Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organization Reporting and Communication; Transplant Outcome Measures and Documentation Requirements; Electronic Health Record (EHR) Incentive Programs; Payment to Certain Off-Campus Outpatient Departments of a Provider; Hospital Value-Based Purchasing (VBP) Program
Federal RegisterJul 14, 2016
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 416, 419, 482, 486, 488, and 495
[CMS-1656-P]
RIN 0938-AS82
Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organization Reporting and Communication; Transplant Outcome Measures and Documentation Requirements; Electronic Health Record (EHR) Incentive Programs; Payment to Certain Off-Campus Outpatient Departments of a Provider; Hospital Value-Based Purchasing (VBP) Program
AGENCY:
Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION:
Proposed rule.
SUMMARY:
This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2017 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this proposed rule, we describe the proposed 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 proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.
Further, in this proposed rule, we are proposing to make changes to tolerance thresholds for clinical outcomes for solid organ transplant programs; to Organ Procurement Organizations (OPOs) definitions, outcome measures, and organ transport documentation; and to the Medicare and Medicaid Electronic Health Record Incentive Programs. We also are proposing to remove the HCAHPS Pain Management dimension from the Hospital Value-Based Purchasing (VBP) Program. In addition, we are proposing to implement section 603 of the Bipartisan Budget Act of 2015 relating to payment for certain items and services furnished by certain off-campus outpatient departments of a provider.
DATES:
Comment period:
To be assured consideration, comments on all sections of this proposed rule must be received at one of the addresses provided in the
ADDRESSES
section no later than 5 p.m. EST on September 6, 2016.
ADDRESSES:
In commenting, please refer to file code CMS-1656-P. 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-1656-P, 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-1656-P, 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 CONTACT:
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact Carol Schwartz at (410) 786-0576.
Ambulatory Surgical Center (ASC) Payment System, contact Elisabeth Daniel at (410) 786-0237.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia at (410) 786-7236.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Vinitha Meyyur at (410) 786-8819.
Blood and Blood Products, contact Lela Strong at (410) 786-3213.
Cancer Hospital Payments, contact David Rice at (410) 786-6004.
Chronic Care Management (CCM) Hospital Services, contact Twi Jackson at (410) 786-1159.
CPT and Level II Alphanumeric HCPCS Codes—Process for Requesting Comments, contact Marjorie Baldo at (410) 786-4617.
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver at (410) 786-9379.
Composite APCs (Extended Assessment and Management, Low Dose Brachytherapy, Multiple Imaging), contact Twi Jackson at (410) 786-1159.
Comprehensive APCs, contact Lela Strong at (410) 786-3213.
Hospital Observation Services, contact Twi Jackson at (410) 786-1159.
Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Elizabeth Bainger at (410) 786-0529.
Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Vinitha Meyyur at (410) 786-8819.
Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Twi Jackson at (410) 786-1159.
Hospital Value-Based Purchasing (VBP) Program, contact Grace Im at (410) 786-0700.
Inpatient Only Procedures List, contact Lela Strong at (410) 786-3213.
Medicare Electronic Health Record (EHR) Incentive Program, contact Kathleen Johnson at (410) 786-3295 or Steven Johnson at (410) 786-3332.
New Technology Intraocular Lenses (NTIOLs), contact Elisabeth Daniel at (410) 786-0237.
No Cost/Full Credit and Partial Credit Devices, contact Twi Jackson at (410) 786-1159.
OPPS Brachytherapy, contact Elisabeth Daniel at (410) 786-0237.
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact David Rice at (410) 786-6004 or Erick Chuang at (410) 786-1816.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Twi Jackson at (410) 786-1159.
OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo at (410) 786-4617.
OPPS Packaged Items/Services, contact Lela Strong at (410) 786-3213.
OPPS Pass-Through Devices and New Technology Procedures/Services, contact Carol Schwartz at (410) 786-0576.
OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova at (410) 786-2682.
Organ Procurement Organization (OPO) Reporting and Communication, contact Peggye Wilkerson at (410) 786-4857 or Melissa Rice at (410) 786-3270.
Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact Marissa Kellam at (410) 786-3012 or Katherine Lucas at (410) 786-7723.
