exception of CPT code 81490, which we discuss below) are cancer-related protein-based MAAAs. In the same final rule, stakeholders suggested that, based on the June 23, 2016 CLFS final rule entitled “Medicare Program; Medicare Clinical Diagnostic Laboratory Tests Payment System,” in which CMS defined an ADLT under section 1834A(d)(5)(A) of the Act to include DNA, RNA, and protein-based tests, they believe that the reference to “protein-based tests” in the definition applies equally to the tests they identified, that is, protein-based MAAAs. Consequently, the stakeholders believed that protein-based MAAAs should be excluded from OPPS packaging and paid separately under the CLFS. As we noted in the CY 2021 OPPS/ASC proposed rule, one of the protein-based MAAAs previously requested by stakeholders to be excluded from OPPS packaging policy is CPT code 81538 (Oncology (lung), mass spectrometric 8-protein signature, including amyloid a, utilizing serum, prognostic and predictive algorithm reported as good versus poor overall survival), which has been designated as an ADLT under section 1834A(d)(5)(A) of the Act as of December 21, 2018. Therefore, CPT code 81538 is currently excluded from the OPPS packaging policy and paid under the CLFS instead of the OPPS when it also meets the laboratory DOS requirements.

(b) CY 2021 Cancer-Related Protein-Based MAAAs

As discussed in the CY 2021 OPPS/ASC proposed rule (85 FR 49032), we have continued to consider previous stakeholder requests to exclude some protein-based MAAAs from the OPPS packaging policy. We stated that, after further review of this issue, we believe that cancer-related protein-based MAAAs, in particular, may be relatively unconnected to the primary hospital outpatient service during which the specimen was collected from the patient. Similar to molecular pathology tests, which are currently excluded from the OPPS packaging policy, cancer-related protein-based MAAAs appear to have a different pattern of clinical use, which may make them generally less tied to the primary service in the hospital outpatient setting than the more common and routine laboratory tests that are packaged.

As we noted previously in the CY 2021 OPPS/ASC proposed rule and in this section of the final rule, commenters to the CY 2018 OPPS/ASC final rule identified specific cancer-related protein-based MAAAs as tests that are generally not performed in the HOPD setting (82 FR 59299). In fact, those tests identified by commenters are used to guide future surgical procedures and chemotherapeutic interventions. Treatments that are based on the results of cancer-related protein-based MAAAs are typically furnished after the patient is no longer in the hospital, in which case they are not tied to the same hospital outpatient encounter during which the specimen was collected.

For these reasons, we proposed to exclude cancer-related protein-based MAAAs from the OPPS packaging policy and pay for them separately under the CLFS.

In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), we explained that the AMA CPT 2020 manual currently describes MAAAs, in part, as “procedures that utilize multiple results derived from panels of analyses of various types, including molecular pathology assays, fluorescent in situ hybridization assays, and non-nucleic acid based assays (for example, proteins, polypeptides, lipids, carbohydrates).” [1] Additionally, the AMA CPT 2020 manual provides a MAAA code descriptor format which includes several specific characteristics, including but not limited to disease type (for example, oncology, autoimmune, tissue rejection), and material(s) analyzed (for example, DNA, RNA, protein, antibody). We noted that as the AMA CPT 2020 manual describes a MAAA, and the code descriptor of each MAAA distinguishes MAAAs that are cancer-related assays from those that test for other disease types, the AMA CPT manual is a potentially instructive tool to identify cancer-related MAAA tests that are “protein-based”. Accordingly, in following the AMA CPT 2020 manual intent to identify MAAA tests that are cancer-related, and, of those tests, identifying the ones whose test analytes are proteins, we have determined there are currently six cancer-related protein-based MAAAs: CPT codes 81500, 81503, 81535, 81536, 81538 and 81539. As discussed previously in the CY 2021 OPPS/ASC proposed rule and in this section of the final rule, CPT code 81538 has been designated as an ADLT under section 1834A(d)(5)(A) of the Act as of December 21, 2018 and therefore, is already paid under the CLFS instead of the OPPS. As such, we proposed to assign status indicator “A” (“Not paid under OPPS. Paid by MACs under a fee schedule or payment system other than Start Printed Page 85901OPPS”) to cancer-related protein-based MAAAs as described by CPT codes 81500, 81503, 81535, 81536, and 81539. We also proposed that we would apply this policy to cancer-related protein-based MAAAs that do not currently exist, but that are developed in the future. Additionally, we stated that we intend to continue to study the list of laboratory tests excluded from the OPPS packaging policy and determine whether any additional changes are warranted and may consider proposing future changes to the laboratory DOS policy through notice-and-comment rulemaking.

In the CY 2021 OPPS/ASC proposed rule (85 FR 49032), we noted that commenters to the CY 2018 OPPS/ASC proposed rule also identified CPT code 81490 as a protein-based MAAA that should be excluded from the OPPS packaging policy and paid outside of the OPPS. However, we stated that we believed that the results for the test described by CPT code 81490 are used to determine disease activity in rheumatoid arthritis patients, guide current therapy to reduce further joint damage, and may be tied to the primary hospital outpatient service, that is, the hospital outpatient encounter during which the specimen was collected. Therefore, we stated that we believed that payment for CPT code 81490 remains appropriately packaged under the OPPS.

We refer readers to section XVIII. of the CY 2021 OPPS/ASC proposed rule and section XVIII. of this final rule with comment period, which describe the related proposal to revise the laboratory DOS policy for cancer-related protein-based MAAAs.

We received public comments on the proposal to exclude cancer-related protein-based MAAAs from the OPPS packaging policy and pay for them separately under the CLFS. The following is a summary of the comments we received and our responses.

Comment: Generally, commenters supported the proposal to exclude cancer-related protein-based MAAAs from the OPPS packaging policy and add them to the list of test codes subject to the laboratory DOS exception for the hospital outpatient setting, leading to the test being paid at the CLFS rate and requiring that the laboratory bill Medicare for the test instead of seeking payment from the hospital. Commenters stated that changes to this policy will lead to improved beneficiary access to diagnostic tests while also reducing hospital administrative burden.

Response: We appreciate the support from commenters for our proposed revisions to the OPPS packaging policy for CDLTs. We agree that the revisions to the laboratory DOS policy that we proposed in the CY 2021 OPPS/ASC proposed rule and finalized in section XVIII of this final rule with comment period may potentially serve to reduce delay in access to laboratory tests by minimizing the likelihood that a hospital will postpone ordering a test until at least 14 days after the patient is discharged from the hospital outpatient department, or even cancel the order in order to avoid having to bill Medicare for the test under the laboratory DOS policy.

Comment: In addition to excluding the cancer-related protein-based MAAAs from OPPS packaging, several commenters suggested a similar change for pathology tests. Specifically, they recommended revising the existing laboratory test packaging policy to allow separate payment under the CLFS for the technical component of pathology tests.

Response: We appreciate the feedback and will consider the issue for future rulemaking.

Comment: Some commenters recommended further expansion of the list of test codes excluded from OPPS packaging to include various other CDLTs, including all protein-based MAAAs, AMA CPT Proprietary Laboratory Analyses (PLA) test codes that may have similar characteristics to AMA CPT MAAA tests but are not currently categorized as AMA CPT MAAA test codes, and several specific CPT test codes, including the OVERA test from Aspira Labs (CPT 0003U), EPI assay by Bio-Techne (CPT 0005U), TissueCypher assay from Cernostics (CPT 0108U), and KidneyIntelX (CPT 0105U).

Commenters also noted that while PLA test codes are not automatically included in the outpatient laboratory test packaging exclusion, some tests described by PLA codes are included under these policies if they qualify as a molecular pathology test or Criterion A ADLT. Therefore, the commenters asserted that CMS should continue its historical practice of applying the laboratory test packaging exclusion to PLA test codes as occurs with molecular pathology tests and ADLTs that have been assigned PLA codes.

Response: We believe that the commenters' suggested modifications to the list of codes excluded from OPPS packaging to include various CDLTs, including all protein-based MAAAs, AMA CPT PLA test codes that may have similar characteristics to AMA CPT MAAA tests but are not currently categorized as AMA CPT MAAA codes, and several specific AMA CPT test codes, are inconsistent with the current OPPS packaging policy and would result in allowing the laboratory to bill Medicare directly for a test that should be incorporated into the hospital OPPS bundled rate. CMS does not believe that all AMA CPT PLA test codes demonstrate a different pattern of clinical use that makes them less tied to the primary service in the hospital outpatient setting such that they should be included in the list of codes excepted from the OPPS packaging policy. Commenters asserted that these tests, as a group, should be excluded from OPPS packaging policy because the results of these tests may inform future interventions beyond the hospital outpatient encounter during which the specimen was collected and may be used by other health care providers to developed long-term plans for treatment. However, we are not convinced based on the commenters' descriptions of these tests that they are generally unconnected to the hospital encounter, the chief requirement for exclusion from OPPS packaging. Although commenters noted that the recommended tests may be utilized for the development of longer-term treatment plans, it is not clear that the clinical usage of these tests reaches the threshold of being “generally unconnected” to the hospital encounter.

Any addition to the list of test codes excluded from OPPS packaging requires careful evaluation as to whether a different pattern of clinical use makes a test generally less tied to a primary service in the hospital outpatient setting than the more common and routine laboratory tests that we package. For instance, as noted in the CY 2021 OPPS/ASC proposed rule (85 FR 49035), in response to the changes in the laboratory DOS policy outlined in the CY 2018 OPPS/ASC final rule with comment period, stakeholders stated that some entities performing molecular pathology testing included on the list of codes excluded from OPPS packaging and subject to the laboratory DOS exception, such as blood banks and blood centers, may perform molecular pathology testing to enable hospitals to prevent adverse conditions associated with blood transfusions, rather than perform molecular pathology testing for diagnostic purposes. This led us to consider whether the molecular pathology testing performed by blood banks and centers is appropriately separable from the hospital stay.

We do not believe all protein-based MAAAs would meet this standard for exclusion from OPPS packaging. CMS has considered expanding the list of codes excluded from OPPS packaging to Start Printed Page 85902include various additional categories of codes, including protein-based MAAAs. However, we note that some protein-based MAAAs include simple and commonly used protein analytes that may also be commonly performed to assist in managing patient care during a hospital outpatient encounter. Therefore, we believe that we cannot conclude that this category of tests is generally less tied to a primary service in the hospital outpatient setting, as some protein-based MAAA tests use common routine protein analytes that are appropriately packaged into OPPS payment. For these reasons, CMS does not believe that all protein-based MAAAs should be included in the list of codes excluded from the OPPS packaging policy.

However, we note that a protein-based MAAA that is designated by CMS as an ADLT under paragraph (1) of the definition of an ADLT in § 414.502 would be added to the list of codes excluded from OPPS packaging, in accordance with our established policy.

Comment: Commenters also recommended that we exclude a particular protein-based MAAA test described by CPT code 81490 from the OPPS packaging policy. Commenters asserted that the use of the test described by CPT code 81490 is unconnected to the hospital outpatient encounter during which the specimen is collected and that the results of the test are used to determine potential future interventions outside of the hospital outpatient encounter. Commenters stated that this test appears to be generally less tied to a primary service in the hospital outpatient setting and does not appear to be a common or routine laboratory test that would otherwise be packaged into OPPS payment.

Response: In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), we stated that we believed the results for the test described by CPT code 81490 are used to determine disease activity in rheumatoid arthritis patients, guide current therapy to reduce further joint damage, and may be tied to the primary hospital outpatient service, that is, the hospital outpatient encounter during which the specimen was collected. Therefore, we stated that we believed that payment for CPT code 81490 remains appropriately packaged under the OPPS.

However, given commenter feedback, we are convinced that the pattern of clinical use for CPT code 81490 is generally unconnected to the hospital outpatient encounter during which the specimen is collected as it is typically used to determine potential interventions outside of the hospital outpatient encounter and is generally used by the rheumatologist to make longer-term changes in RA treatment. Commenters informed us that physicians and patients utilize the objective information provided by the results of the test to make longer-term modifications in treatment, to monitor disease activity, and to prevent joint damage progression, and the results generally would not be utilized for purposes of the hospital outpatient encounter. The commenters further stated that the output of the test is used to assess disease activity, including evaluating response to therapy, directing choice of second-line treatment in patients with inadequate response to the current first line therapy, and identifying patients in stable remission for therapy reduction. The test results appear to guide longer-term therapies and treatments; therefore, we believe that this test, identified by CPT code 81490, is generally less tied to the primary service the patient receives in the hospital outpatient setting and does not appear to be a common or routine laboratory test that would otherwise be packaged into OPPS payment. Consequently, we believe that CPT code 81490 should be excluded from OPPS packaging policy.

As stated previously, we intend to continue to study the list of laboratory tests excluded from the OPPS packaging policy to determine whether any additional changes are warranted and may consider proposing future changes to this policy and the laboratory DOS policy through notice-and-comment rulemaking.

In conclusion, we continue to believe that cancer-related protein-based MAAAs, that is, those represented by CPT codes 81500, 81503, 81535, 81536 and 81539, appear to have a different pattern of clinical use that make them generally less tied to a primary service in the hospital outpatient setting than the more common and routine laboratory tests that are packaged. We also believe that, given the similarity in its clinical pattern of use to the cancer-related protein-based MAAAs, CPT code 81490 should also be added to the list of codes excluded from the OPPS packaging and subject to the laboratory DOS exception at § 414.510(b)(5), which is discussed in section III.XX in this final rule. For the reasons discussed, we are revising the list of test codes excluded from the OPPS packaging policy to include CPT codes 81500, 81503, 81535, 81536, 81539, and 81490. We are also finalizing that we will exclude cancer-related protein-based MAAAs that do not currently exist, but that are developed in the future, from the OPPS packaging policy.

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 2020 OPPS/ASC final rule with comment period (84 FR 61180 through 61182), we applied this policy and calculated the relative payment weights for each APC for CY 2020 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 website) using the APC costs discussed in sections II.A.1. and II.A.2. of that final rule with comment period. For CY 2021, as we did for CY 2020, we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2021 using geometric mean-based APC costs.

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

For CY 2016, we deleted APC 0634 and reassigned the outpatient clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and Related Services) (80 FR 70372). For CY 2021, as we did for CY 2020, we proposed to continue to standardize all of the relative payment weights to APC 5012. We believe that standardizing relative payment weights to the geometric mean of the APC to which HCPCS code G0463 is assigned maintains consistency in calculating unscaled weights that represent the cost of some of the most frequently provided OPPS services. For Start Printed Page 85903CY 2021, as we did for CY 2020, we proposed to assign APC 5012 a relative payment weight of 1.00 and to divide the geometric mean cost of each APC by the geometric mean cost for APC 5012 to derive the unscaled relative payment weight for each APC. The choice of the APC on which to standardize the relative payment weights does not affect payments made under the OPPS because we scale the weights for budget neutrality.

We note that in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59004 through 59015) and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61365 through 61369), we discuss our policy, implemented on January 1, 2019, to control for unnecessary increases in the volume of covered outpatient department services by paying for clinic visits furnished at excepted off-campus provider-based department (PBD) at a reduced rate. While the volume associated with these visits is included in the impact model, and thus used in calculating the weight scalar, the policy has a negligible effect on the scalar. Specifically, under this policy, there is no change to the relativity of the OPPS payment weights because the adjustment is made at the payment level rather than in the cost modeling. Further, under this policy, the savings that result from the change in payments for these clinic visits are not budget neutral. Therefore, the impact of this policy will generally not be reflected in the budget neutrality adjustments, whether the adjustment is to the OPPS relative weights or to the OPPS conversion factor. We note that the volume control method for clinic visit services furnished by non-excepted off-campus PBDs is subject to litigation. For a full discussion of this policy and the litigation, we refer readers to the CY 2020 OPPS/ASC final rule with comment period (84 FR 61142).

Section 1833(t)(9)(B) of the Act requires that APC reclassification and recalibration changes, wage index changes, and other adjustments be made in a budget neutral manner. Budget neutrality ensures that the estimated aggregate weight under the OPPS for CY 2021 is neither greater than nor less than the estimated aggregate weight that would have been calculated without the changes. To comply with this requirement concerning the APC changes, we proposed to compare the estimated aggregate weight using the CY 2020 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2021 unscaled relative payment weights.

For CY 2020, we multiplied the CY 2020 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2019 claims to calculate the total relative payment weight for each service. We then added together the total relative payment weight for each of these services in order to calculate an estimated aggregate weight for the year. For CY 2021, we proposed to apply the same process using the estimated CY 2021 unscaled relative payment weights rather than scaled relative payment weights. We proposed to calculate the weight scalar by dividing the CY 2020 estimated aggregate weight by the unscaled CY 2021 estimated aggregate weight.

For a detailed discussion of the weight scalar calculation, we refer readers to the OPPS claims accounting document available on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. Click on the CY 2021 OPPS proposed 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 2021 to the estimated total relative payment weights in CY 2020 using CY 2019 claims data, holding all other components of the payment system constant to isolate changes in total weight. Based on this comparison, we proposed to adjust the calculated CY 2021 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2021 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4443 to ensure that the proposed CY 2021 relative payment weights are scaled to be budget neutral. The proposed CY 2021 relative payment weights listed in Addenda A and B to the CY 2021 OPPS/ASC proposed rule (which are available via the internet on the CMS website) are scaled and incorporate the recalibration adjustments discussed in sections II.A.1. and II.A.2. of the CY 2021 OPPS/ASC proposed rule.

Section 1833(t)(14) of the Act provides the payment rates for certain SCODs. Section 1833(t)(14)(H) of the Act provides that additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years. Therefore, the cost of those SCODs (as discussed in section V.B.2. of proposed rule) is included in the budget neutrality calculations for the CY 2021 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 2021. Using updated final rule claims data, we are updating the estimated CY 2021 unscaled relative payment weights by multiplying them by a weight scalar of 1.4341 to ensure that the final CY 2021 relative payment weights are scaled to be budget neutral. The final CY 2021 relative payments weights listed in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website) were scaled and incorporate the recalibration adjustments discussed in sections II.A.1. and II.A.2. of this final rule with comment period.

B. Conversion Factor Update

Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to update the conversion factor used to determine the payment rates under the OPPS on an annual basis by applying the OPD fee schedule increase factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee schedule increase factor is equal to the hospital inpatient market basket percentage increase applicable to hospital discharges under section 1886(b)(3)(B)(iii) of the Act. In the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32738), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2019 forecast of the FY 2021 market basket increase, the proposed FY 2021 IPPS market basket update was 3.0 percent. Accordingly, we proposed a CY 2021 OPD fee schedule increase factor of 3.0 percent.

Specifically, section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and subsequent years, the OPD fee schedule increase factor under subparagraph (C)(iv) be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the “MFP adjustment”). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through 51692), we finalized our methodology for calculating and Start Printed Page 85904applying 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 2021 IPPS/LTCH PPS proposed rule (85 FR 32739), the proposed MFP adjustment for FY 2021 was 0.4 percentage point.

Therefore, we proposed that the MFP adjustment for the CY 2021 OPPS would be 0.4 percentage point. We also proposed that if more recent data become subsequently available after the publication of the CY 2021 OPPS/ASC proposed rule (for example, a more recent estimate of the market basket increase and/or the MFP adjustment), we would use such updated data, if appropriate, to determine the CY 2021 market basket update and the MFP adjustment, which are components in calculating the OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act, in the CY 2021 OPPS/ASC final rule.

We note that section 1833(t)(3)(F) of the Act provides that application of this subparagraph may result in the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act being less than 0.0 percent for a year, and may result in OPPS payment rates being less than rates for the preceding year. As described in further detail below, we proposed for CY 2021 an OPD fee schedule increase factor of 2.6 percent for the CY 2021 OPPS (which is the proposed estimate of the hospital inpatient market basket percentage increase of 3.0 percent, less the proposed 0.4 percentage point MFP adjustment).

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

The adjustment described in section 1833(t)(3)(F)(ii) was required only through 2019. The requirement in section 1833(t)(3)(F)(i) of the Act that we reduce the OPD fee schedule increase factor by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II), however, applies for 2012 and subsequent years, and thus, continues to apply. In the CY 2020 OPPS/ASC final rule with comment period, we inadvertently did not amend the regulation at 42 CFR 419.32(b)(1)(iv)(B) to reflect that the adjustment required by section 1833(t)(3)(F)(i) of the Act is the only adjustment under section 1833(t)(3)(F) that applies in CY 2020 and subsequent years. Accordingly, we proposed to amend our regulation at 42 CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (b)(1)(iv)(B)(11) to provide that, for CY 2020 and subsequent years, we reduce the OPD fee schedule increase factor by the MFP adjustment as determined by CMS.

To set the OPPS conversion factor for CY 2021, we proposed to increase the CY 2020 conversion factor of $80.793 by 2.6 percent. In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2021 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 1.0017 for wage index changes. This adjustment was comprised of a 1.0027 proposed budget neutrality adjustment, using our standard calculation of comparing proposed total estimated payments from our simulation model using the proposed FY 2021 IPPS wage indexes to those payments using the FY 2020 IPPS wage indexes, as adopted on a calendar year basis for the OPPS as well as a 0.9990 proposed budget neutrality adjustment for the proposed CY 2021 5 percent cap on wage index decreases to ensure that this transition wage index is implemented in a budget neutral manner, consistent with the proposed FY 2021 IPPS wage index policy (85 FR 32706). We stated in the proposed rule that we believed it was appropriate to ensure that the proposed wage index transition policy (that is, the proposed CY 2021 5 percent cap on wage index decreases) did not increase estimated aggregate payments under the OPPS beyond the payments that would be made without this transition policy. We proposed to calculate this budget neutrality adjustment by comparing total estimated OPPS payments using the FY 2021 IPPS wage index, adopted on a calendar year basis for the OPPS, where a 5 percent cap on wage index decreases is not applied to total estimated OPPS payments where the 5 percent cap on wage index decreases is applied. We stated in the proposed rule that these two proposed wage index budget neutrality adjustments would maintain budget neutrality for the proposed CY 2021 OPPS wage index (which, as we discuss in section II.C of the proposed rule, would use the FY 2021 IPPS post-reclassified wage index and any adjustments, including without limitation any adjustments finalized under the IPPS related to the proposed adoption of the revised OMB delineations).

We did not receive any public comments on our proposed methodology for calculating the wage index budget neutrality adjustment as discussed above. Therefore, for the reasons discussed above and in the CY 2021 OPPS/ASC proposed rule (85 FR 48801), we are finalizing our methodology for calculating the wage index budget neutrality adjustment as proposed, without modification. For CY 2021, based on updated data for this final rule with comment period, we are finalizing an overall budget neutrality factor of 1.0012 for wage index changes. This adjustment is comprised of a 1.0020 budget neutrality adjustment using our standard calculation of comparing total estimated payments from our simulation model using the final FY 2021 IPPS wage indexes to those payments using the FY 2020 IPPS wage indexes, as adopted on a calendar year basis for the OPPS, as well as a 0.9992 budget neutrality adjustment for the CY 2021 5 percent cap on wage index decreases to ensure that this transition wage index is implemented in a budget neutral manner.

For the CY 2021 OPPS, we proposed to maintain the current rural adjustment policy, as discussed in section II.E. of the CY 2021 OPPS/ASC proposed rule. Therefore, the proposed budget neutrality factor for the rural adjustment was 1.0000.

We proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act, as discussed in section II.F. of the CY 2021 OPPS/ASC proposed rule. We proposed to calculate a CY 2021 budget neutrality adjustment factor for the cancer hospital payment adjustment by comparing estimated total CY 2021 payments under section 1833(t) of the Act, including the proposed CY 2021 cancer hospital payment adjustment, to estimated CY 2021 total payments using the CY 2020 final cancer hospital payment adjustment, as required under section 1833(t)(18)(B) of the Act. The proposed CY 2021 estimated payments applying the proposed CY 2021 cancer hospital payment adjustment were the same as estimated payments applying the CY 2020 final cancer hospital payment adjustment. Therefore, we proposed to apply a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 1833(t)(18)(C), as added by section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255), we Start Printed Page 85905proposed to apply a budget neutrality factor calculated as if the proposed cancer hospital adjustment target payment-to-cost ratio was 0.90, not the 0.89 target payment-to-cost ratio we applied as stated in section II.F. of the proposed rule.

For the CY 2021 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2021 would equal approximately $783.2 million, which represented 0.93 percent of total projected CY 2021 OPPS spending. Therefore, we stated that the proposed conversion factor would be adjusted by the difference between the 0.88 percent estimate of pass-through spending for CY 2020 and the 0.93 percent estimate of proposed pass-through spending for CY 2021, resulting in a proposed decrease to the conversion factor for CY 2021 of 0.05 percent.

We also estimated a 0.85 percent upward adjustment to nondrug OPPS payment rates as a result of our payment proposal for separately payable nonpass-through drugs purchased under the 340B Program at a net rate of ASP minus 28.7 percent. Applying the proposed payment policy for drugs purchased under the 340B Program, as described in section V.B.6. of the CY 2021 OPPS/ASC proposed rule, would have resulted in an estimated reduction of approximately $427 million in separately paid OPPS drug payments. To ensure budget neutrality under the OPPS after applying this proposed payment methodology for drugs purchased under the 340B Program, we proposed to apply an offset of approximately $427 million to the OPPS conversion factor, which would result in an adjustment of 1.0085 to the OPPS conversion factor.

Proposed estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2021. We estimated for the proposed rule that outlier payments would be 1.01 percent of total OPPS payments in CY 2020; the 1.00 percent for proposed outlier payments in CY 2021 would constitute a 0.01 percent decrease in payment in CY 2021 relative to CY 2020.

For the CY 2021 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 0.6 percent (that is, the proposed OPD fee schedule increase factor of 2.6 percent further reduced by 2.0 percentage points). This would result in a proposed reduced conversion factor for CY 2021 of $82.065 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of 1.632 in the conversion factor relative to hospitals that met the requirements).

In summary, for CY 2021, we proposed to amend § 419.32 by adding a new paragraph (b)(1)(iv)(B)(11) to reflect the reductions to the OPD fee schedule increase factor that are required for CY 2020, CY 2021, and subsequent years to satisfy the statutory requirements of section 1833(t)(3)(F) of the Act. We proposed to use a reduced conversion factor of $82.065 in the calculation of payments for hospitals that fail to meet the Hospital OQR Program requirements (a difference of −1.632 in the conversion factor relative to hospitals that met the requirements).

For CY 2021, we proposed to use a conversion factor of $83.697 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the proposed OPD fee schedule increase factor of 2.6 percent for CY 2021, the required proposed wage index budget neutrality adjustment of approximately 1.0017, the proposed cancer hospital payment adjustment of 1.0000, the proposed budget neutrality adjustment of 1.0085 applying the proposed payment methodology of ASP minus 28.7 percent for CY 2021 for drugs purchased under the 340B Program, and the proposed adjustment of 0.05 percentage point of projected OPPS spending for the difference in pass-through spending that resulted in a proposed conversion factor for CY 2021 of $83.697.

Comment: One commenter suggested that we eliminate the MFP adjustment because of economic uncertainty as a result of the COVID-19 pandemic. The commenter stated that CMS rules for fiscal year 2021 had a 0.0 percent multifactor productivity adjustment.

Response: We note that under section 1886(b)(3)(B)(xi)(I) of the Act, the Secretary is required to reduce the hospital market basket percentage increase by the 10-year moving average of changes in annual economy-wide, private nonfarm business MFP.

Comment: Multiple commenters supported our proposed CY 2021 OPD fee schedule increase factor percentage increase of 2.6 percent.

Response: We appreciate the support of the commenters.

After reviewing the public comments we received, we are finalizing these proposals with modification. For CY 2021, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act (discussed in section II.F. of this final rule with comment period). Based on the final rule updated data used in calculating the cancer hospital payment adjustment in section II.F. of this final rule with comment period, the target payment-to-cost ratio for the cancer hospital payment adjustment, which was 0.89 for CY 2020, is also 0.89 for CY 2021. As a result, we are applying a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment. We are implementing our alternative proposal for CY 2021 for the payment of drugs acquired through the 340B program. Drugs obtained through the 340B program will be paid at a net rate of ASP minus 22.5 percent. This has been the payment rate for drugs acquired through the 340B program in the OPPS since the policy was initially established in CY 2018. Since there is no change in the net payment rate, the final budget neutral adjustment factor regarding the payment of drugs acquired through the 340B program is 1.0000.

For this CY 2021 OPPS/ASC final rule with comment period, as published in the FY 2021 IPPS/LTCH PPS final rule, based on IGI's 2020 second quarter forecast with historical data through the first quarter of 2020, the hospital market basket update for CY 2021 is 2.4 percent.

As described in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58797), it has typically been our practice to base the projection of the market basket price proxies and MFP for the IPPS/LTCH final rule on the second quarter IGI forecast. At the time of the FY 2021 IPPS/LTCH final rule, the 10-year moving average growth of MFP for FY 2021 based on IGI's second quarter 2020 forecast was 0.7 percentage point. However, for the FY 2021 IPPS/LTCH final rule, we finalized the use of the IGI June 2020 macroeconomic forecast for MFP because it represented a more recent forecast, and we believed it was important to use more recent data during this period when economic trends, particularly employment and labor productivity, are notably uncertain because of the COVID-19 pandemic. Based on these more recent data available for the FY 2021 IPPS/LTCH final rule, the current estimate of the 10-year moving average growth of MFP for FY 2021 was −0.1 percentage point (85 FR 58797).Start Printed Page 85906

Mechanically subtracting the negative 10-year moving average growth of MFP from the hospital market basket percentage increase using the data from the IGI June 2020 macroeconomic forecast would have resulted in a 0.1 percentage point increase in the FY 2021 market basket update. However, we explained that under section 1886(b)(3)(B)(xi)(I) of the Act, the Secretary is required to reduce (not increase) the hospital market basket percentage increase by changes in economy-wide productivity. Accordingly, we applied a 0.0 percent MFP adjustment to the FY 2021 IPPS market basket percentage increase.

Section 1833(t)(3)(F)(i) of the Act also requires us to reduce (not increase) the OPD fee schedule increase factor by the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Accordingly, we are applying a 0.0 percentage point MFP adjustment to the CY 2021 OPD fee schedule increase factor for the OPPS.

As a result of these finalized policies, the OPD fee schedule increase factor for the CY 2021 OPPS is 2.4 percent (which reflects the 2.4 percent final estimate of the hospital inpatient market basket percentage increase with a 0.0 percentage point MFP adjustment since the 10-year moving average growth in MFP was estimated to be less than 0.0 percent). For CY 2021, we are using a conversion factor of $82.797 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the OPD fee schedule increase factor of 2.4 percent for CY 2021, the required wage index budget neutrality adjustment of 1.0012, the budget neutrality adjustment of 1.0000 applying the final payment methodology for drugs purchased under the 340B Program for CY 2021 of ASP minus 22.5 percent, and the adjustment of 0.04 percentage point of projected OPPS spending for the difference in pass-through spending that results in a conversion factor for CY 2021 of $82.797.

We also are finalizing our proposal to amend the regulation at 42 CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (b)(1)(iv)(B)(11) to provide that, for CY 2020 and subsequent years, we reduce the OPD fee schedule increase factor by the MFP adjustment as determined by CMS.

C. Wage Index Changes

Section 1833(t)(2)(D) of the Act requires the Secretary to determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion of the OPPS payment rate is called the OPPS labor-related share. Budget neutrality is discussed in section II.B. of the CY 2021 OPPS/ASC proposed rule.

The OPPS labor-related share is 60 percent of the national OPPS payment. This labor-related share is based on a regression analysis that determined that, for all hospitals, approximately 60 percent of the costs of services paid under the OPPS were attributable to wage costs. We confirmed that this labor-related share for outpatient services is appropriate during our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period (70 FR 68553). We proposed to continue this policy for the CY 2021 OPPS (85 FR 48802). We referred readers to section II.H. of the CY 2021 OPPS/ASC proposed rule for a description and an example of how the wage index for a particular hospital is used to determine payment for the hospital. We did not receive any public comments on this proposal. Accordingly, for the reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we are finalizing our proposal, without modification, to continue this policy for the CY 2021 OPPS.

As discussed in the claims accounting narrative included with the supporting documentation for this final rule with comment period (which is available via the internet on the CMS website), for estimating APC costs, we are standardizing 60 percent of estimated claims costs for geographic area wage variation using the same FY 2021 pre-reclassified wage index that we use under the IPPS to standardize costs. This standardization process removes the effects of differences in area wage levels from the determination of a national unadjusted OPPS payment rate and copayment amount.

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

The Affordable Care Act contained several provisions affecting the wage index. These provisions were discussed in the CY 2012 OPPS/ASC final rule 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 CY 2021, we proposed to implement this provision in the same manner as we have since CY 2011 (85 FR 48802). Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00. Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, we stated that the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. We referred readers to the FY 2011 through FY 2020 IPPS/LTCH PPS final rules for discussions regarding this provision, including our methodology for identifying which areas meet the definition of “frontier States” as provided for in section 1886(d)(3)(E)(iii)(II) of the Act: for FY 2011, 75 FR 50160 through 50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR 53369 through 53370; for FY 2014, 78 FR 50590 through 50591; for FY 2015, 79 FR 49971; for FY 2016, 80 FR 49498; for FY 2017, 81 FR 56922; for FY 2018, 82 FR 38142; for FY 2019, 83 FR 41380; and for FY 2020, 84 FR 42312. We did not receive any public comments on this proposal. Accordingly, for the reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we are finalizing our proposal, without modification, to continue to implement the frontier State floor under the OPPS in the same manner as we have since CY 2011.

In addition to the changes required by the Affordable Care Act, we noted in the CY 2021 OPPS/ASC proposed rule (85 Start Printed Page 85907FR 48802) that the FY 2021 IPPS wage indexes continue to reflect a number of adjustments implemented in past years, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, an adjustment for occupational mix, an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment), and an adjustment to the wage index for certain low wage index hospitals to help address wage index disparities between low and high wage index hospitals. We referred readers to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32695 through 32734) for a detailed discussion of all proposed changes to the FY 2021 IPPS wage indexes.

Furthermore, as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963) and in each subsequent IPPS/LTCH PPS final rule, including the FY 2021 IPPS/LTCH PPS final rule (85 FR 58743), the Office of Management and Budget (OMB) issued revisions to the labor market area delineations on February 28, 2013 (based on 2010 Decennial Census data), that included a number of significant changes, such as new Core Based Statistical Areas (CBSAs), urban counties that became rural, rural counties that became urban, and existing CBSAs that were split apart (OMB Bulletin 13-01). This bulletin can be found at: https://obamawhitehouse.archives.gov/​sites/​default/​files/​omb/​bulletins/​2013/​b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49950 through 49985), for purposes of the IPPS, we adopted the use of the OMB statistical area delineations contained in OMB Bulletin No. 13-01, effective October 1, 2014. For purposes of the OPPS, in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66826 through 66828), we adopted the use of the OMB statistical area delineations contained in OMB Bulletin No. 13-01, effective January 1, 2015, beginning with the CY 2015 OPPS wage indexes. In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56913), we adopted revisions to statistical areas contained in OMB Bulletin No. 15-01, issued on July 15, 2015, which provided updates to and superseded OMB Bulletin No. 13-01 that was issued on February 28, 2013. For purposes of the OPPS, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79598), we adopted the revisions to the OMB statistical area delineations contained in OMB Bulletin No. 15-01, effective January 1, 2017, beginning with the CY 2017 OPPS wage indexes.

On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which provided updates to and superseded OMB Bulletin No. 15-01 that was issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01 provided detailed information on the update to the statistical areas since July 15, 2015, and were based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2014 and July 1, 2015. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58863 through 58865), we adopted the updates set forth in OMB Bulletin No. 17-01, effective January 1, 2019, beginning with the CY 2019 wage index.

