# Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Physician-Owned Hospitals: Data Sources for Expansion Exception; Physician Certification of Inpatient Hospital Services; Medicare Advantage Organizations and Part D Sponsors: CMS-Identified Overpayments Associated with Submitted Payment Data > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2014-26146 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** November 10, 2014 - **Citation:** 79 FR 66770 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 411, 412, 416, 419, 422, 423, and 424 [CMS-1613-FC] RIN 0938-AS15 Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Physician-Owned Hospitals: Data Sources for Expansion Exception; Physician Certification of Inpatient Hospital Services; Medicare Advantage Organizations and Part D Sponsors: CMS-Identified Overpayments Associated with Submitted Payment Data AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule with comment period. SUMMARY: This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2015 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In this document, we also are making changes to the data sources permitted for expansion requests for physician-owned hospitals under the physician self-referral regulations; changes to the underlying authority for the requirement of an admission order for all hospital inpatient admissions and changes to require physician certification for hospital inpatient admissions only for long-stay cases and outlier cases; and changes to establish a formal process, including a three-level appeals process, to recoup overpayments that result from the submission of erroneous payment data by Medicare Advantage (MA) organizations and Part D sponsors in the limited circumstances in which the organization or sponsor fails to correct these data. DATES: Effective Date: This final rule with comment period is effective on January 1, 2015. Comment Period: To be assured consideration, comments on the payment classifications assigned to HCPCS codes identified in Addenda B, AA, and BB to this final rule with comment period with the “NI” comment indicator, and on other areas specified throughout this final rule with comment period must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on December 30, 2014. Application Deadline—New Class of New Technology Intraocular Lenses: Requests for review of applications for a new class of new technology intraocular lenses must be received by 5 p.m. EST on March 2, 2015, at the following address: ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. ADDRESSES: In commenting, please refer to file code CMS-1613-FC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. You may submit comments in one of four ways (no duplicates, please): 1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov . Follow the instructions under the “submit a comment” tab. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1613-FC, P.O. Box 8013, Baltimore, MD 21244-1850. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1613-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses: a. For delivery in Washington, DC— Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201. (Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members. Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION: Marjorie Baldo, (410) 786-4617, for issues related to new CPT and Level II HCPCS codes, revised process for soliciting comments related to new Category I and III CPT codes, and exceptions to the 2 times rule. Elizabeth Bainger, (410) 786-0529, for issues related to the Hospital Outpatient Quality Reporting—Program Administration, Validation, and Reconsideration Issues. Anita Bhatia, (410) 786-7236, for issues related to the Ambulatory Surgical Center Quality Reporting (ASCQR) Program—Program Administration and Reconsideration Issues. Chuck Braver, (410) 786-9379, for issues related to the CMS Web posting of the OPPS and ASC payment files. Anne Calinger, (410) 786-3396, for issues related to Medicare Advantage (MA) organizations and Medicare Part D sponsor overpayments. Elisabeth Daniel, (410) 786-0237, for issues related to OPPS drugs, radiopharmaceuticals, biologicals, blood clotting factors, packaged items/services, and brachytherapy sources payment. Dexter Dickey, (410) 786-6856, or Dorothy Myrick, (410) 786-9671, for issues related to partial hospitalization and community mental health center (CMHC) issues. Eva Fung, (410) 786-7539, or Vinitha Meyyur, (410) 786-8819, for issues related to Hospital OQR Program and ASCQR measures issues and publication of Hospital OQR Program data issues. Twi Jackson, (410) 786-1159, for issues related to device-dependent APCs, composite APCs (extended assessment and management, low dose brachytherapy, multiple imaging), hospital outpatient visits, inpatient procedures list, and no cost/full credit and partial credit devices. Marina Kushnirova, (410) 786-2682, for issues related to OPPS status indicators and comment indicators. John McInnes, (410) 786-0791, for issues related to new technology intraocular lenses (NTIOLs). Esther Markowitz, (410) 786-4595, for issues related to comprehensive APCs and ambulatory surgical center (ASC) payments. David Rice, (410) 786-6004, for issues related to APC weights, blood and blood products, cancer hospital payments, conversion factor, copayments, cost-to-charge ratios (CCRs), data claims, geometric mean calculation, off-campus provider-based issues, rural hospital payments, outlier payments, and wage index. Daniel Schroder, (410) 786-4487, for issues related to physician certification of hospital inpatient services. Carol Schwartz, (410) 786-0576, for issues related to the Advisory Panel on Hospital Outpatient Payment (HOP Panel) and OPPS pass-through devices. Teresa Walden, (410) 786-3755, or Patricia Taft, (410) 786-4561, for issues related to the physician self-referral law/physician-owned hospital expansion exception process. Marjorie Baldo, (410) 786-4617, for all other issues related to hospital outpatient and ambulatory surgical center payments not previously identified. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov . Follow the search instructions on that Web site to view public comments. Comments received timely will also be available for public inspection, generally beginning approximately 3 weeks after publication of the rule, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. EST. To schedule an appointment to view public comments, phone 1-800-743-3951. Electronic Access This Federal Register document is also available from the Federal Register online database through Federal Digital System (FDsys), a service of the U.S. Government Printing Office. This database can be accessed via the Internet at http://www.gpo.gov/fdsys/ . Addenda Available Only Through the Internet on the CMS Web Site In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the Federal Register as part of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear in the Federal Register as part of the annual OPPS/ASC proposed and final rules to decrease administrative burden and reduce costs associated with publishing lengthy tables. Instead, these Addenda are published and available only on the CMS Web site. The Addenda relating to the OPPS are available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html . The Addenda relating to the ASC payment system are available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/index.html . Alphabetical List of Acronyms Appearing in This Federal Register Document AHA American Hospital Association AMA American Medical Association AMI Acute myocardial infarction APC Ambulatory Payment Classification ASC Ambulatory surgical center ASCQR Ambulatory Surgical Center Quality Reporting ASP Average sales price AWP Average wholesale price BBA Balanced Budget Act of 1997, Public Law 105-33 BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113 BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Public Law 106-554 BLS Bureau of Labor Statistics CAH Critical access hospital CAHPS Consumer Assessment of Healthcare Providers and Systems CAP Competitive Acquisition Program C-APC Comprehensive Ambulatory Payment Classification CASPER Certification and Survey Provider Enhanced Reporting CAUTI Catheter-associated urinary tract infection CBSA Core-Based Statistical Area CCN CMS Certification Number CCR Cost-to-charge ratio CDC Centers for Disease Control and Prevention CED Coverage with Evidence Development CERT Comprehensive Error Rate Testing CFR Code of Federal Regulations CI Comment indicator CLABSI Central Line [Catheter] Associated Blood Stream Infection CLFS Clinical Laboratory Fee Schedule CMHC Community mental health center CMS Centers for Medicare & Medicaid Services CoP Condition of participation CPI-U Consumer Price Index for All Urban Consumers CPT Current Procedural Terminology (copyrighted by the American Medical Association) CR Change request CRC Colorectal cancer CSAC Consensus Standards Approval Committee CT Computed tomography CV Coefficient of variation CY Calendar year DFO Designated Federal Official DIR Direct or indirect remuneration DME Durable medical equipment DMEPOS Durable Medical Equipment, Prosthetic, Orthotics, and Supplies DRA Deficit Reduction Act of 2005, Public Law 109-171 DSH Disproportionate share hospital EACH Essential access community hospital EAM Extended assessment and management ECG Electrocardiogram ED Emergency department E/M Evaluation and management EHR Electronic health record ESRD End-stage renal disease ESRD QIP End-Stage Renal Disease Quality Improvement Program FACA Federal Advisory Committee Act, Public Law 92-463 FDA Food and Drug Administration FFS [Medicare] Fee-for-service FY Fiscal year GAO Government Accountability Office GI Gastrointestinal HAI Healthcare-associated infection HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems HCERA Health Care and Education Reconciliation Act of 2010, Public Law 111-152 HCP Health care personnel HCPCS Healthcare Common Procedure Coding System HCRIS Healthcare Cost Report Information System HCUP Healthcare Cost and Utilization Project HH QRP Home Health Quality Reporting Program HHS Department of Health and Human Services HIE Health information exchange HEU Highly enriched uranium HIPAA Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 HOP Hospital Outpatient Payment [Panel] HOPD Hospital outpatient department HOP QDRP Hospital Outpatient Quality Data Reporting Program HPMS Health Plan Management System IBD Inflammatory bowel disease ICC Interclass correlation coefficient ICD Implantable cardioverter defibrillator ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification ICH In-center hemodialysis IDTF Independent diagnostic testing facility IGI IHS Global Insight, Inc. IHS Indian Health Service I/OCE Integrated Outpatient Code Editor IOL Intraocular lens IORT Intraoperative radiation treatment IPFQR Inpatient Psychiatric Facility Quality Reporting IPPS [Hospital] Inpatient Prospective Payment System IQR [Hospital] Inpatient Quality Reporting IRF Inpatient rehabilitation facility IRF QRP Inpatient Rehabilitation Facility Quality Reporting IT Information technology LCD Local coverage determination LDR Low dose rate LTCH Long-term care hospital LTCHQR Long-Term Care Hospital Quality Reporting MAC Medicare Administrative Contractor MAP Measure Application Partnership MedPAC Medicare Payment Advisory Commission MEG Magnetoencephalography MFP Multifactor productivity MGCRB Medicare Geographic Classification Review Board MIEA-TRHCA Medicare Improvements and Extension Act under Division B, Title I of the Tax Relief Health Care Act of 2006, Public Law 109-432 MIPPA Medicare Improvements for Patients and Providers Act of 2008, Public Law 110-275 MLR Medical loss ratio MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173 MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309 MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173 MPFS Medicare Physician Fee Schedule MR Medical review MRA Magnetic resonance angiography MRgFUS Magnetic Resonance Image Guided Focused Ultrasound MRI Magnetic resonance imaging MRSA Methicillin-Resistant Staphylococcus Aures MS-DRG Medicare severity diagnosis-related group MSIS Medicaid Statistical Information System MUC Measure under consideration NCCI National Correct Coding Initiative NDC National Drug Code NHSN National Healthcare Safety Network NOS Not otherwise specified NPWT Negative Pressure Wound Therapy NPI National provider identification NQF National Quality Forum NQS National Quality Strategy NTIOL New technology intraocular lens NUBC National Uniform Billing Committee OACT [CMS] Office of the Actuary OBRA Omnibus Budget Reconciliation Act of 1996, Public Law 99-509 OIG [HHS] Office of the Inspector General OMB Office of Management and Budget ONC Office of the National Coordinator for Health Information Technology OPD [Hospital] Outpatient Department