Rural Hospital Payments, contact David Rice at (410) 786-6004.
Section 603 of the Bipartisan Budget Act of 2015 (Off-Campus Departments of a Provider), contact David Rice at (410) 786-6004 or Elisabeth Daniel at (410) 786-0237.
Transplant Enforcement, contact Paula DiStabile at (410) 786-3039 or Caecilia Blondiaux at (410) 786-2190.
All Other Issues Related to Hospital Outpatient and Ambulatory Surgical Center Payments Not Previously Identified, contact Marjorie Baldo at (410) 786-4617.
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
ACOT Advisory Committee on Organ Transplantation
AHA American Hospital Association
AMA American Medical Association
AMI Acute myocardial infarction
APC Ambulatory Payment Classification
APU Annual payment update
ASC Ambulatory surgical center
ASCQR Ambulatory Surgical Center Quality Reporting
ASP Average sales price
AUC Appropriate use criteria
AWP Average wholesale price
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Public Law 106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Public Law 106-554
BLS Bureau of Labor Statistics
CAH Critical access hospital
CAHPS Consumer Assessment of Healthcare Providers and Systems
CAP Competitive Acquisition Program
C-APC Comprehensive Ambulatory Payment Classification
CASPER Certification and Survey Provider Enhanced Reporting
CAUTI Catheter-associated urinary tract infection
CBSA Core-Based Statistical Area
CCM Chronic care management
CCN CMS Certification Number
CCR Cost-to-charge ratio
CDC Centers for Disease Control and Prevention
CED Coverage with Evidence Development
CERT Comprehensive Error Rate Testing
CfC Conditions of coverage
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
ECD Expanded criteria donor
EBRT External beam radiotherapy
ECG Electrocardiogram
ED Emergency department
EDTC Emergency department transfer communication
EHR Electronic health record
E/M Evaluation and management
ESRD End-stage renal disease
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
FTE Full-time equivalent
FY Fiscal year
GAO Government Accountability Office
GI Gastrointestinal
GME Graduate medical education
HAI Healthcare-associated infection
HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems
HCERA Health Care and Education Reconciliation Act of 2010, Public Law 111-152
HCP Health care personnel
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HCUP Healthcare Cost and Utilization Project
HEU Highly enriched uranium
HH QRP Home Health Quality Reporting Program
HHS Department of Health and Human Services
HIE Health information exchange
HIPAA Health Insurance Portability and Accountability Act of 1996, Public Law 104-191
HOP Hospital Outpatient Payment [Panel]
HOPD Hospital outpatient department
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
ICD-10 International Classification of Diseases, Tenth Revision
ICH In-center hemodialysis
ICR Information collection requirement
IME Indirect medical education
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 Program
IT Information technology
LCD Local coverage determination
LDR Low dose rate
LTCH Long-term care hospital
LTCHQR Long-Term Care Hospital Quality Reporting
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015, Public Law 114-10
MAP Measure Application Partnership
MDH Medicare-dependent, small rural hospital
MedPAC Medicare Payment Advisory Commission
MEG Magnetoencephalography
MFP Multifactor productivity
MGCRB Medicare Geographic Classification Review Board
MIEA-TRHCA Medicare Improvements and Extension Act under Division B, Title I of the Tax Relief Health Care Act of 2006, Public Law 109-432
MIPPA Medicare Improvements for Patients and Providers Act of 2008, Public Law 110-275
MLR Medical loss ratio
MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173
MMEA Medicare and Medicaid Extenders Act of 2010, Public Law 111-309
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public Law 110-173
MPFS Medicare Physician Fee Schedule
MR Medical review
MRA Magnetic resonance angiography
MRgFUS Magnetic Resonance Image Guided Focused Ultrasound
MRI Magnetic resonance imaging
MRSA Methicillin-Resistant Staphylococcus Aures
MS-DRG Medicare severity diagnosis-related group