On April 10, 2018 OMB issued OMB Bulletin No. 18-03 which superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14, 2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10, 2018 OMB Bulletin No. 18-03. Typically, interim OMB bulletins (those issued between decennial censuses) have only contained minor modifications to labor market delineations. However, as we stated in the FY 2021 IPPS/LTCH PPS proposed and final rules (85 FR 32696 through 32697 and 58743), the April 10, 2018 OMB Bulletin No. 18-03 and the September 14, 2018 OMB Bulletin No. 18-04 included more modifications to the labor market areas than are typical for OMB bulletins issued between decennial censuses, including some material modifications that have a number of downstream effects, such as IPPS hospital reclassification changes. These bulletins established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, and provided guidance on the use of the delineations of these statistical areas. A copy of OMB Bulletin No. 18-04 may be obtained at https://www.whitehouse.gov/​wpcontent/​uploads/​2018/​09/​Bulletin-18-04.pdf. According to OMB, “[t]his bulletin provides the delineations of all Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, and New England City and Town Areas in the United States and Puerto Rico based on the standards published on June 28, 2010 (75 FR 37246), and Census Bureau data.”

As noted previously, while OMB Bulletin No. 18-04 is not based on new census data, it includes some material changes to the OMB statistical area delineations. Specifically, as we stated in the CY 2021 OPPS/ASC proposed rule (85 FR 48803), under the revised OMB delineations, there would be some new CBSAs, urban counties that would become rural, rural counties that would become urban, and some existing CBSAs that would be split apart. In addition, we stated in the FY 2021 IPPS/LTCH PPS proposed rule that the revised OMB delineations would affect various hospital reclassifications, the outmigration adjustment (established by section 505 of Pub. L. 108-173), and treatment of hospitals located in certain rural counties (that is, “Lugar” hospitals) under section 1886(d)(8)(B) of the Act. In the CY 2021 OPPS/ASC proposed rule, we referred readers to the FY 2021 IPPS/LTCH PPS proposed rule for a complete discussion of the revised OMB delineations we proposed to adopt under the IPPS and the effects of these revisions on the FY 2021 IPPS wage indexes (85 FR 32696 through 32707, 32717 through 32728). We stated in the FY 2021 IPPS/LTCH PPS proposed rule that we believe using the revised delineations based on OMB Bulletin No. 18-04 would increase the integrity of the IPPS wage index system by creating a more accurate representation of geographic variations in wage levels. Therefore, in the FY 2021 IPPS/LTCH PPS proposed rule, we proposed to implement the revised OMB delineations as described in the September 14, 2018 OMB Bulletin No. 18-04, effective October 1, 2020 beginning with the FY 2021 IPPS wage index. In addition, in the FY 2021 IPPS/LTCH PPS proposed rule, we proposed to apply a 5 percent cap for FY 2021 on any decrease in a hospital's final wage index from the hospital's final wage index for FY 2020 as a proposed transition wage index to help mitigate any significant negative impacts of adopting the revised OMB delineations (85 FR 32706 through 32707). As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58742 through 58755), as we proposed, we adopted the revised OMB delineations as described in the September 14, 2018 OMB Bulletin No. 18-04, effective October 1, 2020 beginning with the FY 2021 IPPS wage index and a 5 percent cap for FY 2021 on any decrease in a hospital's final wage index from the hospital's final wage index for FY 2020.

As further discussed below, in the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we proposed to use the FY 2021 IPPS post-reclassified wage index including the updated OMB delineations and related IPPS wage index adjustments to calculate the CY 2021 OPPS wage indexes. Similar to our discussion in the FY 2021 IPPS/LTCH PPS proposed rule, we stated in the CY Start Printed Page 859082021 OPPS/ASC proposed rule that we believe using the revised delineations based on OMB Bulletin No. 18-04 would increase the integrity of the OPPS wage index system by creating a more accurate representation of geographic variations in wage levels.

A summary of the comments we received regarding the updated OMB delineations and our responses to those comments appear below:

Comment: One commenter supported our proposed adoption of the revised OMB delineations, but several commenters opposed our proposed implementation of the revised OMB delineations. These commenters stated that CMS is not bound to adopt the revised delineations, and suggested that CMS delay adoption of the revised delineations until the completion of the 2020 decennial census. Several comments specifically cited the lack of advance notice and the significant negative financial impacts to hospitals in several counties in the New York-Newark-Jersey City MSA resulting from the adoption of the revised delineations. Additional commenters recommended that CMS engage further with stakeholders to develop more comprehensive wage index reform to address the disparities that exist within the current wage index system.

Response: We appreciate these comments. We refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58744 through 58753) for a detailed discussion of the implementation of the revised OMB delineations and for responses to these and other comments relating to the revised delineations.

Consistent with our longstanding policy, we proposed in the CY 2021 OPPS/ASC proposed rule (85 FR 48803) to use the FY 2021 IPPS post-reclassified wage index, which is based on the updated statistical area delineations set forth in OMB Bulletin No. 18-04, in determining the wage adjustments for both the OPPS payment and copayment rates for CY 2021. Thus, as discussed in the CY 2021 OPPS/ASC proposed rule (85 FR 48803), any adjustments for the FY 2021 IPPS post-reclassified wage index, including without limitation a one year 5 percent cap on any wage index decrease, would be reflected in the final CY 2021 OPPS wage index beginning on January 1, 2021. As we explained in the CY 2021 OPPS/ASC proposed rule, we continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical given the inseparable, subordinate status of the HOPD within the hospital overall. For this reason, as discussed later in this section, we are finalizing our proposal to use the FY 2021 IPPS post-reclassified wage index and applicable IPPS wage index adjustments in determining the wage adjustments for both the OPPS payment rate and the copayment rates for CY 2021. As noted above, in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58742 through 58755), for purposes of calculating the IPPS wage index, we adopted the revised OMB delineations as described in OMB Bulletin No. 18-04 effective October 1, 2020. Thus, effective January 1, 2021, the OPPS wage index also will be based on these updated OMB delineations. As we explained in the CY 2021 OPPS/ASC proposed rule, we believe using the revised delineations based on OMB Bulletin No. 18-04 will increase the integrity of the wage index system by creating a more accurate representation of geographic variations in wage levels.

We concur with commenters that CMS is not bound by statute to use the OMB definitions in calculating the OPPS wage index. However, we believe we have broad authority under section 1833(t)(2)(D) of the Act to determine the methodology for calculating the OPPS wage index, including the labor market areas used for the OPPS wage index. As discussed above, we believe using the IPPS post-reclassified wage index, which is based on the revised OMB delineations, in determining the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021 is reasonable and logical given the inseparable, subordinate status of the HOPD within the hospital overall. In addition, consistent with our discussion in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58745), we believe it is important to use the updated labor market area delineations in order to maintain a more accurate and up-to-date payment system that reflects the reality of current labor market conditions. In response to comments citing a lack of advance notice provided to hospitals regarding the proposed adoption of the revised delineations, as we stated in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58746), the delineation files produced by OMB have been public for nearly 2 years, and OMB definitions and criteria are subject to separate notice and comment rulemaking. Finally, we note that to help mitigate significant negative impacts of the revised OMB delineations, consistent with the FY 2021 IPPS wage index, the CY 2021 OPPS wage index will reflect a 5 percent cap on any wage index decrease compared to a hospital's final CY 2020 wage index. For these reasons, we do not believe it is necessary or appropriate to delay or alter implementation of the revised delineations.

In response to commenters who recommended that CMS engage further with stakeholders to develop a more comprehensive wage index reform to address wage index disparities, we appreciate the continued interest in wage index reform. As we noted in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58745), as a first step toward comprehensive wage index reform, the FY 2021 President's Budget proposes the Secretary conduct and report on a demonstration to improve the Medicare inpatient hospital wage index.

After consideration of the public comments we received, for the reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we are finalizing, without modification, our proposal to adopt the revised OMB delineations as described in the September 14, 2018 OMB Bulletin No. 18-04, and related IPPS wage index adjustments to calculate the CY 2021 OPPS wage index effective beginning January 1, 2021.

CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. The FY 2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different lists of codes to identify counties: Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS wage indexes. However, the SSA county codes are no longer being maintained and updated, although the FIPS codes continue to be maintained by the U.S. Census Bureau. The Census Bureau's most current statistical area information is derived from ongoing census data received since 2010; the most recent data are from 2015. The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the website at: https://www.census.gov/​geo/​reference/​county-changes.html (which, as of May 6, 2019, migrated to: https://www.census.gov/​programs-surveys/​geography.html). In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking counties to CBSAs for the IPPS wage index, we finalized our proposal to discontinue the use of the SSA county codes and begin using only the FIPS county codes. Similarly, for the purposes of crosswalking counties to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59260), we finalized our proposal to discontinue Start Printed Page 85909the use of SSA county codes and begin using only the FIPS county codes. For CY 2021, under the OPPS, we are continuing to use only the FIPS county codes for purposes of crosswalking counties to CBSAs.

In the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we proposed to use the FY 2021 IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021. Therefore, we stated that any adjustments for the FY 2021 IPPS post-reclassified wage index, including, but not limited to, any adjustments that we may finalize related to the proposed adoption of the revised OMB delineations (such as a cap on wage index decreases and revisions to hospital reclassifications), would be reflected in the final CY 2021 OPPS wage index beginning on January 1, 2021. (In the proposed rule, we referred readers to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32695 through 32734) and the proposed FY 2021 hospital wage index files posted on the CMS website.) With regard to budget neutrality for the CY 2021 OPPS wage index, in the proposed rule, we referred readers to section II.B. of the CY 2021 OPPS/ASC proposed rule. We stated that we continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.

We received comments regarding certain adjustments included in the FY 2021 IPPS post-reclassified wage index (which would be reflected in the CY 2021 OPPS wage index). A summary of those comments and our responses appear below:

Comment: Some commenters, while opposing the proposed adoption of revised OMB delineations, generally supported the concept of the 5 percent cap on any wage index decrease for FY 2021 (if the delineations are finalized). Some commenters requested that CMS reduce the amount of potential reduction in FY 2021, and extend transition adjustments to affected hospitals in future years. Other commenters suggested a multiple year transition period. One commenter requested that we apply the 5 percent cap policy to wage index increases as well.

Response: We thank the commenters for their suggestions. We refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 85753 through 58755) for a detailed discussion of our rationale for adopting a one year 5 percent cap on any wage index decrease and for responses to these and other comments regarding this transition wage index.

As discussed previously, in the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we proposed to use the FY 2021 IPPS post-reclassified wage index, including any adjustments such as the one year 5 percent cap on wage index decreases, as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021. We continue to believe that using the IPPS post-reclassified wage index, including any adjustments, 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, and thus, as discussed below, we are finalizing this proposal without modification.

In response to the commenter that requested we also apply the 5 percent cap to wage index increases, we note that as we explained in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58753 through 58755), the purpose of the 5 percent cap is to mitigate significant wage index decreases and provide wage index stability for affected hospitals in light of our adoption of the revised OMB delineations. The purpose of the 5 percent cap is not to curtail the positive impact of such revisions. Thus, we do not think it would be appropriate to apply the cap to wage index increases as well.

Comments: Many commenters thanked CMS for implementing the IPPS low wage index hospital policy (pursuant to which CMS increases the IPPS wage index for certain low wage index hospitals) beginning in FY 2020 in response to rural and other health care stakeholders' requests that CMS address “circularity” in the wage index (the cyclical effect of hospitals with relatively high wages receiving higher reimbursement due to relatively high wage indexes, which allows them to afford paying higher wages) and halt the “death spiral” perpetuating wage index disparities where relatively low wage index hospitals are forced to keep wages low due to low Medicare reimbursements that lag behind areas with higher wage indexes.

Other commenters opposed continuing the low wage index hospital policy in FY 2021. The commenters stated that the policy fails to recognize the legitimate differences in geographic labor markets. Commenters also noted that there is no requirement for hospitals to use the increased reimbursement to boost employee compensation, and suggested CMS begin evaluating the cost report data filed by hospitals in the lowest quartile to ascertain whether the increased funds are being used to raise employee compensation in deciding whether to continue this policy for FY 2022. Some commenters stated that the data lag CMS described in its rationale applies equally to all hospitals, not only those in the lowest quartile. Commenters questioned CMS's statutory authority to promulgate this IPPS policy under 42 U.S.C. 1395ww(d)(3)(E), which requires the agency to adjust payments to reflect area differences in wages, because it artificially inflates wage index values and creates a wage index system not based on actual data. These commenters stated that CMS is using the wage index as a policy vehicle, not as a technical correction, and needs Congressional authority to provide additional funding to low-wage hospitals.

Response: We appreciate the many comments we received regarding our policy to provide an increase in the IPPS wage index beginning in FY 2020 for hospitals with wage index values below the 25th percentile wage index value for a year (referred to as the low wage index hospital policy). We note that we did not propose or finalize any changes to this policy in the FY 2021 IPPS/LTCH PPS proposed and final rules. We refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42326 through 42332) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58765 through 58768) for a detailed discussion of the IPPS low wage index hospital policy and for responses to these and other comments regarding this policy. In the CY 2021 OPPS/ASC proposed rule (85 FR 48803), we proposed to use the FY 2021 IPPS post-reclassified wage index including any adjustments, such as the IPPS low wage index hospital policy, as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021. We continue to believe that using the IPPS post-reclassified wage index, including any adjustments, 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, and thus, as discussed below, we are finalizing this proposal without modification.

Comment: Many commenters supported increasing the wage index values of low-wage hospitals, but suggested that CMS do so in a non-budget-neutral manner. Commenters stated that this redistribution is counterproductive to CMS's larger goals Start Printed Page 85910of high quality care and healthcare access because it forces high-wage, mostly urban hospitals to bear the cost of supporting lower-wage hospitals. Commenters stated that the budget neutrality adjustment penalizes many hospitals, including rural hospitals. Other commenters requested that CMS ensure that the budget neutrality adjustment factor not apply to hospitals falling below the 25th percentile.

Response: We refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42328 through 42332) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58765 through 58768) for a detailed discussion of the budget neutrality adjustment for the IPPS low wage index hospital policy and for responses to these and other comments regarding this adjustment.

We refer readers to section II.B. of this final rule with comment period for a discussion of the OPPS wage index budget neutrality adjustment.

Comment: Many commenters recommended that CMS develop a comprehensive, long-term approach to wage index reform in place of the low wage index hospital policy finalized in the FY 2020 IPPS/LTCH PPS final rule. Two commenters suggested alternative solutions to address wage index disparities, including a national wage index floor for all hospitals. Other commenters recommended that CMS proactively address the effects of COVID-19, which the commenters believed would exacerbate wage index disparities, by excluding wage data collected during the public health emergency from future wage index calculations.

Response: We appreciate the commenters' suggested alternatives. We received similar comments in response to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 58767 through 58768). In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58768), we stated that we considered these comments to be outside the scope of the FY 2021 IPPS/LTCH PPS proposed rule, and thus we did not address them in that final rule but stated that we may consider them in future rulemaking. Similarly, we consider these comments to be outside the scope of the CY 2021 OPPS/ASC proposed rule and thus are not addressing them in this final rule with comment period.

Comment: Multiple commenters specifically supported CMS's continuation of the policy, adopted in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through 42336), to exclude the wage data of urban hospitals that reclassify to rural when calculating each state's rural floor. Commenters stated that the change to the calculation of the rural floor limits the ability of hospitals to game the system and supports the overall goal of making the wage index reflective of variances in labor markets.

Response: We appreciate the commenters' support of our policy to exclude the wage data of hospitals reclassified under § 412.103 from the IPPS rural floor calculation. As stated in the FY 2020 IPPS/LTCH PPS final rule, we believe this policy is necessary and appropriate to address the unanticipated effects of rural reclassifications on the rural floor and the resulting wage index disparities, including the effects of the manipulation of the rural floor by certain hospitals (84 FR 42333 through 42336). We refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through 42336) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58768) for a detailed discussion of this policy and for responses to these and other comments regarding this policy.

Comment: One commenter supported our proposals regarding the wage index and requested that we carry over policies from the IPPS to the OPPS to ensure consistency in hospital payments.

Response: We appreciate the commenter's support of our proposals regarding the wage index. As we discuss below, we are finalizing our proposal to use the FY 2021 IPPS post-reclassified wage index for urban and rural areas (including any applicable adjustments for the FY 2021 IPPS post-reclassified wage index), as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021.

After consideration of the comments received, for the reasons discussed in this final rule with comment period and in the CY 2021 OPPS/ASC proposed rule, we are finalizing, without modification, our proposal to use the FY 2021 IPPS post-reclassified wage index for urban and rural areas, based on the revised OMB delineations set forth in OMB Bulletin No. 18-04, as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment rate for CY 2021. Therefore, any applicable adjustments for the FY 2021 IPPS post-reclassified wage index (including, but not limited to, the low wage index hospital policy, the one year 5 percent cap on wage index decreases, the rural floor, and the frontier State floor) will be reflected in the final CY 2021 OPPS wage index beginning on January 1, 2021. We continue to believe that using the IPPS post-reclassified wage index as the source of an adjustment factor for the OPPS is reasonable and logical given the inseparable, subordinate status of the HOPD within the hospital overall.

Hospitals that are paid under the OPPS, but not under the IPPS, do not have an assigned hospital wage index under the IPPS. Therefore, for non-IPPS hospitals paid under the OPPS, it is our longstanding policy to assign the wage index that would be applicable if the hospital was paid under the IPPS, based on its geographic location and any applicable wage index adjustments. In the CY 2021 OPPS/ASC proposed rule, we proposed to continue this policy for CY 2021, and included a brief summary of the major FY 2021 IPPS wage index policies and adjustments that we proposed to apply to these hospitals under the OPPS for CY 2021, which we have summarized below. We referred readers to the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32695 through 32734) for a detailed discussion of the proposed changes to the FY 2021 IPPS wage indexes.

It has been our longstanding policy to allow non-IPPS hospitals paid under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration county (section 505 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)). Applying this adjustment is consistent with our policy of adopting IPPS wage index policies for hospitals paid under the OPPS. We note that, because non-IPPS hospitals cannot reclassify, they are eligible for the out-migration wage index adjustment if they are located in a section 505 out-migration county. This is the same out-migration adjustment policy that applies if the hospital were paid under the IPPS. For CY 2021, we proposed to continue our policy of allowing non-IPPS hospitals paid under the OPPS to qualify for the outmigration adjustment if they are located in a section 505 out-migration county (section 505 of the MMA). Furthermore, we stated in the proposed rule that the wage index that would apply for CY 2021 to non-IPPS hospitals paid under the OPPS would continue to include the rural floor adjustment and adjustments to the wage index finalized in the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities (84 FR 42325 through 42337). In addition, we proposed that the wage index that would apply to non-IPPS hospitals paid under the OPPS would include any adjustments we may finalize for the FY 2021 IPPS post-reclassified wage index related to the adoption of the revised OMB delineations, as discussed in the CY 2021 OPPS/ASC proposed rule. We did not receive any public comments on these proposals. Accordingly, for the Start Printed Page 85911reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we are finalizing these proposals, without modification.

For CMHCs, for CY 2021, 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. We also proposed that the wage index that would apply to CMHCs would include any adjustments we may finalize for the FY 2021 IPPS post-reclassified wage index related to the adoption of the revised OMB delineations, as discussed in the CY 2021 OPPS/ASC proposed rule. In addition, we proposed that the wage index that would apply to CMHCs for CY 2021 would continue to include the rural floor adjustment and adjustments to the wage index finalized in the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities. Also, we proposed that the wage index that would apply to CMHCs would not include the outmigration adjustment because that adjustment only applies to hospitals. We did not receive any public comments on these proposals. Therefore, for the reasons discussed above and in the CY 2021 OPPS/ASC proposed rule, we are finalizing these proposals without modification.

Table 4A associated with the FY 2021 IPPS/LTCH PPS final rule (available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index) identifies counties eligible for the out-migration adjustment. Table 2 associated with the FY 2021 IPPS/LTCH PPS final rule (available for download via the website above) identifies IPPS hospitals that receive the out-migration adjustment for FY 2021. We are including the outmigration adjustment information from Table 2 associated with the FY 2021 IPPS/LTCH PPS final rule as Addendum L to this CY 2021 OPPS/ASC final rule with comment period with the addition of non-IPPS hospitals that will receive the section 505 outmigration adjustment under this CY 2021 OPPS/ASC final rule with comment period. Addendum L is available via the internet on the CMS website. We refer readers to the CMS website for the OPPS at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index. At this link, readers will find a link to the final FY 2021 IPPS wage index tables and Addendum L.

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

In addition to using CCRs to estimate costs from charges on claims for ratesetting, we use overall hospital-specific CCRs calculated from the hospital's most recent cost report to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS during the PPS year. For certain hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii), we use the statewide average default CCRs to determine the payments mentioned earlier if it is not possible to determine an accurate CCR for a hospital in certain circumstances. This includes hospitals that are new, hospitals that have not accepted assignment of an existing hospital's provider agreement, and hospitals that have not yet submitted a cost report. We also use the statewide average default CCRs to determine payments for hospitals whose CCR falls outside the predetermined ceiling threshold for a valid CCR or for hospitals in which the most recent cost report reflects an all-inclusive rate status (Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section 10.11).

We discussed our policy for using default CCRs, including setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599) in the context of our adoption of an outlier reconciliation policy for cost reports beginning on or after January 1, 2009. For details on our process for calculating the statewide average CCRs, we refer readers to the CY 2021 OPPS proposed rule Claims Accounting Narrative that is posted on our website. We proposed to update the default ratios for CY 2021 using the most recent cost report data. We stated that we would update these ratios in this final rule with comment period if more recent cost report data are available.

We are no longer publishing a table in the Federal Register containing the statewide average CCRs in the annual OPPS proposed rule and final rule with comment period. These CCRs with the upper limit will be available for download with each OPPS CY proposed rule and final rule on the CMS website. We refer readers to our website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.html; click on the link on the left of the page titled “Hospital Outpatient Regulations and Notices” and then select the relevant regulation to download the statewide CCRs and upper limit in the Downloads section of the web page.

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 2021 OPPS relative payment weights. Therefore, we are finalizing our proposal without modification.

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 2021

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

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

This adjustment for rural SCHs is budget neutral and applied before calculating outlier payments and Start Printed Page 85912copayments. 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 2020. Further, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated the regulations at § 419.43(g)(4) to specify, in general terms, that items paid at charges adjusted to costs by application of a hospital-specific CCR are excluded from the 7.1 percent payment adjustment.

For CY 2021, we proposed to continue the current policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy.

Comment: Multiple commenters supported the proposal to continue the 7.1 percent payment adjustment.

Response: We appreciate the commenters' support.

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

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

Comment: One commenter requested that CMS expand the payment adjustment for rural SCHs and EACHs to additional types of hospitals. The commenter requested that the payment adjustment apply to include urban SCHs because, according to the commenter, urban SCHs care for patient populations similar to rural SCHs and EACHs, face similar financial challenges to rural SCHs and EACHs, and act as safety net providers for rural areas despite their designation as urban providers. The same commenter requested that the payment adjustment also apply to Medicare-dependent hospitals (MDHs) because, according to the commenter, these hospitals face similar financial challenges to rural SCHs and EACHs, and MDHs play a similar safety net role to rural SCHs and EACHs, especially for Medicare. The commenter asked that CMS study whether it would be appropriate to provide a payment adjustment to MDHs that is similar to the current adjustment for rural SCHs.

Response: We thank the commenters for their comments. The analysis we did to compare costs of urban providers to those of rural providers did not support an add-on adjustment for providers other than rural SCHs and EACHs. In addition, section 1833(t)(13)(B) of the Act authorizes an adjustment for rural hospitals only. Accordingly, we do not believe we have a basis to expand the payment adjustment to any providers other than rural SCHs and EACHs under our authority at section 1833(t)(13)(B) of the Act.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue the current policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs.

F. Payment Adjustment for Certain Cancer Hospitals for CY 2021

1. Background

Since the inception of the OPPS, which was authorized by the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid the 11 hospitals that meet the criteria for cancer hospitals identified in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered outpatient hospital services. These cancer hospitals are exempted from payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), the Congress 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 Start Printed Page 85913hospitals 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 was 0.90. 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 79604). For CY 2018, the target PCR was 0.88, as discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59265 through 59266). For CY 2019, the target PCR was 0.88, as discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58871 through 58873). For CY 2020, the target PCR was 0.89, as discussed in the CY 2020 OPPS/ASC final rule with comment period (83 FR 61190 through 61192).

2. Policy for CY 2021

Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255) amended section 1833(t)(18) of the Act by adding subparagraph (C), which requires that in applying § 419.43(i) (that is, the payment adjustment for certain cancer hospitals) for services furnished on or after January 1, 2018, the target PCR adjustment be reduced by 1.0 percentage point less than what would otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act.

We proposed to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's final PCR is equal to the weighted average PCR (or “target PCR”) for the other OPPS hospitals, using the most recent submitted or settled cost report data that were available at the time of the development of the proposed rule, reduced by 1.0 percentage point, to comply with section 16002(b) of the 21st Century Cures Act.

We did not propose an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) for CY 2021. To calculate the proposed CY 2021 target PCR, we used the same extract of cost report data from HCRIS, as discussed in section II.A. of this CY 2021 OPPS/ASC proposed rule, used to estimate costs for the CY 2021 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 2019 claims data that we used to model the impact of the proposed CY 2021 APC relative payment weights (3,527 hospitals) because it is appropriate to use the same set of hospitals that are being used to calibrate the modeled CY 2021 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2014 to 2019. We then removed the cost report data of the 49 hospitals located in Puerto Rico from our dataset because we did not believe their cost structure reflected the costs of most hospitals paid under the OPPS, and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 14 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,464 hospitals with cost report data.

Using this smaller dataset of cost report data, we estimate 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.

We did not receive any public comments on our proposals. Therefore, we are finalizing our proposed cancer hospital payment adjustment methodology without modification. For this final rule with comment period, we are using the most recent cost report data through June 30, 2020 to update the adjustment. This update yields a target PCR of 0.90. We limited the dataset to the hospitals with CY 2019 claims data that we used to model the impact of the CY 2021 APC relative payment weights (3,555 hospitals) because it is appropriate to use the same set of hospitals that we are using to calibrate the modeled CY 2021 OPPS. The cost report data for the hospitals in the dataset were from cost report periods with fiscal year ends ranging from 2014 to 2019. We then removed the cost report data of the 47 hospitals located in Puerto Rico from our dataset because we do not believe their cost structure reflects the cost 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 report 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 3,494 hospitals with cost report data.

Using this smaller dataset of cost report data, we estimated a target PCR of 0.90. Therefore, after applying the 1.0 percentage point reduction as required by section 1602(b) of the 21st Century Start Printed Page 85914Cures Act, we are finalizing that the payment amount associated with the cancer hospital adjustment to be determined at cost report settlement will be the additional payment needed to result in a PCR equal to 0.89 for each cancer hospital.

Table 5 shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2021, due to the cancer hospital payment adjustment policy. The actual amount of the CY 2021 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2021 payments and costs. We note that the requirements contained in section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs will be assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period.

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 2020, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times (the multiplier threshold) the APC payment amount and exceeded the APC payment amount plus $5,075 (the fixed-dollar amount threshold) (84 FR 61192 through 61194). 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 2019 OPPS payments, using CY 2019 claims available for the CY 2021 OPPS/ASC proposed rule, was approximately 1.0 percent of the total aggregated OPPS payments. Therefore, for CY 2019, we estimated that we paid the outlier target of 1.0 percent of total aggregated OPPS payments. Using an updated claims dataset for this CY 2021 OPPS/ASC final rule, we estimate that we paid approximately 0.97 percent of the total aggregated OPPS payments in outliers for CY 2019.

For the CY 2021 OPPS/ASC proposed rule, using CY 2019 claims data and CY Start Printed Page 859152020 payment rates, we estimated that the aggregate outlier payments for CY 2020 would be approximately 1.01 percent of the total CY 2020 OPPS payments. We provided estimated CY 2021 outlier payments for hospitals and CMHCs with claims included in the claims data that we used to model impacts in the Hospital-Specific Impacts—Provider-Specific Data file on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html.

2. Outlier Calculation for CY 2021

In the CY 2021 OPPS/ASC proposed rule (85 FR 48807 through 48808), for CY 2021, 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 CY 2021 OPPS/ASC 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.C. of the CY 2021 OPPS/ASC proposed rule and this final rule with comment period.

To ensure that the estimated CY 2021 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 $5,300.

We calculated the proposed fixed-dollar threshold of $5,300 using the standard methodology most recently used for CY 2020 (84 FR 61192 through 61194). For purposes of estimating outlier payments for the proposed rule, we used the hospital-specific overall ancillary CCRs available in the April 2020 update to the Outpatient Provider-Specific File (OPSF). The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we use to model each OPPS update lag by 2 years.

In order to estimate the CY 2021 hospital outlier payments for the proposed rule, we inflated the charges on the CY 2019 claims using the same inflation factor of 1.131096 that we used to estimate the IPPS fixed-dollar outlier threshold for the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32908). We used an inflation factor of 1.06353 to estimate CY 2020 charges from the CY 2019 charges reported on CY 2019 claims. The methodology for determining this charge inflation factor is discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42626 through 42630). 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 is 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 2021 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2021 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2021, we proposed to apply an adjustment factor of 0.975271 to the CCRs that were in the April 2020 OPSF to trend them forward from CY 2020 to CY 2021. The methodology for calculating the proposed adjustment is discussed in the FY 2021 IPPS/LTCH PPS proposed rule (85 FR 32908 through 32909).

To model hospital outlier payments for the proposed rule, we applied the overall CCRs from the April 2020 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 0.97571 to approximate CY 2021 CCRs) to charges on CY 2019 claims that were adjusted (using the proposed charge inflation factor of 1.131096 to approximate CY 2021 charges). We simulated aggregated CY 2021 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiplier threshold constant and assuming that outlier payments would continue to be made at 50 percent of the amount by which the cost of furnishing the service would exceed 1.75 times the APC payment amount, until the total outlier payments equaled 1.0 percent of aggregated estimated total CY 2021 OPPS payments. We estimated that a proposed fixed-dollar threshold of $5,300, 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, as we proposed, we are continuing the policy that we implemented in CY 2010 that the hospitals' costs will be compared to the reduced payments for purposes of outlier eligibility and payment calculation. For more information on the Hospital OQR Program, we refer readers to section XIV. of this CY 2021 OPPS/ASC final rule with comment period.

We received no public comments on our proposal. Therefore, we are finalizing our proposal, without modification, to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS and to use our established methodology to set the OPPS outlier fixed-dollar loss threshold for CY 2021.

3. Final Outlier Calculation

Consistent with historical practice, we used updated data for this final rule with comment period for outlier calculations. For CY 2021, we are Start Printed Page 85916applying the overall CCRs from the October 2020 OPSF file after adjustment (using the CCR inflation adjustment factor of 0.974495 to approximate CY 2021 CCRs) to charges on CY 2019 claims that were adjusted using a charge inflation factor of 1.13218 to approximate CY 2021 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-dollar threshold for the FY 2021 IPPS/LTCH PPS final rule (85 FR 59039 through 59040). We simulated aggregated CY 2021 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 2021 OPPS payments. We estimated that a fixed-dollar threshold of $5,300 combined with the multiple-threshold of 1.75 times the APC payment rate, will allocate the 1.0 percent of aggregated total OPPS payments to outlier payments.

For CMHCs, if a CMHC's cost for partial hospitalization 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 2021 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 website) and for most HCPCS codes to which separate payment under the OPPS has been assigned in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) was calculated by multiplying the final CY 2021 scaled weight for the APC by the CY 2021 conversion factor.

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

We demonstrate the steps used to determine the APC payments that will be made in a CY under the OPPS to a hospital that fulfills the Hospital OQR Program requirements and to a hospital that fails to meet the Hospital OQR Program requirements for a service that has any of the following status indicator assignments: “J1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “Q4”, “R”, “S”, “T”, “U”, or “V” (as defined in Addendum D1 to the final rule, which is available via the internet on the CMS website), in a circumstance in which the multiple procedure discount does not apply, the procedure is not bilateral, and conditionally packaged services (status indicator of “Q1” and “Q2”) qualify for separate payment. We noted 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 website) should follow the formulas presented in the following steps. For purposes of the payment calculations below, we refer to the national unadjusted payment rate for hospitals that meet the requirements of the Hospital OQR Program as the “full” national unadjusted payment rate. We refer to the national unadjusted payment rate for hospitals that fail to meet the requirements of the Hospital OQR Program as the “reduced” national unadjusted payment rate. The reduced national unadjusted payment rate is calculated by multiplying the reporting ratio of 0.9805 times the “full” national unadjusted payment rate. The national unadjusted payment rate used in the calculations below is either the full national unadjusted payment rate or the reduced national unadjusted payment rate, depending on whether the hospital met its Hospital OQR Program requirements to receive the full CY 2021 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, for the CY 2021 OPPS wage index, we are adopting the updated OMB delineations based on OMB Bulletin No. 18-04 and any related IPPS wage index adjustments that were finalized in the FY 2021 IPPS/LTCH PPS final rule, 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 2021 under the IPPS, reclassifications through the Medicare Geographic Classification Review Board (MGCRB), section 1886(d)(8)(B) “Lugar” hospitals, and reclassifications under section 1886(d)(8)(E) of the Act, as implemented in § 412.103 of the regulations. We also are continuing to apply for the CY 2021 Start Printed Page 85917OPPS wage index any other adjustments for the FY 2021 IPPS post-reclassified wage index, including, but not limited to, the rural floor adjustment, a wage index floor of 1.00 in frontier states, in accordance with section 10324 of the Affordable Care Act of 2010, and an adjustment to the wage index for certain low wage index hospitals. For further discussion of the wage index we are applying for the CY 2021 OPPS, we refer readers to section II.C. of this final rule with comment period.

Step 3. Adjust the wage index of hospitals located in certain qualifying counties that have a relatively high percentage of hospital employees who reside in the county, but who work in a different county with a higher wage index, in accordance with section 505 of Public Law 108-173. Addendum L to this final rule with comment period (which is available via the internet on the CMS website) contains the qualifying counties and the associated wage index increase developed for the final FY 2021 IPPS wage index, which are listed in Table 2 associated with the FY 2021 IPPS/LTCH PPS final rule and available via the internet on the CMS website at: http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​AcuteInpatientPPS/​index.html. (Click on the link on the left side of the screen titled “FY 2021 IPPS Final Rule Home Page” and select “FY 2021 Final Rule Tables.”) This step is to be followed only if the hospital is not reclassified or redesignated under section 1886(d)(8) or section 1886(d)(10) of the Act.

Step 4. Multiply the applicable wage index determined under Steps 2 and 3 by the amount determined under Step 1 that represents the labor-related portion of the national unadjusted payment rate.

The formula below is a mathematical representation of Step 4 and adjusts the labor-related portion of the national unadjusted payment rate for the specific service by the wage index.

Xais the labor-related portion of the national unadjusted payment rate (wage adjusted).

Xa = .60 * (national unadjusted payment rate) * applicable wage index.

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

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

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

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

Adjusted Medicare Payment = Y + Xa.

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

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

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

We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that will apply to certain outpatient items and services performed by hospitals that meet and that fail to meet the Hospital OQR Program requirements, using the steps outlined previously. For purposes of this example, we are using a provider that is located in Brooklyn, New York that is assigned to CBSA 35614. This provider bills one service that is assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). The final CY 2021 full national unadjusted payment rate for APC 5071 is $621.97. The reduced national unadjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is $609.84. This reduced rate is calculated by multiplying the reporting ratio of 0.9805 by the full unadjusted payment rate for APC 5071.