OPO Organ Procurement Organization OPPS [Hospital] Outpatient Prospective Payment System OPSF Outpatient Provider-Specific File OQR [Hospital] Outpatient Quality Reporting OT Occupational therapy PBD Provider-Based Department PCHQR PPS-Exempt Cancer Hospital Quality Reporting PCR Payment-to-cost ratio PDE Prescription Drug Event PE Practice expense PEPPER Program Evaluation Payment Patterns Electronic Report PHP Partial hospitalization program PHSA Public Health Service Act, Public Law 96-88 PMA Premarket approval PN Pneumonia POS Place of service PPI Producer Price Index PPS Prospective payment system PQRI Physician Quality Reporting Initiative PQRS Physician Quality Reporting System QDC Quality data code QIO Quality Improvement Organization RAC Recovery Audit Contractor RADV Risk Adjustment Data Validation RFA Regulatory Flexibility Act RHQDAPU Reporting Hospital Quality Data for Annual Payment Update RTI Research Triangle Institute, International RVU Relative value unit SAMS Secure Access Management Services SCH Sole community hospital SCOD Specified covered outpatient drugs SES Socioeconomic status SI Status indicator SIR Standardized infection ratio SNF Skilled nursing facility SRS Stereotactic radiosurgery SSA Social Security Administration SSI Surgical site infection TEP Technical Expert Panel TIP Transprostatic implant procedure TMS Transcranial Magnetic Stimulation [Therapy] TOPs Transitional Outpatient Payments USPSTF United States Preventive Services Task Force VBP Value-based purchasing WAC Wholesale acquisition cost Table of Contents I. Summary and Background A. Executive Summary of This Document 1. Purpose 2. Summary of the Major Provisions 3. Summary of Costs and Benefits B. Legislative and Regulatory Authority for the Hospital OPPS C. Excluded OPPS Services and Hospitals D. Prior Rulemaking E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel) 1. Authority of the Panel 2. Establishment of the Panel 3. Panel Meetings and Organizational Structure F. Public Comments Received on the CY 2015 OPPS/ASC Proposed Rule G. Public Comments Received on the CY 2014 OPPS/ASC Final Rule with Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights 1. Database Construction a. Database Source and Methodology b. Use of Single and Multiple Procedure Claims c. Calculation and Use of Cost-to-Charge Ratios (CCRs) 2. Data Development Process and Calculation of Costs Used for Ratesetting a. Claims Preparation b. Splitting Claims and Creation of “Pseudo” Single Procedure Claims (1) Splitting Claims (2) Creation of “Pseudo” Single Procedure Claims c. Completion of Claim Records and Geometric Mean Cost Calculations (1) General Process (2) Recommendations of the Panel Regarding Data Development d. Calculation of Single Procedure APC Criteria-Based Costs (1) Device-Dependent APCs (2) Blood and Blood Products (3) Brachytherapy Source Payment e. Establishment of Comprehensive APCs (1) Background (2) CY 2015 Policy for C-APCs (3) Public Comments (4) Statement of Final Policy and List of CY 2015 C-APCs f. Calculation of Composite APC Criteria-Based Costs (1) Extended Assessment and Management Composite APCs (APC 8009) (2) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC (APC 8001) (3) Mental Health Services Composite APC (APC 0034) (4) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) 3. Changes to Packaged Items and Services a. Background and Rationale for Packaging in the OPPS b. Revision of a Packaging Policy Established in CY 2014—Procedures Described by Add-On Codes c. Packaging Policies for CY 2015 (1) Ancillary Services (2) Prosthetic Supplies 4. Calculation of OPPS Scaled Payment Weights B. Conversion Factor Update C. Wage Index Changes D. Statewide Average Default CCRs E. Adjustment for Rural SCHs and EACHs under Section 1833(t)(13)(B) of the Act F. OPPS Payment to Certain Cancer Hospitals Described by Section 1886(d)(1)(B)(v) of the Act 1. Background 2. Payment Adjustment for Certain Cancer Hospitals for CY 2015 G. Hospital Outpatient Outlier Payments 1. Background 2. Outlier Calculation 3. Final Outlier Calculation H. Calculation of an Adjusted Medicare Payment from the National Unadjusted Medicare Payment I. Beneficiary Copayments 1. Background 2. OPPS Copayment Policy 3. Calculation of an Adjusted Copayment Amount for an APC Group III. OPPS Ambulatory Payment Classification (APC) Group Policies A. OPPS Treatment of New CPT and Level II HCPCS Codes 1. Treatment of New CY 2014 Level II HCPCS and CPT Codes Effective April 1, 2014 and July 1, 2014 for Which We Solicited Public Comments in the CY 2015 OPPS/ASC Proposed Rule 2. Process for New Level II HCPCS Codes That Will Be Effective October 1, 2014 and New CPT and Level II HCPCS Codes That Will Be Effective January 1, 2015 for Which We Are Soliciting Public Comments in this CY 2015 OPPS/ASC Final Rule with Comment Period 3. Process for Soliciting Public Comments for New and Revised CPT Codes Released by the AMA a. Current Process for Accepting Comments on New and Revised CPT Codes for a Year b. Modification of Process for New and Revised CPT Codes That Are Effective January 1 B. OPPS Changes—Variations within APCs 1. Background 2. Application of the 2 Times Rule 3. Exceptions to the 2 Times Rule C. OPPS APC-Specific Policies 1. Cardiovascular and Vascular Services: Cardiac Telemetry (APC 0213) 2. Gastrointestinal (GI) Services: Upper GI Procedures (APCs 0142, 0361, 0419, and 0422) 3. Genitourinary Services a. Gynecologic Procedures (APCs 0188, 0189, 0192, 0193, and 0202) b. Cystourethroscopy, Transprostatic Implant Procedures, and Other Genitourinary Procedures (APCs 0160, 0161, 0162, 0163, and 1564 c. Level IV Anal/Rectal Procedures (APC 0150) d. Percutaneous Renal Cryoablation (APC 0423) 4. Nervous System Services a. Chemodenervation (APC 0206) b. Epidural Lysis (APCs 0203 and 0207) c. Transcranial Magnetic Stimulation Therapy (TMS) (APC 0218) 5. Ocular Services: Ophthalmic Procedures and Services 6. Imaging a. Echocardiography (APCs 0269, 0270, and 0697) b. Optical Coherence Tomography Procedures of the Breast c. Parathyroid Planar Imaging (APCs 0263, 0317, 0406, 0414) 7. Radiology Oncology a. Proton Beam Therapy and Magnetoencephalography (MEG) Services (APCs 0065, 0412, 0446, 0664, and 0667) b. Stereotactic Radiosurgery Services (SRS) and Magnetic Resonance Image Guided Focused Ultrasound (MRgFUS) (APC 0066) 8. Respiratory Services: Level II Endoscopy Lower Airway (APC 0415) 9. Other Services a. Epidermal Autograft (APC 0327) b. Image-Guided Breast Biopsy Procedures and Image-Guided Abscess Drainage Procedures (APCs 0005 and 0007) c. Negative Pressure Wound Therapy (NPWT) (APCs 0012 and 0015) d. Platelet Rich Plasma (PRP) (APC 0327) IV. OPPS Payment for Devices A. Pass-Through Payments for Devices 1. Expiration of Transitional Pass-Through Payments for Certain Devices a. Background b. CY 2015 Policy 2. Provisions for Reducing Transitional Pass-Through Payments to Offset Costs Packaged into APC Groups a. Background b. CY 2015 Policy B. Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices 1. Background 2. Policy for CY 2015 V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals 1. Background 2. Drugs and Biologicals with Expiring Pass-Through Status in CY 2014 3. Drugs, Biologicals, and Radiopharmaceuticals with New or Continuing Pass-Through Status in CY 2015 4. Provisions for Reducing Transitional Pass-Through Payments for Policy-Packaged Drugs and Biologicals to Offset Costs Packaged into APC Groups a. Background b. Payment Offset Policy for Diagnostic Radiopharmaceuticals c. Payment Offset Policy for Contrast Agents d. Payment Offset Policy for Drugs, Biologicals, and Radiopharmaceuticals That Function as Supplies When Used in a Diagnostic Test or Procedure and Drugs and Biologicals That Function as Supplies When Used in a Surgical Procedure B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals without Pass-Through Status 1. Background 2. Criteria for Packaging Payment for Drugs, Biologicals, and Radiopharmaceuticals a. Background b. Cost Threshold for Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals (“Threshold-Packaged Drugs”) c. High Cost/Low Cost Threshold for Packaged Skin Substitutes d. Pass-Through Evaluation Process for Skin Substitutes e. Packaging Determination for HCPCS Codes That Describe the Same Drug or Biological But Different Dosages 3. Payment for Drugs and Biologicals without Pass-Through Status That Are Not Packaged a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other Separately Payable and Packaged Drugs and Biologicals b. CY 2015 Payment Policy 4. Payment Policy for Therapeutic Radiopharmaceuticals 5. Payment Adjustment Policy for Radioisotopes Derived From Non-Highly Enriched Uranium Sources 6. Payment for Blood Clotting Factors 7. Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals with HCPCS Codes but without OPPS Hospital Claims Data 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 A. Payment for Hospital Outpatient Clinic and Emergency Department Visits B. Payment for Critical Care Services VIII. Payment for Partial Hospitalization Services A. Background B. PHP APC Update for CY 2015 C. Separate Threshold for Outlier Payments to CMHCs IX. Procedures That Will Be Paid Only as Inpatient Procedures A. Background B. Changes to the Inpatient List X. Nonrecurring Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments of Hospitals XI. CY 2015 OPPS Payment Status and Comment Indicators A. CY 2015 OPPS Payment Status Indicator Definitions B. CY 2015 Comment Indicator Definitions XII. Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background 1. Legislative History, Statutory Authority, and Prior Rulemaking for the ASC Payment System 2. Policies Governing Changes to the Lists of Codes and Payment Rates for ASC Covered Surgical Procedures and Covered Ancillary Services B. Treatment of New Codes 1. Process for Recognizing New Category I and Category III CPT Codes and Level II HCPCS Codes 2. Treatment of New Level II HCPCS Codes and Category III CPT Codes Implemented in April 2014 and July 2014 for Which We Solicited Public Comments in the CY 2015 OPPS/ASC Proposed Rule 3. Process for New Level II HCPCS Codes and Category I and Category III CPT Codes for Which We Are Soliciting Public Comments in this CY 2015 OPPS/ASC Final Rule with Comment Period C. Update to the Lists of ASC Covered Surgical Procedures and Covered Ancillary Services 1. Covered Surgical Procedures a. Additions to the List of ASC Covered Surgical Procedures b. Covered Surgical Procedures Designated as Office-Based (1) Background (2) Changes for CY 2015 to Covered Surgical Procedures Designated as Office-Based c. ASC Covered Surgical Procedures Designated as Device-Intensive (1) Background (2) Changes to List of Covered ASC Surgical Procedures Designated as Device-Intensive for CY 2015 d. Adjustment to ASC Payments for No Cost/Full Credit and Partial Credit Devices e. ASC Treatment of Surgical Procedures Removed from the OPPS Inpatient List for CY 2015 2. Covered Ancillary Services D. ASC Payment for Covered Surgical Procedures and Covered Ancillary Services 1. ASC Payment for Covered Surgical Procedures a. Background b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2015 c. Waiver of Coinsurance and Deductible for Certain Preventive Services d. Payment for Cardiac Resynchronization Therapy Services e. Payment for Low Dose Rate (LDR) Prostate Brachytherapy Composite 2. Payment for Covered Ancillary Services a. Background b. Payment for Covered Ancillary Services for CY 2015 E. New Technology Intraocular Lenses (NTIOLs) 1. NTIOL Application Cycle 2. Requests to Establish New NTIOL Classes for CY 2015 3. Payment Adjustment 4. Announcement of CY 2015 Deadline for Submitting Requests for CMS Review of Applications for a New Class of NTIOLs F. ASC Payment and Comment Indicators 1. Background 2. ASC Payment and Comment Indicators G. Calculation of the ASC Conversion Factor and the ASC Payment Rates 1. Background 2. Calculation of the ASC Payment Rates a. Updating the ASC Relative Payment Weights for CY 2015 and Future Years b. Transition Period to New OMB Delineations for ASC Wage Index c. Updating the ASC Conversion Factor 3. Display of CY 2015 ASC Payment Rates XIII. Hospital Outpatient Quality Reporting Program Updates A. Background 1. Overview 2. Statutory History of the Hospital OQR Program 3. Measure Updates and Data Publication a. Maintenance of Technical Specifications for Quality Measures b. Public Display of Quality Measures B. Process for Retention of Hospital OQR Program Measures Adopted in Previous Payment Determinations C. Removal of Quality Measures from the Hospital OQR Program Measure Set 1. Considerations in Removing Quality Measures from the Hospital OQR Program 2. Criteria for Removal of “Topped-Out” Measures 3. Removal of Measures from the Hospital OQR Program for the CY 2017 Payment Determination and Subsequent Years D. Quality Measures Previously Adopted for the CY 2016 Payment Determination and Subsequent Years 1. Data Submission Requirements for OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) Reported via NHSN for the CY 2017 Payment Determination and Subsequent Years a. Clarification of Submission Deadline and Data Submitted b. Clarification on Reporting by CMS Certification Number (CCN) 2. Delayed Data Collection for OP-29 and OP-30 3. OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery a. Correction of Response to Public Comments b. Delayed Data Collection for OP-31 and Exclusion from the CY 2016 Payment Determination Measure Set c. Voluntary Collection of Data for OP-31 for the CY 2017 Payment Determination and Subsequent Years E. New Quality Measure for the CY 2018 Payment Determination and Subsequent Years F. Possible Hospital OQR Program Measures and Topics for Future Consideration 1. Electronic Clinical Quality Measures 2. Partial Hospitalization Program Measures 3. Behavioral Health Measures 4. National Quality Strategy and CMS Quality Strategy Measure Domains G. Payment Reduction for Hospitals That Fail to Meet the Hospital Outpatient Quality Reporting (OQR) Program Requirements for the CY 2015 Payment Update 1. Background 2. Reporting Ratio Application and Associated Adjustment Policy for CY 2015 H. Requirements for Reporting Hospital OQR Program Data for the CY 2017 Payment Determination and Subsequent Years 1. Administrative Requirements for the CY 2017 Payment Determination and Subsequent Years 2. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program a. General Procedural Requirements b. Requirements for Chart-Abstracted Measures Where Data Are Submitted Directly to CMS for the CY 2017 Payment Determination and Subsequent Years c. Claims-Based Measure Data Requirements for the CY 2017 and CY 2018 Payment Determination and Subsequent Years d. Data Submission Requirements for Measure Data Submitted via the CMS Web-Based Tool for the CY 2017 Payment Determination and Subsequent Years e. Population and Sampling Data Requirements for the CY 2017 Payment Determination and Subsequent Years f. Review and Corrections Period for Chart-Abstracted Measures 3. Hospital OQR Program Validation Requirements for Chart-Abstracted Measure Data Submitted Directly to CMS for the CY 2017 Payment Determination and Subsequent Years a. Background b. Selection of Hospitals for Data Validation of Chart-Abstracted Measures for the CY 2017 Payment Determination and Subsequent Years c. Targeting Criteria for Data Validation Selection for the CY 2017 Payment Determination and Subsequent Years d. Methodology for Encounter Selection for the CY 2017 Payment Determination and Subsequent Years e. Medical Record Documentation Requests for Validation and Validation Score Calculation for the CY 2017 Payment Determination and Subsequent Years I. Hospital OQR Program Reconsideration and Appeals Procedures for the CY 2017 Payment Determination and Subsequent Years J. Extension or Exception Process for the CY 2017 Payment Determination and Subsequent Years XIV. Requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program A. Background 1. Overview 2. Statutory History of the Ambulatory Surgical Center Quality Reporting (ASCQR) Program 3. Regulatory History of the ASCQR Program B. ASCQR Program Quality Measures 1. Considerations in the Selection of ASCQR Program Quality Measures 2. Policy for Removal of Quality Measures from the ASCQR Program 3. Criteria for Removal of “Topped-Out” Measures 4. ASCQR Program Quality Measures Adopted in Previous Rulemaking 5. New ASCQR Program Quality Measure for the CY 2018 Payment Determination and Subsequent Years 6. ASCQR Program Measures for Future Consideration 7. Maintenance of Technical Specifications for Quality Measures 8. Public Reporting of ASCQR Program Data C. Payment Reduction for ASCs That Fail to Meet the ASCQR Program Requirements 1. Statutory Background 2. Reduction to the ASC Payment Rates for ASCs That Fail to Meet the ASCQR Program Requirements for a Payment Determination Year D. Administrative Requirements 1. Requirements Regarding QualityNet Account and Security Administrator 2. Requirements Regarding Participation Status E. Form, Manner, and Timing of Data Submitted for the ASCQR Program 1. Requirements Regarding Data Processing and Collection Periods for Claims-Based Measures Using Quality Data Codes (QDCs) 2. Minimum Threshold, Minimum Case Volume, and Data Completeness for Claims-Based Measures Using QDCs 3. Requirements for Data Submitted Via a CMS Online Data Submission Tool a. Data Collection for ASC-6 and ASC-7 b. Delayed Data Collection for ASC-9 and ASC-10 c. Delayed Data Collection and Exclusion for ASC-11 for the CY 2016 Payment Determination and Voluntary Data Collection for ASC-11 for the CY 2017 Payment Determination and Subsequent Years 4. Claims-Based Measure Data Requirements for the New Measure for the CY 2018 Payment Determination and Subsequent Years 5. Data Submission Requirements for ASC-8 (Influenza Vaccination Coverage Among Healthcare Personnel) Reported via the National Healthcare Safety Network (NHSN) for the CY 2016 Payment Determination and Subsequent Years a. Previously Adopted Requirements for the CY 2016 Payment Determination b. Data Collection Timeframes for the CY 2017 Payment Determination and Subsequent Years and Submission Deadlines for the CY 2016 Payment Determination and Subsequent Years 6. ASCQR Program Validation of Claims-Based and CMS Web-Based Measures 7. Extraordinary Circumstances Extensions or Exemptions for the CY 2017 Payment Determination and Subsequent Years 8. ASCQR Program Reconsideration Procedures for the CY 2017 Payment Determination and Subsequent Years XV. Changes to the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law: Expansion Exception Process A. Background 1. Statutory Basis 2. Affordable Care Act Amendments to the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law B. Limitations Identified by Stakeholders Regarding the Required Use of HCRIS Data C. Changes to the Physician-Owned Hospital Expansion Exception Process 1. Supplemental Data Sources a. Internal Data Sources b. External Data Sources c. Completeness of Supplemental Data Sources d. Other Issues Related to Supplemental Data Sources e. Summary of Final Provisions Regarding Supplemental Data Sources 2. Fiscal Year Standard a. Summary of Public Comments and Our Response Regarding the Fiscal Year Standard b. Summary of Final Provisions Regarding the Fiscal Year Standard 3. Community Input and Timing of a Complete Request a. Summary of Public Comments and Our Responses Regarding Community Input and Timing of a Complete Request b. Final Provisions Regarding Community Input and Timing of a Complete Request D. Additional Considerations E. Summary of the Final Provisions Regarding the Expansion Exception Process under the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law XVI. Revision of the Requirements for Physician Certification of Hospital Inpatient Services Other Than Psychiatric Inpatient Services XVII. CMS-Identified Overpayments Associated with Payment Data Submitted by Medicare Advantage (MA) Organizations and Medicare Part D Sponsors (§§ 422.330 and 423.352) A. Background 1. Medicare Part C Payment Background 1. Medicare Part D Payment Background B. Provisions of the Proposed Rule and Final Policies 1. Definitions of “Payment Data” and “Applicable Reconciliation Date” 2. Request for Corrections of Payment Data 3. Payment Offset a. Offset Amount b. Payment Offset Notification 4. Appeals Process for MA Organizations and Part D Sponsors a. Reconsideration b. Informal Hearing c. Review by Administrator 5. Matters Subject to Appeal and Burden of Proof 6. Effective Date of Appeals Process Provisions XVIII. Files Available to the Public Via the Internet XIX. Collection of Information Requirements A. Legislative Requirements for Solicitation of Comments B. Requirements in Regulation Text: Changes to the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law: Expansion Exception Process (§ 411.362) C. Associated Information Collections Not Specified in Regulatory Text 1. Hospital OQR Program a. Revisions to the CY 2016 Payment Determination Estimates b. Hospital OQR Program Requirements for the CY 2017 Payment Determination and Subsequent Years c. Review and Corrections Period Requirements for the CY 2017 Payment Determination and Subsequent Years d. Hospital OQR Program Validation Requirements for the CY 2017 Payment Determination and Subsequent Years e. Extraordinary Circumstances Extensions or Exemptions Process f. Reconsideration and Appeals 2. ASCQR Program Requirements a. Background b. Revisions to the CY 2016 Payment Determination Estimates c. Claims-Based Measures for the CY 2014 Payment Determination and Subsequent Years d. Web-Based Measures for the CY 2017 Payment Determination and Subsequent Years e. Extraordinary Circumstances Extension or Exemptions Process f. Reconsiderations and Appeals XX. Waiver of Proposed Rulemaking and Response to Comments A. Waiver of Proposed Rulemaking B. Response to Comments XXI. Economic Analyses A. Regulatory Impact Analysis 1. Introduction 2. Statement of Need 3. Overall Impacts for the OPPS and ASC Payment Provisions 4. Detailed Economic Analyses a. Estimated Effects of OPPS Changes in this Final Rule with Comment Period (1) Limitations of Our Analysis (2) Estimated Effects of OPPS Changes on Hospitals (3) Estimated Effects of OPPS Changes on CMHCs (4) Estimated Effect of OPPS Changes on Beneficiaries (5) Estimated Effects of OPPS Changes on Other Providers (6) Estimated Effects of OPPS Changes on the Medicare and Medicaid Programs (7) Alternative OPPS Policies Considered b. Estimated Effects of CY 2015 ASC Payment System Policies (1) Limitations of Our Analysis (2) Estimated Effects of CY 2015ASC Payment System Policies on ASCs (3) Estimated Effects of ASC Payment System Policies on Beneficiaries (4) Alternative ASC Payment Policies Considered c. Accounting Statements and Tables d. Effects of Requirements for the Hospital OQR Program e. Effects of CY 2014 Policies for the ASCQR Program f. Effects of Changes to the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law g. Effects of Policies Related to CMS-Identified Overpayments Associated with Payment Data Submitted by Medicare Advantage (MA) Organizations and Medicare Part D Sponsors B. Regulatory Flexibility Act (RFA) Analysis C. Unfunded Mandates Reform Act Analysis D. Conclusion XXII. Federalism Analysis I. Summary and Background A. Executive Summary of This Document 1. Purpose In this final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments and Ambulatory Surgical Centers (ASCs) beginning January 1, 2015. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the relative payment weights and the conversion factor for services payable under the Outpatient Prospective Payment System (OPPS). Under section 1833(i) of the Act, we annually review and update the ASC payment rates. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In this document, we also are making changes to the data sources permitted for expansion requests for physician-owned hospitals under the physician self-referral regulations; changes to the underlying authority for the requirement of an admission order for all hospital inpatient admissions and changes to require physician certification for hospital inpatient admissions only for long-stay cases and outlier cases; and changes to establish a formal process, including a three-level appeals process, to recoup overpayments that result from the submission of erroneous payment data by Medicare Advantage (MA) organizations and Part D sponsors in the limited circumstances in which the organization or sponsor fails to correct these data. 2. Summary of the Major Provisions • OPPS Update: For CY 2015, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.2 percent. This increase is based on the final hospital inpatient market basket percentage increase of 2.9 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the multifactor productivity (MFP) adjustment of 0.5 percentage point, and minus a 0.2 percentage point adjustment required by the Affordable Care Act. Under this final rule with comment period, we estimate that total payments for CY 2015, including beneficiary cost-sharing, to the approximate 4,000 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and community mental health centers (CMHCs)), will be approximately $56.1 billion, an increase of approximately $5.1 billion compared to CY 2014 payments, or $900 million excluding our estimated changes in enrollment, utilization, and case-mix. We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements, by applying a reporting factor of 0.980 to the OPPS payments and copayments for all applicable services. • Rural Adjustment: We are continuing the adjustment of 7.1 percent to the OPPS payments to certain rural sole community hospitals (SCHs), including essential access community hospitals (EACHs). This adjustment will apply to all services paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to cost. • Cancer Hospital Payment Adjustment: For CY 2015, we are continuing to provide additional payments to cancer hospitals so that the cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. Based on those data, a target PCR of 0.89 will be used to determine the CY 2015 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.89 for each cancer hospital. • Payment of Drugs, Biologicals, and Radiopharmaceuticals: For CY 2015, payment for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals that do not have pass-through status are set at the statutory default of average sales price (ASP) plus 6 percent. • Packaging Policies: We are conditionally packaging certain ancillary services when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service. The initial set of services packaged under this ancillary service policy are the services assigned to APCs having an APC geometric mean cost (prior to application of status indicator Q1) of less than or equal to $100. This $100 geometric mean cost limit for the APC is part of the methodology of establishing an initial set of conditionally packaged ancillary service APCs, and is not meant to represent a threshold above which a given ancillary service will not be packaged, but as a basis for selecting an initial set of APCs that will likely be updated and expanded in future years. • Implementation of Comprehensive APCs: For CY 2015, we are implementing, with several modifications, the policy for comprehensive APCs (C-APCs) that was finalized in the CY 2014 OPPS/ASC final rule with comment period effective January 1, 2015. We are continuing to define the services assigned to C-APCs as primary services, and to define a C-APC as a classification for the provision of a primary service and all adjunctive services and supplies provided to support the delivery of the primary service. We continue to consider the entire hospital stay, defined as all services reported on the hospital claim reporting the primary service, to be one comprehensive service for the provision of a primary service into which all other services appearing on the claim would be packaged. This results in a single Medicare payment and a single beneficiary copayment under the OPPS for the comprehensive service based on all included charges on the claim. We are establishing a total of 25 C-APCs for CY 2015, including all of the formerly device-dependent APCs remaining after some restructuring and consolidation of these APCs (except for APCs 0427, 0622, and 0652) and two C-APCs for other procedures that are either largely device-dependent or represent single session services with multiple components (single-session cranial stereotactic radiosurgery and intraocular telescope implantation). We are modifying the complexity adjustment criteria finalized last year by lowering volume and cost threshold criteria for complexity adjustments. Finally, we are packaging all add-on codes furnished as part of a comprehensive service, which is consistent with our general add-on code packaging policy. However, the add-on codes assigned to the CY 2014 device-dependent APCs will be being evaluated with a primary service for a potential complexity adjustment. • Ambulatory Surgical Center Payment Update: For CY 2015, we are increasing payment rates under the ASC payment system by 1.4 percent. This increase is based on a projected CPI-U update of 1.9 percent minus a multifactor productivity adjustment required by the Affordable Care Act that is projected to be 0.5 percentage point. Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix), for CY 2015 will be approximately $4.147 billion, an increase of approximately $236 million compared to estimated CY 2014 Medicare payments. • Hospital Outpatient Quality Reporting (OQR) Program: For the Hospital OQR Program, we are adding one claims-based quality measure for the CY 2018 payment determination and subsequent years instead of the CY 2017 payment determination and subsequent years as proposed. However, prior to publicly reporting this measure, we plan to conduct a dry run (a preliminary analysis) for hospitals to review their performance and provide feedback using the most recently available data. There will be no payment impact during this dry-run period, and the results of the dry run will not be publicly reported. We are refining the criteria for determining “topped-out” measures, and we are removing the OP-6 and OP-7 measures due to “topped-out” status. In addition, we are updating several previously adopted measures. We are clarifying data submission requirements for OP-27 and are noting a delayed data collection for OP-29 and OP-30. We are excluding one previously adopted measure (OP-31) from the measure set for the CY 2016 payment determination and changing this measure from required to voluntary for the CY 2017 payment determination and subsequent years. We will not subject hospitals to payment reductions with respect to the OP-31 measure for the CY 2016 payment determination or during the period of voluntary reporting. In addition, we are formalizing a review and corrections period for chart-abstracted measures. We also are updating validation procedures and changes to regulation text to correct typographical errors. We are changing the eligibility criteria for validation; a hospital will only be eligible for random selection for validation if it submits at least 12 cases to the Hospital OQR Program Clinical Data Warehouse during the quarter with the most recently available data. Hospitals also will have the option to submit validation data using electronic methods and must identify the medical record staff responsible for submission of records to the designated CMS contractor. Finally, we are clarifying how we refer to the extraordinary circumstances extensions or exemptions process. • Ambulatory Surgical Center Quality Reporting (ASCQR) Program: For the ASCQR Program, we are adopting one new quality measure (ASC-12) for the CY 2018 payment determination and subsequent years. This measure will be computed using paid Medicare fee-for-service (FFS) claims data and will not impose any additional burden on ASCs. We also are excluding one measure (ASC-11) previously adopted for the CY 2016 payment determination and providing that this measure may be voluntarily rather than mandatorily reported for the CY 2017 payment determination and subsequent years. We will not subject ASCs to payment reductions with respect to this measure for the CY 2016 payment determination or during the period of voluntary reporting. In addition, we are establishing a measure removal process and criteria, defining data collection timeframes and submission deadlines, and clarifying how we refer to the extraordinary circumstances extensions or exemptions process. 3. Summary of Costs and Benefits In sections XXI. and XXII. of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts are described below. a. Impacts of the OPPS Update (1) Impacts of All OPPS Changes Table 49 in section XXI. of this final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2015 compared to all estimated OPPS payments in CY 2014. We estimate that the policies in this final rule with comment period will result in a 2.3 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2015, including beneficiary cost-sharing, to the approximate 4,000 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will be approximately $56.1 billion, an increase of approximately $5.1 billion compared to CY 2014 payments, or $900 million, 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 that we adopted beginning in CY 2011 and basing payment fully on the type of provider furnishing the service, we estimate a 1.3 percent increase in CY 2015 payments to CMHCs relative to their CY 2014 payments. (2) Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes and application of the frontier State wage index, including changes resulting from the adoption of the new OMB labor market area delineations and the transitional 1-year, 50/50 blended wage index, will mitigate any negative changes due to the new CBSA delineations. (3) Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment There are no significant impacts of our CY 2015 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 and cancer hospital payment adjustments, and the adjustment amounts do not significantly impact the budget neutrality adjustments for these policies. (4) Impacts of the OPD Fee Schedule Increase Factor We estimate that, for most hospitals, the application of the OPD fee schedule increase factor of 2.2 percent to the conversion factor for CY 2015 will mitigate the small negative impacts of the budget neutrality adjustments. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that urban and rural hospitals will experience increases of approximately 2.3 percent for urban hospitals and 1.9 percent for rural hospitals. Classifying hospitals by teaching status or type of ownership suggests that these hospitals will receive similar increases. b. Impacts of the ASC Payment Update For impact purposes, the surgical procedures on the ASC list of covered procedures 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 2015 payment rates compared to estimated CY 2014 payment rates ranges between −4.0 percent for ancillary items and services and 14 percent for hematologic and lymphatic system procedures. c. Impacts of the Hospital OQR Program We do not expect our CY 2015 policies to significantly affect the number of hospitals that do not receive a full annual payment update. d. Impacts of the ASCQR Program We do not expect our CY 2015 proposed policies to significantly affect the number of ASCs that do not receive a full annual payment update. B. Legislative and Regulatory Authority for the Hospital OPPS When Title XVIII of the Social Security 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; and the American Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013. Under the OPPS, we pay for hospital Part B services on a rate-per-service basis that varies according to the APC group to which the service is assigned. We use the Healthcare Common Procedure Coding System (HCPCS) (which includes certain Current Procedural Terminology (CPT) codes) to identify and group the services within each APC. The OPPS includes payment for most hospital outpatient services, except those identified in section I.C. of this final rule with comment period. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Part B. The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located. All services and items within an APC group are comparable clinically and with respect to resource use (section 1833(t)(2)(B) of the Act). In accordance with section 1833(t)(2) of the Act, subject to certain exceptions, items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median cost (or mean cost, if elected by the Secretary) for an item or service in the APC group is more than 2 times greater than the lowest median cost (or mean cost, if elected by the Secretary) for an item or service within the same APC group (referred to as the “2 times rule”). In implementing this provision, we generally use the cost of the item or service assigned to an APC group. For new technology items and services, special payments under the OPPS may be made in one of two ways. Section 1833(t)(6) of the Act provides for temporary additional payments, which we refer to as “transitional pass-through payments,” for at least 2 but not more than 3 years for certain drugs, biological agents, brachytherapy devices used for the treatment of cancer, and categories of other medical devices. For new technology services that are not eligible for transitional pass-through payments, and for which we lack sufficient clinical information and cost data to appropriately assign them to a clinical APC group, we have established special APC groups based on costs, which we refer to as New Technology APCs. These New Technology APCs are designated by cost bands which allow us to provide appropriate and consistent payment for designated new procedures that are not yet reflected in our claims data. Similar to pass-through payments, an assignment to a New Technology APC is temporary; that is, we retain a service within a New Technology APC until we acquire sufficient data to assign it to a clinically appropriate APC group. C. Excluded OPPS Services and Hospitals Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services. The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS); services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system; and services and procedures that require an inpatient stay that are paid under the hospital IPPS. We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22. Under § 419.20(b) of the regulations, we specify the types of hospitals that are excluded from payment under the OPPS. These excluded hospitals include: Critical access hospitals (CAHs); hospitals located 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) of the Act requires the Secretary to review certain components of the OPPS, not less often than annually, and to revise the groups, relative payment weights, and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors. Since initially implementing the OPPS, we have published final rules in the Federal Register annually to implement statutory requirements and changes arising from our continuing experience with this system. These rules can be viewed on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html . E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel) 1. Authority of the Panel Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 106-113, requires that we consult with an external advisory panel of experts to annually review the clinical integrity of the payment groups and their weights under the OPPS. In CY 2000, based on section 1833(t)(9)(A) of the Act and section 222 of the Public Health Service (PHS) Act, the Secretary established the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) to fulfill this requirement. In CY 2011, based on section 222 of the PHS Act which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel, or the Panel). The 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 HOP Panel, at that time named the APC Panel. This expert panel, which may be composed of up to 19 appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise), reviews clinical data and advises CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that: The Panel continues to be technical in nature; is governed by the provisions of the FACA; may convene up to three meetings per year; has a Designated Federal Official (DFO); and is chaired by a Federal Official designated by the Secretary. The current charter was amended on November 15, 2011, and the Panel was renamed to reflect expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and therefore to add CAHs to its membership. The current Panel membership and other information pertaining to the Panel, including its charter, Federal Register notices, membership, meeting dates, agenda topics, and meeting reports, can be viewed on the CMS Web site at: http://www.cms.gov/FACA/05_AdvisoryPanelonAmbulatoryPaymentClassificationGroups­.asp#TopOfPage . 3. Panel Meetings and Organizational Structure The Panel has held multiple meetings, with the last meeting taking place on August 25, 2014. Prior to each meeting, we publish a notice in the Federal Register to announce the meeting and, when necessary, to solicit nominations for Panel membership and to announce new members. The Panel has established an operational structure that, in part, currently includes the use of three subcommittees to facilitate its required review process. The three current subcommittees are the Data Subcommittee, the Visits and Observation Subcommittee, and the Subcommittee for APC Groups and Status Indicator (SI) Assignments. The Data Subcommittee is responsible for studying the data issues confronting the Panel and for recommending options for resolving them. The Visits and Observation Subcommittee reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS (for example, APC configurations and APC relative payment weights). The Subcommittee for APC Groups and SI Assignments advises the Panel on the following issues: The appropriate SIs 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; and the appropriate APC placement of HCPCS codes regarding services for which separate payment is made. Each of these subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 2014 meeting that the subcommittees continue. We accepted this recommendation. Discussions of the other recommendations made by the Panel at the August 2014 Panel meeting are included in the sections of this final rule with comment period that are specific to each recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS Web site mentioned earlier in this section, and the FACA database at: http://fido.gov/facadatabase/public.asp . F. Public Comments Received on the CY 2015 OPPS/ASC Proposed Rule We received approximately 719 timely pieces of correspondence on the CY 2015 OPPS/ASC proposed rule that appeared in the Federal Register on July 14, 2014 (79 FR 40915). We note that we received some public comments that are outside the scope of the CY 2015 OPPS/ASC proposed rule. Out-of-scope public comments are not addressed in this CY 2015 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 2014 OPPS/ASC Final Rule With Comment Period We received approximately 490 timely pieces of correspondence on the CY 2014 OPPS/ASC final rule with comment period that appeared in the Federal Register on December 10, 2013 (78 FR 74826), some of which contained comments on the interim APC assignments and/or status indicators of new or replacement HCPCS codes (identified with comment indicator “NI” in Addenda B, AA, and BB to that final rule). Summaries of the public comments on new or replacement codes are set forth in this CY 2015 OPPS/ASC 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. In the CY 2015 OPPS/ASC proposed rule (79 FR 40925), for the CY 2015 OPPS, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2015, and before January 1, 2016 (CY 2015), using the same basic methodology that we described in the CY 2014 OPPS/ASC final rule with comment period. That is, we proposed to recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services, using the most recent available data to construct a database for calculating APC group weights. Therefore, for the purpose of recalibrating the proposed APC relative payment weights for CY 2015, we used approximately 149 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for hospital outpatient department services furnished on or after January 1, 2013, and before January 1, 2014. For this final rule with comment period, for the purpose of recalibrating the final APC relative payment weights for CY 2015, we used approximately 161 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, 2013, and before January 1, 2014. For exact counts of claims used, we refer readers to the claims accounting narrative under supporting documentation for the CY 2015 OPPS/ASC proposed rule and this final rule with comment period on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html . Of the approximately 161 million final action claims for services provided in hospital outpatient settings used to calculate the CY 2015 OPPS payment rates for this final rule with comment period, approximately 123 million claims were the type of bill potentially appropriate for use in setting rates for OPPS services (but did not necessarily contain services payable under the OPPS). Of the approximately 123 million claims, approximately 5 million claims were not for services paid under the OPPS or were excluded as not appropriate for use (for example, erroneous cost-to-charge ratios (CCRs) or no HCPCS codes reported on the claim). From the remaining approximately 118 million claims, we created approximately 101 million single records, of which approximately 50 million were “pseudo” single or “single session” claims (created from approximately 22 million multiple procedure claims using the process we discuss later in this section). Approximately 1 million claims were trimmed out on cost or units in excess of ± 3 standard deviations from the geometric mean, yielding approximately 101 million single bills for ratesetting. As described in section II.A.2. of this final rule with comment period, our data development process is designed with the goal of using appropriate cost information in setting the APC relative payment weights. The bypass process is described in section II.A.1.b. of this final rule with comment period. This section discusses how we develop “pseudo” single procedure claims (as defined below), with the intention of using more appropriate data from the available claims. In some cases, the bypass process allows us to use some portion of the submitted claim for cost estimation purposes, while the remaining information on the claim continues to be unusable. Consistent with the goal of using appropriate information in our data development process, we only use claims (or portions of each claim) that are appropriate for ratesetting purposes. The final APC relative weights and payments for CY 2015 in Addenda A and B to this final rule with comment period (which are available via the Internet on the CMS Web site) were calculated using claims from CY 2013 that were processed through June 30, 2014. While prior to CY 2013 we historically based the payments on median hospital costs for services in the APC groups, beginning with the CY 2013 OPPS, we established the cost-based relative payment weights for the OPPS using geometric mean costs, as discussed in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271). For the CY 2015 OPPS, we proposed and are using this same methodology, basing payments on geometric mean costs. Under this methodology, we select claims for services paid under the OPPS and match these claims to the most recent cost report filed by the individual hospitals represented in our claims data. We continue to believe that it is appropriate to use the most current full calendar year claims data and the most recently submitted cost reports to calculate the relative costs underpinning the APC relative payment weights and the CY 2015 payment rates. b. Use of Single and Multiple Procedure Claims For CY 2015, in general, and as we proposed, we are continuing to use single procedure claims to set the costs on which the APC relative payment weights are based. We generally use single procedure claims to set the estimated costs for APCs because we believe that the OPPS relative weights on which payment rates are based should be derived from the costs of furnishing one unit of one procedure and because, in many circumstances, we are unable to ensure that packaged costs can be appropriately allocated across multiple procedures performed on the same date of service. It is generally desirable to use the data from as many claims as possible to recalibrate the APC relative payment weights, including those claims for multiple procedures. As we have for several years, we are continuing to use date of service stratification and a list of codes to be bypassed to convert multiple procedure claims to “pseudo” single procedure claims. Through bypassing specified codes that we believe do not have significant packaged costs, we are able to use more data from multiple procedure claims. In many cases, this enables us to create multiple “pseudo” single procedure claims from claims that were submitted as multiple procedure claims spanning multiple dates of service, or claims that contained numerous separately paid procedures reported on the same date on one claim. We refer to these newly created single procedure claims as “pseudo” single procedure claims. The history of our use of a bypass list to generate “pseudo” single procedure claims is well documented, most recently in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74849 through 74851). In addition, for CY 2008 (72 FR 66614 through 66664), we increased packaging and created the first composite APCs, and continued those policies through CY 2014. Increased packaging and creation of composite APCs also increased the number of bills that we were able to use for ratesetting by enabling us to use claims that contained multiple major procedures that previously would not have been usable. Further, for CY 2009, we expanded the composite APC model to one additional clinical area, multiple imaging services (73 FR 68559 through 68569), which also increased the number of bills we were able to use in developing the OPPS relative weights on which payments are based. We have continued the composite APCs for multiple imaging services through CY 2014, and as we proposed, we are continuing this policy for CY 2015. We refer readers to section II.A.2.f. of the CY 2014 OPPS/ASC final rule with comment period (78 FR 74910 through 74925) for a discussion of the use of claims in modeling the costs for composite APCs and to section II.A.3. of the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925 through 74948) for a discussion of our packaging policies for CY 2014. In addition, as we proposed, we are establishing additional packaging policies for the CY 2015 OPPS, as discussed in section II.A.3. of this final rule with comment period. As we proposed, we are continuing to apply these processes to enable us to use as much claims data as possible for ratesetting for the CY 2015 OPPS. This methodology enabled us to create, for this final rule with comment period, approximately 50 million “pseudo” single procedure claims, including multiple imaging composite “single session” bills (we refer readers to section II.A.2.f.