MSIS Medicaid Statistical Information System
MUC Measure under consideration
NCCI National Correct Coding Initiative
NEMA National Electrical Manufacturers Association
NHSN National Healthcare Safety Network
NOTA National Organ and Transplantation Act
NOS Not otherwise specified
NPI National Provider Identifier
NPWT Negative Pressure Wound Therapy
NQF National Quality Forum
NQS National Quality Strategy
NTIOL New technology intraocular lens
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act of 1996, Public Law 99-509
O/E Observed to expected event
OIG [HHS] Office of the Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information Technology
OPD [Hospital] Outpatient Department
OPO Organ Procurement Organization
OPPS [Hospital] Outpatient Prospective Payment System
OPSF Outpatient Provider-Specific File
OPTN Organ Procurement and Transplantation Network
OQR [Hospital] Outpatient Quality Reporting
OT Occupational therapy
PAMA Protecting Access to Medicare Act of 2014, Public Law 113-93
PCHQR PPS-Exempt Cancer Hospital Quality Reporting
PCR Payment-to-cost ratio
PDC Per day cost
PDE Prescription Drug Event
PE Practice expense
PEPPER Program Evaluation Payment Patterns Electronic Report
PHP Partial hospitalization program
PHS Public Health Service Act, Public Law 96-88
PN Pneumonia
POS Place of service
PPI Producer Price Index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PQRS Physician Quality Reporting System
QDC Quality data code
QIO Quality Improvement Organization
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data for Annual Payment Update
RTI Research Triangle Institute, International
RVU Relative value unit
SAD Self-administered drug
SAMS Secure Access Management Services
SCH Sole community hospital
SCOD Specified covered outpatient drugs
SES Socioeconomic status
SI Status indicator
SIA Systems Improvement Agreement
SIR Standardized infection ratio
SNF Skilled nursing facility
SRS Stereotactic radiosurgery
SRTR Scientific Registry of Transplant Recipients
SSA Social Security Administration
SSI Surgical site infection
TEP Technical Expert Panel
TIP Transprostatic implant procedure
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 in Response to CY 2016 OPPS/ASC Final Rule With Comment Period
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
2. Proposed Data Development Process and Calculation of Costs Used for Ratesetting
a. Recommendations of the Panel Regarding Data Development
b. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(2) Brachytherapy Sources
c. Proposed Comprehensive APCs (C-APCs) for CY 2017
(1) Background
(2) Proposed C-APCs for CY 2017
(a) Proposed Additional CY 2017 C-APCs
(b) Proposed New Allogeneic Hematopoietic Stem Cell Transplantation (HSCT) C-APC
d. Proposed Calculation of Composite APC Criteria-Based Costs
(1) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC
(2) Mental Health Services Composite APC
(3) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)
3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
b. Proposed Clinical Diagnostic Laboratory Test Packaging Policy
(1) Background
(2) Proposed “Unrelated” Laboratory Test Exception
(3) Proposed Molecular Pathology Test Exception
c. Conditional Packaging Status Indicators “Q1” and “Q2”
(1) Background
(2) Proposed Change in Conditional Packaging Status Indicators Logic
4. Proposed Calculation of OPPS Scaled Payment Weights
B. Proposed Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default CCRs
E. Proposed Adjustment for Rural SCHs and EACHs under Section 1833(t)(13)(B) of the Act
F. Proposed OPPS Payment to Certain Cancer Hospitals Described by Section 1886(d)(1)(B)(v) of the Act
1. Background
2. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2017
G. Proposed Hospital Outpatient Outlier Payments
1. Background
2. Proposed Outlier Calculation
H. Proposed Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
1. Background
2. Proposed OPPS Copayment Policy
3. Proposed Calculation of an Adjusted Copayment Amount for an APC Group
III. Proposed OPPS Ambulatory Payment Classification (APC) Group Policies
A. Proposed OPPS Treatment of New CPT and Level II HCPCS Codes