The final FY 2021 wage index for a provider located in CBSA 35614 in New York, which includes the adoption of IPPS 2021 wage index policies, is 1.3468. The labor-related portion of the final full national unadjusted payment is approximately $502.60 (.60 * $621.97 * 1.3468). The labor-related portion of the reduced national unadjusted payment is approximately $492.80 (.60 * $609.84 * 1.3468). The nonlabor-related portion of the full national unadjusted payment is approximately $248.79 (.40 * $621.97). The nonlabor-related portion of the reduced national unadjusted payment is approximately $243.94 (.40 * $609.84). The sum of the labor-related and nonlabor-related portions of the full national adjusted payment is approximately $751.39 ($502.60 + $248.79). The sum of the portions of the reduced national adjusted payment is approximately $736.74 ($492.80 + $243.94).

We did not receive any public comments on these steps under the methodology that we included in the proposed rule to determine the APC payments for CY 2021. Therefore, we are using the steps in the methodology specified above, to demonstrate the calculation of the final CY 2021 OPPS payments using the same parameters.

I. Beneficiary Copayments

1. Background

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

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

Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure. 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

For CY 2021, we proposed to determine copayment amounts for new Start Printed Page 85918and 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, 2021 are included in Addenda A and B to the proposed rule with comment period (which are available via the internet on the CMS website).

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 XIV.E. of the CY 2021 OPPS/ASC proposed rule and this final rule with comment period, for CY 2021, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service.

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

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

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

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

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

Individuals interested in calculating the national copayment liability for a Medicare beneficiary for a given service provided by a hospital that met or failed to meet its Hospital OQR Program requirements should follow the formulas presented in the following steps.

Step 1. Calculate the beneficiary payment percentage for the APC by dividing the APC's national unadjusted copayment by its payment rate. For example, using APC 5071, $124.40 is approximately 20 percent of the full national unadjusted payment rate of $621.97. For APCs with only a minimum unadjusted copayment in Addenda A and B to this final rule (which are available via the internet on the CMS website), the beneficiary payment percentage is 20 percent.

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

B is the beneficiary payment percentage.

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

Step 2. Calculate the appropriate wage-adjusted payment rate for the APC for the provider in question, as indicated in Steps 2 through 4 under section II.H. of 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 Start Printed Page 85919calculate 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 0.9805.

The finalized unadjusted copayments for services payable under the OPPS that will be effective January 1, 2021, are shown in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). We note that the finalized national unadjusted payment rates and copayment rates shown in Addenda A and B to this final rule with comment period reflect the CY 2021 OPD fee schedule increase factor discussed in section II.B. of this final rule with comment period.

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

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New and Revised HCPCS Codes

Payments for OPPS procedures, services, and items are generally based on medical billing codes, specifically, Healthcare Common Procedure Coding System (HCPCS) codes, that are reported on hospital outpatient department (HOPD) claims. The HCPCS is divided into two principal subsystems, referred to as Level I and Level II of the HCPCS. Level I is comprised of Current Procedural Terminology (CPT), a numeric and alphanumeric coding system maintained by the American Medical Association (AMA), and consists of Category I, II, and III CPT codes. Level II, which is maintained by Centers for Medicare & Medicaid Services (CMS), is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes. HCPCS codes are used to report surgical procedures, medical services, items, and supplies under the hospital OPPS. Specifically, CMS recognizes the following codes on OPPS claims:

  • Category I CPT codes, which describe surgical procedures, diagnostic and therapeutic services, and vaccine codes;
  • Category III CPT codes, which describe new and emerging technologies, services, and procedures; and
  • Level II HCPCS codes (also known as alphanumeric codes), which are used primarily to identify drugs, devices, ambulance services, durable medical equipment, orthotics, prosthetics, supplies, temporary surgical procedures, and medical services not described by CPT codes.

CPT codes are established by the AMA while the Level II HCPCS codes are established by the CMS HCPCS Workgroup. These codes are updated and changed throughout the year. CPT and Level II HCPCS code changes that affect the OPPS are published through the annual rulemaking cycle and through the OPPS quarterly update Change Requests (CRs). Generally, these code changes are effective January 1, April 1, July 1, or October 1. CPT code changes are released by the AMA via their website while Level II HCPCS code changes are released to the public via the CMS HCPCS website. CMS recognizes the release of new CPT and Level II HCPCS codes and makes the codes effective (that is, the codes can be reported on Medicare claims) outside of the formal rulemaking process via OPPS quarterly update CRs. Based on our review, we assign the new codes to interim status indicators (SIs) and APCs. These interim assignments are finalized in the OPPS/ASC final rules with comment period. This quarterly process offers hospitals access to codes that more accurately describe items or services furnished and provides payment for these items or services in a timelier manner than if we waited for the annual rulemaking process. We solicit public comments on the new CPT and Level II HCPCS codes and finalize policies for 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 SIs. Certain payment SIs provide separate payment while other payment SIs do not. In section XI. (CY 2021 OPPS Payment Status and Comment Indicators) of this final rule with comment period, we discuss the various SIs used under the OPPS. We also provide a complete list of the SIs and their definitions in Addendum D1 to this CY 2021 OPPS/ASC final rule with comment period.

1. HCPCS Codes That Were Effective April 1, 2020 for Which We Solicited Public Comments in the CY 2021 OPPS/ASC Proposed Rule

For the April 2020 update, there were no new CPT codes. However, thirteen new Level II HCPCS codes were established and made effective on April 1, 2020. These codes and their long descriptors were included in Table 6 of the proposed rule and are now listed in Table 6 of this final rule with comment period. Through the April 2020 OPPS quarterly update CR (Transmittal 10013, Change Request 11691, dated March 25, 2020), we recognized several new Level II HCPCS codes for separate payment under the OPPS. In the CY 2021 OPPS/ASC proposed rule (85 FR 48812 through 48813), we solicited public comments on the proposed APC and status indicator (SI) assignments for these Level II HCPCS codes, which were listed in Table 6 of the proposed rule.

We did not receive any public comments on the proposed OPPS APC and SI assignments for the new Level II HCPCS codes implemented in April 2020. Therefore, we are finalizing the proposed APC and SI assignments for these codes, as indicated in Table 6. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2021. Their replacement codes are listed in Table 6. The final payment rates for these codes can be found in Addendum B to this final rule with comment period. In addition, the SI definitions can be found in Addendum D1 to this final rule with comment period. Both Addendum B and Addendum D1 are available via the internet on the CMS website.

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3. October 2020 HCPCS Codes for Which We Are Soliciting Public Comments in This CY 2021 OPPS/ASC Final Rule With Comment Period

As has been our practice in the past, we incorporate those new HCPCS codes that are effective October 1 in the final rule with comment period, thereby updating the OPPS for the following calendar year, as displayed in Table 8 of the proposed rule and reprinted as Table 8 of this final rule with comment period. These codes are released to the public through the October OPPS Start Printed Page 85930quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS codes). For CY 2021, these codes are flagged with comment indicator “NI” in Addendum B to this OPPS/ASC final rule with comment period to indicate that we are assigning them an interim payment status which is subject to public comment. Specifically, the interim SI and APC assignments for codes flagged with comment indicator “NI” are open to public comment in this final rule with comment period, and we will respond to these public comments in the OPPS/ASC final rule with comment period for the next year's OPPS/ASC update.

In the CY 2021 OPPS/ASC proposed rule (85 FR 48823), we proposed to continue this process for CY 2021. Specifically, for CY 2021, we proposed to include in Addendum B to the CY 2021 OPPS/ASC final rule with comment period the new HCPCS codes effective October 1, 2020 that would be incorporated in the October 2020 OPPS quarterly update CR. Also, as stated above, the October 1, 2020 codes are flagged with comment indicator “NI” in Addendum B to this CY 2021 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2021. We are inviting public comments on the interim SI and APC assignments for these codes, if applicable, that will be finalized in the CY 2021 OPPS/ASC final rule with comment period.

We note that we received a comment related to HCPCS codes C9757 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and excision of herniated intervertebral disc, and repair of annular defect with implantation of bone anchored annular closure device, including annular defect measurement, alignment and sizing assessment, and image guidance; 1 interspace, lumbar) and P9099 (Blood component or product not otherwise classified), which were assigned to comment indicator “NI” (new code; comments will be accepted on the interim APC assignment) in Addendum B of the CY 2020 OPPS/ASC final rule with comment period. The comments and our responses can be found in section II.A.2(a)(1) (Blood Products) and III.D. (APC-Specific Policies) of this CY 2021 OPPS/ASC final rule with comment period.

4. January 2021 HCPCS Codes

a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments in this CY 2021 OPPS/ASC Final Rule With Comment Period

As shown in Table 8, and as stated in the CY 2021 OPPS/ASC proposed rule (85 FR 48823 through 48825), consistent with past practice, we solicit comments on the new Level II HCPCS codes that will be effective January 1 in the OPPS/ASC final rule with comment period, thereby allowing us to finalize the SIs and APC assignments for the codes in the next OPPS/ASC final rule with comment period. Unlike the CPT codes that are effective January 1 and are included in the OPPS/ASC proposed rules, most Level II HCPCS codes are not released until sometime around November to be effective January 1. Because these codes are not available until November, we are unable to include them in the OPPS/ASC proposed rules. Consequently, for CY 2021, we proposed to include in Addendum B to the CY 2021 OPPS/ASC final rule with comment period the new Level II HCPCS codes effective January 1, 2021, that would be incorporated in the January 2021 OPPS quarterly update CR. These codes will be released to the public through the January OPPS quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS codes). For CY 2021, the Level II HCPCS codes effective January 1, 2021 are flagged with comment indicator “NI” in Addendum B to this CY 2021 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2021. We are inviting public comments on the interim SI and APC assignments for these codes, if applicable, that will be finalized in the CY 2021 OPPS/ASC final rule with comment period.

b. CPT Codes For Which We Solicited Public Comments in the CY 2021 OPPS/ASC Proposed Rule

For CY 2021, we received the CY 2021 CPT code updates that would be effective January 1, 2021, from AMA in time for inclusion in the CY 2021 OPPS/ASC proposed rule. We note that 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 SIs 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 SI assignments for them, and to finalize the APC and SI 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 SI assignments for a year until we can propose APC and SI assignments in the following year's rulemaking cycle. We note that even if we find that we need to create HCPCS G-codes in place of certain CPT codes for the PFS proposed rule, we do not anticipate that these HCPCS G-codes will always be necessary for OPPS purposes. We will make every effort to include proposed APC and SI assignments for all new and revised CPT codes that the AMA makes publicly available in time for us to include them in the annual 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 SI 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 SI assignments for those codes in the following year's final rule.

As stated above, for the CY 2021 OPPS update, we received the CY 2021 CPT codes from AMA in time for inclusion in the CY 2021 OPPS/ASC proposed rule. The new, revised, and deleted CY 2021 Category I and III CPT codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website). 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 current calendar year with a proposed APC assignment, and that comments will be accepted on the proposed APC and SI assignments.

Further, we reminded readers that the CPT code descriptors that appear in Addendum B are short descriptors and do not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and their long descriptors for the new and revised CY 2021 CPT codes in Addendum O to Start Printed Page 85931the proposed rule (which is available via the internet on the CMS website) so that the public could adequately comment on the proposed APCs and SI assignments. The 5-digit placeholder codes were included in Addendum O, specifically under the column labeled “CY 2021 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,” to the proposed rule. We noted that the final CPT code numbers would be included in this CY 2021 OPPS/ASC final rule with comment period. We also noted that not every code listed in Addendum O is subject to public comment. For the new and revised Category I and III CPT codes, we requested public comments on only those codes that are assigned comment indicator “NP”.

In summary, in the CY 2021 OPPS/ASC proposed rule, we solicited public comments on the proposed CY 2021 SI and APC assignments for the new and revised Category I and III CPT codes that will be effective January 1, 2021. The CPT codes were listed in Addendum B to the proposed rule with short descriptors only. We listed them again in Addendum O to the proposed rule with long descriptors. We also proposed to finalize the SI and APC assignments for these codes (with their final CPT code numbers) in the CY 2021 OPPS/ASC final rule with comment period. The proposed SI and APC assignments for these codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website).

Commenters addressed several of the new CPT codes that were assigned to comment indicator “NP” in Addendum B to the CY 2021 OPPS/ASC proposed rule. We have responded to those public comments in sections III.C. (New Technology APCs), III.D. (OPPS APC-Specific Policies), and IV. (OPPS Payment for Devices) of this CY 2021 OPPS/ASC final rule with comment period.

The final SIs, APC assignments, and payment rates for the new CPT codes that are effective January 1, 2021 can be found in Addendum B to this final rule with comment period. In addition, the SI meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2021) to this final rule with comment period. Both Addendum B and D1 are available via the internet on the CMS website.

Finally, Table 8, which is a reprint of Table 8 from the CY 2021 OPPS/ASC proposed rule, shows the comment timeframe for new and revised HCPCS codes. The table provides information on our current process for updating codes through our OPPS quarterly update CRs, seeking public comments, and finalizing the treatment of these codes under the OPPS.

B. OPPS Changes—Variations Within APCs

1. Background

Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient department services. Section 1833(t)(2)(B) of the Act provides that the Secretary may establish groups of covered OPD services within this classification system, so that services classified within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we developed a grouping classification system, referred to as Ambulatory Payment Classifications (APCs), as set forth in regulations at 42 CFR 419.31. We use Level I (also known as CPT codes) and Level II HCPCS codes (also known as alphanumeric codes) to identify and Start Printed Page 85932group the services within each APC. The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of similar services. We also have developed separate APC groups for certain medical devices, drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy devices that are not packaged into the payment for the procedure.

We have packaged into the payment for each procedure or service within an APC group the costs associated with those items and services that are typically ancillary and supportive to a primary diagnostic or therapeutic modality and, in those cases, are an integral part of the primary service they support. Therefore, we do not make separate payment for these packaged items or services. In general, packaged items and services include, but are not limited to, the items and services listed in regulations at 42 CFR 419.2(b). A further discussion of packaged services is included in section II.A.3. of this final rule with comment period.

Under the OPPS, we generally pay for covered hospital outpatient services on a rate-per-service basis, where the service may be reported with one or more HCPCS codes. Payment varies according to the APC group to which the independent service or combination of services is assigned. In the CY 2021 OPPS/ASC proposed rule (85 FR 48799), for CY 2021, 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 Hospital Outpatient Payment (HOP) Panel recommendations for specific services for the CY 2021 OPPS update are discussed in the relevant specific sections throughout this CY 2021 OPPS/ASC final rule with comment period.

In addition, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable 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). In determining the APCs with a 2 times rule violation, we consider only those HCPCS codes that are significant based on the number of claims. We note that, for purposes of identifying significant procedure codes for examination under the 2 times rule, we consider procedure codes that have more than 1,000 single major claims or procedure codes that both have more than 99 single major claims and contribute at least 2 percent of the single major claims used to establish the APC cost to be significant (75 FR 71832). This longstanding definition of when a procedure code is significant for purposes of the 2 times rule was selected because we believe that a subset of 1,000 or fewer claims is negligible within the set of approximately 100 million single procedure or single session claims we use for establishing costs. Similarly, a procedure code for which there are fewer than 99 single claims and that comprises less than 2 percent of the single major claims within an APC will have a negligible impact on the APC cost (75 FR 71832). In the CY 2021 OPPS/ASC proposed rule (85 FR 48826 through 48827), for CY 2021, we proposed to make exceptions to this limit on the variation of costs within each APC group in unusual cases, such as for certain low-volume items and services.

In the CY 2021 OPPS/ASC proposed rule, we identified the APCs with violations of the 2 times rule. Therefore, we proposed changes to the procedure codes assigned to these APCs in Addendum B to the proposed rule. We noted that Addendum B does not appear in the printed version of the Federal Register as part of the CY 2021 OPPS/ASC proposed rule. Rather, it is published and made available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​index.html. To eliminate a violation of the 2 times rule and improve clinical and resource homogeneity, we proposed to reassign these procedure codes to new APCs that contain services that are similar with regard to both their clinical and resource characteristics. In many cases, the proposed procedure code reassignments and associated APC reconfigurations for CY 2021 included in the proposed rule were related to changes in costs of services that were observed in the CY 2019 claims data newly available for CY 2021 ratesetting. Addendum B to the CY 2021 OPPS/ASC proposed rule identified with a comment indicator “CH” those procedure codes for which we proposed a change to the APC assignment or SI, or both, that were initially assigned in the July 1, 2020 OPPS Addendum B Update (available via the internet on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Addendum-A-and-Addendum-B-Updates.html), which was the latest payment rate file for 2019 prior to issuance of the proposed rule.

3. APC Exceptions to the 2 Times Rule

Taking into account the APC changes that we proposed to make for CY 2021 in the CY 2021 OPPS/ASC proposed rule, we reviewed all of the APCs to determine which APCs would not meet the requirements of the 2 times rule. We used the following criteria to evaluate whether to propose exceptions to the 2 times rule for affected APCs:

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

Based on the CY 2019 claims data available for the CY 2021 proposed rule, we found 18 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 2021, and found that all of the 18 APCs we identified met the criteria for an exception to the 2 times rule based on the CY 2019 claims data available for the proposed rule. We did not include in that determination those APCs where Start Printed Page 85933a 2 times rule violation was not a relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS codes assigned to it that have a similar geometric mean costs and do not create a 2 time rule violation. Therefore, we only identified those APCs, including those with criteria-based costs, with violations of the 2 times rule.

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

Table 9 of the proposed rule listed the 18 APCs for which we proposed to make an exception for under the 2 times rule for CY 2021 based on the criteria cited above and claims data submitted between January 1, 2019, and December 31, 2019, and processed on or before December 31, 2019. In the proposed rule, we stated that for the final rule with comment period, we intended to use claims data for dates of service between January 1, 2019, and December 31, 2019, that were processed on or before June 30, 2020, and updated CCRs, if available. We stated that the proposed geometric mean costs for covered hospital outpatient services for these and all other APCs that were used in the development of the proposed rule could be found on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.

Based on the updated final rule CY 2019 claims data used for this CY 2021 final rule with comment period, we found a total of 23 APCs with violations of the 2 times rule. Of these 23 total APCs, 18 were identified in the proposed rule and five are newly identified APCs. The five newly identified APCs with violations of the 2 times rule include the following:

  • APC 5101 (Level 1 Strapping and Cast Application)
  • APC 5161 (Level 1 ENT Procedures)
  • APC 5593 (Level 3 Nuclear Medicine and Related Services)
  • APC 5673 (Level 3 Pathology)
  • APC 5734 (Level 4 Minor Procedures)

Although we did not receive any comments on Table 9 of the proposed rule, we did receive comments on APC assignments for specific HCPCS codes. The comments, and our responses, can be found in section III.D. (OPPS APC-Specific Policies) of this final rule with comment period.

After considering the public comments we received on APC assignments and our analysis of the CY 2019 costs from hospital claims and cost report data available for this CY 2021 final rule with comment period, we are finalizing our proposals with some modifications. Specifically, we are finalizing our proposal to except 18 of the 18 proposed APCs from the 2 times rule for CY 2021 and also excepting five additional APCs (APCs 5101, 5161, 5593, 5673, and 5734) for a total of 23 APCs.

In summary, Table 9 lists the 23 APCs that we are excepting from the 2 times rule for CY 2021 based on the criteria described earlier and a review of updated claims data for dates of service between January 1, 2019 and December 31, 2019, that were processed on or before June 30, 2020, and updated CCRs, if available. We note that, for cases in which a recommendation by the HOP Panel appears to result in or allow a violation of the 2 times rule, we generally accept the HOP Panel's recommendation because those recommendations are based on explicit consideration of resource use, clinical homogeneity, site of service, and the quality of the claims data used to determine the APC payment rates. The geometric mean costs for hospital outpatient services for these and all other APCs that were used in the development of this final rule with comment period can be found on the CMS website at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices.

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C. New Technology APCs

1. Background

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

In the CY 2004 OPPS final rule with comment period (68 FR 63416), we restructured the New Technology APCs to make the cost intervals more consistent across payment levels and refined the cost bands for these APCs to retain two parallel sets of New Technology APCs, one set with a status indicator of “S” (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment) and the other set with a status indicator of “T” (Significant Procedure, Multiple Reduction Applies. Paid under OPPS; separate APC payment). These current New Technology APC configurations allow us to price new technology services more appropriately and consistently.

For CY 2020, there were 52 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 1908 (New Technology—Level 52 ($145,001-$160,000)). We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1908, vary with increments ranging from $10 to $14,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band. For example, payment for New Technology APC 1507 (New Technology—Level 7 ($501-$600)) is made at $550.50.

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

For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the technologies and their clinical Start Printed Page 85935utility. Quite often, parties request that Medicare make higher payment amounts under the New Technology APCs for new procedures in that transitional phase. These requests, and their accompanying estimates for expected total patient utilization, often reflect very low rates of patient use of expensive equipment, resulting in high per-use costs for which requesters believe Medicare should make full payment. Medicare does not, and we believe should not, assume responsibility for more than its share of the costs of procedures based on projected utilization for Medicare beneficiaries and does not set its payment rates based on initial projections of low utilization for services that require expensive capital equipment. For the OPPS, we rely on hospitals to make informed business decisions regarding the acquisition of high-cost capital equipment, taking into consideration their knowledge about their entire patient base (Medicare beneficiaries included) and an understanding of Medicare's and other payers' payment policies. We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68314) for further discussion regarding this payment policy.

We note that, in a budget neutral system, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high-cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates, including those made through New Technology APCs, for new services that lack hospital claims data based on realistic utilization projections for all such services delivered in cost-efficient hospital outpatient settings. As the OPPS acquires claims data regarding hospital costs associated with new procedures, we regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures as they transition into mainstream medical practice (77 FR 68314). For CY 2021, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to this CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

2. Establishing Payment Rates for Low-Volume New Technology Services

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

In accordance with section 1833(t)(2)(B) of the Act, services classified within each APC must be comparable clinically and with respect to the use of resources. As described earlier, assigning a service to a new technology APC allows us to gather claims data to price the service and assign it to the APC with services that use similar resources and are clinically comparable. However, where utilization of services assigned to a New Technology APC is low, it can lead to wide variation in payment rates from year to year, resulting in even lower utilization and potential barriers to access to new technologies, which ultimately limits our ability to assign the service to the appropriate clinical APC. To mitigate these issues, we determined in the CY 2019 OPPS/ASC final rule with comment period that it was appropriate to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to adjust how we determined the costs for low-volume services assigned to New Technology APCs (83 FR 58892 through 58893). We have utilized our equitable adjustment authority at section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to estimate an appropriate payment amount for low-volume new technology services in the past (82 FR 59281). Although we have used this adjustment authority on a case-by-case basis in the past, we stated in the CY 2019 OPPS/ASC final rule with comment period that we believe it is appropriate to adopt an adjustment for low-volume services assigned to New Technology APCs in order to mitigate the wide payment fluctuations that have occurred for new technology services with fewer than 100 claims and to provide more predictable payment for these services.

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

In addition, to better approximate the cost of a low-volume service within a New Technology APC, we stated that we believe using the median or arithmetic mean rather than the geometric mean (which “trims” the costs of certain claims out) could be more appropriate in some circumstances, given the extremely low volume of claims. Low claim volumes increase the impact of “outlier” claims; that is, claims with either a very low or very high payment Start Printed Page 85936rate as compared to the average claim, which would have a substantial impact on any statistical methodology used to estimate the most appropriate payment rate for a service. We also explained that we believe having the flexibility to utilize an alternative statistical methodology to calculate the payment rate in the case of low-volume new technology services would help to create a more stable payment rate. Therefore, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58893), we established that, in each of our annual rulemakings, we will seek public comments on which statistical methodology should be used for each low-volume service assigned to a New Technology APC. In the preamble of each annual rulemaking, we stated that we would present the result of each statistical methodology and solicit public comment on which methodology should be used to establish the payment rate for a low-volume new technology service. In addition, we will use our assessment of the resources used to perform a service and guidance from the developer or manufacturer of the service, as well as other stakeholders, to determine the most appropriate payment rate. Once we identify the most appropriate payment rate for a service, we will assign the service to the New Technology APC with the cost band that includes its payment rate.

Accordingly, for CY 2021, we proposed to continue the policy we adopted in CY 2019 under which we will utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median using multiple years of claims data to select the appropriate payment rate for purposes of assigning services with fewer than 100 claims per year to a New Technology APC. Additional details on our policy is available in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58892 through 58893).

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

3. Procedures Assigned to New Technology APC Groups for CY 2021

As we described 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 2021, 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). We received no public comments on our proposal. Therefore, we will implement our proposal without modification.

a. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS)

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 that we proposed to continue to assign to a New Technology APC for CY 2021. These codes include CPT codes 0071T, 0072T, and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T describe procedures for the treatment of uterine fibroids, CPT code 0398T describes procedures for the treatment of essential tremor, and HCPCS code C9734 describes procedures for pain palliation for metastatic bone cancer.

For the procedure described by CPT code 0398T, we have identified 169 paid claims for CY 2019 with a geometric mean of $12,027.76. The number of claims for the service means that the procedure is no longer a low-volume new technology service, and we will use the geometric mean of the CY 2019 claims data to determine the cost of the service for its APC assignment. We reviewed the OPPS to determine whether CPT code 0398T could be assigned to a clinical APC. The most appropriate clinical APC family for the service would be the Neurostimulator and Related Procedures APC series (APCs 5461 through 5464). However, there was a large payment rate difference between Level 2 Neurostimulator and Related Procedures (APC 5462) with a payment rate of $6,169.27 and Level 3 Neurostimulator and Related Procedures (APC 5463) with a payment rate of $19,737.37. Based on the geometric mean cost of CPT code 0398T available for the CY 2021 OPPS/ASC proposed rule, we believe the payment rate for APC 5462 would be too low for CPT code 0398T since it is more than $6,000 less than the geometric mean cost for CPT code 0398T, and we believe the payment rate for APC 5463 would be too high since it is around $6,800 more than the geometric mean cost for CPT code 0398T.

In addition, given the significant difference in the payment rate between APC 5462 and 5463, we believed a restructuring of the APC family would be appropriate. We believed that creating an additional payment level between the two existing APC levels would allow for a smoother distribution of the costs between the different levels based on their resource costs and clinical characteristics. Please refer to section III.D.1 for detailed explanation of our proposal to reorganize the Neurostimulator and Related Procedures APCs (APCs 5461-5464). Reorganizing the Neurostimulator and Related Procedures APCs would create a proposed Level 3 APC to be referred to as “Proposed APC 5463” with a payment rate of approximately $12,286 that is close to the geometric mean of CPT code 0398T which is approximately $12,798. The payment rate of proposed APC 5463 is representative of the cost of the service described by CPT code 0398T. Therefore, we proposed to reassign the service described by CPT code 0398T to the proposed new Level 3 APC for Neurostimulator and Related Procedures (Proposed APC 5463) for CY 2021.

Comment: Multiple commenters supported our proposal to reassign CPT code 0398T to proposed new APC 5463 (Level 3 Neurostimulator and Related Procedures).

Response: We appreciate the support of the commenters for our proposal.

The final rule data shows the payment rate for the new APC 5463 (Level 3 Neurostimulator and Related Procedures) is $11,236.21. While this payment rate is lower than what was calculated for the proposed rule, we continue to believe APC 5463 is an appropriate placement for CPT code 0398T. After our review of the public comments, we have decided to Start Printed Page 85937implement our proposal to assign CPT code 0398T to APC 5463 for CY 2021. The final APC assignment, status indicator, and payment rate for CPT code 0398T are found in Table 10. We refer readers to Addendum B of the final rule for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.

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 FDA in 2013 for adult patients diagnosed with severe to profound 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, the procedure described by 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 included 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 at the retail price of approximately $145,000.

For CY 2017, analysis of the CY 2015 OPPS claims data used for the CY 2017 OPPS/ASC final rule with comment period showed 9 single claims (out of 13 total claims) for the procedure described by 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 the procedure described by 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).

For CY 2018, the reported cost of the Argus® II procedure based on CY 2016 hospital outpatient claims data for 6 claims used for the CY 2018 OPPS/ASC final rule with comment period was approximately $94,455, which was more than $55,000 less than the payment rate for the procedure in CY 2017, but closer to the CY 2016 payment rate for the procedure. We noted 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 been very low and has not exceeded 10 claims within a single year. We believed that it is important to mitigate significant payment differences, especially shifts of several tens of thousands of dollars, while also basing payment rates on available cost 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, if we had established the payment rate based on updated final rule claims data, the Start Printed Page 85938payment rate would have decreased to $95,000.50 for CY 2018, a decrease of $55,000 relative to CY 2017. We were concerned that these large fluctuations in payment could potentially create an access to care issue for the Argus® II procedure, and we wanted to establish a payment rate to mitigate the potential sharp decline in payment from CY 2017 to CY 2018.

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. Therefore, for CY 2018, we used 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 payment rate for this procedure, despite the lower geometric mean costs available in the claims data used for the final rule with comment period. For CY 2018, we reassigned the Argus® II procedure to APC 1904 (New Technology—Level 50 ($115,001-$130,000)), which established a payment rate for the Argus® II procedure of $122,500.50, which was the arithmetic mean of the payment rates for the procedure for CY 2016 and CY 2017.

For CY 2019, the reported cost of the Argus® II procedure based on the geometric mean cost of 12 claims from the CY 2017 hospital outpatient claims data was approximately $171,865, which was approximately $49,364 more than the payment rate for the procedure for CY 2018. In the CY 2019 OPPS/ASC final rule with comment period, we continued to note that the costs of the Argus® II procedure are extraordinarily high compared to many other procedures paid under the OPPS (83 FR 58897 through 58898). In addition, the number of claims submitted continued to be very low for the Argus® II procedure. We stated that we continued to believe that it is important to mitigate significant payment fluctuations for a procedure, especially shifts of several tens of thousands of dollars, while also basing payment rates on available cost information and claims data because we are concerned that large decreases in the payment rate could potentially create an access to care issue for the Argus® II procedure. In addition, we indicated that we wanted to establish a payment rate to mitigate the potential sharp increase in payment from CY 2018 to CY 2019, and potentially ensure a more stable payment rate in future years.

As discussed in section III.C.2. of the CY 2019 OPPS/ASC final rule with comment period (83 FR 58892 through 58893), we used 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 establish a payment rate that is more representative of the likely cost of the service. We stated that we believed the likely cost of the Argus® II procedure is higher than the geometric mean cost calculated from the claims data used for the CY 2018 OPPS/ASC final rule with comment period but lower than the geometric mean cost calculated from the claims data used for the CY 2019 OPPS/ASC final rule with comment period.

For CY 2019, we analyzed claims data for the Argus® II procedure using 3 years of available data from CY 2015 through CY 2017. These data included claims from the last year that the Argus® II received transitional device pass-through payments (CY 2015) and the first 2 years since device pass-through payment status for the Argus® II expired. We found that the geometric mean cost for the procedure was approximately $145,808, the arithmetic mean cost was approximately $151,367, and the median cost was approximately $151,266. As we do each year, we reviewed 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 OPPS payments remain appropriate for procedures like the Argus® II procedure as they transition into mainstream medical practice (77 FR 68314). We noted that the proposed payment rate included both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841). For CY 2019, the estimated costs using all three potential statistical methods for determining APC assignment under the New Technology low-volume payment policy fell within the cost band of New Technology APC 1908, which is between $145,001 and $160,000. Therefore, we reassigned the Argus® II procedure (CPT code 0100T) to APC 1908 (New Technology—Level 52 ($145,001-$160,000)), with a payment rate of $152,500.50 for CY 2019.

For CY 2020, we identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2015 through CY 2018. We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $146,059, the arithmetic mean cost to be approximately $152,123, and the median cost to be approximately $151,267. All of the resulting estimates from using the three statistical methodologies fell within the same New Technology APC cost band ($145,001-$160,000), where the Argus® II procedure was assigned for CY 2019. Consistent with our policy stated in section III.C.2, we presented the result of each statistical methodology in the proposed rule, and we sought public comments on which method should be used to assign procedures described by CPT code 0100T to a New Technology APC. All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fell within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000. Accordingly, we assigned CPT code 0100T in APC 1908 (New Technology—Level 52 ($145,001-$160,000)), with a payment rate of $152,500.50 for CY 2020.

For CY 2021, the number of reported claims for the Argus® II procedure continues to be very low with a substantial fluctuation in cost from year to year. The high annual variability of the cost of the Argus® II procedure continues to make it difficult to establish a consistent and stable payment rate for the procedure. As previously mentioned, in accordance with section 1833(t)(2)(B) of the Act, we are required to establish that services classified within each APC are comparable clinically and with respect to the use of resources. Therefore, for CY 2021, we proposed to apply the policy we adopted in CY 2019, under which we utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median costs using multiple years of claims data to select the appropriate payment rate for purposes of assigning the Argus® II procedure (CPT code 0100T) to a New Technology APC.

For CY 2021, we identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2016 through CY 2019. We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $148,807, the arithmetic mean cost to be approximately $154,504, and the median cost to be approximately $151,974. All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fall within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000.

Accordingly, we proposed to maintain the assignment of the procedure Start Printed Page 85939described by CPT code 0100T in APC 1908 (New Technology—Level 52 ($145,001-$160,000)), with a proposed payment rate of $152,500.50 for CY 2021. We note that the proposed payment rate includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841). We refer 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 website.

For our analysis for the CY 2021 final rule, we identified 35 claims reporting the procedure described by CPT code 0100T for the 4-year period of CY 2016 through CY 2019. We found the geometric mean cost for the procedure described by CPT code 0100T to be approximately $148,148, the arithmetic mean cost to be approximately $153,682, and the median cost to be approximately $151,974. The slight differences from the calculations using the proposed rule data are caused by changes to the wage indexes of a few providers. All three potential statistical methodologies used to estimate the cost of the Argus® II procedure fall within the cost band for New Technology APC 1908, with the estimated cost being between $145,001 and $160,000.

We received no public comments on our proposal. Therefore, we are finalizing our proposal without modification. We will maintain the assignment of the procedure described by CPT code 0100T in APC 1908 (New Technology—Level 52 ($145,001-$160,000)), with a payment rate of $152,500.50 for CY 2021. We note that the final payment rate includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841). We refer readers to Addendum B to the final rule for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.

c. Administration of Subretinal Therapies Requiring Vitrectomy (APC 1561)

CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes) is a gene therapy for a rare mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna®), was approved by FDA in December of 2017, and is indicated as an adeno-associated virus vector-based gene therapy indicated for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy.[2] This therapy is administered through a subretinal injection, which stakeholders describe as an extremely delicate and sensitive surgical procedure. The FDA package insert describes one of the steps for administering Luxturna as, “after completing a vitrectomy, identify the intended site of administration. The subretinal injection can be introduced via pars plana.” 1

Stakeholders, including the manufacturer of Luxturna®, recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana approach) for the administration of the gene therapy.[3] However, the manufacturer contends the administration is not currently described by any existing codes as HCPCS code 67036 (Vitrectomy, mechanical, pars plana approach) does not account for the administration itself. For HCPCS code J3398, a typical patient would receive a standard dose of 150 billion vector genomes, with an approximate payment rate of $432,480 (we refer readers to Addendum B of the CY 2021 OPPS/ASC Final Rule with comment period rule for the payment rate associated with HCPCS code J3398).

It is important to note that HCPCS code J3398 was granted drug pass-through status under the OPPS as of July 1, 2018 and is assigned status indicator “G”. (We refer readers to Addendum D of the CY 2021 OPPS/ASC Final rule for the list of status indicator definitions for CY2021). HCPCS code J3398 is scheduled to have its drug pass-through status expire June 30, 2021, at which point the code would be packaged into the payment for any primary service with which it is billed when that primary service is assigned to a comprehensive APC (C-APC). A C-APC packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure. (For a full discussion and background on C-APCs, see section II.A.2.b). Based on information from the manufacturer of Luxturna, we believe that HCPCS code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion vector genomes) would commonly be billed with the service described by HCPCS code 67036 (Vitrectomy, mechanical, pars plana approach), which describes the administration of the gene therapy, and which is assigned to a comprehensive APC, (APC 5492—Level 2 Intraocular Procedures). Thus, when its pass-through status expires, payment for HCPCS code J3398, the primary therapy, would be packaged into payment for HCPCS code 67036, its administration procedure.