(4) of this final rule with comment period for further discussion), to add to the approximately 51 million “natural” single procedure claims. For CY 2015, we proposed to bypass 227 HCPCS codes that were identified in Addendum N to the CY 2015 OPPS/ASC proposed rule (which is available via the Internet on the CMS Web site). Since the inception of the bypass list, which is the list of codes to be bypassed to convert multiple procedure claims to “pseudo” single procedure claims, we have calculated the percent of “natural” single bills that contained packaging for each HCPCS code and the amount of packaging on each “natural” single bill for each code. Each year, we generally retain the codes on the previous year's bypass list and use the updated year's data (for CY 2015, data available for the March 10, 2014 meeting of the Advisory Panel on Hospital Outpatient Payment (the Panel) from CY 2013 claims processed through September 30, 2013, and CY 2012 claims data processed through June 30, 2013, used to model the payment rates for CY 2014) to determine whether it would be appropriate to add additional codes to the previous year's bypass list. For CY 2015, we proposed to continue to bypass all of the HCPCS codes on the CY 2014 OPPS bypass list, with the exception of HCPCS codes that we proposed to delete for CY 2015, which were listed in Table 1 of the proposed rule (79 FR 40927 through 40929). We also proposed to remove HCPCS codes that are not separately paid under the OPPS because the purpose of the bypass list is to obtain more data for those codes relevant to ratesetting. Some of the codes we proposed to remove from the CY 2015 bypass list are affected by the CY 2015 final packaging policy, discussed in section II.A.3. of this final rule with comment period. In addition, we proposed to add to the bypass list for CY 2015 HCPCS codes not on the CY 2014 bypass list that, using either the CY 2014 final rule with comment period data (CY 2012 claims) or the March 10, 2014 Panel data (first 9 months of CY 2013 claims), met the empirical criteria for the bypass list that are summarized below. Finally, to remain consistent with the CY 2015 proposal to continue to develop OPPS relative payment weights based on geometric mean costs, we also proposed that the packaged cost criterion continue to be based on the geometric mean cost. The entire list proposed for CY 2015 (including the codes that remain on the bypass list from prior years) was open to public comment in the CY 2015 OPPS/ASC proposed rule. Because we must make some assumptions about packaging in the multiple procedure claims in order to assess a HCPCS code for addition to the bypass list, we assumed that the representation of packaging on “natural” single procedure claims for any given code is comparable to packaging for that code in the multiple procedure claims. The criteria for the bypass list are: • There are 100 or more “natural” single procedure claims for the code. This number of single procedure claims ensures that observed outcomes are sufficiently representative of packaging that might occur in the multiple claims. • Five percent or fewer of the “natural” single procedure claims for the code have packaged costs on that single procedure claim for the code. This criterion results in limiting the amount of packaging being redistributed to the separately payable procedures remaining on the claim after the bypass code is removed and ensures that the costs associated with the bypass code represent the cost of the bypassed service. • The geometric mean cost of packaging observed in the “natural” single procedure claims is equal to or less than $55. This criterion also limits the amount of error in redistributed costs. During the assessment of claims against the bypass criteria, we do not know the dollar value of the packaged cost that should be appropriately attributed to the other procedures on the claim. Therefore, ensuring that redistributed costs associated with a bypass code are small in amount and volume protects the validity of cost estimates for low cost services billed with the bypassed service. We note that, as we did for CY 2014, we proposed to continue to establish the CY 2015 OPPS relative payment weights based on geometric mean costs. To remain consistent in the metric used for identifying cost patterns, we proposed to use the geometric mean cost of packaging to identify potential codes to add to the bypass list. In response to public comments on the CY 2010 OPPS/ASC proposed rule requesting that the packaged cost threshold be updated, we considered whether it would be appropriate to update the $50 packaged cost threshold for inflation when examining potential bypass list additions. As discussed in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60328), the real value of this packaged cost threshold criterion has declined due to inflation, making the packaged cost threshold more restrictive over time when considering additions to the bypass list. Therefore, adjusting the threshold by the market basket increase would prevent continuing decline in the threshold's real value. Based on the same rationale described for the CY 2014 OPPS/ASC final rule with comment period (78 FR 74838), we proposed for CY 2015 to continue to update the packaged cost threshold by the market basket increase. By applying the final CY 2014 market basket increase of 1.7 percent to the prior nonrounded dollar threshold of $54.73 (78 FR 74838), we determined that the threshold remains for CY 2015 at $55 ($55.66 rounded to $55, the nearest $5 increment). Therefore, we proposed to set the geometric mean packaged cost threshold on the CY 2013 claims at $55 for a code to be considered for addition to the CY 2015 OPPS bypass list. • The code is not a code for an unlisted service. Unlisted codes do not describe a specific service, and thus their costs would not be appropriate for bypass list purposes. In addition, we proposed to continue to include on the bypass list HCPCS codes that CMS medical advisors believe have minimal associated packaging based on their clinical assessment of the complete CY 2015 OPPS proposal. Some of these codes were identified by CMS medical advisors and some were identified in prior years by commenters with specialized knowledge of the packaging associated with specific services. We also proposed to continue to include certain HCPCS codes on the bypass list in order to purposefully direct the assignment of packaged costs to a companion code where services always appear together and where there would otherwise be few single procedure claims available for ratesetting. For example, we have previously discussed our reasoning for adding HCPCS code G0390 (Trauma response team associated with hospital critical care service) to the bypass list (73 FR 68513). As a result of the multiple imaging composite APCs that we established in CY 2009, the program logic for creating “pseudo” single procedure claims from bypassed codes that are also members of multiple imaging composite APCs changed. When creating the set of “pseudo” single procedure claims, claims that contain “overlap bypass codes” (those HCPCS codes that are both on the bypass list and are members of the multiple imaging composite APCs) were identified first. These HCPCS codes were then processed to create multiple imaging composite “single session” bills, that is, claims containing HCPCS codes from only one imaging family, thus suppressing the initial use of these codes as bypass codes. However, these “overlap bypass codes” were retained on the bypass list because, at the end of the “pseudo” single processing logic, we reassessed the claims without suppression of the “overlap bypass codes” under our longstanding “pseudo” single process to determine whether we could convert additional claims to “pseudo” single procedure claims. (We refer readers to section II.A.2.b. of this final rule with comment period for further discussion of the treatment of “overlap bypass codes.”) This process also created multiple imaging composite “single session” bills that could be used for calculating composite APC costs. “Overlap bypass codes” that are members of the multiple imaging composite APCs are identified by asterisks (*) in Addendum N to this final rule with comment period (which is available via the Internet on the CMS Web site). Comment: One commenter supported the CY 2015 proposal to remove certain codes from the bypass list, in particular for the anatomic pathology procedures, and suggested that the bypass list undervalues codes and artificially lowers their estimated costs, as evidenced by the estimated increase in payment for some of those services in the CY 2015 OPPS/ASC proposed rule. Response: We appreciate the commenter's support. The bypass list process is used to extract more data from claims that would otherwise be unusable. We use a variety of information in identifying codes that could be potentially added to the bypass list each year, including codes selected based on the empirical criteria, CMS medical advisor recommendations, and commenter requests. In doing so, we attempt to ensure that the amount of packaged cost being redistributed as a result of the process is limited. After consideration of the public comments we received, we are adopting as final the proposed “pseudo” single claims process. As discussed earlier in this section, there are interactions between the application of a bypass list and various other OPPS payment policies. As a result of modifications to the packaging policies described in section III. of this final rule with comment period, we are adding codes that we had originally proposed to remove from the CY 2015 bypass list back on the CY 2015 final OPPS bypass list. Addendum N to this final rule with comment period (which is available via the Internet on the CMS Web site) includes the list of bypass codes for CY 2015. The list of bypass codes contains codes that were reported on claims for services in CY 2013 and, therefore, includes codes that were in effect in CY 2013 and used for billing but were deleted for CY 2014. We retained these deleted bypass codes on the CY 2015 bypass list because these codes existed in CY 2013 and were covered OPD services in that period, and CY 2013 claims data are used to calculate CY 2015 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 were members of the multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to this final rule with comment period. HCPCS codes that we are adding for CY 2015 are identified by asterisks (*) in the fourth column of Addendum N. Table 1 of the proposed rule contained the list of codes that we proposed to remove from the CY 2015 bypass list (79 FR 40927 through 40929). Table 1 below contains the list of codes that we are removing from the final CY 2015 bypass list because these codes were either deleted from the HCPCS before CY 2013 (and therefore were not covered OPD services in CY 2013) or were not separately payable codes under the CY 2015 OPPS because these codes are not used for ratesetting through the bypass process. The list of codes for removal from the bypass list includes those that will be affected by the CY 2015 OPPS packaging policy described in section II.A.3. of this final rule with comment period. Table 1—HCPCS Codes Removed From the CY 2015 Bypass List HCPCS Code HCPCS Short descriptor 11056 Trim skin lesions 2 to 4. 11300 Shave skin lesion 0.5 cm/<. 11301 Shave skin lesion 0.6-1.0 cm. 11719 Trim nail(s) any number. 11720 Debride nail 1-5. 11721 Debride nail 6 or more. 17000 Destruct premalg lesion. 17110 Destruct b9 lesion 1-14. 29240 Strapping of shoulder. 29260 Strapping of elbow or wrist. 29280 Strapping of hand or finger. 29520 Strapping of hip. 29530 Strapping of knee. 51741 Electro-uroflowmetry first. 51798 Us urine capacity measure. 53601 Dilate urethra stricture. 53661 Dilation of urethra. 54240 Penis study. 67820 Revise eyelashes. 69210 Remove impacted ear wax uni. 69220 Clean out mastoid cavity. 70030 X-ray eye for foreign body. 70100 X-ray exam of jaw <4 views. 70110 X-ray exam of jaw 4/>> views. 70120 X-ray exam of mastoids. 70130 X-ray exam of mastoids. 70140 X-ray exam of facial bones. 70150 X-ray exam of facial bones. 70160 X-ray exam of nasal bones. 70200 X-ray exam of eye sockets. 70210 X-ray exam of sinuses. 70220 X-ray exam of sinuses. 70240 X-ray exam pituitary saddle. 70250 X-ray exam of skull. 70260 X-ray exam of skull. 70320 Full mouth x-ray of teeth. 70328 X-ray exam of jaw joint. 70330 X-ray exam of jaw joints. 70355 Panoramic x-ray of jaws. 70360 X-ray exam of neck. 71021 Chest x-ray frnt lat lordotc. 71022 Chest x-ray frnt lat oblique. 71023 Chest x-ray and fluoroscopy. 71030 Chest x-ray 4/> views. 71035 Chest x-ray special views. 