1. Proposed Treatment of New CY 2016 Level II HCPCS and CPT Codes Effective April 1, 2016 and July 1, 2016 for Which We Are Soliciting Public Comments in this CY 2017 OPPS/ASC Proposed Rule
2. Proposed Process for New Level II HCPCS Codes That Will Be Effective October 1, 2016 and January 1, 2017 for Which We Will Be Soliciting Public Comments in the CY 2017 OPPS/ASC Final Rule With Comment Period
3. Proposed Treatment of New and Revised CY 2017 Category I and III CPT Codes That Will Be Effective January 1, 2017 for Which We Are Soliciting Public Comments in This CY 2017 OPPS/ASC Proposed Rule
B. Proposed OPPS Changes—Variations Within APCs
1. Background
2. Application of the 2 Times Rule
3. Proposed APC Exceptions to the 2 Times Rule
C. Proposed New Technology APCs
1. Background
2. Proposed Additional New Technology APC Groups
3. Proposed Procedures Assigned to New Technology APC Groups for CY 2017
a. Overall Proposal
b. Retinal Prosthesis Implant Procedures
D. Proposed OPPS Ambulatory Payment Classification (APC) Group Policies
1. Imaging
2. Strapping and Cast Application (APCs 5101 and 5102)
3. Transprostatic Urethral Implant Procedure
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payments for Devices
1. Expiration Dates for Current Transitional Pass-Through Devices
a. Background
b. Proposed CY 2017 Pass-Through Device Policy
2. New Device Pass-Through Applications
a. Background
b. Applications Received for Device Pass-Through Payment for CY 2017
(1) BioBag® (Larval Debridement Therapy in a Contained Dressing)
(2) ENCORE
TM
Suspension System
(3) Endophys Pressure Sensing System (Endophys PSS) or Endophys Pressure Sensing Kit
3. Proposal to Change the Beginning Eligibility Date for Device Pass-Through Payment Status
4. Proposal To Make the Transitional Pass-Through Payment Period 3 Years for All Pass-Through Devices and Expire Pass-Through Status on a Quarterly Rather Than Annual Basis
(a) Background
(b) Proposed CY 2017 Policy
5. Proposed Changes to Cost-to-Charge Ratios (CCRs) That Are Used To Determine Device Pass-Through Payment
a. Background
b. Proposed CY 2017 Policy
6. Proposed Provisions for Reducing Transitional Pass-Through Payments To Offset Costs Packaged into APC Groups
a. Background
b. Proposed CY 2017 Policy
B. Proposed Device-Intensive Procedures
1. Background
2. Proposed HCPCS Code-Level Device-Intensive Determination
3. Proposed Changes to Device Edit Policy
4. Proposed Adjustment to OPPS Payment for No Cost/Full Credit and Partial Credit Devices
a. Background
b. Proposed Policy for CY 2017
5. Proposed Payment Policy for Low Volume Device-Intensive Procedures
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
2. Proposal To Make the Transitional Pass-Through Payment Period 3 Years for All Pass-Through Drugs, Biologicals and Radiopharmaceuticals and Expire Pass-Through Status on a Quarterly Rather Than Annual Basis
3. Proposed Drugs and Biologicals With Expiring Pass-Through Payment Status in CY 2016
4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing Pass-Through Status in CY 2017
5. Proposed Provisions for Reducing Transitional Pass-Through Payments for Policy-Packaged Drugs and Biologicals To Offset Costs Packaged Into APC Groups
B. Proposed OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Status
1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and Radiopharmaceuticals
a. Proposed Packaging Threshold
b. Proposed Packaging of Payment for HCPCS Codes That Describe Certain Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals Under the Cost Threshold (Threshold Packaging Policy)
c. Proposed High Cost/Low Cost Threshold for Packaged Skin Substitutes
d. Proposed Packaging Determination for HCPCS Codes That Describe the Same Drug or Biological But Different Dosages
2. Proposed Payment for Drugs and Biologicals Without Pass-Through Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and Other Separately Payable and Packaged Drugs and Biologicals
b. Proposed CY 2017 Payment Policy
c. Biosimilar Biological Products
3. Proposed Payment Policy for Therapeutic Radiopharmaceuticals
4. Proposed Payment Adjustment Policy for Radioisotopes Derived From Non-Highly Enriched Uranium Sources
5. Proposed Payment for Blood Clotting Factors