CMS recognizes the need to accurately describe the unique administration procedure that is required to administer the therapy described by HCPCS code J3398. We proposed to establish a new HCPCS code, C97X1 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) to describe this process. We believe that this new HCPCS code accurately describes the service associated with intraocular administration of HCPCS code J3398. CMS recognized that HCPCS code 67036 represents a similar procedure and process that approximates similar resource utilization that is associated with C97X1. CMS also recognized that it is not prudent for the code that describes the administration of this gene therapy, C97X1, to be assigned to the same C-APC to which HCPCS code 67036 is assigned, as this would package the primary therapy, HCPCS code J3398, into the code that represents the process to administer the gene therapy.

For CY 2021, we proposed to assign the services described by C97X1 to a new technology payment band based on the geometric mean cost for HCPCS code 67036. For the CY 2021 OPPS/ASC Proposed Rule, HCPCS code 67036 had a geometric mean cost of $3,407.84. Therefore, for the proposed rule we proposed to assign C97X1 to APC 1561—New Technology—Level 24 ($3001-$3500). See Table 11 for proposed descriptors and APC assignment.

Start Printed Page 85940

Comment: Commenters were largely supportive of our proposal to create a “C” code to describe the administration of J3398 and assign this newly created “C” code to New Technology APC 1561. Commenters largely advised CMS to finalize our proposal as proposed.

Response: We thank the commenters for their support on our proposal.

Comment: A small minority of commenters supported our approach to create a “C” code to describe the administration of J3398 and assign the newly created “C” code to a New Technology APC, but suggested alternate APC placements. The commenters' suggested alternate APC placements included APC 1562, based on a crosswalk of HCPCS code 67042, as well as APC 1564. Additionally, one commenter expressed uncertainty about when it would be appropriate to bill this code.

Response: We thank commenters for their feedback. Based on our review, we believe assigning C9770 to APC 1561 based on the geometric mean costs of HCPCS code 67036 is the most appropriate APC placement for this code. Our clinical review along with an overwhelming number of stakeholders have found that HCPCS code 67036 represents a similar procedure and process that approximates similar resource utilization that is associated with C9770. Additionally, regarding when C9770 may be billed, we remind stakeholders that HOPDs and ASCs may bill C9770 under Medicare in the HOPD and ASC settings when reasonable and necessary services are furnished. HCPCS C-codes are reportable only on Medicare OPPS and ASC claims. HOPDs and ASCs are expected to make appropriate coding decisions based on instructions and other information available to them (for example, federal regulations, CMS instructions, MAC instructions, etc.).

Based on the above discussion, for CY 2021 we are finalizing our proposal without modification to establish C9770 and assign the code to a New Technology APC based on the geometric mean cost of HCPCS code 67036. For CY 2021, HCPCS code 67036 has a geometric mean cost of $3,435.61. Therefore, as shown in Table 12, for CY 2021 we are finalizing our proposal to create C9770 (Vitrectomy, mechanical, pars plana approach, with subretinal injection of pharmacologic/biologic agent) and assign this code to APC 1561 (New Technology—Level 24 ($3001-$3500)).

d. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave Energy

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

In claims data available for CY 2019 for the CY 2021 OPPS/ASC proposed rule, there were 4 claims reported for bronchoscopy with transbronchial ablation of lesions by microwave energy. Given the low volume of claims for the service, we proposed for CY 2021 to apply the policy we adopted in CY 2019, under which we utilize our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median costs to calculate an Start Printed Page 85941appropriate payment rate for purposes of assigning bronchoscopy with transbronchial ablation of lesions by microwave energy to a New Technology APC. We found the geometric mean cost for the service to be approximately $4,051, the arithmetic mean cost to be approximately $4,067, and the median cost to be approximately $4,067. All three potential statistical methodologies used to estimate the cost of the service procedure fall within the cost band for New Technology APC 1563, with the estimated cost being between $4,001 and $4,500. Accordingly, we proposed to change the assignment of the HCPCS code C9751 to APC 1563 (New Technology—Level 26 ($4001-$4500)), with a proposed payment rate of $4,250.50 for CY 2021.

Comment: Two commenters did not support our proposal to assign HCPCS code C9751 to APC 1563 (New Technology—Level 26 ($4001-$4500)), with a proposed payment rate of $4,250.50 for CY 2021. The commenters stated that there was not enough claims data to change the APC assignment for HCPCS code C9751, and that HCPCS code C9751 should continue to be assigned to APC 1571 (New Technology—Level 34 ($8001-$8500)) with a proposed payment rate of $8,250.50.

Response: Because of the low number of claims for HCPCS C9751, we utilized our equitable adjustment authority under section 1833(t)(2)(E) of the Act for our final rule analysis to calculate the geometric mean, arithmetic mean, and median costs to calculate a payment rate to assign bronchoscopy with transbronchial ablation of lesions by microwave energy to a New Technology APC. Even though the number of claims are small, it is the best data available to determine the cost of the procedure. The assignment of HCPCS code C9751 to APC 1571 was based on guidance from the developer of the procedure and our best estimates of the cost of the procedure. The claims data, however limited, provide evidence of the cost of the procedure based on service utilization rather than having to forecast the cost of procedure.

Therefore, we decided to use our low-volume methodology for new technology services to determine the payment rate for the service described by HCPCS code C9751. We found for our final rule analysis that the geometric mean cost for the service to be approximately $2,693, the arithmetic mean cost to be approximately $3,086, and the median cost to be approximately $3,708. The median was the statistical methodology that estimated the highest cost for the service and provides a reasonable estimate of the midpoint cost of the three claims that have been paid for this service. The payment rate calculated using this methodology falls within the cost band for New Technology APC 1562 (New Technology—Level 25 ($3501-$4000)). Based on our updated analysis of the data, we have decided to implement our original proposal with modifications. For CY 2021, we will change the assignment of HCPCS code C9751 to APC 1562 (New Technology—Level 25 ($3501-$4000)) using our equitable adjustment authority under section 1833(t)(2)(E) of the Act and our low-volume new technology service methodology. The payment rate for C9751 will be based on the median cost of claims reported for the service since CY 2019 as the median cost is the highest estimated cost for the service, and the median provides a reasonable estimate of the midpoint cost of the three claims that have been paid for this service. Details regarding HCPCS code C9751 are shown in Table 13. We refer readers to Addendum B of the final rule for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.

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

Fractional Flow Reserve Derived from Computed Tomography (FFRCT), also known by the trade name HeartFlow, is a noninvasive diagnostic service that allows physicians to measure coronary artery disease in a patient through the use of coronary CT scans. The HeartFlow procedure is intended for clinically stable symptomatic patients with coronary artery disease, and, in many cases, may avoid the need for an invasive coronary angiogram procedure. HeartFlow uses a proprietary data analysis process performed at a central facility to develop a three-dimensional image of a patient's coronary arteries, which allows physicians to identify the fractional flow reserve to assess whether or not patients should undergo further invasive testing (that is, a coronary angiogram).

For many services paid under the OPPS, payment for analytics that are performed after the main diagnostic/Start Printed Page 85942image procedure are packaged into the payment for the primary service. However, in CY 2018, we determined that HeartFlow should receive a separate payment because the service is performed by a separate entity (that is, a HeartFlow technician who conducts computer analysis offsite) rather than the provider performing the CT scan. We assigned CPT code 0503T, which describes the analytics performed, to New Technology APC 1516 (New Technology—Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50 based on pricing information provided by the developer of the procedure that indicated the price of the procedure was approximately $1,500. We did not have Medicare claims data in CY 2019 for CPT code 0503T, and we continued to assign the service to New Technology APC 1516 (New Technology—Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50.

CY 2020 was the first year we had Medicare claims data to calculate the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final rule, there were 957 claims with CPT code 0503T of which 101 of the claims were single frequency claims that were used to calculate the geometric mean of the procedure. We planned to use the geometric mean to report the cost of HeartFlow. However, the number of single frequency claims for CPT code 0503T was below the low-volume payment policy threshold for the proposed rule, and the number of single frequency claims was only two claims above the threshold for the new technology APC low-volume policy for the final rule. Therefore, we decided to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic mean, and median using the CY 2018 claims data to determine an appropriate payment rate for HeartFlow using our new technology APC low-volume payment policy. While the number of single frequency claims was just above our threshold to use the low-volume payment policy, we still had concerns about the normal cost distribution of the claims used to calculate the payment rate for HeartFlow, and we decided the low-volume payment policy would be the best approach to address those concerns.

Our analysis found that the geometric mean cost for CPT code 0503T was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12 and that the median cost for CPT code 0503T was $900.28. Of the three cost methods, the highest amount was for the arithmetic mean. The arithmetic mean fell within the cost band for New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) with a payment rate of $950.50. The arithmetic mean helped to account for some of the higher costs of CPT code 0503T identified by the developer and other stakeholders that may not have been reflected by either the median or the geometric mean.

For CY 2021, we observed a significant increase in the number of claims billed with CPT code 0503T that were available for the CY 2021 OPPS/ASC proposed rule. Specifically, using the most recently available data for the CY 2021 OPPS/ASC proposed rule (that is, CY 2019), we identified 2,820 claims billed with CPT code 0503T including 415 single frequency claims. These totals were well above the threshold of 100 claims for a procedure to be evaluated using the new technology APC low-volume policy. Therefore, we proposed to use our standard methodology rather than the low-volume methodology we previously used to determine the cost of CPT code 0503T.

Our analysis of the available claims data for the proposed rule found the geometric mean cost for CPT code 0503T was approximately $851. Therefore, we proposed to reassign the service described by CPT code 0503T in order to adjust the payment rate to better reflect the cost for the service. While we considered proposing to reassign CPT code 0503T to APC 5724 (Level 4—Diagnostic Tests and Related Services), which had a proposed payment rate of around $903 based on the clinical and resource similarity to other services within that APC, we did not propose such reassignment because the payment rate for the new technology APC was closer to the geometric mean costs of CPT code 0503T. Nonetheless, we welcomed comments on whether reassignment to the clinical APC would be more appropriate. Therefore, we proposed to reassign the service described by CPT code 0503T to New Technology APC 1510 (New Technology—Level 10 ($801-$900)), with a proposed payment rate of $850.50 for CY 2021.

Comment: The developer of HeartFlow and multiple other commenters stated that the CPT code 0503T should not be assigned to New Technology APC 1510. Instead, they suggested that the HeartFlow procedure be assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a payment rate of around $1,270. The developer asserted that even though the payment for APC 5593 is substantially higher than the estimated cost of CPT code 0503T, the cost of the service fits reasonably well with the cost of other procedures assigned to APC 5593. The developer and other commenters also assert that the HeartFlow procedure has enough clinical similarity to other procedures currently assigned to the nuclear medicine and related services family. According to the developer and the other commenters, HeartFlow is comparable to other nuclear medicine procedures that are image analysis tests characterizing organ-specific function. The developer and the other commenters also note that cardiac CT procedures, which are used to identify coronary artery disease, are assigned to the nuclear medicine APC family. Finally, the developer cited two examples of procedures in the OPPS that are assigned to APCs where the procedure in question does not have clinical similarity to the other procedures in the APC.

Response: We disagree with the suggestion that CPT code 0503T should be assigned to APC 5593. The nuclear medicine and related procedures APC family describes diagnostic and therapeutic procedures, many of them involving imaging, where radiopharmaceuticals and other nuclear materials are critical supplies for the performance of the procedure. In comparison, HeartFlow is a computer algorithm that does not directly take images nor is it used on its own to generate a diagnosis for a patient. Instead, HeartFlow analyzes diagnostic images obtained through other medical procedures and assists with the interpretation of those diagnostic images to determine if a patient has coronary artery disease. There is little clinical similarity between the HeartFlow procedure and the procedures currently assigned to the nuclear medicine and related procedures, and we cannot support assigning CPT code 0503T to APC 5593.

Comment: Several commenters asserted the proposed payment rate for CPT code 0503T is too low and does not reflect their individual hospital's cost to use HeartFlow. Commenters mentioned cost issues, including the $1,100 list price for each individual HeartFlow service and the staff resources involved to transmit data to the HeartFlow analysis facility and review the results of the analyses performed by HeartFlow. Commenters suggested a range of potential payments for a HeartFlow procedure from $1,051 up to $1,451, and they encouraged CMS to use our equitable adjustment authority at section 1833(t)(2)(E) of the Act to establish a payment rate that would more closely reflect the costs the Start Printed Page 85943commenters believe they are incurring to perform the HeartFlow procedure.

Response: For this CY 2021 OPPS/ASC final rule, we identified 3,188 claims billed with CPT code 0503T including 465 single frequency claims for CPT code 0503T. Our analysis has found that the geometric mean for CPT code 0503T is $804.35, and the geometric mean cost falls within the cost band for New Technology APC 1510 (New Technology—Level 10 ($801-$900)), which is similar to our results for the proposed rule. However, multiple commenters have noted that the FFRCT service costs $1,100 and that there are additional staff costs related to the submission of coronary CT image data for processing by HeartFlow.

HeartFlow is one of the first procedures utilizing artificial intelligence to be separately payable in the OPPS, and providers are still learning how to accurately report their charges to Medicare when billing for artificial intelligence services. This is especially the case for allocating the cost of staff resources between the HeartFlow procedure and the coronary CT imaging services. Therefore, we feel it would be appropriate to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to assign CPT code 0503T to the same New Technology APC in CY 2021 as in CY 2020 in order to provide payment stability and equitable payment for providers as they continue to become more familiar with the proper cost reporting for HeartFlow and other artificial intelligence services. As mentioned earlier in this section, CPT code 0503T was assigned to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) with a payment rate of $950.50 for CY 2020, and we will continue to assign CPT code 0503T to New Technology APC 1511 for CY 2021.

After reviewing all of the public comments, we have decided to finalize our proposal with modification by using our equitable adjustment authority under section 1833(t)(2)(E) of the Act to continue to assign CPT code 0503T to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) for CY 2021. We refer readers to Addendum B of the final rule for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.

f. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) Studies

Effective January 1, 2020, we assigned three CPT codes (78431, 78432, and 78433) that describe the services associated with cardiac PET/CT studies to New Technology APCs. CPT code 78431 was assigned to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50. CPT codes 78432 and 78433 were assigned to APC 1523 (New Technology—Level 23 ($2501-$3000)) with a payment rate of $2,750.50.

We had not received any claims billed with CPT codes 78431, 78432, or 78433 prior to the proposed rule. Therefore, we proposed to continue to assign these CPT codes to the same new technology APCs as they were in CY 2020. The proposed CY 2021 payment rate for the codes can be found in Addendum B to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

Comment: Several commenters expressed their support for our proposal to assign CPT code 78431 to APC 1522 (New Technology—Level 22 ($2001-$2500)) with a payment rate of $2,250.50, and to assign CPT codes 78432 and 78433 to APC 1523 (New Technology—Level 23 ($2501-$3000)) with a payment rate of $2,750.50.

Response: We appreciate the support of the commenters for our proposal.

We have not received any claims for these services prior to this final rule. After our review of the public comments, we have decided to implement our proposal without modification. Table 14 reports code descriptors, status indicators, and APC assignments for these CPT codes.

Start Printed Page 85944

g. Pathogen Test for Platelets/Rapid Bacterial Testing

For the July 2017 update, the HCPCS Workgroup established HCPCS code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017. This new code and the OPPS APC assignment was announced in the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017). Because HCPCS code Q9987 represented a test to identify bacterial or other pathogen contamination in blood platelets, we assigned the code to a new technology APC, specifically, New Technology APC 1493 (New Technology—Level 1C ($21-$30)) with a status indicator “S” and a payment rate of $25.50. We note that temporary HCPCS code Q9987 was subsequently deleted on December 31, 2017, and replaced with permanent HCPCS code P9100 (Pathogen(s) test for platelets) effective January 1, 2018. For the January 2018 update, we continued to assign the new code to the same APC and status indicator as its predecessor code. Specifically, we assigned HCPCS code P9100 to New Technology APC 1493 and status indicator “S”. For the CY 2019 update, we made no change to the APC or status indicator assignment for P9100, however, for the CY 2020 update, we revised the APC assignment from New Technology APC 1493 to 1494 (New Technology—Level 1D ($31-$40) based on the latest claims data used to set the payment rates for CY 2020. We discussed the revision in the CY 2020 OPPS/ASC final rule (84 FR 61219) and indicated that the reassignment to APC 1494 appropriately reflected the cost of the service.

For the CY 2021 OPPS/ASC proposed rule, we stated that we believed we had sufficient claims data to reassign the code from a New Technology APC to a clinical APC, and noted that HCPCS code P9100 has been assigned to a New Technology APC for over 3 years. As stated in section III.D. (New Technology APCs), a service is paid under a New Technology APC until sufficient claims data have been collected to allow CMS to assign the procedure to a clinical APC group that is appropriate in clinical and resource terms. We expect this to occur within two to three years from the time a new HCPCS code becomes effective. However, if we are able to collect sufficient claims data in less than 2 years, we would consider reassigning the service to an appropriate clinical APC. Since HCPCS code P9100 has been assigned to a new technology APC since July 2017, we believe that we should reassign the code to a clinical APC. Specifically, our claims data for the CY 2021 OPPS/ASC proposed rule showed a geometric mean cost of approximately $30 for HCPCS code P9100 based on 70 single claims (out of 1,835 total claims). Start Printed Page 85945Based on resource cost and clinical homogeneity to the other services assigned to APC 5732 (Level 2 Minor Procedures), we believed that HCPCS code P9100 should be reassigned to clinical APC 5732, which had a geometric mean cost of approximately $33.

As we have stated several times since the implementation of the OPPS on August 1, 2000, we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. For the CY 2021 OPPS update, based on claims submitted between January 1, 2019, and December 30, 2019, our analysis of the latest claims data for the CY 2021 OPPS/ASC proposed rule supports reassigning HCPCS code P9100 to APC 5732 based on its clinical and resource homogeneity to the procedures and services in the APC. Therefore, we proposed to reassign HCPCS code P9100 from New Technology APC 1494 to clinical APC 5732 for CY 2021. The proposed CY 2021 payment rate for HCPCS code P9100 can be found in Addendum B to the CY 2021 OPPS/ASC proposed rule with comment period. In addition, we refer readers to Addendum D1 of the CY 2021 OPPS/ASC proposed rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

Comment: Two commenters expressed their support for our proposal.

Response: We appreciate the support of the commenters.

After reviewing the public comments for this proposal, we have decided to finalize our proposal without modification to reassign HCPCS code P9100 from New Technology APC 1494 to clinical APC 5732 for CY 2021. The final rule data supports our decision. The data show a geometric mean cost of approximately $31 for HCPCS code P9100 based on 75 single claims (out of 2,038 total claims), which is close to the payment rate of around $33 for APC 5732. The final CY 2021 payment rate for HCPCS code P9100 can be found in Addendum B to this CY 2021 OPPS/ASC final rule with comment period. In addition, we refer readers to Addendum D1 of this CY 2021 OPPS/ASC final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

h. V-Wave Medical Interatrial Shunt Procedure

A randomized, double-blinded, controlled IDE study is currently in progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt is for patients with severe symptomatic heart failure and is designed to regulate left atrial pressure in the heart. All participants who passed initial screening for the study receive a right heart catheterization procedure described by CPT code 93451 (Right heart catheterization including measurement(s) of oxygen saturation and cardiac output, when performed). Participants assigned to the experimental group also receive the V-Wave interatrial shunt procedure while participants assigned to the control group only receive right heart catheterization. The developer of V-Wave was concerned that the current coding of these services by Medicare would reveal to the study participants whether they have received the interatrial shunt because an additional procedure code, CPT code 93799 (Unlisted cardiovascular service or procedure), would be included on the claims for participants receiving the interatrial shunt. Therefore, we created a temporary HCPCS code to describe the V-wave interatrial shunt procedure for both the experimental group and the control group in the study. Specifically, we established HCPCS code C9758 (Blinded procedure for NYHA class III/IV heart failure; transcatheter implantation of interatrial shunt or placebo control, including right heart catheterization, trans-esophageal echocardiography (TEE)/intracardiac echocardiography (ICE), and all imaging with or without guidance (for example, ultrasound, fluoroscopy), performed in an approved investigational device exemption (IDE) study) to describe the service, and we assigned the service to New Technology APC 1589 (New Technology—Level 38 ($10,001-$15,000)).

No claims have been reported for HCPCS code C9758. Therefore, we proposed to continue to assign the service to New Technology APC 1589 for CY 2021. The proposed CY 2021 payment rate for V-Wave interatrial shunt procedure can be found in Addendum B to the proposed rule (which is available via the internet on the CMS website).

Comment: Three commenters including the developer of the V-Wave interatrial shunt procedure and the developer of the Corvia Medical interatrial shunt procedure requested that we delete HCPCS code C9758 because V-Wave has decided to no longer seek Medicare payment for its interatrial shunt procedure trial. The commenters believe that deleting HCPCS code C9758 will help prevent provider confusion with billing procedures describing the implementation of interatrial shunts.

Response: We do not intend to delete HCPCS code C9758 and believe that HCPCS code C9758 is sufficiently distinct from HCPCS code C9760 (Non-randomized, non-blinded procedure for nyha class ii, iii, iv heart failure; transcatheter implantation of interatrial shunt or placebo control, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (tee)/intracardiac echocardiography (ice), and all imaging with or without guidance (for example, ultrasound, fluoroscopy), performed in an approved investigational device exemption (ide) study) that providers will not be confused about the appropriate service code to report.

Comment: Two commenters, including the developer of the V-Wave interatrial shunt procedure and the developer of the Corvia Medical interatrial shunt procedure, provided information about procedures that had comparable non-device service costs similar to the interatrial shunt procedures. One commenter suggested using the non-device cost of CPT code 93580 (Percutaneous transcatheter closure of congenital interatrial communication (that is, fontan fenestration, atrial septal defect) with implant) to approximate non-device costs for this procedure. The other commenter suggested that interatrial septal shunt procedures and percutaneous intracardiac closure procedures (CPTs 93580-93591) assigned to APC 5194 (Level 4—Endovascular Procedures) would describe the non-device costs of the interatrial shunt procedures.

Response: Based on the suggestions of the commenters, we averaged the non-device costs of the interatrial septal shunt procedures and percutaneous intracardiac closure procedures to estimate the non-device costs of the interatrial shunt procedures. Our estimate of the non-device costs of both the V-Wave interatrial shunt and Corvia Medical interatrial shunt procedures was around $6,500.

Comment: One commenter requested that we assign the V-Wave interatrial shunt procedure to a New Technology APC that reflects the cost of the procedure.

Response: We will assign the V-Wave interatrial shunt procedure to an APC that reasonably reflects the cost of the Start Printed Page 85946procedure both when the device is implanted and when a placebo treatment occurs.

After reviewing the public comments and analyzing the cost of both the V-Wave interatrial shunt procedure and the Corvia Medical interatrial shunt procedure, we will finalize our proposal with modifications. We believe that similar resources and device costs are involved with the V-Wave interatrial shunt procedure and the Corvia Medical interatrial shunt procedure. Therefore, the difference in the payment for HCPCS codes C9758 and C9760 is based on how often the interatrial shunt is implanted when each code is billed. An interatrial shunt is implanted one-half of the time HCPCS code C9758 is billed. Therefore, we will reassign HCPCS code C9758 to New Technology APC 1590, which reflects the cost of having surgery every time and receiving the interatrial shunt one-half of the time when the procedure is performed. Details about the HCPCS code and its APC assignment are shown in Table 15. The final CY 2021 payment rate for the V-Wave interatrial shunt procedure can be found in Addendum B to the final rule.

i. Corvia Medical Interatrial Shunt Procedure

Corvia Medical is currently conducting their pivotal trial for their interatrial shunt procedure. The trial started in Quarter 1 of CY 2017 and is scheduled to continue through CY 2021. On July 1, 2020, we established HCPCS code C9760 (Non-randomized, non-blinded procedure for nyha class ii, iii, iv heart failure; transcatheter implantation of interatrial shunt or placebo control, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (tee)/intracardiac echocardiography (ice), and all imaging with or without guidance (for example, ultrasound, fluoroscopy), performed in an approved investigational device exemption (ide) study) to facilitate the implantation of the Corvia Medical interatrial shunt.

In the CY 2021 OPPS/ASC proposed rule, we proposed to assign HCPCS code C9760 to New Technology APC 1589. The proposed CY 2021 payment rate for Corvia Medical interatrial shunt procedure was found in Addendum B to the proposed rule (which is available via the internet on the CMS website).

Comment: Several commenters recommended revising the code descriptor for HCPCS code C9760 since the current descriptor inaccurately suggests that the code may include placebo control subjects who would not receive a shunt implant. The commenters specifically requested deleting the phrase “or placebo control” to eliminate any confusion on how this code should be reported.

Response: We agree with the commenters and have revised the long descriptor effective January 1, 2021 to read “Non-randomized, non-blinded procedure for NYHA Class II, III, IV heart failure; transcatheter implantation of interatrial shunt, including right and left heart catheterization, transeptal puncture, trans-esophageal echocardiography (TEE)/intracardiac echocardiography (ICE), and all imaging with or without guidance (for example, ultrasound, fluoroscopy), performed in an approved investigational device exemption (IDE) study.” The revised long descriptor for HCPCS code C9760 can also be found in the 2021 Alpha Numeric HCPCS File that is posted on the CMS HCPCS website, specifically, at https://www.cms.gov/​Medicare/​Coding/​HCPCSReleaseCodeSets/​Alpha-Numeric-HCPCS.

Comment: Two commenters, including the developer of the Corvia Medical interatrial shunt procedure and the developer of the V-Wave interatrial shunt procedure, provided information about procedures that had comparable non-device service costs similar to the interatrial shunt procedures. One commenter suggested using the non-device cost of CPT code 93580 (Percutaneous transcatheter closure of congenital interatrial communication (that is, fontan fenestration, atrial septal defect) with implant). The other commenter suggested that interatrial septal shunt procedures and percutaneous intracardiac closure procedures (CPTs 93580-93591) assigned to APC 5194 (Level 4—Endovascular Procedures) would describe the non-device costs of the interatrial shunt procedures.

Response: Based on the suggestions of the commenters, we averaged the non-device costs of the interatrial septal shunt procedures and percutaneous intracardiac closure procedures to estimate the non-device costs of the interatrial shunt procedures. Our estimated cost of the non-device costs of the both the Corvia Medical interatrial shunt and V-Wave interatrial shunt procedures was around $6,500.

Comment: Multiple commenters, including the developer of the Corvia Medical interatrial shunt procedure and the developer of the V-Wave interatrial shunt procedure, requested a higher payment rate for the procedure. Several commenters were concerned that the payment rate established for HCPCS Start Printed Page 85947code C9760 would discourage providers from participating in the clinical trial, and the developer of the Corvia Medical interatrial shunt procedure stated that they had to assume all costs for the trial because of inadequate payment for the Corvia Medical interatrial shunt procedure. The developer of the V-Wave interatrial shunt procedure mentioned that HCPCS code C9760 is the service code they will use to report interatrial shunt procedures for their continuing study.

Response: As mentioned earlier, we decided to estimate the non-device costs of both the Corvia Medical interatrial shunt procedure and the V-Wave interatrial shunt procedure. We also plan to combine the non-device costs of the procedures with the costs of the interatrial shunt device to create a new estimate of the payment rate for HCPCS code C9760. HCPCS code C9760 can be used to report any non-randomized, non-blinded study related to the implantation of interatrial shunts where the device is implanted for every procedure reported.

After our review of the public comments, we intend to finalize our proposal with modifications. We believe that similar resources and device costs are involved with the Corvia Medical interatrial shunt procedure and the V-Wave interatrial shunt procedure. Therefore, the difference in the payment for HCPCS codes C9760 and C9758 is based on how often the interatrial shunt is implanted when each code is billed. The Corvia Medical interatrial shunt is implanted every time HCPCS code C9760 is billed. Therefore, we will reassign HCPCS code C9760 to New Technology APC 1592. We also will implement the commenters' suggestion to modify the code descriptor for HCPCS code C9760 to remove the phrase “or placebo control,” from the descriptor. Details about the HCPCS code and its APC assignment are shown in Table 16. The final CY 2021 payment rate for the Corvia Medical interatrial shunt procedure can be found in Addendum B to the final rule.

j. Supervised Visits for Esketamine Self-Administration (HCPCS Codes G2082 and G2083 APCs 1508 and 1511)

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

A treatment session of esketamine consists of instructed nasal self-administration by the patient, followed by a period of post-administration observation of the patient under direct supervision of a health care professional. Esketamine is a noncompetitive N-methyl D-aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as an aqueous solution of esketamine hydrochloride in a vial with a nasal spray device. This is the first FDA approval of esketamine for any use. Each device delivers two sprays containing a total of 28 mg of esketamine. Patients would require either two (2) devices (for a 56mg dose) or three (3) devices (for an 84 mg dose) per treatment.

Because of the risk of serious adverse outcomes resulting from sedation and dissociation caused by Spravato administration, and the potential for abuse and misuse of the product, Spravato is only available through a restricted distribution system under a REMS; patients must be monitored by a health care provider for at least 2 hours after receiving their Spravato dose; the prescriber and patient must both sign a Patient Enrollment Form; and the product will only be administered in a certified medical office where the health care provider can monitor the patient. Please refer to the CY 2020 PFS final rule and interim final rule for more information about supervised visits for esketamine self-administration (84 FR 63102 through 63105).

To facilitate prompt beneficiary access to the new, potentially life-saving treatment for TRD using esketamine, we created two new HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code G2082 is for an outpatient visit for the evaluation and management of an established patient that requires the supervision of a physician or other qualified health care professional and provision of up to 56 mg of esketamine nasal self-administration and includes 2 hours post-administration observation. HCPCS code G2082 was assigned to New Technology APC 1508 (New Start Printed Page 85948Technology—Level 8 ($601-$700)) with a payment rate of $650.50. HCPCS code G2083 describes a similar service to HCPCS code G2082, but involves the administration of more than 56 mg of esketamine. HCPCS code G2083 was assigned to New Technology APC 1511 (New Technology—Level 11 ($901-$1000)) with a payment rate of $950.50.

No Medicare OPPS claims had been reported for either HCPCS code G2082 or G2083 prior to the CY 2021 OPPS/ASC proposed rule. Therefore, we proposed to continue to assign HCPCS code G2082 to New Technology APC 1508 and to assign HCPCS code G2083 to New Technology APC 1511. The proposed CY 2021 payment rate for esketamine self-administration can be found in Addendum B to proposed rule (which is available via the internet on the CMS website).

Comment: Two commenters supported our proposal.

Response: We appreciate the support of the commenters.

We have not received any OPPS claims for this code prior to this final rule. After reviewing the public comments for this proposal, we have decided to implement our proposal without modification to assign HCPCS code G2082 to New Technology APC 1508 and to assign HCPCS code G2083 to New Technology APC 1511. Details about the HCPCS codes and their APC assignments are shown in Table 17. The final CY 2021 payment rate for esketamine self-administration can be found in Addendum B to the proposed rule (which is available via the internet on the CMS website).

D. APC-Specific Policies

1. Administration of Lacrimal Ophthalmic Insert Into Lacrimal Canaliculus (APC 5692)

HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg) is a drug indicated “for the treatment of ocular inflammation and pain following ophthalmic surgery.”[4] Stakeholders assert that this drug is administered through CPT code 0356T (Insertion of drug-eluting implant (including punctal dilation and implant removal when performed) into lacrimal canaliculus, each). Stakeholders also state the drug is inserted in a natural opening in the eyelid (called the punctum) and that the drug is designed to deliver a tapered dose of dexamethasone to the ocular surface for up to 30 days.

HCPCS code J1096 is currently on pass-through status and assigned to APC 9308 (Dexametha opth insert 0.1 mg) with status indicator “G”. Please see section V.A.5. of this final rule with comment period for further information Start Printed Page 85949regarding the pass-through status of J1096. CPT code 0356T is currently assigned to status indicator “Q1,” indicating conditionally packaged payment under the OPPS. Packaged payment applies if a code assigned status indicator “Q1” is billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”. Accordingly, based on the OPPS assigned status indicator, CPT code 0356T is assigned to payment indicator “N1” in the ASC setting, meaning a packaged service/item.

We refer readers to Addendum D1 of this final rule for a list of OPPS status indicators and their definitions, available via the internet on the CMS website. We also refer readers to Addendum AA for ASC payment indicator assignments and to Addendum DD1 for payment indicator definitions, available via the internet on the CMS website.

CPT code 0356T is assigned to APC 5692 (Level 2 Drug Administration). With regards to APCs 5691 (Level 1 Drug Administration) and APC 5692 (Level 2 Drug Administration), and as stated in the CY 2018 OPPS/ASC final rule with comment period, 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. Therefore, in the CY 2018 OPPS/ASC final rule with comment period, after consideration of the public comments we received, we finalized, without modification, the proposed policy to conditionally package low-cost drug administration services assigned to APC 5691 and APC 5692 (82 FR 52391 through 52393). Additionally, conditional packaging for Levels 1 and 2 Drug Administration services is consistent with the ancillary packaging policy that was adopted in the 2015 OPPS/ASC Final Rule with comment period (79 FR 66819 through 66822). Accordingly, in the CY 2021 OPPS/ASC Proposed Rule, we did not propose to change the OPPS status indicator assignment and APC placement, or ASC payment indicator assignment for CPT code 0356T.

Comment: Several commenters had concerns with continuing the same APC placement of APC 5692 for CPT code 0356T for CY 2021. Commenters generally advocated for separate payment for this CPT code through a change in status indicator. A few commenters suggested alternative APC placements, such as APC 5501 (Level 1 Extraocular, Repair, and Plastic Eye Procedures), APC 5693 (Level 3 Drug Administration), or APC 1504 (New Technology—Level 4), whereas other commenters requested a larger payment in general without a specific APC placement suggestion. Several stakeholders commented that the clinical importance of providing HCPCS code J1096 to patients is that it reduces ocular pain, inflammation, and reduces the burden of topical eyedrop application.

Additionally, providers stated that they usually perform CPT code 0356T to administer HCPCS code J1096 after the conclusion of ophthalmic surgeries. Most commonly, providers cited using CPT code 0356T to administer HCPCS code J1096 after surgeries such as cataract, glaucoma, and corneal surgeries. Commenters believe the procedure is a distinct surgical procedure that requires additional operating room time and resources. Commenters were concerned that the lack of increased or separate payment may reduce access to HCPCS J1096, particularly in the ASC setting.

Response: We thank commenters for their feedback. After careful consideration of the statements from commenters, we continue to believe that assignment of CPT code 0356T to APC 5692, with an OPPS status indicator “Q1” and an associated ASC payment indicator of “N1”, is appropriate based on its clinical and resource use similarity to other services assigned to that APC. Commenters have stated that CPT code 0356T is performed during ophthalmic surgeries such as cataract surgeries. We do not find it appropriate to compare CPT code 0356T to that of an independent procedure when performed during these other ophthalmic surgeries. We continue to believe that conditionally packaging the payment for CPT code 0356T into the payment for these primary procedures is appropriate. This is consistent with our policy to conditionally package low-cost drug administration services assigned to APC 5691 (Level 1 Drug Administration) and APC 5692 (Level 2 Drug Administration). We note the policy established in the CY 2018 OPPS to conditionally package low-cost drug administration services assigned to APC 5691 and APC 5692 (82 FR 52391 through 52393). Also, we note that the conditional packaging of drug administration supports our overarching goal to make payments for all services paid under the OPPS and ASC payment system more consistent with those of a prospective payment system and less like those of a per-service fee schedule. We believe that packaging encourages efficiency and is an essential component of a prospective payment system, and that packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service is a fundamental part of the OPPS.