71100 X-ray exam ribs uni 2 views. 71101 X-ray exam unilat ribs/chest. 71110 X-ray exam ribs bil 3 views. 71111 X-ray exam ribs/chest4/> vws. 71120 X-ray exam breastbone 2/> vws. 71130 X-ray strenoclavic jt 3/>vws. 72020 X-ray exam of spine 1 view. 72040 X-ray exam neck spine 2-3 vw. 72050 X-ray exam neck spine 4/5vws. 72052 X-ray exam neck spine 6/>vws. 72069 X-ray exam trunk spine stand. 72070 X-ray exam thorac spine 2vws. 72072 X-ray exam thorac spine 3vws. 72074 X-ray exam thorac spine4/>vw. 72080 X-ray exam trunk spine 2 vws. 72090 X-ray exam scloiosis erect. 72100 X-ray exam l-s spine 2/3 vws. 72110 X-ray exam l-2 spine 4/>vws. 72114 X-ray exam l-s spine bending. 72120 X-ray bend only l-s spine. 72170 X-ray exam of pelvis. 72190 X-ray exam of pelvis. 72202 X-ray exam si joints 3/> vws. 72220 X-ray exam sacrum tailbone. 73000 X-ray exam of collar bone. 73010 X-ray exam of shoulder blade. 73020 X-ray exam of shoulder. 73030 X-ray exam of shoulder. 73050 X-ray exam of shoulders. 73060 X-ray exam of humerus. 73070 X-ray exam of elbow. 73080 X-ray exam of elbow. 73090 X-ray exam of forearm. 73100 X-ray exam of wrist. 73110 X-ray exam of wrist. 73120 X-ray exam of hand. 73130 X-ray exam of hand. 73140 X-ray exam of finger(s). 73510 X-ray exam of hip. 73520 X-ray exam of hips. 73540 X-ray exam of pelvis & hips. 73550 X-ray exam of thigh. 73560 X-ray exam of knee 1 or 2. 73562 X-ray exam of knee 3. 73564 X-ray exam knee 4 or more. 73565 X-ray exam of knees. 73590 X-ray exam of lower leg. 73600 X-ray exam of ankle. 73610 X-ray exam of ankle. 73620 X-ray exam of foot. 73630 X-ray exam of foot. 73650 X-ray exam of heel. 73660 X-ray exam of toe(s). 74000 X-ray exam of abdomen. 74010 X-ray exam of abdomen. 74020 X-ray exam of abdomen. 74022 X-ray exam series abdomen. 76100 X-ray exam of body section. 76510 Ophth us b & quant a. 76514 Echo exam of eye thickness. 76516 Echo exam of eye. 76519 Echo exam of eye. 76645 Us exam breast(s). 76816 Ob us follow-up per fetus. 76882 Us xtr non-vasc lmtd. 76970 Ultrasound exam follow-up. 76977 Us bone density measure. 77072 X-rays for bone age. 77073 X-rays bone length studies. 77074 X-rays bone survey limited. 77076 X-rays bone survey infant. 77077 Joint survey single view. 77078 Ct bone density axial. 77079 Ct bone density peripheral. 77080 Dxa bone density axial. 77081 Dxa bone density/peripheral. 77082 Dxa bone density vert fx. 77083 Radiographic absorptiometry. 80500 Lab pathology consultation. 80502 Lab pathology consultation. 85097 Bone marrow interpretation. 86510 Histoplasmosis skin test. 86850 Rbc antibody screen. 86870 Rbc antibody identification. 86880 Coombs test direct. 86885 Coombs test indirect qual. 86886 Coombs test indirect titer. 86900 Blood typing abo. 86901 Blood typing rh (d). 86904 Blood typing patient serum. 86905 Blood typing rbc antigens. 86906 Blood typing rh phenotype. 86930 Frozen blood prep. 86970 Rbc pretx incubatj w/chemicl. 86977 Rbc serum pretx incubj/inhib. 88104 Cytopath fl nongyn smears. 88106 Cytopath fl nongyn filter. 88107 Cytopath fl nongyn sm/fltr. 88108 Cytopath concentrate tech. 88112 Cytopath cell enhance tech. 88120 Cytp urne 3-5 probes ea spec. 88160 Cytopath smear other source. 88161 Cytopath smear other source. 88162 Cytopath smear other source. 88172 Cytp dx eval fna 1st ea site. 88173 Cytopath eval fna report. 88182 Cell marker study. 88184 Flowcytometry/tc 1 marker. 88189 Flowcytometry/read 16 & >. 88300 Surgical path gross. 88302 Tissue exam by pathologist. 88304 Tissue exam by pathologist. 88305 Tissue exam by pathologist. 88307 Tissue exam by pathologist. 88312 Special stains group 1. 88313 Special stains group 2. 88321 Microslide consultation. 88323 Microslide consultation. 88325 Comprehensive review of data. 88329 Path consult introp. 88331 Path consult intraop 1 bloc. 88342 Immunohisto antibody slide. 88346 Immunofluorescent study. 88347 Immunofluorescent study. 88348 Electron microscopy. 88358 Analysis tumor. 88360 Tumor immunohistochem/manual. 88361 Tumor immunohistochem/comput. 88365 Insitu hybridization (fish). 88368 Insitu hybridization manual. 88385 Eval molecul probes 51-250. 88386 Eval molecul probes 251-500. 89049 Chct for mal hyperthermia. 89220 Sputum specimen collection. 89230 Collect sweat for test. 89240 Pathology lab procedure. 92020 Special eye evaluation. 92025 Corneal topography. 92060 Special eye evaluation. 92081 Visual field examination(s). 92082 Visual field examination(s). 92083 Visual field examination(s). 92133 Cmptr ophth img optic nerve. 92134 Cptr ophth dx img post segmt. 92136 Ophthalmic biometry. 92225 Special eye exam initial. 92226 Special eye exam subsequent. 92230 Eye exam with photos. 92250 Eye exam with photos. 92285 Eye photography. 92286 Internal eye photography. 92520 Laryngeal function studies. 92541 Spontaneous nystagmus test. 92542 Positional nystagmus test. 92550 Tympanometry & reflex thresh. 92552 Pure tone audiometry air. 92553 Audiometry air & bone. 92555 Speech threshold audiometry. 92556 Speech audiometry complete. 92557 Comprehensive hearing test. 92567 Tympanometry. 92570 Acoustic immitance testing. 92582 Conditioning play audiometry. 92603 Cochlear implt f/up exam 7/>. 92604 Reprogram cochlear implt 7/>. 92626 Eval aud rehab status. 93005 Electrocardiogram tracing. 93017 Cardiovascular stress test. 93225 Ecg monit/reprt up to 48 hrs. 93226 Ecg monit/reprt up to 48 hrs. 93270 Remote 30 day ecg rev/report. 93278 Ecg/signal-averaged. 93279 Pm device progr eval sngl. 93280 Pm device progr eval dual. 93281 Pm device progr eval multi. 93282 Icd device progr eval 1 sngl. 93283 Icd device progr eval dual. 93284 Icd device progr eval mult. 93285 Ilr device eval progr. 93288 Pm device eval in person. 93289 Icd device interrogate. 93290 Icm device eval. 93291 Ilr device interrogate. 93292 Wcd device interrogate. 93293 Pm phone r-strip device eval. 93296 Pm/icd remote tech serv. 93299 Icm/ilr remote tech serv. 93701 Bioimpedance cv analysis. 93786 Ambulatory bp recording. 93788 Ambulatory bp analysis. 93875 Extracranial study. 94015 Patient recorded spirometry. 94690 Exhaled air analysis. 95803 Actigraphy testing. 95869 Muscle test thor paraspinal. 95900 Motor nerve conduction test. 95921 Autonomic nrv parasym inervj. 95970 Analyze neurostim no prog. 96900 Ultraviolet light therapy. 96910 Photochemotherapy with uv-b. 96912 Photochemotherapy with uv-a. 96920 Laser tx skin < 250 sq cm. 96921 Laser tx skin 250-500 sq cm. 98925 Osteopath manj 1-2 regions. 98926 Osteopath manj 3-4 regions. 98927 Osteopath manj 5-6 regions. 98928 Osteopath manj 7-8 regions. 98929 Osteopath manj 9-10 regions. 98940 Chiropract manj 1-2 regions. 98941 Chiropract manj 3-4 regions. 98942 Chiropractic manj 5 regions. G0127 Trim nail(s). G0130 Single energy x-ray study. G0166 Extrnl counterpulse, per tx. G0239 Oth resp proc, group. G0389 Ultrasound exam aaa screen. G0404 Ekg tracing for initial prev. G0424 Pulmonary rehab w exer. Q0091 Obtaining screen pap smear. c. Calculation and Use of Cost-to-Charge Ratios (CCRs) In the CY 2015 OPPS/ASC proposed rule (79 FR 40929), we proposed to continue to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the proposed CY 2015 APC payment rates were based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2013 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, were from CY 2012. For the CY 2015 OPPS proposed rates, we used the set of claims processed during CY 2013. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. That crosswalk is available for review and continuous comment on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html . To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2013 (the year of claims data we used to calculate the proposed CY 2015 OPPS payment rates) and found that the National Uniform Billing Committee (NUBC) did not add any new revenue codes to the NUBC 2013 Data Specifications Manual. In accordance with our longstanding policy, we calculated CCRs for the standard and nonstandard cost centers accepted by the electronic cost report database. In general, the most detailed level at which we calculated CCRs was 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.d.(2) of this final rule with comment period. For the CCR calculation process, we used the same general approach that we used in developing the final APC rates for CY 2007 and thereafter, using the revised CCR calculation that excluded the costs of paramedical education programs and weighted the outpatient charges by the volume of outpatient services furnished by the hospital. We refer readers to the CY 2007 OPPS/ASC final rule with comment period for more information (71 FR 67983 through 67985). We first limited the population of cost reports to only those hospitals that filed outpatient claims in CY 2013 before determining whether the CCRs for such hospitals were valid. We then calculated the CCRs for each cost center and the overall ancillary CCR for each hospital for which we had claims data. We did this using hospital-specific data from the Hospital Cost Report Information System (HCRIS). We used the most recent available cost report data, which, in most cases, were from cost reports with cost reporting periods beginning in CY 2012. For the proposed rule, we used the most recently submitted cost reports to calculate the CCRs to be used to calculate costs for the proposed CY 2015 OPPS payment rates. If the most recently available cost report was submitted but not settled, we looked at the last settled cost report to determine the ratio of submitted to settled cost using the overall ancillary CCR, and we then adjusted the most recent available submitted, but not settled, cost report using that ratio. We then calculated both an overall ancillary CCR and cost center-specific CCRs for each hospital. We used the overall ancillary CCR referenced above for all purposes that require use of an overall ancillary CCR. We proposed to continue this longstanding methodology for the calculation of costs for CY 2015. Since the implementation of the OPPS, some commenters have raised concerns about potential bias in the OPPS cost-based weights due to “charge compression,” which is the practice of applying a lower charge markup to higher cost services and a higher charge markup to lower cost services. As a result, the cost-based weights may reflect some aggregation bias, undervaluing high-cost items and overvaluing low-cost items when an estimate of average markup, embodied in a single CCR, is applied to items of widely varying costs in the same cost center. This issue was evaluated in a report by the Research Triangle Institute, International (RTI). The RTI final report can be found on RTI's Web site at: http://www.rti.org/reports/cms/HHSM-500-2005-0029I/PDF/Refining_Cost_to_Charge_ratios_200807_Final.pdf . For a complete discussion of the RTI recommendations, public comments, and our responses, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68519 through 68527). We addressed the RTI finding that there was aggregation bias in both the IPPS and the OPPS cost estimation of expensive and inexpensive medical supplies in the FY 2009 IPPS final rule (73 FR 48458 through 45467). Specifically, we created one cost center for “Medical Supplies Charged to Patients” and one cost center for “Implantable Devices Charged to Patients,” essentially splitting the then current cost center for “Medical Supplies Charged to Patients” into one cost center for low-cost medical supplies and another cost center for high-cost implantable devices in order to mitigate some of the effects of charge compression. In determining the items that should be reported in these respective cost centers, we adopted commenters' recommendations that hospitals should use revenue codes established by the AHA's NUBC to determine the items that should be reported in the “Medical Supplies Charged to Patients” and the “Implantable Devices Charged to Patients” cost centers. For a complete discussion of the rationale for the creation of the new cost center for “Implantable Devices Charged to Patients,” a summary of public comments received, and our responses to those public comments, we refer readers to the FY 2009 IPPS final rule. The cost center for “Implantable Devices Charged to Patients” has been available for use for cost reporting periods beginning on or after May 1, 2009. In the CY 2013 OPPS/ASC final rule with comment period, we determined that a significant volume of hospitals were utilizing the “Implantable Devices Charged to Patients” cost center. Because a sufficient amount of data from which to generate a meaningful analysis was available, we established in the CY 2013 OPPS/ASC final rule with comment period a policy to create a distinct CCR using the “Implantable Devices Charged to Patients” cost center (77 FR 68225). We retained this policy for the CY 2014 OPPS and, as we proposed, we are continuing this practice for the CY 2015 