6. Proposed Payment for Nonpass-Through Drugs, Biologicals, and Radiopharmaceuticals With HCPCS Codes but Without OPPS Hospital Claims Data
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Proposed Estimate of Pass-Through Spending
VII. Proposed OPPS Payment for Hospital Outpatient Visits and Critical Care Services
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
B. Proposed PHP APC Update for CY 2017
1. Proposed PHP APC Changes and Effect on Geometric Mean Per Diem Costs
a. Proposed Changes to PHP APCs
b. Rationale for Proposed Changes in PHP APCs
c. Alternatives Considered
2. Development of the Proposed PHP APC Geometric Mean Per Diem Costs and Payment Rates
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
3. PHP Ratesetting Process
C. Proposed Outlier Policy for CMHCs
1. Estimated Outlier Thresholds
2. Proposed CMHC Outlier Cap
3. Implementation Strategy for a Proposed 8-Percent Cap on CMHS Outlier Payments
4. Summary of Proposals
IX. Proposed Procedures That Would Be Paid Only as Inpatient Procedures
A. Background
B. Proposed Changes to the Inpatient Only (IPO) List
C. Solicitation of Public Comments on Possible Removal of Total Knee Arthroplasty (TKA) Procedures From the IPO List
1. Background
2. Discussion of TKA and the IPO List
3. Topics and Questions for Public Comment
X. Proposed Nonrecurring Policy Changes
A. Implementation of Section 603 of the Bipartisan Budget Act of 2015 Relating to Payment for Certain Items and Services Furnished by Certain Off-Campus Departments of a Provider
1. Background
2. Defining Applicable Items and Services and Off-Campus Outpatient Department of a Provider As Set Forth in Sections 1833(t)(21)(A) and (B) of the Act
a. Background on the Provider-Based Status Rules
b. Proposed Exemption of Items and Services Furnished in a Dedicated Emergency Department or an On-Campus PBD as Defined at Sections 1833(t)(21)(B)(i)(I) and (II) of the Act (Excepted Off-Campus PBD)
(1) Dedicated Emergency Departments (EDs)
(2) On-Campus Locations
(3) Within the Distance From Remote Locations
c. Applicability of Exception at Section 1833(t)(21)(B)(ii) of the Act
(1) Relocation of Off-Campus PBDs Excepted Under Section 1833(t)(21)(B)(ii) of the Act
(2) Expansion of Clinical Family of Services at an Off-Campus PBD Excepted Under Section 1833(t)(21)(B)(ii) of the Act
d. Change of Ownership and Excepted Status
e. Comment Solicitation for Data Collection Under Section 1833(t)(21)(D) of the Act
3. Payment for Services Furnished in Off-Campus PBDs to Which Sections 1833(t)(1)(B)(v) and 1833(t)(21) of the Act Apply (Nonexcepted Off-Campus PBDs)
a. Background on Medicare Payment for Services Furnished in an Off-Campus PBD
b. Proposed Payment for Items and Services Furnished in Off-Campus PBD That Are Subject to Sections 1833(t)(1)(B)(v) and (t)(21)(C) of the Act
(1) Definition of “Applicable Payment System” for Nonexcepted Items and Services
(2) Definition of Applicable Items and Services and Section 603 Amendments to Section 1833(t)(1)(B) of the Act and Proposed Payment for Nonexcepted Items and Services for CY 2017
(3) Comment Solicitation on Allowing Direct Billing and Payment for Nonexcepted Items and Services in CY 2018
4. Beneficiary Cost-Sharing
5. Summary of Proposals
6. Proposed Changes to Regulations
B. Changes for Payment for Film X-Ray
C. Changes to Certain Scope of Services Elements for Chronic Care Management (CCM) Services
D. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
XI. Proposed CY 2017 OPPS Payment Status and Comment Indicators
A. Proposed CY 2017 OPPS Payment Status Indicator Definitions
B. Proposed CY 2017 Comment Indicator Definitions
XII. Proposed 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. Proposed Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised Category I and Category III CPT Codes and Level II HCPCS Codes
2. Proposed Treatment of New and Revised Level II HCPCS Codes and Category III CPT Codes Implemented in April 2016 and July 2016 for Which We Are Soliciting Public Comments in This Proposed Rule
3. Proposed Process for Recognizing New and Revised Category I and Category III CPT Codes That Will Be Effective January 1, 2017 for Which We Will Be Soliciting Public Comments in the CY 2017 OPPS/ASC Final Rule With Comment Period