After consideration of the public comments, we are finalizing our proposed policy without modification to assign CPT code 0356T to APC 5692 (Level 2 Drug Administration) with OPPS status indicator “Q1” in the CY 2021 OPPS. Based on those assignments, we are also finalizing an ASC payment indicator for CPT code 0356T of “N1” under the CY 2021 ASC payment system.

2. Chimeric Antigen Receptor T-Cell (CAR T-Cell) Therapy (APCs 5694, 9035, 9194, and 9391)

Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell-based gene therapy in which T-cells are collected and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient's cancerous cells. The CAR T-cells are then administered to the patient to attack certain cancerous cells and the individual is observed for potential serious side effects that would require medical intervention. We refer readers to previous discussions in the OPPS/ASC final rules with comment period for background regarding the specific CAR T-cell products, in both the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908). In addition, for discussion about CY 2021 OPPS payment policies for separately paid drugs with pass-through status expiring or continuing in CY 2021, please see sections V.A.4. and V.A.5. of this final rule with comment period.

The AMA created four Category III CPT codes that are related to CAR T-cell therapy, effective January 1, 2019. As discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58904 through 58908) and the CY 2020 OPPS/ASC final rule with comment period (84 FR 61231 through 61234), we finalized our proposal to assign procedures described by CPT codes 0537T, 0538T, and 0539T to status indicator “B” (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. The procedures described by CPT codes 0537T, 0538T, and 0539T describe the various steps required to collect and Start Printed Page 85950prepare the genetically modified T-cells, and Medicare does not generally pay separately for each step used to manufacture a drug or biological. We also finalized that the procedures described by CPT code 0540T would be assigned status indicator “S” (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level 4 Drug Administration) for CY 2019 and CY 2020, and made no proposal to change the assignment for CY 2021. Additionally, the National Uniform Billing Committee (NUBC) established CAR T-cell-related revenue codes and a value code to be reportable on Hospital Outpatient Department (HOPD) claims effective for claims received on or after April 1, 2019.

We made no specific proposal related to the CAR T-cell preparation codes, as described by CPT codes 0537T, 0538T, 0539T. As listed in Addendum B of the CY 2021 OPPS/ASC proposed rule, we proposed to continue to assign procedures described by these CPT codes, 0537T, 0538T, and 0539T, to status indicator “B” (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. We proposed to continue to assign CPT code 0540T to status indicator “S” (Procedure or Service, Not Discounted when Multiple) and APC 5694 (Level IV Drug Administration).

Comment: Several commenters opposed our proposal to continue to assign status indicator “B” to CPT codes 0537T, 0538T, and 0539T for CY 2021. Commenters stated that a change in status indicator would be appropriate, with a preference for assigning CPT codes 0537T, 0538T, and 0539T to status indicator “Q1”. Commenters believed that the procedures these CPT codes describe did not represent the steps required to manufacture the CAR T-cell product, as CMS has stated. Generally, those advocating for a change in status indicator contend this change is necessary to allow services furnished to the patient to be eligible for payment and for hospitals to be paid appropriately for the services they provide during each step of the CAR T-cell process. Commenters asked CMS to release new cost centers and to revise the instructions in MLN Matters Article SE19009 accordingly.

Response: We thank the commenters for their feedback. CMS does not believe that separate or packaged payment under the OPPS is necessary for the procedures described by CPT codes 0537T, 0538T, and 0539T for CY 2021. The procedures described by CPT codes 0537T, 0538T, and 0539T describe the various steps required to collect and prepare the genetically modified T-cells and Medicare does not generally pay separately for each step used to manufacture a drug or biological product. Additionally, we note that CAR T-cell therapy is a unique therapy approved as a biologic, with unique preparation procedures, that cannot be directly compared to other therapies or existing CPT codes. We note that the current HCPCS coding for the currently approved CAR T-cell therapies include leukapheresis and dose preparation procedures, as these services are included in the manufacturing of these biologicals. Therefore, payment for these services is incorporated into the drug codes. Please see Table 18 for HCPCS coding for CAR T-cell therapies.

We note that although there is no payment associated with CPT codes 0537T, 0538T, and 0539T for reasons stated previously, these codes can still be reported to CMS for tracking purposes. We thank commenters for their feedback related to cost centers and our guidance contained in MLN Matters Article SE19009.[5] We are not revising this document at this time, but appreciate the feedback from stakeholders. Also, we would like to note that HOPDs can bill Medicare for reasonable and necessary services that are otherwise payable under the OPPS, and we believe that the comments in reference to payment for services in settings not payable under the OPPS are outside the scope of this proposed rule. Accordingly, we are not revising the existing codes for CAR T-cell therapies to remove leukapheresis and dose preparation procedures, and we are not accepting the recommendations at this time to revise the status indicators for procedures described by CPT codes 0537T, 0538T, and 0539T. We will continue to evaluate and monitor payment for CAR T-cell therapies.

In summary, after consideration of the public comments we received, we are finalizing our proposal to assign status indicator “B” to CPT codes 0537T, 0538T, and 0539T for CY 2021. Additionally, we are continuing our policy from CY 2019 to assign status indicator “S” to CPT code 0540T for CY 2021. Table 19 below shows the final SI Start Printed Page 85951and APC assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for CY 2021. For more information on CY 2021 OPPS final status indicators, APC assignments, and payment rates for HCPCS codes, including the CAR T-cell drug codes, we refer readers to Addendum B to this final rule with comment period. In addition, the status indicator definitions can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2021) to this final rule with comment period. Both Addendum B and D1 are available via the internet on the CMS website.

3. Eustachian Tube Balloon Dilation Procedure (APC 5165)

For the CY 2021 update, the CPT Editorial Panel established CPT codes 69705 and 69706 to describe the eustachian tube balloon dilation (ETBD) surgical procedure effective January 1, 2021. Prior to CY 2021, this surgical procedure was described by HCPCS code C9745.

In 2017, CMS received a new technology application for the transnasal flexible balloon catheter eustachian tube dilation surgical procedure, which is associated with the Acclarent Aera Eustachian Tube Balloon Dilation System, and established a new code, specifically, HCPCS code C9745. Based on the estimated cost for the bilateral placement of the eustachian tube balloon dilation devices, we assigned the code to APC 5165 (Level 5 ENT Procedures) with a payment rate of $4,130.94 effective July 1, 2017. We announced the new code, interim SI and APC assignments, and payment rate in the July 2017 quarterly update to the OPPS (Transmittal 3783, Change Request 10122, dated May 26, 2017).

For the CY 2018 update, we made no change to the APC assignment and continued to assign HCPCS code C9745 to APC 5165 with a payment rate of $4,338.79. We note that OPPS payment rates for the CY 2018 update were based on claims submitted between January 1, 2016 through December 30, 2016, that were processed on or before June 30, 2017. Because HCPCS code C9745 was established on July 1, 2017, we had no claims data for the procedure for use in CY 2018 ratesetting.

For the CY 2019 update, based on our analysis of the claims data, we made no change to the payment assignment and continued to assign HCPCS code C9745 to APC 5165. Specifically, our claims data showed a geometric mean cost of approximately $4,385 for HCPCS code C9745 based on 217 single claims (out of 218 total claims), which was consistent with the geometric mean cost of about $4,462 for APC 5165. Consequently, we retained HCPCS code C9745 in APC 5165.

Similarly, for CY 2020, we made no change to the APC assignment for HCPCS code C9745, consistent with our claims data. Based on claims submitted between January 1, 2018 through December 30, 2018, that were processed on or before June 30, 2019, the geometric mean cost for HCPCS code C9745 was approximately $4,547 based on 577 single claims (out of 582 total claims), which is in line with the geometric mean cost of $4,746 for APC 5165. Therefore, we maintained HCPCS code C9745 in APC 5165.

For CY 2021, we proposed to delete HCPCS code C9745 and assign CPT code 69705 to APC 5164 (Level 4 ENT Procedures) with a proposed OPPS payment of $2,776.63 and assign CPT code 69706 to APC 5165 (Level 5 ENT Procedures) with a proposed OPPS payment of $5,150.60. Because HCPCS code C9745 was on the ASC Covered Surgical Procedures list, we also proposed to assign CPT code 69705 to ASC payment indicator “J8” (device-intensive) with a proposed ASC payment of $1,564.17. Similarly, we proposed to assign CPT code 69706 to ASC payment indicator “J8” (device-intensive) with a proposed ASC payment of $3,453.23. We note that CPT codes 69705 and 69706 were listed as placeholder codes 697XX and 697X1, respectively, in OPPS Addendum B and ASC Addendum AA to the CY 2021 OPPS/ASC proposed rule.

Comment: Some commenters expressed concern with the proposed assignment to APC 5164 for CPT code 69705 (unilateral procedure) and stated that the proposed assignment will negatively affect the reimbursement of the procedure in the ASC setting, and ultimately decrease access to the procedure. They stated that the major portion of the procedure cost is the device used in the procedure, and reported the device cost is about $2,180, which is used for each procedure, regardless of whether it is a unilateral or bilateral procedure. In addition, they stated that in the CY 2021 Physician Fee Schedule (PFS) proposed rule, the Start Printed Page 85952estimate for the non-facility payment for CPT codes 69705 and 69706 includes the full cost of the device kit, specifically, $3,092.81 for CPT code 69705 (unilateral) and $3,183.14 for CPT code 69706 (bilateral). To ensure fair reimbursement for unilateral procedures, they recommended that CMS assign both codes to APC 5165. However, in the event the recommendation is not accepted, they urged CMS to reconsider the device-intensive calculation for CPT code 69705 to reflect the cost of the device kit for unilateral procedures in the ASC setting; otherwise, commenters contended the ASC payment will be reduced below the actual cost of the device kit.

Response: Our medical advisors advised that the procedure described by CPT code 69705, while performed in the hospital outpatient setting, will primarily be performed in either the physician office or ASC setting. To ensure that Medicare beneficiaries have access to the procedure, we believe that it is appropriate to reassign CPT code 69705 (unilateral) to the same APC as CPT code 69706 (bilateral). That is, we believe that reassigning CPT code 69705 to APC 5165 will better reflect the device cost to perform this procedure either unilaterally or bilaterally when furnished in either the hospital outpatient or the ASC setting.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign CPT code 69706 to APC 5165. However, we are finalizing our proposal, with modification, to assign CPT code 69705 to APC 5165 for CY 2021. We note that we are deleting HCPCS code C9745 on December 31, 2020, since it has been replaced with CPT codes 69705 and 69706 effective January 1, 2021. Table 20 lists the final SI and APC assignments for the two codes. The final CY 2021 OPPS payment rate for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

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

For July 2020, the CPT Editorial Panel established a new CPT code 0615T, effective July 1, 2020, to describe eye-movement analysis without spatial calibration that involves the use of the EyeBOX system as an aid in the diagnosis of concussion, also known as mild traumatic brain injury (mTBI). The EyeBOX is intended to measure and analyze eye movements as an aid in the diagnosis of concussion within one week of head injury in patients 5 through 67 years of age in conjunction with a standard neurological assessment of concussion. A negative EyeBOX classification may correspond to eye movement that is consistent with a lack of concussion. A positive EyeBOX classification corresponds to eye movement that may be present in both patients with or without a concussion.

We included this new code in the July quarterly OPPS update CR (Transmittal 10224, Change Request 11814, dated July 15, 2020). Effective July 1, 2020, we assigned CPT code 0615T to APC 5734 (Level 4 Minor Procedures) with status indicator “Q1” (conditionally packaged) and a CY 2020 OPPS payment rate of $109.03 as reflected in the Addendum B to the July 2020 quarterly OPPS update.

As displayed in the Addendum B to the 2021 ASC/OPPS Proposed Rule, we proposed to assign 0615T to APC 5734 with status indicator “Q1” and a proposed OPPS payment rate of $113.23 for CY 2021. We also assigned this code to comment indicator “NP” in Addendum B to indicate that this code is new effective July 1, 2020, and that public comments would be accepted on its proposed status indicator assignment.

Comment: A commenter was concerned that what they believed was a lack of adequate, separate payment would strongly discourage hospitals from providing this important new technology to their patients. The commenter urged CMS to: (1) Change the APC assignment of CPT code 0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services) with a proposed OPPS payment rate of $269.85 and (2) change the status indicator for the service to “S” to allow for a separate payment under the OPPS.

The commenter asked that CMS assign CPT code 0615T to APC 5722 for two reasons: (1) The current and proposed reimbursement rates for services in APC 5734 are inadequate to pay hospitals appropriately for the costs Start Printed Page 85953of furnishing the EyeBOX test; and (2) the clinical characteristics and resources associated with 0615T are more similar to codes in APC 5722 than services in APC 5734.

Response: We note that OPPS payment rates for the CY 2021 final rule are based on claims submitted between January 1, 2019 through December 31, 2019, that were processed on or before June 30, 2020. Because HCPCS code 0615T was established on July 1, 2020, we did not have claims data for CY 2021 OPPS ratesetting.

In terms of the resource similarity of CPT code 0615T to other eye-related diagnostic tests that are assigned to APC 5722, such as CPT code 92240 (Indocyanine-green angiography (includes multiframe imaging) with interpretation and report, unilateral or bilateral) and CPT code 92242 (Fluorescein angiography and indocyanine-green angiography (includes multiframe imaging) performed at the same patient encounter with interpretation and report, unilateral or bilateral), the EyeBOX test does not involve an injection. Therefore, we do not believe that the resource costs for CPT code 0615T are comparable to other eye-related diagnostic tests in APC 5722. Updated claims data for this final rule with comment period indicate that the geometric mean cost of APC 5722 is $257.61, while the geometric mean cost of APC 5734 is $109.05. However, because there were no claims for CPT code 0615T in the CY 2021 updated data set, we have decided not to make any changes to the proposed CY 2021 APC assignment and to assign the code to the APC with the lower geometric mean cost. Based on these findings, we believe that maintaining assignment of APC 5734 for CPT code 0615T for CY 2021 is appropriate.

In response to the comment related to status indicator “Q1”, we note that status indicator “Q1” listed in the OPPS Addendum D1 to this 2021 OPPS/ASC final rule with comment period allows for up to three potential payment assignments:

  • Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”; or
  • Composite APC payment if billed with specific combinations of services based on OPPS composite-specific payment criteria. Payment is packaged into a single payment for specific combinations of services; or
  • In other circumstances, payment is made through a separate APC payment.

Depending on the procedures submitted on the claim and whether the procedure described by CPT code 0615T is performed with any other services on the same day, the procedure described by CPT code 0615T may be paid separately through an APC (in this case APC 5734) or receive packaged payment when accompanying a more significant procedure that is reported on the claim. Based on the nature of this procedure, which may be performed by itself or with other procedures on the same claim, we believe that the continued assignment of status indicator “Q1” is appropriate for the procedure described by CPT code 0615T.

As we do every year, we will reevaluate the APC assignment for CPT code 0615T for the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to assign CPT code 0615T to status indicator “Q1” and APC 5734 for CY 2021. The final CY 2021 payment rate for the CPT code can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).

5. Gynecologic Procedures and Services (APC 5416)

For CY 2021, we proposed to continue to assign CPT code 0404T (Transcervical uterine fibroid(s) ablation with ultrasound guidance, radiofrequency) to APC 5416 (Level 6 Gynecologic Procedures) with a proposed payment of $6,929.92. CPT code 0404T describes the procedure associated with the Sonata System, which is used for the treatment of symptomatic uterine fibroids. We note that CPT code 0404T was effective on January 1, 2016.

Comment: Several commenters stated that the proposed APC payment rate is insufficient to compensate hospital outpatient departments for the resources needed to perform the procedure. They indicated that the combined cost of the single-use handpiece, capital equipment, supplies, screening labs, anesthesia, medication, and facility and personnel overhead are higher than the OPPS payment rate. The commenters asserted that the proposed payment will significantly limit patient access to the procedure because it does not cover the total cost of the surgery. One commenter acknowledged that the proposed payment appropriately reimburses for hospital outpatient costs, but believed the ASC proposed payment of $2,763.68 significantly underpays for the procedure in the ASC setting. The same commenter explained that CMS has no claims data for the code because the procedure is rarely performed on Medicare patients, and also due to the device's commercial availability. Although the CPT code was effective January 2016, because of manufacturing issues, the company was unable to submit their FDA application until a couple of years later. The company eventually received market approval from the FDA in August 2018 and the device was commercially available in late summer/early Fall 2019. To ensure access to the procedure, the commenters suggested reassigning CPT code 0404T to either:

  • APC 5362 (Level 2 Laparoscopy and Related Services) with a proposed payment rate of $9,041.94 because the procedure cost is similar to these procedures:

○ CPT code 43210 (Esophagogastroduodenoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performed);

○ CPT code 50593 (Ablation, renal tumor(s), unilateral, percutaneous, cryotherapy);

○ CPT code 58546 (Laparoscopy, surgical, myomectomy, excision; 5 or more intramural myomas and/or intramural myomas with total weight greater than 250 g); and

○ CPT code 58674 (Laparoscopy, surgical, ablation of uterine fibroid(s) including intraoperative ultrasound guidance and monitoring, radiofrequency), or

  • APC 5376 (Level 6 Urology and Related Services) with a proposed payment of $8,395.62 because the procedure cost is similar to these procedures:

○ CPT code 55873 (Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring); and

○ CPT code 0421T (Transurethral waterjet ablation of prostate, including control of post-operative bleeding, including ultrasound guidance, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included when performed)).

Response: For CY 2021, OPPS payments are developed based on claims submitted between January 1, 2019 through December 31, 2019, and processed through June 30, 2020. For this final rule with comment period, we have no claims data for this code. As explained by a commenter, CPT code 0404T is a procedure not commonly performed on Medicare beneficiaries. In addition, we disagree with the commenters' assessment that CPT code Start Printed Page 859540404T is similar to the codes they have referenced. CPT code 0404T is not a urology, kidney, or esophagogastroduodenum-related procedure, nor is it a laparoscopy procedure. We believe that the code is appropriately placed in APC 5416 based on its clinical homogeneity and resource costs to the other gynecology-related procedures in the APC. We agree with the commenter who believed that the proposed OPPS payment for the service is adequate to cover the cost of providing the procedure in the hospital outpatient setting.

For a discussion on the ASC payment for CPT code 0404T, we refer readers to the ASC payment section of this CY 2021 OPPS/ASC final rule with comment period, specifically, section XIII. (Updates to the Ambulatory Surgical Center (ASC) Payment System).

Comment: Some commenters suggested designating CPT code 0404T as device-intensive under the OPPS so that facilities can be paid appropriately for furnishing the procedure in the ASC setting. They also recommended establishing an offset percentage that is higher than the default 31 percent based on invoice pricing data provided to CMS by the device manufacturer so that payment for the procedure in the ASC setting includes the cost of the device.

Response: We refer readers to section IV. B. (Device-Intensive Procedures) for the discussion related to the OPPS device offset for the code. For a discussion of the ASC procedures designed as device intensive, please see section XIII.C.1. of this final rule with comment period.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, and assigning CPT code 0404T to APC 5416 for CY 2021. The final CY 2021 OPPS payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) assignments for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

6. Hemodialysis Arteriovenous Fistula (AVF) Procedures (APC 5194)

For CY 2019, based on two new technology applications received by CMS for hemodialysis arteriovenous fistula creation, CMS established two new HCPCS codes to describe the surgical procedure associated with the two technologies since no specific CPT codes exist. Specifically, CMS established HCPCS code C9754 for the Ellipsys System and C9755 for the WavelinQ System effective January 1, 2019. The complete descriptors for both codes are as follows:

  • C9754 (Creation of arteriovenous fistula, percutaneous; direct, any site, including all imaging and radiologic supervision and interpretation, when performed and secondary procedures to redirect blood flow (e.g., transluminal balloon angioplasty, coil embolization, when performed))
  • C9755 (Creation of arteriovenous fistula, percutaneous using magnetic-guided arterial and venous catheters and radiofrequency energy, including flow-directing procedures (e.g., vascular coil embolization with radiologic supervision and interpretation, when performed) and fistulogram(s), angiography, venography, and/or ultrasound, with radiologic supervision and interpretation, when performed)

Both HCPCS codes were assigned to APC 5193 (Level 3 Endovascular Procedures) with a payment rate of $9,669.04 for CY 2019. For CY 2020, as discussed in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61246), we revised the assignment for both codes to APC 5194 (Level 4 Endovascular Procedures) with a payment rate of $15,939.97.

For the July 2020 update, we deleted HCPCS codes C9754 and C9755 on June 30, 2020, and replaced them with G-codes effective July 1, 2020 to enable physicians to report the procedures when performed in the physician office setting. Specifically, we deleted HCPCS code C9754 on June 30, 2020 because it was replaced with HCPCS code G2170 effective July 1, 2020. Similarly, we deleted HCPCS code C9755 on June 30, 2020 because it was replaced with HCPCS code G2171 effective July 1, 2020. Below are the complete descriptors for HCPCS codes G2170 and G2171:

  • G2170 (Percutaneous arteriovenous fistula creation (AVF), direct, any site, by tissue approximation using thermal resistance energy, and secondary procedures to redirect blood flow (e.g., transluminal balloon angioplasty, coil embolization) when performed, and includes all imaging and radiologic guidance, supervision and interpretation, when performed)
  • G2171 (Percutaneous arteriovenous fistula creation (AVF), direct, any site, using magnetic-guided arterial and venous catheters and radiofrequency energy, including flow-directing procedures (e.g., vascular coil embolization with radiologic supervision and interpretation, when performed) and fistulogram(s), angiography, enography, and/or ultrasound, with radiologic supervision and interpretation, when performed)

We deleted the C-codes based on concerns from stakeholders that physicians are reluctant to perform the Ellipsys procedure in the physician office setting without a specific HCPCS code. With the deletion of the C-codes, we crosswalked the APC assignment and payment rate for the C-codes to the new G-codes. We note that C-codes are not reportable on Medicare physician office claims, whereas G-codes are reportable on physician office, hospital outpatient, and ambulatory surgical center claims.

For CY 2021, we proposed to reassign HCPCS code G2170 (Ellipsys System) from APC 5194 to APC 5193 (Level 3 Endovascular Procedures) with a proposed payment rate of $10,222.32, based on the latest claims data. Specifically, based on the predecessor HCPCS code C9754, our claims data for the proposed rule showed a HCPCS geometric mean cost of approximately $10,068 based on 57 single claims (out of 57 total claims), which is comparable to the geometric mean cost of about $9,850 for APC 5193 rather than the geometric mean cost of approximately $15,753 for APC 5194. In addition, we proposed to maintain the assignment to APC 5194 for G2171 (WavelinQ System) because our claims data for the proposed rule, based on predecessor HCPCS code C9755, showed a geometric mean cost of about $13,519 based on 182 single claims (out of 186 total claims), which is consistent with the geometric mean cost of about $15,753 for APC 5194.

At the August 31, 2020 HOP Panel Meeting, a presenter requested that we maintain the assignment for the WavelinQ procedure (HCPCS code G2170) to APC 5194. The presenter stated that the number of single claims is too small to support a reassignment to APC 5193. Based on the discussion during the meeting, the HOP Panel recommended that CMS maintain the assignment of HCPCS code G2170 in APC 5194 for CY 2021.

Comment: Most commenters opposed the reassignment to APC 5193 for G2170 and suggested that we continue to assign the code to APC 5194 based on the HOP Panel recommendation at the August 31, 2020 meeting. They argued that the number of single claims on which to base the reassignment is too low, and recommended that CMS maintain the current assignment to APC 5194 until more claims data can be gathered for appropriate APC assignment. However, one commenter suggested that we reassign HCPCS code G2170 to APC 5193 based on the 1-year Start Printed Page 85955claims data, and stated that the HOP Panel recommendation to maintain the assignment to APC 5194 is not supported by the hospital claims data. This same commenter suggested that the 1-year hospital claims data does support maintaining HCPCS code G2171 in APC 5194. One commenter reported that reassigning the code to APC 5193 would be insufficient to cover the cost of the procedure in the ASC setting. According to the commenter, the proposed CY 2021 ASC payment for HCPCS code G2170 is $5,887.63, which does not cover the cost of the $6,000 device used in the procedure.

Response: As noted above, HCPCS codes G2170 and G2171 are two technologies used for hemodialysis arteriovenous fistula creation. We note that these procedures are furnished to dialysis patients with chronic kidney disease, which affects thousands of Medicare beneficiaries. To ensure Medicare access to these dialysis-related procedures in both the hospital outpatient and ASC settings, which is in line with various HHS initiatives, including the HHS Initiative on “Advancing American Kidney Health”, we believe that we should maintain both codes in APC 5194 for CY 2021. In addition, maintaining the assignment to APC 5194 for both codes is consistent with the HOP Panel's recommendation at the August 31, 2020 meeting. Moreover, given the low frequency of claims for HCPCS code G2170 (predecessor HCPCS code C9754), we also reviewed the arithmetic mean and median costs for the code, as we would do for New Technology APC services with fewer than 100 claims. We noted that HCPCS code G2170 and HCPCS code G2171 (predecessor HCPCS code C9755) have very similar median costs, and combined with the low claims data for HCPCS code G2170, the fact that this is the first year of claims data available for these services, as well as the public comments and the HOP Panel recommendation, we believe that it would be inappropriate to assign these two services to different APCs. As a result, we are using 1833(t)(2)(E) to assign HCPCS code G2170 (predecessor HCPCS code C9754) to APC 5194 because its cost is similar to HCPCS code G2171 and both procedures are performed for ESRD patients that need dialysis. Therefore, 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 assign G2170 to APC 5194. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS, and continue to monitor the updated claims data for these codes as they become available.

In summary, after consideration of the public comments, we are finalizing our proposal with modification. Specifically, we are finalizing our APC proposal to assign HCPCS code G2171 to APC 5194, and assigning HCPCS code G2170 to APC 5194 for CY 2021 using our equitable adjustment authority. The final CY 2021 OPPS payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

7. Health and Behavior Services (APC 5822)

For CY 2021, we proposed to revise the payment rate associated with APC 5822 (Level 2 Health and Behavior Services) from $78.54 to $75.26 based on the latest OPPS claims data.

Comment: Some commenters expressed concern with the proposed payment decrease for APC 5822. Several commenters noted that the APC includes a number of needed behavioral health services. Those services include group therapy as well as outpatient programs that are less intensive than PHPs but are still important for those who may not need a full day of treatment all week, but who still require substantial support. The commenters noted that the proposed payment rate decrease of $3.10 per group per patient equates to a reduction of approximately $9.30 per patient per day and that group psychotherapy makes up well over 95 percent of the services provided by programs under Hospital Partial Hospitalization Services. The commenters urged CMS to reexamine the data used in developing the payment for APC 5822. Other commenters requested we reconsider the proposed 4.2 percent payment rate decrease for APC 5822.

Response: The CY 2021 OPPS payment rates are based on claims submitted January 1, 2019 through December 31, 2019, processed through June 30, 2020. Based on our evaluation of the claims data for this final rule with comment period, the geometric mean cost of APC 5822 is approximately $72.94 based on 1,069,622 single claims (out of 1,085,044 total claims).

Based on our review, we have no reason to believe that the services are miscoded. In addition, based on our analysis of the CY 2021 claims data used for this final rule with comment period, we are unable to determine whether facilities are misreporting the services. It is generally not our policy to judge the accuracy of provider coding and charging for purposes of ratesetting. We rely on providers to accurately report the use of HCPCS codes in accordance with their code descriptors and CPT and CMS instructions, and to report services on claims and charges and costs for the services on their Medicare hospital cost report appropriately. Also, we generally do not specify the methodologies that providers use to set charges for this or any other service. Furthermore, we state in Chapter 4 of the Medicare Claims Processing Manual that it is extremely important that facilities report all HCPCS codes consistent with their descriptors; CPT and/or CMS instructions; and correct coding principles, and that all charges for services they furnish, whether payment for the services is made separately paid or is packaged, are reported to enable CMS to establish future ratesetting for OPPS services. Therefore, we are finalizing our proposal, without modification, for APC 5822.

8. High-Density Lipoprotein (HDL) Therapy (APC 5243)

For CY 2021, we proposed to continue to assign CPT code 0342T (Therapeutic apheresis with selective hdl delipidation and plasma reinfusion) to APC 5243 (Level 3 Blood Product Exchange and Related Services) with a proposed payment of $4,074.81.

Comment: One commenter reported that their company expects FDA Humanitarian Device Exemption approval in Q4 of 2020 for its “PDS-2 System,” an HDL Therapy system that is designed to reduce plaque in coronary arteries and increase HDL levels in patients diagnosed with homozygous familial hypercholesterolemia (HoFH). The commenter indicated that the code associated with their device is CPT code 0342T. The commenter stated that they intend to apply to CMS for a new technology APC in early 2021. According to the commenter, the cost of the therapy described by CPT code 0342T is $77,100. The commenter suggested that the proposed payment of $4,074.81 for APC 5243 (Level 3 Blood Product Exchange and Related Services) and $37,470.54 for APC 5244 (Level 4 Blood Product Exchange and Related Services) does not capture the cost of providing the therapy, and Start Printed Page 85956consequently, the company intends to submit an application for a new technology APC in 2021.

Response: We thank the commenter for making us aware of their intent to submit a new technology APC application. Once we receive the application, we will review it and make the appropriate determination.

9. Imaging With and Without Contrast (APCs 5523, 5524, 5571, 5572, and 5573)

a. Cardiac Computed Tomography (CT) (APC 5571)

For CY 2021, we proposed to continue to assign the following cardiac CT exam codes to APC 5571 (Level 1 Imaging with Contrast) with a proposed payment rate of $181.41.

  • 75572 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology (including 3d image postprocessing, assessment of cardiac function, and evaluation of venous structures, if performed))
  • 75573 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology in the setting of congenital heart disease (including 3d image postprocessing, assessment of lv cardiac function, rv structure and function and evaluation of venous structures, if performed))
  • 75574 (Computed tomographic angiography, heart, coronary arteries and bypass grafts (when present), with contrast material, including 3d image postprocessing (including evaluation of cardiac structure and morphology, assessment of cardiac function, and evaluation of venous structures, if performed))

We received many comments related to our proposed payment for the cardiac CT codes. Below is a summary of the public comments and our responses to the comments.

Comment: Many commenters opposed the assignment of CPT codes 75572, 75573, and 75574, which are the codes that describe cardiac CT exams, to APC 5571. They stated that the proposed CY 2021 OPPS payment rate of $181.41 for APC 5571 is inadequate to cover the total cost of providing the service. They also indicated that the proposed payment will result in decreased reimbursement for cardiac CT for the fourth consecutive year. Commenters were particularly concerned with the proposed payment for CPT code 75574, for which, according to the commenters, the payment rate has decreased by 30 percent over the past 3 years. They reported that the cardiac CT exam is a complex exam and more time-consuming to perform and interpret than any other type of contrast CT scan. They also believe that the resource costs required to perform cardiac CT scans are similar to the tests that are assigned to APC 5573 rather than APC 5571. They noted that the low payment for the test limits patient access, and requested that CMS take action to increase reimbursement to levels in line with the actual testing costs. The commenters requested an APC reassignment for all three codes. Specifically, the commenters suggested reassigning CPT codes 75572 and 75573 to APC 5572 and CPT code 75574 to APC 5573. Most of the commenters reported that cardiac CT scans are more resource intensive than other CT and x-ray scans and are similar to other cardiac stress imaging modalities like nuclear stress testing; therefore, cardiac CT scans should be reimbursed accordingly.

Another commenter reported that the test described by CPT code 75574 generally takes about four times longer to perform than a CT scan of the thorax with contrast that is described by CPT code 71260 (Computed tomography, thorax; with contrast material(s)) and also assigned to APC 5571. The commenters noted that based on clinical indications and performance/interpretation, CPT code 75574 is very much like a SPECT nuclear scan, which is described by CPT code 78452 (Myocardial perfusion imaging, tomographic (spect) (including attenuation correction, qualitative or quantitative wall motion, ejection fraction by first pass or gated technique, additional quantification, when performed); multiple studies, at rest and/or stress (exercise or pharmacologic) and/or redistribution and/or rest reinjection) and assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a proposed payment rate of $1,336.28, rather than a CT scan of the thorax. The commenters further asserted that cardiac CT scans prior to invasive angiography lead to lower utilization of cardiac catheterization, PCI, and costs.

Response: Payments under the OPPS are based on our analysis of the latest available claims and cost report data submitted to Medicare. We have many years of claims data for CPT codes 75572, 75573, and 75574. The AMA established specific CPT codes for cardiac CT services beginning in 2006 when they were first described by Category III codes. The Category III CPT codes were subsequently deleted on December 31, 2009, and replaced with Category I CPT codes 75572, 75573, and 75574, which were effective on January 1, 2010. Because OPPS payments are updated every year based on our analysis of the latest claims data, the payment rates have varied each year based on that data.

For CY 2021, OPPS payments are based on claims submitted between January 1, 2019 through December 31, 2019, that were processed on or before June 30, 2020. Based on our evaluation of the claims data for this final rule, the geometric mean costs for the cardiac CT scan codes range between $157 and $196. Specifically, as shown in Table 21, our analysis show a geometric mean cost of approximately $157 for CPT code 75572 based on 14,262 single claims, approximately $194 for CPT code 75573 based on 317 single claims, and approximately $196 for CPT code 75574 based on 32,556 single claims. Based on the geometric mean costs for these codes, we do not believe that CPT codes 75572, 75573, and 75574 utilize similar resources as the exams assigned to APC 5572 or APC 5573. The geometric mean costs for the tests placed in APC 5571 range between $157 and $196, while the tests in APC 5572 range between $265 and $510, and for APC 5573, between $534 and $961.

In addition, our data shows that the resources associated with cardiac CT exams are unlike those of single photon emission CT (SPECT) nuclear scans (CPT code 78452). As listed in Table 21, our data shows that SPECT nuclear scans are more often performed on Medicare patients than cardiac CT exams. Specifically, CPT code 78452 shows a geometric mean cost of approximately $1,288 based on 591,344 single claims compared to 47,135 single claims for cardiac CT (CPT codes 75572, 75573, and 75574). Although the commenters have indicated that the resource costs associated with cardiac CT exams are similar to SPECT nuclear scans, our analysis of the latest OPPS claims data reveal otherwise. Similarly, we found the same results for nuclear stress tests (CPT codes 93350 and 93351). That is, that the estimated resource costs to perform nuclear stress tests are higher than for cardiac CT. As noted in Table 21, the geometric mean costs for nuclear stress test range between $529 and $671 based on 92,670 single claims for CPT codes 93350 and 93351, while the geometric mean costs for the cardiac CT codes range between $157 and $196.

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We believe our claims data accurately reflects the resources associated with providing cardiac CT exams in the HOPD setting. Because CPT codes 75572, 75573, and 5574 have been active for some time now, we have no reason to believe that HOPDs have issues with coding or reporting these exams correctly. We believe that HOPDs have had sufficient time to learn how to code and report these services accurately using the Category I CPT codes that were established in 2010.

Moreover, we believe that we have substantial claims data for the cardiac CT services upon which to base the CY 2021 final OPPS payment rates. As noted in Table 22, the total number of claims for these codes has increased each year. The historical OPPS payments for cardiac CT services does not appear to have affected Medicare beneficiaries' access to these services. Given that these services have been paid under the OPPS for many years, with payments based on the latest hospital claims and Medicare cost report data, we believe we are providing a stable and consistent payment methodology that appropriately reflects the hospital resources required for cardiac CT.

Further, reassigning CPT codes 75572 and 75573 from APC 5571 to APC 5572, and CPT code 75574 from APC 5571 to APC 5573 would potentially significantly overpay for the exams. As noted in Table 23, which shows the percent change for each code, reassigning the codes to APC 5572 and APC 5573 would pay at a rate that is two and three times the estimated cost of the service as reflected in the hospital outpatient claims data, and we do not believe that overpaying for the exams is appropriate. We note that we monitor our claims data every year to assess the appropriateness of the APC assignments for all services under the hospital OPPS.