OPPS. In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080), we finalized our proposal to create new standard cost centers for “Computed Tomography (CT),” “Magnetic Resonance Imaging (MRI),” and “Cardiac Catheterization,” and to require that hospitals report the costs and charges for these services under these new cost centers on the revised Medicare cost report Form CMS 2552-10. As we discussed in the FY 2009 IPPS and CY 2009 OPPS/ASC proposed and final rules, RTI also found that the costs and charges of CT scans, MRIs, and cardiac catheterization differ significantly from the costs and charges of other services included in the standard associated cost center. RTI concluded that both the IPPS and the OPPS relative payment weights would better estimate the costs of those services if CMS were to add standard costs centers for CT scans, MRIs, and cardiac catheterization in order for hospitals to report separately the costs and charges for those services and in order for CMS to calculate unique CCRs to estimate the cost from charges on claims data. We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080) for a more detailed discussion on the reasons for the creation of standard cost centers for CT scans, MRIs, and cardiac catheterization. The new standard cost centers for CT scans, MRIs, and cardiac catheterization were effective for cost report periods beginning on or after May 1, 2010, on the revised cost report Form CMS-2552-10. Using the HCRIS update for the CY 2015 final rule cycle, which we used to estimate costs in the CY 2015 OPPS ratesetting process, as discussed in the CY 2015 OPPS/ASC proposed rule (79 FR 40930), we were able to calculate a valid implantable device CCR for 2,895 hospitals, a valid MRI CCR for 1,934 hospitals, a valid CT scan CCR for 2,035 hospitals, and a valid Cardiac Catheterization CCR for 1,397 hospitals. In our CY 2014 OPPS/ASC proposed rule discussion (78 FR 43549), we noted that, for CY 2014, the estimated changes in geometric mean estimated APC cost of using data from the new standard cost centers for CT scans and MRIs appeared consistent with RTI's analysis of cost report and claims data in the July 2008 final report (pages 5 and 6). RTI concluded that “in hospitals that aggregate data for CT scanning, MRI, or nuclear medicine services with the standard line for Diagnostic Radiology, costs for these services all appear substantially overstated, while the costs for plain films, ultrasound and other imaging procedures are correspondingly understated.” We also noted that there were limited additional impacts in the implantable device-related APCs from adopting the new cost report Form CMS 2552-10 because we had used data from the standard cost center for implantable medical devices beginning in CY 2013 OPPS ratesetting, as discussed above. As we indicated in prior rulemaking (77 FR 68223 through 68225), once we determined that cost report data for the new standard cost centers were sufficiently available, we would analyze that data and, if appropriate, we would propose to use the distinct CCRs for new standard cost centers described above in the calculation of the OPPS relative payment weights. As stated in the CY 2014 OPPS/ASC proposed rule (78 FR 43550), we have conducted our analysis and concluded that we should develop distinct CCRs for each of the new cost centers and use them in ratesetting. Therefore, we began in the CY 2014 OPPS, and proposed to continue for the CY 2015 OPPS, to calculate the OPPS relative payment weights using distinct CCRs for cardiac catheterization, CT scan, MRI, and implantable medical devices. Section XXI. of this final rule with comment period includes the impacts of calculating the CY 2015 OPPS relative payment weights using these new standard cost centers. Comment: A few commenters encouraged CMS to ensure data quality and continue to test, refine, and improve its CCR analysis for CT scans and MRI. Response: We will continue to monitor the CCRs for these services. After consideration of the public comments we received, we are finalizing our proposal to calculate the OPPS relative payment weights using distinct CCRs for cardiac catheterization, CT scan, MRI, and implantable medical devices for CY 2015 without modification. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74847), we finalized a policy to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the CT and MRI APCs. This change allows hospitals additional time to use one of the more accurate cost allocation methods, and thereby improve the accuracy of the CCRs on which the OPPS relative payment weights are developed. In Table 2 below, we display CCR values for providers based on various cost allocation methods. Table 2—CCR Statistical Values Based on Use of Different Cost Allocation Methods Cost allocation method CT Median CCR Mean CCR MRI Median CCR Mean CCR All Providers 0.0464 0.0608 0.0901 0.1151 Square Feet Only 0.0370 0.0502 0.0787 0.1013 Direct Assign 0.0640 0.0740 0.1063 0.1294 Dollar Value 0.0555 0.0718 0.1046 0.1298 Direct Assign and Dollar Value 0.0554 0.0715 0.1047 0.1297 As part of this transitional policy to estimate the CT and MRI APC relative payment weights using only cost data from providers that do not use “square feet” as the cost allocation statistic, we adopted a policy in the CY 2014 OPPS/ASC final rule with comment period that we will sunset this policy in 4 years once the updated cost report data become available for ratesetting purposes. We stated that we believe 4 years is sufficient time for hospitals that have not done so to transition to a more accurate cost allocation method and for the related data to be available for ratesetting purposes. Therefore, in CY 2018, we will estimate the CT and MRI APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed. In Table 3 below, we display the impact of excluding claims based on the “square feet” cost allocation method from estimates of CT and MRI costs in CY 2015. Table 3—Percentage Change in Estimated Cost for CT and MRI APCs When Excluding Claims From Providers Using “Square Feet” as the Cost Allocation Method CY 2015 APC CY 2015 APC Descriptor Percent change 0283 Computed Tomography with Contrast 9.6 0284 Magnetic Resonance Imaging and Magnetic Resonance Angiography with Contrast 4.0 0331 Combined Abdomen and Pelvis CT without Contrast 12.1 0332 Computed Tomography without Contrast 14.5 0333 Computed Tomography without Contrast followed by Contrast 12.3 0334 Combined Abdomen and Pelvis CT with Contrast 10.1 0336 Magnetic Resonance Imaging and Magnetic Resonance Angiography without Contrast 7.5 0337 Magnetic Resonance Imaging and Magnetic Resonance Angiography without Contrast f 6.4 0383 Cardiac Computed Tomographic Imaging 3.6 0662 CT Angiography 10.3 8005 CT and CTA without Contrast Composite 12.8 8006 CT and CTA with Contrast Composite 9.4 8007 MRI and MRA without Contrast Composite 6.7 8008 MRI and MRA with Contrast Composite 6.9 Comment: A few commenters supported CMS' proposal to continue removing claims from providers that use the “square feet” cost allocation method from the cost model. One commenter suggested that CMS continue removing claims from providers that use this method in CY 2018 and beyond. Response: We thank the commenters for their support and are finalizing this policy as proposed. We will continue to only include cost data from providers that do not use “square feet” as the cost allocation statistic in relative payment weights through CY 2017. For CY 2018 and beyond, we will estimate the CT and MRI APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed. In summary, as we proposed, we are continuing to use data from the “Implantable Devices Charged to Patients” and “Cardiac Catheterization” cost centers to create distinct CCRs for use in calculating the OPPS relative payment weights for the CY 2015 OPPS. For the “Magnetic Resonance Imaging (MRI)” and “Computed Tomography (CT) Scan” APCs identified in Table 3 of this final rule with comment period, we are continuing our policy of removing claims from cost modeling for those providers using “square feet” as the cost allocation statistic for CY 2015. 2. Data Development Process and Calculation of Costs Used for Ratesetting In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2015. The Hospital OPPS page on the CMS Web site on which this final rule with comment period is posted ( http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html ) provides an accounting of claims used in the development of the final payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, below in this section we discuss the file of claims that comprises the data set that is available for purchase under a CMS data use agreement. The CMS Web site, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html , includes information about purchasing the “OPPS Limited Data Set,” which now includes the additional variables previously available only in the OPPS Identifiable Data Set, including ICD-9-CM diagnosis codes and revenue code payment amounts. This file is derived from the CY 2013 claims that were used to calculate the final payment rates for the CY 2015 OPPS. In the history of the OPPS, we have traditionally established the scaled relative weights on which payments are based using APC median costs, which is a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based. While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same, under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. For CY 2015, as we proposed, we are continuing to use geometric mean costs to calculate the relative weights on which the CY 2015 OPPS payment rates are based. We used the methodology described in sections II.A.2.a. through II.A.2.f. of this final rule with comment period to calculate the costs we used to establish the relative weights used in calculating the OPPS payment rates for CY 2015 shown in Addenda A and B to this final rule with comment period (which are available via the Internet on the CMS Web site). We refer readers to section II.A.4. of this final rule with comment period for a discussion of the conversion of APC costs to scaled payment weights. a. Claims Preparation For this final rule with comment period, we used the CY 2013 hospital outpatient claims processed through June 30, 2014, to calculate the geometric mean costs of APCs that underpin the relative payment weights for CY 2015. To begin the calculation of the relative payment weights for CY 2015, we pulled all claims for outpatient services furnished in CY 2013 from the national claims history file. This is not the population of claims paid under the OPPS, but all outpatient claims (including, for example, critical access hospital (CAH) claims and hospital claims for clinical laboratory tests for persons who are neither inpatients nor outpatients of the hospital). We then excluded claims with condition codes 04, 20, 21, and 77 because these are claims that providers submitted to Medicare knowing that no payment would be made. For example, providers submit claims with a condition code 21 to elicit an official denial notice from Medicare and document that a service is not covered. We then excluded claims for services furnished in Maryland, Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands because hospitals in those geographic areas are not paid under the OPPS, and, therefore, we do not use claims for services furnished in these areas in ratesetting. We divided the remaining claims into the three groups shown below. Groups 2 and 3 comprise the 123 million claims that contain hospital bill types paid under the OPPS. 1. Claims that were not bill types 12X (Hospital Inpatient (Medicare Part B only)), 13X (Hospital Outpatient), 14X (Hospital—Laboratory Services Provided to Nonpatients), or 76X (Clinic—Community Mental Health Center). Other bill types are not paid under the OPPS; therefore, these claims were not used to set OPPS payment. 2. Claims that were bill types 12X, 13X or 14X. Claims with bill types 12X and 13X are hospital outpatient claims. Claims with bill type 14X are laboratory specimen claims. 3. Claims that were bill type 76X (CMHC). To convert charges on the claims to estimated cost, we multiplied the charges on each claim by the appropriate hospital-specific CCR associated with the revenue code for the charge as discussed in section II.A.1.c. of this final rule with comment period. We then flagged and excluded CAH claims (which are not paid under the OPPS) and claims from hospitals with invalid CCRs. The latter included claims from hospitals without a CCR; those from hospitals paid an all-inclusive rate; those from hospitals with obviously erroneous CCRs (greater than 90 or less than 0.0001); and those from hospitals with overall ancillary CCRs that were identified as outliers (that exceeded ± 3 stan [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2014-26146. Public record. Not legal advice.