4. Proposed Process for New and Revised Level II HCPCS Codes That Will Be Effective October 1, 2016 and January 1, 2017 for Which We Will be Soliciting Public Comments in the CY 2017 OPPS/ASC Final Rule with Comment Period
C. Proposed Update to the Lists of ASC Covered Surgical Procedures and Covered Ancillary Services
1. Covered Surgical Procedures
a. Proposed Covered Surgical Procedures Designated as Office-Based
b. ASC Covered Surgical Procedures Designated as Device-Intensive—Finalized Policy for CY 2016 and Proposed Policy for CY 2017
c. Proposed Adjustment to ASC Payments for No Cost/Full Credit and Partial Credit Devices
d. Proposed Additions to the List of ASC Covered Surgical Procedures
2. Covered Ancillary Services
D. Proposed ASC Payment for Covered Surgical Procedures and Covered Ancillary Services
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
b. Proposed Update to ASC Covered Surgical Procedure Payment Rates for CY 2017
2. Proposed Payment for Covered Ancillary Services
a. Background
b. Proposed Payment for Covered Ancillary Services for CY 2017
E. New Technology Intraocular Lenses (NTIOLs)
1. NTIOL Application Cycle
2. Requests to Establish New NTIOL Classes for CY 2017
3. Payment Adjustment
F. Proposed ASC Payment and Comment Indicators
1. Background
2. Proposed ASC Payment and Comment Indicators
G. Calculation of the Proposed ASC Conversion Factor and the Proposed ASC Payment Rates
1. Background
2. Proposed Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2017 and Future Years
b. Updating the ASC Conversion Factor
3. Display of Proposed CY 2017 ASC Payment Rates
XIII. Requirements for the Hospital Outpatient Quality Reporting (OQR) Program
A. Background
1. Overview
2. Statutory History of the Hospital OQR Program
3. Regulatory History of the Hospital OQR Program
B. Hospital OQR Program Quality Measures
1. Considerations in the Selection of Hospital OQR Program Quality Measures
2. Retention of Hospital OQR Program Measures Adopted in Previous Payment Determinations
3. Removal of Quality Measures from the Hospital OQR Program Measure Set
a. Considerations in Removing Quality Measures From the Hospital OQR Program
b. Criteria for Removal of “Topped-Out” Measures
4. Hospital OQR Program Quality Measures Adopted in Previous Rulemaking
5. Proposed New Hospital OQR Program Quality Measures for the CY 2020 Payment Determination and Subsequent Years
a. OP-35: Admissions and Emergency Department Visits for Patients Receiving Outpatient Chemotherapy Measure
b. OP-36: Hospital Visits after Hospital Outpatient Surgery Measure (NQF #2687)
c. OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of
Healthcare Providers and Systems (OAS CAHPS) Survey Measures
d. Summary of Previously Adopted and Newly Proposed Hospital OQR Program Measures for the CY 2020 Payment Determinations and Subsequent Years
6. Hospital OQR Program Measures and Topics for Future Consideration
a. Future Measure Topics
b. Electronic Clinical Quality Measures
c. Possible Future eCQM: Safe Use of Opioids-Concurrent Prescribing
7. Maintenance of Technical Specifications for Quality Measures
8. Public Display of Quality Measures
C. Administrative Requirements
1. QualityNet Account and Security Administrator
2. Requirements Regarding Participation Status
D. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program
1. Hospital OQR Program Annual Payment Determinations
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data Are Submitted Directly to CMS for the CY 2019 Payment Determination and Subsequent Years
3. Claims-Based Measure Data Requirements for the CY 2019 Payment Determination and Subsequent Years and CY 2020 Payment Determination and Subsequent Years
4. Proposed Data Submission Requirements for the Proposed OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures for the CY 2020 Payment Determination and Subsequent Years
a. Survey Requirements
b. Vendor Requirements
5. Data Submission Requirements for Previously Finalized Measures for Data Submitted via a Web Based Tool for the CY 2019 Payment Determination and Subsequent Years
6. Population and Sampling Data Requirements for the CY 2019 Payment Determination and Subsequent Years