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Every year, since the implementation of the OPPS on August 1, 2000, we receive many requests from specialty associations, device manufacturers, drug manufacturers, and consultants to increase the payments for codes associated with specific drugs, devices, services, and surgical procedures. Under the OPPS, one of our goals is to make payments that are appropriate for the items and services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are generally limited to the annual payment update factor. As a budget neutral payment system, the OPPS does not pay the full hospital costs of services, however, 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.

Comment: Commenters stated that the current methodology for determining OPPS payments disadvantages cardiac CT exams disproportionately and requested that CMS exercise its authority to create an exception to the current payment methodology for the three cardiac CT codes. As an alternative to the current methodology for establishing OPPS payment rates, the commenters suggested using the general cardiology revenue code to set the payment rates for CPT codes 75572, 75573, and 75574. They stated that based on their study that used claims data from CY 2021 OPPS proposed rulemaking, the use of a general cardiology revenue code to set the payment rates matches the actual cost of cardiac exams. Specifically, their results reveal a geometric mean cost of about $400.55 for CPT code 75572, $479.74 for CPT code 75573, and $505.89 for CPT code 75574. Based on their analysis, the commenters contended that the geometric mean costs for CPT codes 75572 and 75573 justify their assignment to APC 5572, and CPT code 75574 to APC 5573.

Response: It is our standard ratesetting methodology to rely on hospital cost and charge information as it is reported to us through the claims and cost report data. We believe that the assignment to APC 5571 for the cardiac CT codes is fully consistent with our standard ratesetting methodology, which provides appropriate incentives for efficiency. The OPPS is a prospective payment system that relies on hospital charges on the claims and cost report data from the hospitals that furnish the services in order to determine relative costs for OPPS ratesetting. We believe that the prospective payment rates for CPT codes 75572, 75573, and 75574, calculated based on the costs of those providers that furnished the services in CY 2019, provide appropriate payment to the providers who will furnish the services in CY 2021. We continue to believe that this standard ratesetting methodology accurately provides payment for cardiac CT exams furnished to hospital outpatients.

Comment: One commenter recommended that we decrease the payment for CPT code 78452 because the commenter believes SPECT is an outdated test for chest pain evaluation. The commenter also stated that the test is overutilized with no evidence of improvement in patient outcomes.

Response: As stated above, we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. For CY 2021, OPPS payments are based on claims data submitted between January 1, 2019 through December 30, 2019, that were processed on or before June 30, 2020. Based on our analysis, and as shown in Table 21 above, the claims data for CPT code 78452 show a geometric mean cost of approximately $1,288 based on 591,344 single claims, which is consistent with the geometric mean cost of about $1,272 for APC 5593 (Level 3 Nuclear Medicine and Related Services). We believe that CPT code 78452 is appropriately assigned to APC 5593. Therefore, based on the latest claims data, we have no basis to reassign the SPECT exam CPT code 78452 to another APC with a lower payment rate.

Comment: Some commenters recommended that CMS allow facilities to submit charges for cardiac CT using revenue codes that they believe would more accurately estimate costs. They added that CMS should provide explicit permission via a line item to allow hospitals to submit charges for cardiac Start Printed Page 85959CT tests under the cardiology stress testing revenue/cost centers. They noted that CMS guidance for all non-CT and MR CPT codes is for hospitals to submit claims utilizing revenue codes that most accurately reflect clinical and resource homogeneity. They believe that making an exception to the current policy and allowing HOPDs to submit charges for cardiac CT tests under the cardiology stress testing revenue/cost centers would provide better data in the future that reflects actual resource costs for cardiac CT.

Response: Hospital outpatient facilities make the final determination for reporting the appropriate cost centers and revenue codes. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims Processing, CMS “does not instruct hospitals on the assignment of HCPCS codes to revenue codes for services provided under OPPS since hospitals' assignment of cost vary. Where explicit instructions are not provided, providers should report their charges under the revenue code that will result in the charges being assigned to the same cost center to which the cost of those services are assigned in the cost report.” Therefore, HOPDs must determine the most appropriate cost center and revenue code for the cardiac CT exams.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign the cardiac CT exam codes, specifically, CPT codes 75572, 75573, and 75574 to APC 5571. The final CY 2021 OPPS payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

b. Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and 5573)

For CY 2021, we proposed to continue to assign the following cardiac magnetic resonance imaging (MRI) CPT codes to APC 5523, 5524, 5572, and 5573, respectively:

  • CPT code 75557 (Cardiac magnetic resonance imaging for morphology and function without contrast material) to APC 5523 (Level 3 Imaging without Contrast) with a proposed payment of $235.05;
  • CPT code 75559 (Cardiac magnetic resonance imaging for morphology and function without contrast material; with stress imaging) to APC 5524 (Level 3 Imaging without Contrast) with a proposed payment of $490.52;
  • CPT code 75561 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences) to APC 5572 (Level 2 Imaging with Contrast) with a proposed payment of $375.33; and
  • CPT code 75563 (Cardiac magnetic resonance imaging for morphology and function without contrast material(s), followed by contrast material(s) and further sequences; with stress imaging) to APC 5573 (Level 3 Imaging with Contrast) with a proposed payment of $722.74.

Comment: Some commenters expressed concern with the lack of payment stability for cardiac MRI services, specifically, those described by CPT codes 75557, 75559, 75561, and 75563. They indicated that the payments for these codes have decreased in the last several years, and prior to CY 2017, the codes were placed in appropriate APCs. Of significant concern are the payment rates for CPT codes 75561 and 75563, which, according to the commenters, are grouped with services that are not clinically similar. The commenters stated that CPT code 75561 is unlike CT of the abdomen or pelvis or MRI of the neck and spine in APC 5572, and instead, the code should be placed in APC 5573 with comparable services. The commenters further added that CPT code 75563 is labor-intensive and should be assigned to APC 5593 (Level 3 Nuclear Medicine and Related Services).

Response: Payment changes from one year to the next are unavoidable in a relative weight payment system that depends on updated hospital charges and costs and in which reassignment of HCPCS codes from one APC to another is required by law in cases of 2 times rule violations. The statutory design of the OPPS and the evolution in the delivery of outpatient hospital services include elements that are responsible for some of the fluctuation in payment rates from year to year. The OPPS is based on HCPCS coding for which there are hundreds of changes each year. In addition, the entry of new technology into a budget neutral payment system results in a shift of funds away from previously existing services to provide payments for new services. These factors are reflections of the changes in services in the outpatient department, and shifts in payment mirror those changes.

Moreover, 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 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. Consequently, we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. For CY 2021, OPPS payments are based on claims data submitted between January 1, 2019 through December 30, 2019, that were processed on or before June 30, 2020. Based on our analysis, and as shown in Table 24, the claims data for CPT code 75557 show a geometric mean cost of approximately $250 based on 1,941 single claims, which is consistent with the geometric mean cost of about $224 for APC 5523 (Level 3 Imaging Without Contrast). Similarly, the geometric mean cost for CPT code 75559 is approximately $403 based on 57 single claims, which is in line with the geometric mean cost of about $470 for APC 5524. For CPT code 75561, the geometric mean cost is approximately $426 based on 17,216 single claims, which is in line with the geometric mean cost of approximately $359 for APC 5572. We note that the geometric mean cost of approximately $426 for CPT code 75561 is within the range of the significant geometric mean cost for APC 5572, which is between approximately $265 (for CPT code 74174) and about $510 (for CPT code 73525). For CPT code 75563, the geometric mean cost is about $761 based on 2,370 single claims, which is close to the geometric mean cost of approximately $697 for APC 5573. The geometric cost of approximately $761 for CPT code 75563 is within the range of the significant geometric mean cost for APC 5573, which is approximately between $534 (for CPT code C8923) and about $961 (for HCPCS code C8928). Based on the latest claims data, we believe that the cardiac MRI codes are appropriately assigned to APCs 5523, 5524, 5572, and 5573.

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In addition, based on the commenters' belief that the APC assignments for the cardiac MRI codes were appropriately placed prior to CY 2017 and not currently, we reviewed the OPPS payment rates from CY 2016 through CY 2021. Based on our evaluation, we believe that the payments for the cardiac MRI codes are appropriate. The OPPS, like other Medicare payment systems, is a prospective payment system based on averages. In some individual cases payment exceeds the average cost and in other cases payment is less than the average cost. Based on our review, we believe that the historical and current payment rates for CPT codes 75557, 75559, 75561, and 75563, reflect the geometric mean costs associated with the service that are consistent with providing cardiac MRI to Medicare beneficiaries in cost efficient settings.

Comment: Some commenters expressed concern with the clinical homogeneity in the Imaging APCs and requested more transparency. They also questioned the criteria for assigning HCPCS codes to specific APCs and as well as why the Imaging APCs were reduced from 17 to 7 APCs.

Response: Every year we publish an OPPS/ASC proposed rule that informs the public of our proposed policies, which include payment rates for specific HCPCS codes, for the upcoming year that will become effective on January 1. The proposed rules are subject to a 60-day public comment period, and comments received by the due dates are addressed in the final rules. In the April 7, 2000 OPPS final rule, we defined the term “clinical homogeneity.” As stated in the April 7, 2000 final rule, “The definition of each APC group should be `clinically meaningful,' that is, the procedures or services included within the APC group relate generally to a common organ system or etiology, have the same degree of extensiveness, and utilize the same method of treatment, for example, surgical, endoscopic, etc. The definition of clinical meaningfulness is, of course, dependent on the goal of the classification system. For APCs, the definition of clinical meaningfulness relates to the medical rationale for differences in resource use. If, on the other hand, classifying patient prognosis were the goal, the definition of patient characteristics that were clinically meaningful might be different.” (68 FR 18457).

In addition, we believe that the combined annual proposed and final rules with their accompanying addenda and cost statistics files, as well as the quarterly OPPS and ASC update change request documents that are issued by CMS provide substantial transparency on APCs and, overall, the OPPS payment system.

With regard to the reduction from 17 to 7 APCs for the Imaging APCs, we discussed the issue in the CY 2017 OPPS/ASC final rule (81 FR 79628 through 79631) and stated that the change was based on stakeholder recommendations. As a part of our CY 2016 (80 FR 70392 through 70397) and CY 2017 (81 FR 79628 through 79631) comprehensive review of the structure of the imaging APCs and procedure code assignments, we examined the APCs that contained imaging services. For CY 2017, we proposed and updated the restructuring of the OPPS APC groupings for imaging services to more appropriately reflect the costs and clinical characteristics of the procedures within each APC grouping in the context of the OPPS. We believe that the updated restructuring and reconfiguration of the Imaging APCs appropriately reflect the similar resource costs and clinical characteristics of the procedures within each APC. We also believe that the current broader categories of Imaging APCs are appropriate for ratesetting under the OPPS because they support greater similarities in clinical characteristics and resource use of procedures assigned to the APCs, while improving the homogeneity of the APC structure.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign CPT code 75557 to APC 5523, CPT code 75559 to APC 5524, CPT code 75561 to APC 5572, and CPT code 75563 to APC 5573. The final CY 2021 payment rates for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

10. IDx-DR: Artificial Intelligence System To Detect Diabetic Retinopathy (APC 5733)

As stated in a press release issued by the FDA on April 11, 2018, the IDx-DR is the “first medical device to use artificial intelligence (AI) to detect greater than a mild level of the eye disease diabetic retinopathy in adults who have diabetes” (https://www.fda.gov/​news-events/​press-announcements/​fda-permits-marketing-artificial-intelligence-based-device-detect-certain-diabetes-related-eye). Approved for marketing by the FDA in April 2018, the artificial intelligence Start Printed Page 85961algorithm provides a clinical decision without the need for a clinician to also interpret the image. A provider uploads the digital images of the patient's retinas to a cloud server on which the IDx-DR software is installed, and once analysis is completed, the provider is given one of the following two results:

  • More than mild diabetic retinopathy detected: Refer to an eye care professional; or
  • negative for more than mild diabetic retinopathy; rescreen in 12 months.

The test itself generally takes about 5 minutes to complete and does not need to be performed by a clinician. The test associated with the IDx-DR technology received a new CPT code effective January 1, 2021, specifically, CPT code 92229. With the establishment of the new code, the CPT Editorial Panel also revised the descriptors associated with existing CPT codes 92227 and 92228 to appropriately differentiate them from the IDx-DR test. Below are the complete descriptors for CPT codes 92227, 92228, and 92229 for CY 2021. We note that CPT code 92229 was listed as placeholder 9225X in Addendum B of the CY 2021 OPPS/ASC proposed rule:

  • 92227 (Imaging of retina for detection or monitoring of disease; with remote clinical staff review and report, unilateral or bilateral);
  • 92228 (Imaging of retina for detection or monitoring of disease; with remote physician or other qualified health care professional interpretation and report, unilateral or bilateral); and
  • 92229 (Imaging of retina for detection or monitoring of disease; point-of-care automated analysis and report, unilateral or bilateral).

As stated in the CY 2021 OPPS/ASC proposed rule (85 FR 48839), based on our evaluation of the service, we believe that IDx-DR is a diagnostic test that should be payable under the hospital OPPS, similar to existing CPT codes 92227 and 92228, which are assigned to APC 5732 (Level 2 Minor Procedures) and status indicator “Q1.” Based on its clinical similarity to CPT codes 92227 and 92228, we believe that the IDx-DR test should also be assigned to APC 5732. Consequently, for CY 2021, we proposed to assign the new IDx-DR CPT code to APC 5732 with a proposed payment rate of $33.16. We also proposed to assign the code to status indicator “Q1” to indicate that the code is conditionally packaged when performed with another service on the same day. Because the IDx-DR test will most often be performed as part of a visit, we believed that packaging the cost into the primary service is appropriate. We note that under the OPPS, the HOPD E&M visit code (G0463; CY 2021 OPPS proposed payment rate of $120.88) is paid separately when not billed with a C-APC, and we believed that payment would include the cost of providing the IDx-DR test. Generally, our policy for tests with minimal costs is to package the cost into the primary service.

Comment: Some commenters disagreed with the proposed payment amount and requested a revision in the assignment from APC 5732 to APC 5734 (Level 4 Minor Procedures) with a proposed payment rate of $113.23 and assignment to status indicator “Q1”. The commenters reported that the service described by new CPT code 92229, which was listed as placeholder CPT code 9225X in Addendum B to the CY 2021 OPPS/ASC proposed rule), is similar to the technical components described by existing CPT code 92250 (Fundus photography with interpretation and report), which was proposed for assignment to APC 5734 and status indicator “Q1”. They stated that providers are currently billing on an interim basis under CPT code 92250 for the same service. The commenters further disagreed with the comparison to CPT code 92227 and 92228, which are assigned to APC 5732 with a status indicator “Q1” and stated that the tests described by these codes involve human readers while the service described by CPT code 92229 is artificial (AI) intelligence-related. The commenters indicated that APC 5734, which is the APC assigned to the predecessor CPT code 92250, is the more appropriate assignment for new CPT code 92229 until sufficient Medicare claims data can be collected by CMS to either retain that assignment or reassign to another APC.

Response: We stated in the CY 2021 OPPS/ASC proposed rule with comment period (85 FR 48839) that the CPT Editorial Panel revised the descriptors associated with existing CPT codes 92227 and 92228 to appropriately differentiate them from the IDx-DR test, which is described by new CPT code 92229. We note that the descriptors for all three codes involve tests that use imaging of the retina for detection or monitoring of disease. Based on the revisions to CPT code 92227 and 92228 and placement of the new code, we believe that the IDx-DR test is similar to CPT code 92227 and 92228. We do not believe that CPT code 92250, which the commenters reported to be the predecessor code, is similar to the IDx-DR test; otherwise, the placement of the new IDx-DR code would have been close to CPT code 92250. However, after further review and consideration of the issue, we believe that CPT code 92229 should be assigned to APC 5733 (Level 3 Minor Procedures) rather than APC 5732 (Level 2 Minor Procedures).

We note that under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is a prospective payment system. The payment rates that are established reflect the geometric mean costs associated with items and services assigned to an APC and we believe that our payment rates generally reflect the costs that are associated with providing care to Medicare beneficiaries in cost efficient settings. Moreover, we strive to establish rates that are adequate to ensure access to medically necessary services for Medicare beneficiaries.

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, the requests for higher payment amounts are for new procedures in that transitional phase. These requests, and their accompanying estimates for expected Medicare beneficiary or total patient utilization, often reflect very low rates of patient use, 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 Medicare beneficiary projected utilization and does not set its payment rates based on initial projections of low utilization for services that require expensive capital equipment.

We note that in a budget neutral environment, payments may not fully cover hospitals' costs, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates for new 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 annually review the claims data and any available new information regarding the clinical aspects of new procedures to confirm that OPPS payments remain appropriate for procedures as they transition into mainstream medical practice.Start Printed Page 85962

Commen t: Several commenters requested a reassignment from proposed APC 5732 to APC 5733 (Level 3 Minor Procedures) consistent with the APC assignment for CPT codes 92285 (External ocular photography with interpretation and report for documentation of medical progress (e.g., close-up photography, slit lamp photography, goniophotography, stereo-photography) and 92134 (Scanning computerized ophthalmic diagnostic imaging, posterior segment, with interpretation and report, unilateral or bilateral; retina).

Response: The IDx-DR test generally takes about 5 minutes to complete and does not need to be performed by a clinician. Based on our evaluation of the service, we believe that IDx-DR is a diagnostic test that should be payable under the hospital OPPS. We do not believe that the services described by CPT code 92285 or 92134 are appropriate comparisons for the IDx-DR test because these tests generally involve physician work and require approximately 10 minutes to perform. However, after further review and deliberation of the issue, we believe that CPT code 92229 should be assigned to APC 5733 (Level 3 Minor Procedures) rather than APC 5732 (Level 2 Minor Procedures).

Comment: Some commenters requested a change in the proposed status indicator assignment for CPT code 92229 from “Q1” to “S” to ensure that the test is separately reimbursed when provided with an outpatient clinic visit or other service. The commenters indicated that assigning the code to “Q1” will not support patient access in the outpatient setting and will encourage less efficient care. They suggested that HOPDs would likely schedule patients to receive only the IDx-DR test during an outpatient visit, instead of performing the test during a clinic visit, and could discourage hospitals from offering the test altogether. They further suggested that diabetic patients receiving diabetic care in the outpatient setting would likely be asked to make separate appointments as a result of the status indicator “Q1” assignment.

Response: With regard to HOPDs potentially scheduling the IDx-DR test on a separate day from the clinic visit to receive separate payment, we have concerns about this kind of manipulation of patient scheduling because such a practice could create an undue burden for Medicare beneficiaries. We expect HOPDs to furnish services in the most efficient way that meets the needs of the patient. After further review and deliberation on the issue, we are revising the status indicator to “S” to ensure patient access to the test.

In summary, after consideration of the public comments, we are finalizing our proposal, with modification. Specifically, we are assigning CPT code 92229 to APC 5733 with status indicator “S.” The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

11. Implantable Interstitial Glucose Sensor System (APC 5051 and 5054)

For CY 2021, we proposed to assign CPT code 0447T to APC 5051 (Level 1 Skin Procedures) with a proposed OPPS payment of $182.38. In addition, we proposed to assign CPT codes 0446T and 0448T to APC 5053 (Level 3 Skin Procedures) with a proposed OPPS payment of $530.98. We note that the long descriptors for these codes can be found in Table 25 below.

Comment: A commenter agreed with the proposed APC assignment for CPT code 0447T to APC 5051 but opposed the proposed assignment for CPT codes 0446T and 0448T to APC 5053. The commenter stated that the payment for APC 5053 does not include the provision of the service associated with the Eversense Implantable Continuous Glucose System (CGS), which is a technology that provides real-time glucose monitoring. Specifically, the payment for APC 5053 does not account for providing the glucose sensor and wireless transmitter, as well as implanting, removing, and replacing the glucose sensor. In contrast, the commenter believed that CPT codes 0446T and 0448T include those costs, referring to the discussion in the CY 2020 PFS final rule (84 FR 62627). The commenter added that assignment to APC 5053 is inappropriate based on clinical homogeneity and resource cost, and suggested reassigning CPT codes 0446T and 0448T to either APC 5054 (Level 4 Skin Procedures) with a proposed OPPS payment of $1,733.06 or New Technology APC 1523 (New Technology—Level 23 ($2501-$3000)) with a proposed OPPS payment of $2,750.50.

Response: Although CPT codes 0446T, 0447T, and 0448T were effective January 1, 2017, the Eversense CGM technology was only recently approved for marketing by the FDA on June 6, 2019. For CY 2021, OPPS payments are developed based on claims submitted between January 1, 2019 through December 31, 2019, and processed through June 30, 2020. For this final rule with comment period, we have no claims data for CPT codes 0446T, 0447T, or 0448T for OPPS ratesetting purposes. However, based on our review of the issue, and feedback from our medical advisors, as well as the expected device costs associated with CPT codes 0446T and 0448T as discussed in the CY 2021 PFS proposed rule (85 FR 50174), we believe that these codes should be reassigned to APC 5054 (Level 4 Skin Procedures) rather than New Technology APC 1523 (New Technology—Level 23 ($2501-$3000)). Because we have neither claims data nor specific HOPD costs, including the cost to perform each exam (other than the supply cost discussed in the CY 2021 PFS proposed rule), we believe that APC 5054 is the most appropriate assignment at this time for CPT codes 0446T and 0448T.

Therefore, after consideration of the public comment, we are finalizing our proposal, with modification. Specifically, we are finalizing our proposal for CPT code 0447T and assigning the code to APC 5051, however, we are reassigning CPT codes 0446T and 0448T to APC 5054. Table 25 list the long descriptors and final SI and APC assignments for the codes. The final CY 2021 payment rate for the codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

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12. Intervertebral Disc Allogeneic Cellular and/or Tissue-Based Product Percutaneous Injection (APC 5115)

In the CY 2021 OPPS/ASC Proposed Rule, we proposed to assign the procedures described by CPT codes 0627T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar; first level) and 0629T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with CT guidance, lumbar; first level) to status indicator “T”, APC 5443 (Level 3 Nerve Injections) with a proposed OPPS payment rate of $836.26 based on the estimated costs of these procedures.

We proposed to assign the procedures described by CPT codes 0628T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar; each additional level (List separately in addition to code for primary procedure) and 0630T (Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with CT guidance, lumbar; each additional level (List separately in addition to code for primary procedure) to status indicator “N” to indicate that they are packaged under OPPS since they are add-on codes. These codes were listed as 0X32T, 0X33T, 0X34T, and 0X37T (the 5-digit CMS placeholder codes) in Addendum B with the short descriptor and also in Addendum O with the long descriptor, to the CY 2021 OPPS/ASC proposed rule.

We also proposed to assign these codes to comment indicator “NP” in Addendum B to indicate that the codes are new for CY 2021 and that public comments would be accepted on the proposed status indicator assignment. We note that these codes will be effective January 1, 2021.

Comment: Some commenters disagreed with the assignment of codes 0627T and 0629T to APC 5443 based on what the commenters believed was a lack of clinical and resource coherence with other procedures in this APC. They stated that CPT codes 0627T and 0629T involve percutaneous placement of an allogeneic cellular and/or tissue-based biologics to supplement and support deteriorating vertebral discs in patients suffering from degenerative disc disease. They believe that these procedures are not comparable to a simple nerve injection.

One commenter explained that the cost of these procedures is significantly higher than the proposed Level 3 Nerve Injection APC payment, which is $836.26. The cost of the VIA Disc Matrix Kit used for these procedures is $8,000 per kit. Therefore, they believed that a higher APC payment level more appropriately covers both the cost of the device and the non-device costs of the procedure.

Another commenter noted that the non-device costs of procedures 0627T and 0629T are most appropriately crosswalked to CPT code 22514 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g. kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; lumbar) that is assigned to APC 5114 (Level 4 Musculoskeletal Procedures) with the payment rate of $6,368.58.

A medical device company recently submitted a new technology APC application to CMS for VIA® Disc Allograft Supplementation described by codes 0627T and 0629T and requested that CMS assign CPT codes 0627T and 0629 to APC 1575 (New Technology APC Level 38 ($10,001-$15,000)) for CY 2021 based on total estimated non-device-related cost of APC 5114 ($4,524) plus the device-related costs ($8,000) or $12,524 which is closest to APC 1575 with a CY 2021 proposed payment rate of $12,500.50.

The same device company recommended, because 0628T and 0630T are add-on codes used in conjunction with their primary procedural codes 0627T and 0629T, that CMS uses the device-related cost for each additional VIA Disc mixing system kit of $8,000 plus an incremental thirty minute non-device cost to capture the additional operative time and costs in performing a separate intervertebral disc injection.

The commenter requested that CMS assign CPT codes 0628T and 0630T to APC 1571 (New Technology APC Level 34 ($8001-$8500)) for CY 2021 since the total estimated cost of these codes is closest to APC 1571 with a CY 2021 proposed payment rate of $8,250.50.Start Printed Page 85964

Response: Based on our review of the application and input from our clinical advisors, we agree that the codes would be appropriately placed in an alternative APC that might better reflect their resource costs. Our updated claims data for this final rule with comment period shows that the geometric mean cost of APC 5115 is about $11,996.45, which is more similar to the device and procedure costs associated with these codes. Therefore, we are assigning CPT codes 0627T and 0629T to comprehensive APC 5115 (Level 5 Musculoskeletal Procedures) with status indicator “J1” for the CY 2021 OPPS.

CPT codes 0628T and 0630T would be assigned to status indicator “N” under OPPS for CY 2021 because the cost of an add-on code is packaged into the primary procedure under OPPS packaging policy, as discussed in the CY 2014 OPPS/ASC final rule (78 FR 74942).

In summary, after consideration of the public comments and our analysis of updated claims data for this final rule and other additional information, we are finalizing our proposal related to codes 0627T and 0629T with modification. Specifically, we are revising the APC assignment for CPT codes 0627T and 0629T to APC 5115 and revising their status indicator to “J1” for the CY 2021 OPPS. For CPT codes 0628T and 0630T, we are finalizing our proposal without modification and maintaining the assignment of status indicator “N” to these codes.

The final CY 2021 OPPS payment rate for CPT codes 0627T and 0629T and final status indicator assignment for 0628T and 0630T can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

The final CY 2021 APC and SI assignments for 0627T through 0630T can be found in Table 26.

13. Intraocular Procedures (APCs 5491 Through 5495)

In prior years, CPT code 0308T (Insertion of ocular telescope prosthesis including removal of crystalline lens or intraocular lens prosthesis) was assigned to the APC 5495 (Level 5 Intraocular Procedures) based on its estimated costs. In addition, its relative payment weight has been based on its median cost under our payment policy for low-volume device-intensive procedures because the APC contained a low volume of claims. The low volume device-intensive procedures payment policy was discussed in more detail in section III.C.2. of the proposed rule.

In the CY 2019 OPPS, we assigned procedure code CPT code 0308T to the APC 5494 (Level 4 Intraocular Procedures) (83 FR 58917 through 58918). We made this change based on the similarity of the estimated cost for the single claim of $12,939.75 to that of the APC ($11,427.14). However, this created a discrepancy in payments between the OPPS setting and the ASC setting in which the ASC payments would be significantly lower than the OPPS payments for the same service because of the difference in estimated cost for the encounter determined under a comprehensive methodology within the OPPS and the estimated cost determined under the payment methodology for device intensive services within the ASC payment system.

In CY 2020 OPPS/ASC rulemaking, we reestablished APC 5495 (Level 5 Intraocular Procedures) because we believed that the procedure described by CPT code 0308T would be most appropriately placed in the APC based on its estimated cost (84 FR 61249 through 61250). Assignment of the procedure to the Level 5 Intraocular Procedures APC was consistent with its historical placement and would also address the large discrepancy in payment for the procedure between the OPPS and the ASC payment system. We note that we also implemented a policy where the payment for a service when performed in an ASC (84 FR 61399 through 61400), would be no higher than the OPPS payment rate for the Start Printed Page 85965service when performed in the hospital outpatient setting.

In reviewing the claims data available for CY 2021 ratesetting, there was a single claim containing the code 0308T that was unable to be used for the ratesetting process. In addition, this code and its APC have historically had relatively low claims volume for ratesetting purposes. While there were no claims usable for ratesetting in the CY 2021 OPPS proposed data under our standard process, we still needed to determine a payment weight for the APC. We believed that the most recently available data that we used to set payment for this service in the CY 2020 OPPS final rule was an appropriate proxy for both the procedure's estimated cost and its relative payment weight. We note that the proposed policy to use prior year claims data in ratesetting is similar to the application of a geometric mean cost floor to the Partial Hospitalization APCs, as initially established in the CY 2020 OPPS/ASC final rule (84 FR 61339 through 61347). Therefore, we believed it was appropriate to propose to use the median cost of $20,229.78 for CPT 0308T, calculated from claims data used in the CY 2020 OPPS final rule with comment period, to establish the payment weight for the CY 2021 OPPS for CPT code 0308T. We will continue to monitor the claims available for the procedure for ratesetting purposes.

To summarize, for CY 2021, we proposed to assign 0308T a payment weight based on the most recently available data, from the CY 2020 OPPS final rule, and therefore proposed to assign CPT code 0308T to APC 5495 (Level 5 Intraocular Procedures). Under the proposal, the proposed CY 2021 OPPS payment rate for the service would be established based on the median cost, as discussed in section V.A.5. of the proposed rule, because it is a device intensive procedure assigned to an APC with fewer than 100 total annual claims within the APC. Therefore, the proposed APC assignment for CPT code 0308T would be based on the CY 2020 OPPS final rule median cost of $20,229.78.

Comment: We received one comment supporting our proposal to continue to assign the CPT code 0308T to APC 5495 (Level 5 Intraocular Procedures) and use the CY 2020 median cost as a proxy for use in developing the CY 2021 OPPS payment rate.

Response: We appreciate the commenter's support. While the updated final rule claims data includes two claims containing the code 0308T, those claims are unusable for OPPS ratesetting purposes. Therefore, we are finalizing our proposed policy to assign CPT code 0308T to APC 5495 and use the CY 2020 median cost in determining a CY 2021 OPPS payment rate.

After consideration of the public comment we received, we are finalizing our proposal to continue to assign CPT code 0308T to APC 5495 (Level 5 Intraocular Procedures) for the CY 2021 OPPS and, as a device intensive procedure assigned to an APC with fewer than 100 total claims, to establish the CY 2021 OPPS payment rate for the service using its CY 2020 median cost. Therefore, the CY 2021 OPPS payment rate for CPT 0308T will be based on the CY 2020 OPPS final rule median cost of $20,229.78.

14. Irreversible Electroporation Ablation of Tumors (NanoKnife® System) (APC 5362)

Electroporation is a technique in which an electrical field is applied to cells in order to increase the permeability of the cell membranes through the formation of nanoscale defects in the lipid bilayer. The result is creation of nanopores in the cell membrane and disruption of intra-cellular homeostasis, ultimately causing cell death. After the NanoKnife® System delivers a sufficient number of high voltage pulses; the cells surrounded by the electrodes will be irreversibly damaged. This mechanism, which causes permanent cell damage, is referred to as Irreversible Electroporation (IRE). The NanoKnife® System with six outputs for the treatment of Stage III pancreatic cancer received FDA Breakthrough Device designation on January 18, 2018 and approval of an FDA investigational device exemption (IDE G180278) on March 28, 2019.

The CPT Editorial Panel established two new codes; specifically CPT codes 0600T and 0601T, to describe NanoKnife® System procedures effective July 1, 2020. The manufacturer also submitted a new technology application requesting new technology APC assignments for CPT codes 0600T and 0601T. Based on our review of the new technology APC application for the NanoKnife® System, we provided temporary APC and status indicators assignments for 0600T and 0601T. The temporary APC and SI assignments were publicly released in the July 2020 quarterly update to the OPPS (Transmittal 10224, Change Request 11814, and dated July 15, 2020). In addition, in the CY 2021 OPPS/ASC proposed rule with comment period, we proposed to assign the codes to APC 5361 (Level 1 Laparoscopy and Related Procedures) with a payment rate of $5,148.34, and status indicator `J1” (Hospital Part B services paid through a comprehensive APC) based on clinical and resource similarities between 0600T, 0601T and other procedures in the same APC. We also proposed to assign these codes to comment indicator (CI) “NP” in Addendum B to the proposed rule to indicate that the codes are new for CY 2020 and that public comments would be accepted on their proposed APC assignments.

Comment: We received one comment from the applicant on the proposed assignment to APC 5361 (Level 1 Laparoscopy and Related Procedures). According to the applicant, new Category III CPT codes 0600T and 0601T should not be assigned to APC 5361 because the clinical characteristics and resource costs associated with the procedures are significantly different from existing procedures assigned to that APC. The applicant noted that under the IPPS, the NanoKnife® System was estimated to have a technology added cost of approximately $11,086, and that the procedures for which the system would apply generally were not significantly different in the inpatient and outpatient settings. They believe that the codes would be more appropriately placed in New Technology APC 1576 (New Technology—Level 39 ($15,001-$20,000)) with a payment rate of $17,500.50, based on the estimated costs and complexity of the procedures.

Response: We thank the applicant for their comment and the additional information they have provided regarding the procedures and in particular their estimated costs. While we recognize that there are differences between the various ablation modalities, we believe that the APC levels 5361 and 5362 for “Laparoscopy and Related Services” appropriately describe the resource costs and clinical characteristics of these procedures. However, we agree with the commenter that an alternative APC might better reflect the resource costs of the procedures. Therefore, we are revising the CY 2021 APC assignments for these codes. Specifically, we are assigning CPT codes 0600T and 0601T to APC 5362 (Level 2 Laparoscopy and Related Procedures) with a status indicator of “J1” in the CY 2021 OPPS.

After consideration of the public comment for the new irreversible electroporation codes, and based on our evaluation of the new technology application which provided the estimated costs for the services and described the components and characteristics of the new codes, we are finalizing our proposal with Start Printed Page 85966modification, and reassigning CPT codes 0600T and 0601T to the final CY 2021 OPPS APC 5362 (Level 2 Laparoscopy and Related Services). Table 27 lists the four Category III CPT codes for the NanoKnife® System and their APC and SI assignments for CY 2021. The final CY 2021 OPPS payment rate for the codes can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).

15. Medical Physics Dose Evaluation (APC 5611)

For CY 2021, we proposed to assign CPT code 76145 (Medical physics dose evaluation for radiation exposure that exceeds institutional review threshold, including report (medical physicist/dosimetrist)) in APC 5611 (Level 1 Therapeutic Radiation Treatment Preparation) with a proposed payment rate of $129.86. We note this is a new code that will be effective on January 1, 2021. Because the code is new, we requested public comments on the APC assignment for CY 2021. We also note that CPT code 76145 was listed as placeholder code 7615X in Addendum B and Addendum O of the CY 2021 OPPS/ASC proposed rule.

Comment: Several commenters disagreed with the assignment to APC 5611 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests and Related Services) with a proposed payment rate of $936.70. The commenters indicated that CPT code 76145 is not a radiation oncology code, rather, it is a service that will be performed in interventional radiology or interventional cardiology. The commenters stated that the resource consumption in APC 5724 more closely aligns with the resources used to perform CPT code 76145. One commenter explained that CPT code 76145 is used to describe the medical physicist's work in performing a patient-specific peak organ dose calculation subsequent to an interventional radiology or interventional cardiology procedure. The same commenter expressed concern that the new code will be included on the Deficit Reduction Act (DRA) cap designation list.

Response: Section 5102(b) of the Deficit Reduction Act of 2005 (DRA) added section 1848(b)(4) to the statute to place a payment cap on the technical component (TC) of certain diagnostic imaging procedures and the TC portions of the global diagnostic imaging services at the amount paid under the OPPS. To implement this provision, the physician fee schedule (PFS) amount is compared to the OPPS payment amount and the lower amount is used for payment under the PFS. However, we note that the OPPS cap is a policy that applies to the PFS payment and is not applicable under the OPPS; and the list of services that are subject to the OPPS cap is published as part of the annual PFS final rules. In addition, based on our review of the service associated with CPT code 76145 and input from our medical advisors, we believe that APC code 5611 is the most appropriate assignment for the code. The code is new for CY 2021 and therefore we have no claims data available for OPPS ratesetting. However, once we have claims data, we will review the APC assignment and determine whether a change is necessary. We note that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, and assigning CPT code 76145 to APC 5611 for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

16. Musculoskeletal Procedures (APCs 5111 Through 5116)

Prior to CY 2016, OPPS payment for musculoskeletal procedures was primarily divided according to anatomy and the type of musculoskeletal procedure. As part of the CY 2016 reorganization to better structure the OPPS payments towards prospective payment packages, we consolidated those individual APCs so that they became a general Musculoskeletal APC series (80 FR 70397 through 70398).

In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59300), we continued to apply a six-level structure for the Musculoskeletal APCs because doing so provided an appropriate distinction for resource costs at each level and provided clinical homogeneity. However, we indicated that we would continue to review the structure of these APCs to determine whether additional granularity would be necessary.

In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that commenters had previously expressed concerns regarding the granularity of the current APC levels and, therefore, requested comment on the establishment of additional levels. Specifically, we solicited comments on the creation of a new APC level between the current Level 5 and Level 6 within Start Printed Page 85967the Musculoskeletal APC series. While some commenters suggested APC reconfigurations and requests for change to APC assignments, many commenters requested that we maintain the current six-level structure and continue to monitor the claims data as they become available. Therefore, in the CY 2019 OPPS/ASC final rule with comment period, we maintained the six-level APC structure for the Musculoskeletal Procedures APCs (83 FR 58920 through 58921).

Based on the claims data available for the CY 2021 OPPS/ASC proposed rule, we stated that we continued to believe that the six-level APC structure for the Musculoskeletal Procedures APC series is appropriate. Therefore, we proposed to maintain the APC structure for the CY 2021 OPPS update.

In the CY 2020 OPPS/ASC final rule, we discussed issues related to the APC assignment of CPT code 22869 (Insertion of interlaminar/interspinous process stabilization/distraction device, without open decompression or fusion, including image guidance when performed, lumbar; single level) to APC 5115 (84 FR 61253 through 61254). Specifically, commenters believed that the code was inappropriately assigned to APC 5115 due to one hospital inaccurately reporting its costs and charges. While we recognized the concerns that the commenters described, we noted that it is generally not our policy to judge the accuracy of hospital coding and charging for purposes of ratesetting. For the proposed CY 2021 OPPS, the geometric mean cost of CPT code 22869 increased slightly relative to the prior year, from $11,023.45 to $12,788.56. However, the proposed geometric mean costs of the Level 5 and Level 6 Musculoskeletal Procedures APCs were $12,102.02 and $15,975.08, respectively, and so, based on the data that was available, we continued to believe that it is appropriate to assign CPT code 22869 to APC 5115 (Level 5 Musculoskeletal Procedures APC).

For the CY 2021 OPPS, we also proposed to eliminate the Inpatient Only (IPO) list over a three-year transition and to assign codes removed from the IPO list to clinical APCs. Many of the codes proposed to be removed from the IPO list are musculoskeletal procedures that we proposed to assign to APCs in the Musculoskeletal Procedures APC series, and so there may be effects on the geometric means as the limited claims data for those codes is included in OPPS ratesetting. For a more detailed discussion of the proposal to remove certain codes from the IPO list, please see section IX.B. of the CY 2021 OPPS/ASC proposed rule.

Table 28 displays the final CY 2021 Musculoskeletal Procedures APC series' structure and APC geometric mean costs.

Comment: One commenter recommended that CMS create a seventh Musculoskeletal APC level above APC 5116 to account for complex procedures that were proposed to be removed from the IPO list. Another commenter requested that CMS consider the development of an additional Musculoskeletal APC between current APCs 5114 and 5115.

Response: We appreciate the commenters' recommendation. We understand that the addition of codes removed from the IPO list may affect the geometric means of the Musculoskeletal Procedures APCs and we will continue to monitor the claims data as they become available. We also appreciate the goal of developing APC levels that appropriately reflect resource costs. At this time, we believe the six-level structure for the Musculoskeletal APCs continues to be appropriate. However, we will take these comments into consideration for future rulemaking

Comment: We received one comment recommending that CMS reassign CPT codes 28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint arthrodesis, any method) and 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint) to APC 5115 (Level 5 Musculoskeletal Procedures) to resolve any 2 times rule violations.

Response: We appreciate the commenter's recommendation regarding the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740 are currently assigned to APC 5114 (Level 4 Musculoskeletal Procedures). Our review did not find that APC 5114 violates the 2 times rule. We also note that for purposes of identifying significant procedure codes for examination under the 2 times rule, we only consider procedure codes that have more than 1,000 single major claims or procedure codes that both have more than 99 single major claims and Start Printed Page 85968contribute at least 2 percent of the single major claims used to establish the APC cost to be significant (75 FR 71832). Neither of these codes met this requirement and therefore were not considered significant procedure codes for 2 times rule purposes. Therefore, we are finalizing our proposal to continue to assign CPT codes 28297 and 28740 to APC 5114 in the CY 2021 OPPS.

Comment: Commenters supported our proposal to continue to assign CPT code 22869 to APC 5115 (Level 5 Musculoskeletal Procedures). One commenter requested that CMS continue to monitor the geometric mean cost for CPT code 22869 and reestablish the code with assignment to APC 5116 (Level 6 Musculoskeletal Procedures) when appropriate.

Response: We appreciate commenters' support. We will continue to review the most recent data and update the APC assignment for CPT code 22869 as necessary.

Comment: One commenter requested that we assign CPT code 23473 (Revision of total shoulder arthroplasty, including allograft when performed; humeral or glenoid component) from APC 5115 to APC 5116, based on their belief that the claims data was inaccurate and that the time required to perform the procedure was not reflected in the resource costs of the proposed APC placement.

Response: We note that CPT code 23473 has been established for some time, with an effective date of January 1, 2013 and that it was the initially established with a status indicator of “T” in the CY 2013 OPPS. Therefore, some of the issues related to codes transitioning off the IPO list do not necessarily apply in this case and the actual data for the claims are more appropriate in ratesetting than alternative proxies. In the updated final rule claims data available for ratesetting, the estimated geometric mean cost of CPT 23473 is approximately $10,634 based on 287 claims, which is within the range of the significant procedure costs of APC 5115 from approximately $9,644 to $12,902. As a result, we believe that the code is appropriately placed in APC 5115.

Comment: For the CY 2020 OPPS/ASC final rule, HCPCS code C9757 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and excision of herniated intervertebral disc, and repair of annular defect with implantation of bone anchored annular closure device, including annular defect measurement, alignment and sizing assessment, and image guidance; 1 interspace, lumbar) was assigned to comment indicator “NI” in the OPPS Addendum B to indicate that the code was new and that we would be accepting comments on the interim APC assignment. A commenter supported the assignment to APC 5115 (Level 5 Musculoskeletal Procedures) with a CY 2020 payment rate of $11,900.71.

Response: As we stated in the CY 2020 OPPS/ASC final rule, we accepted comments on the interim OPPS payment assignment for new codes effective January 1, 2020 that are assigned to comment indicator “NI” in the OPPS Addendum B (84 FR 61207). We further stated that the comments would be addressed, and if applicable, the APC assignment would be finalized in the CY 2021 OPPS/ASC final rule comment period. We appreciate the feedback. We note that for CY 2021, we are finalizing the assignment to APC 5115 (Level 5 Musculoskeletal Procedures) for HCPCS code C9757. The final payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, the status indicator definitions can be found in Addendum D1 to this final rule with comment period. Both Addendum B and Addendum D1 are available via the internet on the CMS website.

After consideration of the comments, we are finalizing our proposal to maintain the six-level Musculoskeletal Procedures APC structure. We are also finalizing the proposed assignment of CPT codes 28297 and 28740 to APC 5114, and the proposed assignment of CPT codes 22869 and 23473 to APC 5115 for the CY 2021 OPPS.

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

In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66807 through 66808), we finalized a restructuring of what were previously several neurostimulator procedure-related APCs into a four-level series. Since CY 2015, the four-level APC structure for the series has remained unchanged. In addition to that restructuring, in the CY 2015 OPPS/ASC final rule, we also made the Level 2 through 4 APCs comprehensive APCs (79 FR 66807 through 66808). Later, in the CY 2020 OPPS final rule, we also established the Level 1 Neurostimulator and Related Procedure APC (APC 5461) as a comprehensive APC (84 FR 61162 through 61166).

In reviewing the claims data available for the CY 2021 OPPS proposed rule, we believed that it was appropriate to create an additional Neurostimulator and Related Procedures level, between the current Level 2 and 3 APCs. Creating this APC allows for a smoother distribution of the costs between the different levels based on their resource costs and clinical characteristics. Therefore, for the CY 2021 OPPS, we proposed to establish a five-level APC structure for the Neurostimulator and Related Procedures series. We noted that in addition to creating the new level, we also proposed to assign CPT code 0398T (Magnetic resonance image guided high intensity focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performed) to the new Level 3 APC, as discussed in further detail in section III.C.3.A of the CY 2021 OPPS/ASC proposed rule with comment period.

Comment: Multiple commenters requested that we add a Level 6 Neurostimulator and Related Procedures APC. The commenters are concerned that the payment rate for the current Level 4 APC and the proposed Level 5 APC is dominated by CPT code 63685 (Insertion or replacement of spinal neurostimulator pulse generator or receiver, direct or inductive coupling) which has a geometric mean of $29,123.02. The commenter indicated this means that higher cost neurostimulator services that have relatively low utilization are substantially underpaid. The commenters believe the lack of payment for these services is discouraging their use, and they want a Level 6 APC to establish a payment rate that more closely reflects the cost of these expensive, low utilization services.

Response: We appreciate the concerns of the commenters, but we reiterate that the OPPS is a prospective payment system. We group procedures with similar clinical characteristics and resource costs into APCs and establish a payment rate that reflects the geometric mean of all services in the group even though the cost of each service within the APC may be higher or lower than the APC's geometric mean. As a result, in the OPPS any individual procedure may potentially be overpaid or underpaid because the payment rate is based on the geometric mean of the entire group of services in the APC. However, the impact of these payment differences should be mitigated when distributed across a large number of APCs. If we were to establish a Level 6 APC for Neurostimulators and Related Procedures based on the commenters' request, we would find the payment rate for the APC would be closer to some of the services assigned to that APC but Start Printed Page 85969other services would continue to receive payment that is substantially lower than those services' geometric mean cost. In the end, the only way to ensure each service receives payment equivalent to the cost of the service would be to establish separate APCs for each service the commenters believe is underpaid. That solution would be contrary to payment principles of the OPPS, which is based on prospective payment. Therefore, we believe it is appropriate to maintain the same five level structure as proposed in the CY 2021 OPPS.

Comment: Most commenters supported our proposal to create an additional Neurostimulator and Related Procedures level, between the current Level 2 and 3 APCs, which is described as the Level 3 Neurostimulator and Related Procedures APC in our proposal.

Response: We appreciate the support of the commenters for our proposal.

Comment: One commenter noted that our proposal to establish an additional APC level would lead to a decrease in payment for services described by CPT codes 63650 (Percutaneous implantation of neurostimulator electrode array, epidural), 63685 (Insertion or replacement of spinal neurostimulator pulse generator or receiver, direct or inductive coupling), and 63688 (Revision or removal of implanted spinal neurostimulator pulse generator or receiver).

Response: We did not find that there would be a substantial decrease in the payment for the procedures described by CPT codes 63650, 63685, and 63688 due to our proposal. Based on a review of our claims data, we found only a modest payment decrease for CPT code 63650 and modest payment increases for CPT codes 63685 and 63688.

In addition, for CY 2021, we proposed to continue to assign CPT code 0587T to APC 5442 (Level 2 Nerve Injections) with a proposed payment of $644.55. We also proposed to continue to assign CPT code 0588T to APC 5441 (Level 1 Nerve Injections) with a proposed payment of $267.50. We note that because both codes were effective on January 1, 2020, we have no claims data available for OPPS ratesetting, as the CY 2021 OPPS payment rates are based on claims submitted between January 1, 2019 through December 31, 2019, and processed through June 30, 2020. The long descriptors for both codes can be found in Table 29 below.

Comment: A commenter explained that in May 2019 the AMA CPT Editorial Panel approved four (4) Category III CPT codes to describe the surgical procedures associated with the PROTECT PNS Neurostimulation System, specifically, CPT codes 0587T, 0588T, 0589T, and 0590T. The PROTECT PNS device is used for the treatment of overactive bladder (OAB) symptoms. The commenter added that on October 19, 2016, CMS approved Medicare coverage for the Category B IDE study associated with the PROTECT PNS device. In addition, the commenter also stated that CMS incorrectly assigned CPT codes 0587T and 0588T to inappropriate APC assignments.

For CPT code 0587T, the commenter clarified that CPT code 0587T is not an injection; rather, the code describes an implantation or replacement of an integrated single device neurostimulation system, similar to the procedures assigned to the Neurostimulator and Related Procedures (APCs 5461 through 5465) family. The commenter recommended reassigning CPT code 0587T to one of these APCs to adequately capture the correct clinical characteristics and resource costs of the technology similar to other neurostimulation devices in APCs 5461 through 5465. The commenter specifically recommended the reassignment to APC 5464 (Level 4 Neurostimulator and Related Procedures) with a proposed payment rate of $20,789.82, since the procedure is very similar to CPT code 64590 (Insertion or replacement of peripheral or gastric neurostimulator pulse generator or receiver, direct or inductive coupling), which is assigned to APC 5464. According to the commenter, the cost of the PROTECT implantable device and transmitter kit that is used in the procedure is about $15,820. Based on the commenter's estimated cost of approximately $20,032, which includes the non-device cost of $2,737 and the PROTECT device cost of $15,820, the appropriate assignment for the code until OPPS claims are available is APC 5464.

For CPT code 0588T, the commenter explained that the code is not an injection procedure, rather, the code describes the surgical removal of the device. The commenter suggested reassigning the code to APC 5461 (Level 1 Neurostimulator and Related Procedures) with a proposed payment of $3,498.13 because it is comparable to CPT code 64595 (Revision or removal of peripheral or gastric neurostimulator pulse generator or receiver) based on clinical similarity and resource costs.

Response: We do not agree that CPT code 0587T is comparable to CPT code 64590. Based on our review of the clinical characteristics of the procedure and input from our medical advisors, we believe CPT code 0587T is more similar to the procedures assigned to APC 5462 (Level 2 Neurostimulator and Related Procedures). However, we agree that CPT code 0588T is similar to the procedures in APC 5461, and are therefore assigning the code to APC 5461 in the CY 2021 OPPS.

In summary, after consideration of the public comment, we are finalizing our proposal with modification, and reassigning CPT code 0587T to APC 5462 and CPT code 0588T to APC 5461. Table 29 below list the four Category III CPT codes for the PROTECT PNS System and their APC and SI assignments for CY 2021. The final CY 2021 OPPS payment rates for the codes can be found in Addendum B of this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator meanings for all codes reported under the OPPS for CY 2021. Both Addendum B and Addendum D1 are available via the internet on the CMS website.

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Comment: Two commenters supported our proposal to change the APC assignment for CPT code 0398T (Magnetic resonance image guided high intensity focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performed) to the proposed new Level 3 Neurostimulator and Related Procedures APC.

Response: We appreciate the support of the commenters for our proposal.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to establish a five-level APC structure for the Neurostimulator and Related Procedures series. In addition to creating this new level, we also finalizing our proposal to assign CPT 0398T (Magnetic resonance image guided high intensity focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial for movement disorder including stereotactic navigation and frame placement when performed) to this new Level 3 APC. Table 30 displays the proposed and final CY 2021 Neurostimulator and Related Procedures APC series' structure and APC geometric mean costs.

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18. Noncontact Real-Time Fluorescence Wound Imaging/MolecuLight (APC 5722)

For the July 2020 update, the CPT Editorial Panel established two new codes, specifically, CPT codes 0598T and 0599T, to report noncontact real-time fluorescence wound imaging for bacterial presence in chronic and acute wounds. The codes and their long descriptors were listed in Table 7 (New HCPCS Codes Effective July 1, 2020) of the CY 2021 OPPS/ASC final rule with comment period (85 FR 48815 through 48823). We note that CMS recently received a new technology application for the MolecuLight i: X procedure, which is described by CPT codes 0598T and 0599T. In determining the appropriate payment for CPT code 0598T, we considered whether there should be separate or conditionally packaged payment for the procedure since the use of the MolecuLight imaging device will most often involve another procedure or service during the same session (for example, debridement of the wound, laboratory service, or another skin-related procedure). In addition, we considered whether the code should be placed in either the Diagnostic Procedures or Minor Procedures APC group. Based on our review of the application and input from our physicians, we assigned CPT code 0598T to APC 5722 (Level 2 Diagnostic Tests and Related Services) and status indicator “T” with a payment rate of $253.10 effective July 1, 2020. In addition, because CPT code 0599T is an add-on code, we assigned the code to status indicator “N” to indicate that the payment is included in the primary procedure. We note that the new technology application indicated a higher projected cost involving care in an operating room (OR), however, based on our review of the MolecuLight service, we removed OR-associated costs because it was not clear to us that the test would routinely be performed in the OR setting. However, in the CY 2021 OPPS/ASC proposed rule we solicited public comments from hospital-based providers that have used MolecuLight on the appropriate OPPS payment, particularly with respect to the cost of providing the service in the hospital outpatient setting.

For CY 2021, we proposed to continue to assign CPT code 0598T to APC 5722 (Level 2 Diagnostic Tests and Related Services) with a proposed payment rate of $269.85. We proposed to maintain a status indicator of “N” for CPT code 0599T, which is an add-on code, to indicate that the payment is included in the primary procedure. The long descriptors and proposed SI and APC assignments for both codes can be found in Table 31 below.

Comment: Some commenters agreed with the APC assignment to APC 5722 for CPT code 0598T, however, they had concerns with the packaged status indicator assignment for CPT code 0599T, and suggested assigning the code to a different APC and revising the status indicator from “N” (packaged) to “S” (Procedure or Service, Not Discounted When Multiple). One commenter indicated that the payment is insufficient to cover the cost of the procedure and contended that the low reimbursement will dissuade hospitals from offering the service. The commenter reported that the procedure requires the use of a Dark Drape technology and also requires significant time because the second ulcer and subsequent ulcers typically involve different anatomical locations. Another commenter reported that hospital outpatient charges for CPT code 0598T are between $850 and $2,500 for the first wound and between $850 and $1,850 for subsequent anatomic sites. The same commenter suggested that OPPS payment is inadequate, especially in cases that involve additional wounds in different anatomic sites such as the sacrum, abdomen, toe, or leg, all of which require additional resource costs. Consequently, the commenter requested a revision in the APC assignment for both codes. Specifically, the commenter recommended reassigning CPT code 0598T from APC 5722 to APC 5723 (Level 3 Diagnostic Tests and Related Services) with a proposed payment of $497.96, and to assign CPT code 0599T to APC 5722 with a proposed payment of $269.85. In addition, the commenter recommended assigning both codes status indicator “S”.

Response: With regard to CPT code 0598T, based on our evaluation of the new technology application submitted to CMS as well as input from our physicians, we believe that we should maintain the assignment to APC 5722 for CY 2021. In addition, because CPT code 0599T is an add-on code, we are maintaining its status indicator assignment of “N” (packaged). As specified in section § 419.2(b)(18), add-on codes are generally packaged under Start Printed Page 85972the hospital OPPS. As explained 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.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign CPT code 0598T to APC 5722 with status indicator “T” and to assign CPT code 0599T status indicator “N” for CY 2021. The final CY 2021 payment rate for CPT code 0598T can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

19. Nuclear Medicine Services: Single-Photon Emission Computed Tomography (SPECT) Studies (APC 5593)

For CY 2021, we proposed to reassign CPT code 78803 (Radiopharmaceutical localization of tumor, inflammatory process or distribution of radiopharmaceutical agent(s) (includes vascular flow and blood pool imaging, when performed); tomographic (spect), single area (e.g., head, neck, chest, pelvis), single day imaging) from APC 5593 (Level 3 Nuclear Medicine and Related Services) with a payment rate of $1,272.19 to APC 5592 (Level 2 Nuclear Medicine and Related Services) with a proposed payment rate of $501.45.

Comment: Several commenters objected to the reassignment of CPT code 78803 to APC 5592 and requested that we not finalize our proposal but rather maintain the current placement in APC 5593. They stated that the significant payment decrease would limit patient access, affect patient care, and restrict hospitals from offering the test. One commenter reported that the Medicare payment for CPT code 78803 is insufficient, and as a result, many hospitals refuse to offer the service. This same commenter reported that lowering the payment for the test may force some hospitals that currently offer the test to stop providing it altogether. The commenter added that many patients travel hours to access a SPECT scan exam and lowering the payment for the test would not improve patient care. Some commenters reminded us that for CY 2020, CPT code 78803 replaced seven codes that were deleted on December 31, 2019. Most commenters stated that the more appropriate placement for CPT code 78803 is APC 5593, based on resource use and clinical similarity to the other procedures in the APC.

Response: We discussed the issue related to the seven deleted codes in the CY 2020 OPPS/ASC final rule (84 FR 61257 through 61258) and noted that based on the geometric mean costs for CPT code 78803 and the deleted codes, we believe it was necessary for us to maintain the APC assignment for CPT code 78803 in APC 5593. Because the CY 2021 OPPS payments are based on claims submitted between January 1, 2019 through December 31, 2019, and processed through June 30, 2020, we again reviewed the claims data for the deleted codes to determine the appropriate placement for CPT code 78803. As listed in Table 32, the range of geometric mean costs for CPT code 78803 and the seven deleted codes is between $408 and $1,508. Similar to our CY 2020 findings, we note that several of the deleted codes were assigned to APC 5593, and based on our review of these codes, we believe it would be appropriate to maintain assignment of CPT code 78803 to APC 5593 for CY 2021.

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Comment: One commenter agreed with the proposal to maintain the four levels of nuclear medicine APCs for CY 2021 but requested that CMS consider establishing additional APCs as needed to ensure that the nuclear medicine APCs do not violate the 2-times rule when the cost of packaged diagnostic radiopharmaceuticals drugs are included.

Response: We appreciate the feedback and will consider in future rulemaking whether establishing additional nuclear medicine APCs would be appropriate.

In summary, after consideration of the public comments, and after our analysis of the updated claims data for this final rule with comment period, we are finalizing a modification to our proposal. Specifically, we are revising the APC assignment for CPT code 78803 to APC 5593 for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).

As we do every year, we will reevaluate the APC assignment for CPT code 78803 for the next rulemaking cycle. We note that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS.

20. Pathogen Test for Platelets/Rapid Bacterial Testing (APC 5732)

For the July 2017 update, the HCPCS Workgroup established HCPCS code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017. This new code and the OPPS APC assignment were announced in the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017). Because HCPCS code Q9987 represented a test to identify bacterial or other pathogen contamination in blood platelets, we assigned the code to a new technology APC, specifically, New Technology APC 1493 (New Technology—Level 1C ($21-$30)) with a status indicator “S” and a payment rate of $25.50. We note that temporary HCPCS code Q9987 was subsequently deleted on December 31, 2017, and replaced with permanent HCPCS code P9100 (Pathogen(s) test for platelets) effective January 1, 2018. For the January 2018 update, we continued to assign the new code to the same APC and status indicator as its predecessor code. Specifically, we assigned HCPCS code P9100 to New Technology APC 1493 and status indicator “S”. For the CY 2019 update, we made no change to the APC or status indicator assignment for P9100, however, for the CY 2020 update, we revised the APC assignment from New Technology APC 1493 to 1494 (New Technology—Level 1D ($31-$40)) based on the latest claims data used to set the payment rates for CY 2020. We discussed the revision in the CY 2020 OPPS/ASC final rule (84 FR 61219) and indicated that the reassignment to APC 1494 appropriately reflected the cost of the service.

For the CY 2021 proposed rule, we believed that we had sufficient claims data to reassign the code from a New Technology APC to a clinical APC, and noted that HCPCS code P9100 had been assigned to a New Technology APC for over 3 years. As stated in section III.D. (New Technology APCs), a service is paid under a New Technology APC until sufficient claims data have been collected to allow CMS to assign the procedure to a clinical APC group that is appropriate in clinical and resource terms. We expect this to occur within two to three years from the time a new HCPCS code becomes effective. However, if we are able to collect sufficient claims data in less than 2 years, we would consider reassigning the service to an appropriate clinical APC. Since HCPCS code P9100 has been assigned to a new technology APC since July 2017, we believed that we should reassign the code to a clinical APC. Specifically, our claims data for the proposed rule showed a geometric mean cost of approximately $30 for HCPCS code P9100 based on 70 single claims (out of 1,835 total claims). Based on resource cost and clinical homogeneity to the other services assigned to APC 5732 (Level 2 Minor Procedures), we believed that HCPCS code P9100 should be reassigned to clinical APC 5732, which had a geometric mean cost of approximately $33.

As we have stated several times since the implementation of the OPPS on August 1, 2000, we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. For the CY 2021 OPPS update, based on claims submitted between January 1, 2019, and December Start Printed Page 8597430, 2019, our analysis of the latest claims data for the proposed rule supported reassigning HCPCS code P9100 to APC 5732 based on its clinical and resource similarity to the procedures and services in the APC. Therefore, we proposed to reassign HCPCS code P9100 from New Technology APC 1494 to clinical APC 5732 for CY 2021.

Comment: A commenter supported our proposal to revise the APC assignment for HCPCS code P9100 to APC 5732.

Response: We appreciate the support for our proposal. Based on our review of the updated claims data for this final rule with comment period, which is based on claims submitted between January 1, 2019, and December 30, 2019, and processed through June 30, 2020, we continue to believe that reassigning HCPCS code P9100 to APC 5732 is appropriate. Specifically, our claims data show a geometric mean cost of approximately $30.86 for HCPCS P9100 based on 75 single claims (out of 2,038 total claims), which is consistent with the geometric mean cost of about $32.97 for APC 5732.

In summary, after consideration of the public comment, and after our analysis of the updated claims data for this final rule with comment period, we are finalizing our proposal, without modification, to assign HCPCS code P9100 to APC 5732 for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

21. Payment for Radioisotopes Derived From Non-Highly Enriched Uranium (Non-HEU) Sources (APC 1442)

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

The United States would like to eliminate domestic reliance on these reactors, and is promoting the conversion of all medical radioisotope production to non-HEU sources. Alternative methods for producing 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).

Comment: One commenter requested that we increase the payment rate for HCPCS add-on code Q9969 from $10. The commenter noted that we have not increased the payment rate for Q9969 since the code was established in CY 2013. The commenter suggested increasing the payment for Q9969 by the annual market basket increase for CY 2021 along with a one-time increase to reflect prior increases to the market basket between CY 2013 and CY 2021. Alternatively, the commenter suggested the payment rate could be increased by the change in the drug cost threshold packaging amount between CY 2013 and CY 2021.

Response: We appreciate the information we received from the commenter supporting an increase to the payment rate of $10 for HCPCS code Q9969. As discussed in the CY 2013 OPPS/ASC final rule with comment period, we did not finalize a policy to use the usual OPPS methodologies to update the non-HEU add-on payment (77 FR 68317). The purpose of the additional payment is limited to mitigating any adverse impact of transitioning to non-HEU sources and we believe the add-on is appropriate at this time.

Comment: Multiple commenters supported the current payment amount for HCPCS code Q9969 and they requested that we finalize our proposed payment rate for the add-on.

Response: We appreciate the support of the commenters for the proposed payment rate for HCPCS code Q9969.

After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue the policy of providing an additional $10 payment for radioisotopes produced by non-HEU sources for CY 2021 and subsequent years as represented by HCPCS code Q9969.

22. Percutaneous Transcatheter Ultrasound Nerve Ablation

The Therapeutic Intra-Vascular Ultrasound System (TIVUSTM) is a high intensity, non-focused, ultrasound catheter system, which enables remote, localized, controlled and repeatable thermal modulation of nerves adjacent to arterial vessel wall for performing therapeutic pulmonary artery sympathetic denervation and is used for the treatment of pulmonary arterial hypertension (PAH). In 2020, the TIVUSTM system was approved by FDA for a Category B (Nonexperimental/investigational) Investigational Device Exemption (IDE) for the device to be used in a clinical study. The study sponsors have also requested Medicare coverage of the Category B IDE study to allow for coverage of the TIVUSTM system and the routine care items and services in the clinical trial. To date, CMS has not established approval of Medicare coverage for the Category B IDE study for the TIVUSTM system.

The TIVUSTM system is used with CPT code 0632T (Percutaneous transcatheter ultrasound ablation, nerves innervating the pulmonary arteries, including right heart catheterization, radiological supervision and interpretation and pulmonary artery angiography), which will become effective January 1, 2021. In the CY 2021 OPPS/ASC proposed rule, CPT code 0632T was assigned status indicator “E1”, which describes items, codes, and services not covered by any Medicare outpatient benefit category, statutorily excluded by Medicare, or not reasonable and necessary. These items, codes, and services are not paid by Medicare when submitted on outpatient claims.

Comment: One commenter, the manufacturer of the TIVUSTM system, requested that, in anticipation of approval of Medicare coverage for the Category B IDE study for the TIVUSTM system, CMS assign CPT code 0632T status indicator “J1”, which describes services paid through a comprehensive APC (C-APC) instead of status indicator “E1” for CY 2021. The commenter also requested that CMS assign CPT code 0632T to C-APC 5213 (Level 3 Electrophysiologic Procedures) for CY 2021, stating that the procedure is similar in clinical characteristics and resource costs to CPT code 93656 (Comprehensive electrophysiologic evaluation including transseptal catheterizations, insertion and repositioning of multiple electrode catheters with induction or attempted induction of an arrhythmia including Start Printed Page 85975left or right atrial pacing/recording, when necessary, right ventricular pacing/recording when necessary, and his bundle recording when necessary with intracardiac catheter ablation of atrial fibrillation by pulmonary vein isolation), which is assigned to C-APC 5213 for CY 2021.

Response: For approved Category B IDE studies, CMS allows for coverage of the Category B device and the routine care items and services in the clinical trial. To date, coverage for the Category B IDE clinical study for the TIVUSTM system has not been approved by CMS. We do not believe that it is appropriate to assign a payable status indicator under the OPPS to CPT code 0632T prior to the approval of the Category B IDE study. Therefore, for CY 2021, we are finalizing the assignment of status indicator “E1” to CPT code 0632T.

23. Peripheral Intravascular Lithotripsy (IVL) Procedure (APCs 5192, 5193, and 5194)

The IVL system has three components: A proprietary IVL Catheter, an IVL Generator, and an IVL Connector Cable. It is a lithotripsy-enhanced balloon catheter used to dilate lesions, including calcified lesions, in the peripheral vasculature, including the iliac, femoral, ilio-femoral, popliteal, infra-popliteal, and renal arteries. The IVL catheter has integrated lithotripsy emitters and is designed to enhance percutaneous transluminal angioplasty by enabling delivery of the calcium disrupting capability of lithotripsy prior to full balloon dilatation at low pressures. The application of lithotripsy mechanical pulse waves alters the structure of an occlusive vascular deposit (stenosis) prior to low-pressure balloon dilation of the stenosis and facilitates the passage of blood and is used for the treatment of peripheral artery disease (PAD).

In 2019, FDA cleared 510(k) submission based on a determination of substantial equivalence to a legally marketed predicate device. The manufacturer also submitted a new technology application requesting new technology APC assignment for IVL procedures. Based on our review of the New Technology APC application for this service and the service's clinical similarity to existing APCs in the OPPS, we created four new HCPCS codes for these services and assigned these codes to existing clinical APCs. Specifically, CMS proposed to add HCPCS code C9764 (Revascularization, endovascular, open or percutaneous, any vessel(s); with intravascular lithotripsy, includes angioplasty within the same vessel(s), when performed), C9765 (Revascularization, endovascular, open or percutaneous, any vessel(s); with intravascular lithotripsy, and transluminal stent placement(s), includes angioplasty within the same vessel(s), when performed) C9766 (Revascularization, endovascular, open or percutaneous, any vessel(s); with intravascular lithotripsy and atherectomy, includes angioplasty within the same vessel(s), when performed), and C9767 (Revascularization, endovascular, open or percutaneous, any vessel(s); with intravascular lithotripsy and transluminal stent placement(s), and atherectomy, includes angioplasty within the same vessel(s), when performed), effective July 1, 2020. We assigned code C9764 to APC 5192 (Level 2 Endovascular Procedures) with a payment rate of $4,953.91; C9765 and C9766 to APC 5193 (Level 3 Endovascular Procedures) with a payment rate of $9,908.48; and C9767 to APC 5194 (Level 4 Endovascular Procedures) with a payment rate of $15,939.97 for CY 2020. In the CY 2021 OPPS/ASC proposed rule, we proposed to maintain these APC assignments for these codes in CY 2021.

At the August 31, 2020 HOP Panel Meeting, a presenter requested that we reassign IVL procedure C9764 to APC 5193 and procedures C9765 and C9766 to APC 5194. The presenter indicated that the APC payment associated with HCPCS code(s) C9764, C9765 and C9766 is inadequate to cover the cost of the procedures. According to the presenter, the proposed CY 2021 geometric mean cost for the procedures range from $6,619.26 to $22,305.36, not including the additional cost of the IVL catheter. The presenter reported that the cost of one catheter is $2,800 but each procedure requires an average of 1.2 catheters, bringing the total cost of catheters to $3,360 per procedure. The presenter stated that the payment rate for the IVL procedures on tibial and peroneal vessels was lower than the payment rate for similar procedures without IVL. The presenter believed that hospitals will limit access to IVL, reducing patient access, because payment for the procedure is inadequate. They argued that limiting IVL access to patients suffering from critical limb ischemia in tibial and peroneal arteries could lead to higher complications associated with current treatment modalities. They believe that traditional treatments are associated with higher risk of distal embolization, perforation and possible amputation. Based on the information presented at the meeting, the HOP Panel recommended CMS reassign HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766 to APC 5194, as long as the cost of the IVL device is within 10 percent of other devices currently available. However, we are unable to identify devices that are similar to IVL and therefore cannot complete the data analysis recommended by the HOP Panel.

Comment: Several commenters disagreed with CMS' proposed APC assignments for the peripheral intravascular lithotripsy service described by HCPCS codes C9764, C9765 and C9766. They reported that, based on the resource cost of the service described by HCPCS code C9764, APC 5192 does not provide adequate reimbursement for the service, and recommended reassignment to APC 5193 (Level 3 Endovascular Procedures) with a proposed payment rate of $10,222.32. Similarly, for HCPCS codes C9765 and C9766, the commenters indicated that APC 5193 would not adequately cover the resource costs associated with these procedures, and recommended their reassignment to APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate of $16,348.66.

Response: APC assignment for a code is based on similarity to other codes within an APC in terms of clinical homogeneity and resource costs. As specified in 42 CFR 419.31(a)(1), CMS classifies outpatient services and procedures that are comparable clinically and in terms of resource use into APC groups. As we stated in the CY 2012 OPPS/ASC final rule (76 FR 74224), the OPPS is a prospective payment system that provides payment for groups of services that share clinical and resource use characteristics. For all new codes, our policy has been to assign the service or procedure to an APC informed by a variety of sources, including but not limited to, review of the clinical similarity of the service to existing procedures; advice from CMS medical advisors; information from interested specialty societies; and review of all other information available to us, including information provided to us by the public, whether through meetings with stakeholders or additional information that is mailed or otherwise communicated to us.

Based on the comments we received, the HOP Panel recommendation, information provided in the new technology application, and advice from our medical advisors, we believe we should add new HCPCS codes to describe tibial and peroneal IVL procedures, for a total of eight IVL procedure codes, and revise the long Start Printed Page 85976descriptors for HCPCS codes C9764, C9765, C9766, and C9767 by deleting the words “any vessel(s)” and replacing with “lower extremity artery(ies), except tibial/peroneal” effective January 1, 2021. We agree with commenters that the resources associated with tibial and peroneal IVL procedures are higher than iliac, femoral and popliteal procedures. Therefore, we are creating new HCPCS codes C9772, C9773, C9774, and C9775 to describe tibial and peroneal procedures and assigning these codes to APCs as listed in the Table 33 below.

In summary, after consideration of public comments, we are finalizing our proposal with modification, to provide new HCPCS codes C9772, C9773, C9774 and C9775 and assign these codes to APCs listed in Table 33. Table 33 also lists revised long descriptors for HCPCS codes C9764, C9765, C9766, and C9767, and final SI and APC assignments for all eight codes. The final CY 2021 payment rate for these codes can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

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24. Remote Physiological Monitoring (APC 5741)

a. Initial Remote Monitoring of Physiologic Parameters (APC 5741)

For the CY 2019 update, the CPT Editorial Panel established a new code, specifically, CPT code 99454, to describe initial remote monitoring of physiological parameters effective January 1, 2019. In the CY 2019 update, we assigned this code to APC 5741 (Level 1 Electronic Analysis of Devices) with status indicator “Q1” (conditionally packaged) and a payment rate of $37.16 effective January 1, 2019, based on the clinical and resource similarity with CPT code 93270 (External patient and, when performed, auto activated electrocardiographic rhythm derived event recording with symptom-related memory loop with remote download capability up to 30 days, 24-hour attended monitoring; recording (includes connection, recording, and disconnection)). The new code appeared in the OPPS Addendum B of the CY 2019 OPPS/ASC final rule.

For CY 2020 OPPS/ASC final rule, we maintained the assignment of CPT code 99454 to APC 5741 with a payment rate of $36.25. We note that we had no claims data for CPT code 99454 for the CY 2020 final rule since the code was established on January 1, 2019. For the CY 2021 OPPS/ASC proposed rule, we proposed to maintain the assignment of CPT code 99454 to APC 5741 with the proposed payment rate of $37.76.

Comment: One commenter was concerned that the current reimbursement rate is too low, which the commenter believes discourages providers from using much-needed equipment and services. The commenter stated that CMS must ensure that life-saving RPM technology would be available to Medicare beneficiaries by updating the status indicator and increasing reimbursement rate for CPT code 99454. The commenter requested: (1) A change in the status indicator for CPT code 99454 from “Q1” to “S,” so that it will be paid when used in conjunction with other services; and (2) reassignment of CPT code 99454 from APC 5741 (Level 1 Electronic Analysis of Devices) to APC 5742 (Level 2 Electronic Analysis of Devices).

Response: As we have stated every year since the implementation of the OPPS on August 1, 2000, we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on our analysis of the latest claims data. For CY 2021, based on claims submitted between January 1, 2019 through December 31, 2019, that were processed on or before June 30, 2020, our analysis of the latest claims data for this final rule with comment period supports continuing to assign CPT code 99454 to APC 5741. Specifically, our claims data shows a geometric mean cost of approximately $28.06 for CPT 99454 based on 185 single claims (out of 275 total claims), which is comparable to the geometric mean cost of about $36.19 for APC 5741, rather than the geometric mean cost of approximately $97.72 for APC 5742.

We proposed to assign code 99454 to status indicator “Q1” for CY 2021 to indicate that the payment for CPT code 99454 is packaged when the code is billed on the same claim as a HCPCS code assigned to OPPS status indicator “S”, “T”, or “V”, but is paid separately when it is the only major service on the claim. Because the service described by CPT code 99454 will most often be performed as part of another significant procedure, we believe that packaging the cost associated with CPT code 99454 into the primary service is appropriate. Therefore, assignment of status indicator “Q1” to CPT 99454 is appropriate.

In summary, after consideration of the public comments and after evaluation of our claims data for this final rule with comment period, we are finalizing our proposal, without modification, for CPT code 99454. The final CY 2021 payment rate for the CPT code 99454 can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).

As we do every year, we will reevaluate the APC assignment for CPT code 99454 for the next rulemaking cycle. We remind hospitals that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on the latest claims data.

b. Remote Physiological Monitoring Services, Virtual Check-In, E-Visits, Telephone E/M, and Medication Management Services

For CY 2021, we proposed to continue to assign CPT code 99091 (Collection and interpretation of physiologic data (e.g., ecg, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (when applicable) requiring a minimum of 30 minutes of time, each 30 days) to status indicator “N” (packaged) to indicate that the payment for the service is included in the primary service reported with the code. We also proposed to continue to assign CPT codes 99457 (Remote physiologic monitoring treatment management services, clinical staff/physician/other qualified health care professional time in a calendar month requiring interactive communication with the patient/caregiver during the month; first 20 minutes) and 99458 (Remote physiologic monitoring treatment management services, clinical staff/physician/other qualified health care professional time in a calendar month requiring interactive communication with the patient/caregiver during the month; each additional 20 minutes (list separately in addition to code for primary procedure)) to status indicator “B” (not recognized under OPPS) to indicate that the codes are not paid under the hospital OPPS but may be paid under a different Medicare payment system other than the OPPS. However, if the services described by either CPT code 99457 or 99458 are performed in the hospital outpatient facility, the facility should report an alternate code. These codes are listed in Table 34 along with the descriptors and status indicator assignments. In addition, the definitions for all the OPPS status indicators can be found in Addendum D1.

We note that for CY 2020, we revised the status indicator for CPT code 99457 from “M” (Items and Services Not Billable to the MAC. Not paid under OPPS) to “B,” and for CPT code 99458, which is an add-on code, from “N” (packaged) to “B” effective March 1, 2020. We made the changes to enable Critical Access Hospitals (CAHs) to bill under CAH's Method II for these waiver services so that claims with these codes would process appropriately in the Integrated Outpatient Code Editor (IOCE). We announced the revisions in the July 2020 OPPS Quarterly Update CR (Transmittal 10224, Change Request 11814, dated July 15, 2020).

At the August 31, 2020 HOP Panel Meeting, a presenter requested that we revise the status indicators for these codes. Specifically, the presenter suggested that CPT codes 99091 and 99457 should be treated similar to HCPCS G0463 (Hospital outpatient clinic visit for assessment and management of a patient), which is assigned to status indicator “V” (Clinic or Emergency Department Visit) and APC 5012 (Clinic Visits and Related Services) which has a CY 2021 proposed payment rate of $120.88. Based on the discussion at the Panel Meeting, the HOP Panel recommended that the status indicator for CPT codes 99091 and 99457 be revised to “V” and the status indicator for CPT code 99458 be revised Start Printed Page 85978to “N”. We note that we are not accepting the Panel's recommendation because we believe that we need further review to determine whether these type of services (i.e., remote physiologic monitoring) should be paid separately under the OPPS. We appreciate the HOP Panel's recommendations on the status indicator revisions for CPT codes 99091, 99457, and 99458, and will consider them in future rulemaking.

Comment: For CPT code 99091, one commenter disagreed with the status indicator assignment of “N,” and stated the code should not be packaged because the service may be the only OPPS service furnished during a month for a registered hospital outpatient. The commenter recommended assigning the code to either status indicator “V” or treating it similar to CPT code 99454 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days), which has a payable status indicator of “Q1” (STV-Packaged Codes) and assigned to APC 5741 (Level 1 Electronic Analysis of Devices) with a CY 2021 proposed payment of $37.76.

Response: Although we are sensitive to the concern raised by the commenter, we do not believe that revising the status indicator for CPT code 99091 would be appropriate at this time. We believe we need further review of this code, along with all the remote physiological monitoring (PRM) service codes, to determine whether these types of services should be separately payable under the OPPS. Therefore, for CY 2021, we are finalizing our proposal, without modification and will continue to assign CPT code 99091 to status indicator “N,” and consider the suggestion to revise the status indicator in future rulemaking. The final CY 2021 status indicator for CPT code 99091 can also be found in Table 34 below.

Comment: For CPT code 99457, several commenters suggested reassigning the code to status indicator “V,” similar to CPT code 99453 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment), which has a payable status indicator of “V” and assigned to APC 5012 with a CY 2021 proposed payment of $120.88. The commenters stated that in the CY 2020 Physician Fee Schedule (PFS), CMS clarified that “CPT codes 99457 and 99458 can be furnished by clinical staff under the general supervision of the physician or NPP.” Based on this statement, the commenters believe that CPT code 99457 should be paid separately under the OPPS. The commenters reported that because the code is currently assigned to status indicator “B,” hospital outpatient facilities do not receive any reimbursement when the service is provided by clinical staff in a hospital outpatient setting. One commenter stated that the status indicator should be revised to “V” to support the service being provided to Medicare beneficiaries under the order of a physician.

Response: We appreciate the commenters' suggestions, however, we believe we need further evaluation of this code, along with the rest of the RPM service codes, to determine whether this type of service should be separately payable under the OPPS. Therefore, for CY 2021, we are finalizing our proposal, without modification, to assign CPT code 99457 to status indicator “B.” We will consider the commenters' suggestion to revise the status indicator for future rulemaking. The final CY 2021 status indicator for CPT code 99457 can also be found in Table 34 below. Also, as noted above, we revised the status indicator for CPT code 99457 from “M” to “B” effective March 1, 2020, to enable Critical Access Hospitals (CAHs) to bill under CAH's Method II for these waiver services so that claims with this code would process appropriately in the Integrated Outpatient Code Editor (IOCE). We announced the revisions in the July 2020 OPPS Quarterly Update CR (Transmittal 10224, Change Request 11814, dated July 15, 2020).

Comment: For CPT code 99458, the commenters suggested the reassignment to status indicator “N” because this is an add-on code.

Response: As noted above, similar to CPT code 99457, we revised the status indicator for CPT code 99458 to “B” effective March 1, 2020, to enable Critical Access Hospitals (CAHs) to bill under CAH's Method II for the service so that claims with this code would process appropriately in the Integrated Outpatient Code Editor (IOCE). We announced the revisions in the July 2020 OPPS Quarterly Update CR (Transmittal 10224, Change Request 11814, dated July 15, 2020). We appreciate the commenters' suggestions, however, we believe we need further evaluation of this code, along with the rest of the RPM service codes, to determine whether this type of service should be separately payable under the OPPS. Therefore, for CY 2021, we are finalizing our proposal, without modification, to assign CPT code 99458 to status indicator “B,” and we will consider the suggestion to revise the status indicator in future rulemaking. The final CY 2021 status indicator for CPT code 99458 can be found in Table 34 below.

Comment: One commenter indicated that CMS is currently paying separately for certain RPM services and have assigned the codes to separately payable status indicator “V,” “S,” or “Q1,” however, some other RPM codes are assigned to non-payable status indicators such as “B” and “M”. The commenter added that the status indicator assignments for the RPM codes are inconsistent and confusing to providers. The same commenter suggested that CMS recognize each distinct RPM CPT code that require hospital resources and assign the codes consistently to payable status indicators. The commenter recommended reassigning CPT codes 93264, 93268, 93297, 93298 from status indicator “M” to “S” and assigning the code to either APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed CY 2021 payment rate of $37.76, APC 5742 (Level 2 Electronic Analysis of Devices) with a proposed CY 2021 payment rate of $101.76, or APC 5743 (Level 3 Electronic Analysis of Devices) with a proposed CY 2021 payment rate of $272.91. The commenter stated that CPT codes 93264, 93268, 93297, 93298 should be covered and payable, similar to CPT code 93296 (Interrogation device evaluation(s) (remote), up to 90 days; single, dual, or multiple lead pacemaker system, leadless pacemaker system, or implantable defibrillator system, remote data acquisition(s), receipt of transmissions and technician review, technical support and distribution of results), which is assigned to APC 5741 with a proposed CY 2021 payment rate of $37.76. The same commenter suggested reassigning CPT code 99474 from status indicator “B” to “V” and assigning it to APC 5012, similar to CPT code 99453 (Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment).

Response: We appreciate the commenter's suggestions, however, we believe that we need further evaluation of the codes to determine whether all RPM CPT codes should be paid separately under the OPPS. Therefore, for CY 2021, we are finalizing our proposal, without modification, to assign CPT codes 93264, 93268, 93297, and 93298 to status indicator “M,” and consider the suggestions to revise the status indicator and assign appropriate APCs to the codes in future rulemaking. Similarly, we are finalizing our Start Printed Page 85979proposal, without modification, to assign CPT code 99474 to status indicator B” for CY 2021. The final status indicators for CPT codes 93264, 93268, 93297, 93298, and 99474 can be found in Table 34 below.

Commenter: One commenter suggested revising the status indicator for 19 CPT codes that describe virtual check-ins, e-visits, and telephone evaluation and management services from non-payable to separately payable under the OPPS. The 19 codes, along with the proposed status indicator assignments and descriptors, can be found in Table 34 below. The commenter explained that when clinicians furnish virtual check-ins, e-visits, and telephone E/M services to hospital outpatients, hospital resources are used to support the clinician. The commenter stated that while the codes are separately payable under the PFS, the hospital resources are not paid separately under the OPPS. The commenter believes that under 42 CFR 419.22, virtual or remote services are not excluded from OPPS and, therefore, the facility expense should be paid separately under the OPPS.

Response: We appreciate the commenter's suggestions, however, we believe that we need further evaluation of the 19 codes to determine whether the services should be paid separately under the OPPS. Therefore, for CY 2021, we are finalizing our proposal, without modification, to assign the codes to either status indicator “A” or “B” for the 19 codes listed in Table 34 as virtual check-in, e-visit, and telephone E/M services.

Comment: One commenter suggested revising the status indicator for two medication therapy management (MTM) codes from “E1” to “B,” and indicated that the codes should be assigned to the same status indicator as genetic counseling code CPT 96040 (Medical genetics and genetic counseling services, each 30 minutes face-to-face with patient/family), which is assigned to status indicator “B” under the OPPS. Specifically, the commenter recommended reassigning CPT codes 99605 (Medication therapy management service(s) provided by a pharmacist, individual, face-to-face with patient, with assessment and intervention if provided; initial 15 minutes, new patient) and 99606 (Medication therapy management service(s) provided by a pharmacist, individual, face-to-face with patient, with assessment and intervention if provided; initial 15 minutes, established patient) from “E1” to “B.” The commenter explained that the CY 2021 PFS proposed rule clarified that genetic counseling and pharmacist services can be considered “incident to” a professional service in the office setting. Specifically, the commenter noted that the 2021 PFS proposed rule (85 FR 50146) states “Medication management is covered under both Medicare Part B and Part D. We are reiterating the clarification we provided in the May 1st COVID-19 IFC (85 FR 27550 through 27629), that pharmacists fall within the regulatory definition of auxiliary personnel under our regulations at § 410.26. As such, pharmacists may provide services incident to the services, and under the appropriate level of supervision, of the billing physician or NPP, if payment for the services is not made under the Medicare Part D benefit.” In light of the statements, the commenter believes that when MTM services are furnished in the HOPD setting, the hospital outpatient facility is reporting for the pharmacists' services, which the commenter believes meet the definition of outpatient services at 42 CFR 410.27 and the definition of OPPS services at 42 CFR 419.21. Consequently, the commenter believes that MTM services should be paid separately under the OPPS.

Response: We appreciate the commenter's suggestions, however, we believe that we need further evaluation of the two MTM codes to determine whether the services should be paid separately under the OPPS. We note that policies discussed in the PFS proposed rules typically do not apply to OPPS policies; however, we will review the issue. Therefore, for CY 2021, we are finalizing our proposal, without modification, to assign the codes to status indicator “E1” for the 2 MTM codes listed in Table 34.

Comment: One commenter suggested that CMS treat all telehealth and communication technology-based services (CTBS) consistently with OPPS payable status indicators and ambulatory payment classification (APC) assignments. The commenter explained that these issues were discussed in the 2021 PFS proposed rule.

Response: We appreciate the commenter's suggestion, however, we believe that we need further evaluation of the issue to determine whether all the codes that describe telehealth and communication technology-based services (CTBS) should be paid separately under the OPPS. In addition, we made no proposals regarding these issues in the CY 2021 OPPS/ASC proposed rule. As stated above, the proposed policies discussed in the PFS proposed rules typically do not apply to OPPS policies because they are two different Medicare payment systems. However, we will review the issue for potential future rulemaking.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, for the 29 codes listed in Table 34 for CY 2021. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

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25. Review of Electrocorticograms From an Implanted Brain Neurostimulator (APC 5741)

For CY 2021, we proposed to continue to assign CPT code 95836 (Electrocorticogram from an implanted brain neurostimulator pulse generator/transmitter, including recording, with interpretation and written report, up to 30 days) to APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed payment of $37.76.

Comment: A commenter urged CMS to reassign CPT code 95836 from APC 5741 to APC 5742 (Level 2 Electronic Analysis of Devices) with a proposed payment rate of $101.76, and stated that the payment for APC 5741 does not adequately reflect the resources used by HOPDs in performing this procedure.

Response: Based on our analysis of the hospital outpatient claims data for this final rule, we disagree that the resource cost to perform the service is inappropriate. Our evaluation of the latest claims data show a geometric mean cost of about $14 based on 21 single claims (out of 213 total claims). We believe that reassigning the code to APC 5742, whose geometric mean cost is approximately $98, would significantly overpay for the service. Additionally, we believe that the payment for CPT code 95836 is sufficient to cover the hospital cost of performing the service.

In summary, after consideration of the public comment, we are finalizing our proposal, without modification, to continue to assign CPT code 95836 to APC 5741 for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

As we do every year, we will reevaluate the APC assignment for CPT code 95836 in the next rulemaking cycle. We remind hospitals that we review, on an annual basis, the APC assignments for all services and items paid under the OPPS based on the latest claims data available to us.

26. Therapeutic Apheresis

The LIXELLE® β2-microglobulin Apheresis Column is indicated for use in the treatment of dialysis-related amyloidosis (DRA), a disease that affects people with end-stage renal disease (ESRD) who have been receiving dialysis for five or more years. The LIXELLE® device is used in an apheresis procedure that selectively removes β2-microglobulin (“β2m”) from the circulating blood of patients with DRA. LIXELLE® is used pursuant to a physician prescription in conjunction with hemodialysis and is intended to be used at each hemodialysis session (i.e., frequency of treatment is expected to be three times per week).

In March 2015, FDA approved LIXELLE® as a Class III Humanitarian Use Device (HUD) with an approved Humanitarian Device Exemption (HDE). FDA regulations require the manufacturer to conduct a post-approval study (PAS) to evaluate the safety of the LIXELLE® Apheresis procedure in U.S. patients on chronic hemodialysis with clinically-diagnosed DRA, and assess the probable benefit of LIXELLE® Apheresis to increase the β2m reduction rate in these patients in successive dialysis sessions (compared to dialysis without LIXELLE®). Currently, there is no payment under the OPPS for the apheresis procedure used with the LIXELLE® device.

Comment: One commenter, the manufacturer of the LIXELLE® device, Start Printed Page 85983requested that CMS provide payment for the apheresis procedure used with the device under the OPPS. The commenter stated that the LIXELLE® apheresis procedure may be administered in either a dialysis facility or the hospital outpatient department and that the HOPD was the more clinically appropriate setting. Specifically, the commenter requested that CMS provide payment through the OPPS via one of three potential pathways: (1) Allow payment for the apheresis procedure used with the LIXELLE® device through CPT code 36516 (Therapeutic apheresis with extracorporeal immunoadsorption, selective adsorption or selective filtration and plasma reinfusion), which was proposed to be assigned to APC 5243 (Level 3 Blood Product Exchange and Related Services) for CY 2021, and require the use of a modifier or add-on code when the LIXELLE® apheresis procedure is billed to reduce the payment for the procedure to the payment rate for APC 5242 (Level 2 Blood Product Exchange and Related Services); (2) allow payment for the dialysis performed as part of LIXELLE® apheresis procedure through HCPCS code G0257 (Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility), which is assigned to APC 5401 (Dialysis) for CY 2021, and require the use of a modifier or add-on code to provide additional payment beyond that provided by APC 5401; or (3) create a HCPCS C code or G code for the LIXELLE® apheresis procedure and assign the code to APC 5242 (Level 2 Blood Product Exchange and Related Services). Finally, the commenter also noted that they have been unable to complete the FDA-required post-approval study as a condition of the HDE, due to difficulty in securing patient enrollment because of lack of CMS payment for the LIXELLE® apheresis procedure.

Response: We appreciate these comments and understand the various issues related to coverage and payment for the LIXELLE® apheresis procedure. We will consider these comments for future rulemaking.

27. Tympanostomy Using an Automated Tube Delivery System (APC 5163)

As displayed in Addendum B to the CY 2021 OPPS/ASC proposed rule, we proposed to assign CPT code 0583T (Tympanostomy (requiring insertion of ventilating tube), using an automated tube delivery system, iontophoresis local anesthesia) to status indicator (SI) “E1” to indicate that the code is not payable by Medicare when submitted on outpatient claims (any outpatient bill type) because the services associated with these codes are either not covered by any Medicare outpatient benefit category, are statutorily excluded from Medicare payment, or are not reasonable and necessary.

Comment: Some commenters reported that the device associated with CPT code 0583T received FDA approval in November 2019 and requested separate payment for the code. They specifically requested assignment to APC 5164 (Level 4 ENT Procedures), with a proposed payment of $2,776.63, and also requested assignment to either status indicator “S” (Procedure or Service, Not Discounted When Multiple) or “T” (Procedure or Service, Multiple Procedure Reduction Applies). They reported that assignment to APC 5164 would match the resources furnished when providing this service. The manufacturer for the device associated with the code explained that while the surgical procedure described by CPT code 0583T is primarily performed on children, the device is approved for all ages above 6 months. The manufacturer also indicated that the procedure will be extremely important for the Medicaid population and Medicaid programs who often refer to Medicare to establish coverage and payment. One commenter reported that the total cost for the complete procedure is approximately $2,776, while the device manufacturer reported a cost of about $1,400 for the device.

Response: Based on our review of the procedure and input from our medical advisors, we believe that the surgical procedure described by CPT code 0583T is most similar, in terms of clinical homogeneity and resource cost, to CPT code 69436 (Tympanostomy (requiring insertion of ventilating tube), local or topical anesthesia), which is assigned to APC 5163 (Level 3 ENT Procedures) with a proposed payment of about $1,395. Both procedures (as described by CPT codes 0583T and 69436) require ventilating tubes that require anesthesia. Therefore, we believe that the most appropriate APC assignment for CPT code 0583T is APC 5163, which is associated with status indicator “J1” (Hospital Part B services paid through a comprehensive APC).

In summary, after consideration of the public comments, we are finalizing our proposal with modification, and assigning CPT code 0583T to APC 5163 with a status indicator of “J1” for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

28. Unlisted Dental Procedure (APC 5161)

For CY 2021, we proposed to continue to assign CPT code 41899 (Unlisted procedure, dentoalveolar structures) to APC 5161 (Level 1 ENT Procedures) with a payment rate of $213.59.

Comment: Two dental specialty societies expressed concern with the payment rate for CPT code 41899. They explained that this is the only CPT code available for dental surgery and its low reimbursement is insufficient to cover the facility costs. The commenters added that the low payment rate has resulted in many dentists, especially pediatric dentists, experiencing difficulty in obtaining operating room (OR) time to perform surgical procedures under general anesthesia. They stated that the problem has been exacerbated by the COVID-19 pandemic, with further limited access to ORs to address patient dental needs.

Response: CPT code 41899 is designated as an unlisted code. Some HCPCS codes are used to report items, services, and procedures that do not define the exact item, service, or surgical procedure furnished. They are commonly called “unlisted” codes. The code descriptors often contain phrases such as: “unlisted procedure,” “not otherwise classified,” or “not otherwise specified.” The unlisted codes typically fall within a clinical or procedural category, but they lack the specificity needed to describe the resources used. Until a more specific HCPCS code is established, as an interim, the unlisted code provides a way for providers to report items, services, and procedures furnished. In general, unlisted codes are reported when no other specific CPT or Level II HCPCS code accurately describes the item, procedure, or service. Because of the lack of specificity, unlisted codes are assigned to the lowest level, clinically appropriate APC group under the OPPS. The assignment of the unlisted codes to the lowest level APC in the clinical category specified in the code provides a reasonable means for interim payment until such time as there is a code that specifically describes what is being paid. It also encourages the creation of codes where appropriate and protects against overpayment of services that are not clearly identified on the claim. As a reminder, unlisted codes are not used in establishing the percent of claims contributing to the APC, nor are their Start Printed Page 85984costs used in the calculation of the APC geometric mean (80 FR 70321), because, by the code's definition, we do not know what service or combination of services is reflected in the claims billed with the unlisted code. Currently, we have five levels of ENT Procedure APCs, Levels 1 through 5, with Level 1 assigned to the lowest paying of the five APCs. Because the code is designated as an unlisted code, we believe that CPT 41899 code is appropriately assigned to APC 5161, which is the lowest level ENT APC.

In addition, because unlisted codes are non-specific, HOPDs are reminded that Medicare Administrative Contractors (MACs) may have additional documentation requirements for how the codes should be reported to receive payment. Refer to section 180.3 (Unlisted Service or Procedure) in Chapter 4 (Part B Hospital) of the Medicare Claims Processing Manual for information on how MACs review claims with unlisted codes.

We note that AMA establishes new CPT codes, depending on the code type, quarterly and annually. Interested parties that desire more specific codes for unlisted codes should consult the AMA. Information on CPT codes and the process for requesting new codes can be found on the AMA website: https://www.ama-assn.org/​about/​cpt-editorial-panel/​cpt-code-process.

In summary, after consideration of the public comments, we are finalizing our proposal, without modification, to assign CPT code 41899 to APC 5161 for CY 2021. The final CY 2021 payment rate for the code can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

29. Urology and Related Services (APCs 5371 Through 5378)

We received comments on the CY 2020 OPPS/ASC proposed rule suggesting we revise the APC assignments for the services assigned to the Urology & Related Services APCs. The commenter specifically noted that a reorganization for APCs 5374 through 5376 would be appropriate, but added that there were other adjustments across services within the Urology APCs that could improve the structure of these APCs. In response to this comment, we stated in the CY 2020 OPPS/ASC final rule with comment period that we would consider revisions to the urology APCs in future rulemaking.

Currently, for CY 2020, there are seven levels of APCs for urology services. We reviewed the geometric mean cost for APCs 5371 through 5377 and, after our analysis of the claims data for the CY 2021 OPPS/ASC proposed rule, we believed that a modification to the urology APCs would be appropriate.

For the CY 2021 OPPS/ASC proposed rule, we evaluated the claims data and noted the large difference in geometric mean cost between APC 5376 (level 6) and APC 5377 (level 7) has continued to grow. This difference in the geometric mean cost from APC 5376 to APC 5377 would have been about $9,700, with the geometric mean cost for APC 5377 at approximately 220 percent of the geometric mean cost of APC 5376. Based on the proposed rule claims data, which showed an unusually large difference between the geometric mean costs of the Level 6 Urology APC and the Level 7 Urology APC on both a dollar and percentage basis, we believed that creating an additional APC in the urology and related series would provide an appropriate structure, distinguishing between clinical and cost similarity for the procedures in the different levels. Therefore, for CY 2021, we proposed to establish an additional level for the urology and related services APCs, specifically, APC 5378 (Level 8 Urology and Related Services) and to re-organize the current APCs 5376 (Level 6 Urology and Related Services) and 5377 (Level 7 Urology and Related Services). We believed this re-organization would address the lack of an appropriate level for procedures with geometric mean costs that fall between current APC 5376 and current APC 5377.

As we stated in the proposed rule (85 FR 48842), the proposed reorganization would reassign CPT 53440 (Male sling procedure) and CPT 0548T (Transperineal periurethral balloon continence device; bilateral placement, including cystoscopy and fluoroscopy) from the current APC 5376 to APC 5377.

In addition, the proposed revision would reassign the following services from APC 5377 to APC 5378:

  • CPT 54416 (Removal and replacement of non-inflatable (semi-rigid) or inflatable (self-contained) penile prosthesis at the same operative session).
  • CPT 53444 (Insert tandem cuff).
  • CPT 54410 (Removal and replacement of all component(s) of a multi-component, inflatable penile prosthesis at the same operative session).
  • CPT 54411 (Removal and replacement of all components of a multi-component inflatable penile prosthesis through an infected field at the same operative session, including irrigation and debridement of infected tissue).
  • CPT 54401 (Insertion of penile prosthesis; inflatable (self-contained)).
  • CPT 54405 (Insertion of multi-component, inflatable penile prosthesis, including placement of pump, cylinders, and reservoir).
  • CPT 53447 (Removal and replacement of inflatable urethral/bladder neck sphincter including pump, reservoir, and cuff at the same operative session).
  • CPT 53445 (Insertion of inflatable urethral/bladder neck sphincter, including placement of pump, reservoir, and cuff).

As further stated in the proposed rule, the proposed APC reassignment for these 10 codes results in geometric mean costs for Levels 6, 7, and 8 of the Urology APCs that we believe more appropriately align with the geometric mean costs for services in these APCs than the current structure. Specifically, as listed in Table 19 of the proposed rule, and reprinted below, the geometric mean cost of $8,089.78 for APC 5376, $11,275.15 for APC 5377, and $18,015.54 for APC 5378 reduces the unusually large gaps on both a dollar and percentage basis in geometric mean costs between each APC level.

Start Printed Page 85985

We received many comments on our proposal. Below are the comments and our responses.

Comment: Several commenters supported our proposal to establish an additional Urology and Related Services APC, specifically, APC 5378 (Level 8 Urology and Related Services), and re-organize the current APCs 5376 (Level 6 Urology and Related Services) and 5377 (Level 7 Urology and Related Services). These commenters agreed that the addition of APC 5378 within the Urology APCs would better align procedures based on their resource cost and clinical homogeneity.

Response: We appreciate the commenters' support for our proposal to establish new APC 5378 and to re-organize the procedures in the Urology APCs. We note that each year, under the OPPS, we revise and make changes to the APC groupings based on the latest hospital outpatient claims data to appropriately place procedures and services in APCs based on clinical characteristics and resource similarity. We note that based on our review of the claims data for the final rule, we are also finalizing our proposal without modification to reassign CPT codes 53440 and 0548T to APC 5377. Similarly, we are finalizing our proposal without modification to reassign CPT codes 54416, 53444, 54410, 54411, 54401, 54405, 53447, and 53445 to APC 5378.

Comment: A commenter supported the continued assignment of HCPCS code C9739 (Cystourethroscopy, with insertion of transprostatic implant; 1 to 3 implants) to APC 5375 and HCPCS C9740 (Cystourethroscopy, with insertion of transprostatic implant; 4 or more implants) to APC 5376.

Response: We appreciate the commenter's support for our APC assignments, which are based on our review of the latest claims data. We are finalizing our proposal and assigning these codes to the proposed APCs in this final rule.

Comment: Several commenters also recommended additional changes within APCs 5371 to APC 5376. Specifically, for APCs 5371 and 5372, the commenters recommended the following reassignments from APC 5371 to APC 5372:

  • CPT 51720 (Bladder instillation of anticarcinogenic agent (including retention time);
  • CPT 43763 (lacement of gastrostomy tube, percutaneous, includes removal, when performed, without imaging or endoscopic guidance; requiring revision of gastrostomy tract);
  • 51725 Simple cystometrogram (cmg) (e.g., spinal manometer);
  • 51726 Complex cystometrogram (i.e., calibrated electronic equipment); and
  • 51040 Cystostomy, cystotomy with drainage.

Also, the commenters suggested the reassignment of the following codes from APC 5373 to APC 5374:

  • 52287 Cystourethroscopy, with injection(s) for chemodenervation of the bladder
  • 52276 Cystourethroscopy with direct vision internal urethrotomy
  • 54840 Excision of spermatocele, with or without epididymectomy
  • 53854 Transurethral destruction of prostate tissue; by radiofrequency generated water vapor thermotherapy

In addition, the commenters recommended reassigning the following codes from APC 5375 to APC 5376:

  • 53420 Urethroplasty, 2-stage reconstruction or repair of prostatic or membranous urethra; first stage;
  • C9747 Ablation of prostate, transrectal, high intensity focused ultrasound (hifu), including imaging guidance;
  • 53410 Urethroplasty, 1-stage reconstruction of male anterior urethra;
  • 50553 Renal endoscopy through established nephrostomy or pyelostomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with ureteral catheterization, with or without dilation of ureter;
  • 54111 Excision of penile plaque (peyronie disease); with graft to 5 cm in length;
  • 55875 Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy;
  • 54660 Insertion of testicular prosthesis (separate procedure);
  • 50576 Renal endoscopy through nephrotomy or pyelotomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with fulguration and/or incision, with or without biopsy; and
  • 0549T Transperineal periurethral balloon continence device; unilateral placement, including cystoscopy and fluoroscopy;

Further, the commenters suggested revising the assignment for these codes from APC 5376 to APC 5377:Start Printed Page 85986

  • 55873 Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring);
  • 50081 Percutaneous nephrostolithotomy or pyelostolithotomy, with or without dilation, endoscopy, lithotripsy, stenting, or basket extraction; over 2 cm; and
  • 50562 Renal endoscopy through established nephrostomy or pyelostomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with resection of tumor.

Response: Based on our review of the claims data for the final rule, we do not believe that reassigning these 21 urology procedures to the suggested APCs is appropriate. Our review of the claims data for this CY 2021 OPPS/ASC final rule with comment period show that the procedures are appropriately placed in the proposed APCs based on clinical homogeneity and resource costs. Consequently, we are finalizing our proposal without modification for the 21 urology procedures discussed above.

In summary, after consideration of the public comments, and after our analysis of the updated claims data for this final rule with comment period, we are finalizing our proposal, without modification, to reorganize the Urology and Related Services APCs. The final CY 2021 payment rate for the codes for all the codes discussed above can be found in Addendum B to this final rule with comment period. In addition, we refer readers to Addendum D1 of this final rule with comment period for the status indicator (SI) meanings for all codes reported under the OPPS. Both Addendum B and D1 are available via the internet on the CMS website.

a. High-Intensity Focused Ultrasound of the Prostate (HIFU) Procedure (APC 5375)

In 2017, CMS received a new technology application for the prostate HIFU procedure and established a new code, specifically, HCPCS code C9747 (Ablation of prostate, transrectal, high intensity focused ultrasound (hifu), including imaging guidance). Based on the estimated cost provided in the new technology application, we assigned the new code to APC 5376 (Level 6 Urology and Related Services) with a payment rate of $7,452.66 effective July 1, 2017. We announced the SI and APC assignment in the July 2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017).

For the CY 2018 update, we maintained the assignment of HCPCS code C9747 to APC 5376 with a payment rate of $7,596.26. We note that the payment rates for the CY 2018 OPPS update were based on claims submitted between January 1, 2016 through December 30, 2016, that were processed on or before June 30, 2017. Since HCPCS code C9747 was established on July 1, 2017, we had no claims data for the procedure for use in ratesetting for CY 2018.

However, for the CY 2019 update, based on the latest claims data for the final rule, we revised the APC assignment for HCPCS code C9747 from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note that the payment rates for CY 2019 were based on claims submitted between January 1, 2017 through December 30, 2017, that were processed on or before June 30, 2018. Our claims data showed a geometric mean cost of approximately $5,000 for HCPCS code C9747 based on 64 single claims (out of 64 total claims), which was significantly lower than the geometric mean cost of about $7,717 for APC 5376. We believed that the geometric mean cost for HCPCS code C9747 was more comparable to the geometric mean cost of approximately $4,055 for APC 5375. Consequently, we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and Related Services) for CY 2019 and C9747 remai