7. Hospital OQR Program Validation Requirements for Chart-Abstracted Measure Data Submitted Directly to CMS for the CY 2019 Payment Determination and Subsequent Years
8. Proposed Extension or Exemption Process for the CY 2019 Payment Determination and Subsequent Years
9. Hospital OQR Program Reconsideration and Appeals Procedures for the CY 2019 Payment Determination and Subsequent Years—Clarification
E. Proposed Payment Reduction for Hospitals That Fail To Meet the Hospital Outpatient Quality Reporting (OQR) Program Requirements for the CY 2017 Payment Determination
1. Background
2. Proposed Reporting Ratio Application and Associated Adjustment Policy for CY 2017
XIV. Requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program
A. Background
1. Overview
2. Statutory History of the ASCQR Program
3. Regulatory History of the ASCQR Program
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality Measures
2. Policies for Retention and Removal of Quality Measures from the ASCQR Program
3. ASCQR Program Quality Measures Adopted in Previous Rulemaking
4. Proposed ASCQR Program Quality Measures for the CY 2020 Payment Determination and Subsequent Years
a. ASC-13: Normothermia Outcome
b. ASC-14: Unplanned Anterior Vitrectomy
c. ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey Measures
5. ASCQR Program Measure for Future Consideration
6. Maintenance of Technical Specifications for Quality Measures
7. Public Reporting of ASCQR Program Data
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security Administrator
2. Requirements Regarding Participation Status
D. Form, Manner, and Timing of Data Submitted for the ASCQR Program
1. Requirements Regarding Data Processing and Collection Periods for Claims-Based Measures Using Quality Data Codes (QDCs)
2. Minimum Threshold, Minimum Case Volume, and Data Completeness for Claims-Based Measures Using QDCs
3. Requirements for Data Submitted Via a CMS Online Data Submission Tool
a. Requirements for Data Submitted via a non-CMS Online Data Submission Tool
b. Requirements for Data Submitted via a CMS Online Data Submission Tool
4. Claims-Based Measure Data Requirements for the CY 2019 Payment Determination and Subsequent Years
5. Proposed Data Submission Requirements for the Proposed ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-Based Measures for the CY 2020 Payment Determination and Subsequent Years
a. Survey Requirements
b. Vendor Requirements
6. Extraordinary Circumstances Extensions or Exemptions for the CY 2019 Payment Determination and Subsequent Years
7. ASCQR Program Reconsideration Procedures
E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements
XV. Transplant Outcomes: Restoring the Tolerance Range for Patient and Graft Survival
A. Background
B. Proposed Revisions to Performance Thresholds
XVI. Organ Procurement Organizations (OPOs): Changes to Definitions, Outcome Measures, and Documentation Requirements
A. Background
1. Organ Procurement Organizations (OPOs)
2. Statutory Provisions
3. HHS Initiatives Related to OPO Services
4. Requirements for OPOs
B. Proposed Provisions
1. Definition of “Eligible Death”
2. Aggregate Donor Yield for OPO Outcome Performance Measures
3. Organ Preparation and Transport-Documentation With the Organ
XVII. Transplant Enforcement Technical Corrections and Proposals
A. Technical Corrections to Transplant Enforcement Regulatory References
B. Other Proposed Revisions to § 488.61
XVIII. Proposed Changes to the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs
A. Background
B. Summary of Proposals Included in this Proposed Rule
C. Proposed Revisions to Objectives and Measures for Eligible Hospitals and CAHs
1. Removal of the Clinical Decision Support (CDS) and Computerized Provider Order Entry (CPOE) Objectives and Measures for Eligible Hospitals and CAHs
2. Reduction of Measure Thresholds for Eligible Hospitals and CAHs for 2017 and 2018
a. Proposed Changes to the Objectives and Measures for Modified Stage 2 (42 CFR 495.22) in 2017
b. Proposed Changes to the Objectives and Measures for Stage 3 (42 CFR 495.24) in 2017 and 2018
D. Proposed Revisions to the EHR Reporting Period in 2016 for EPs, Eligible Hospitals and CAHs
1. Definition of “EHR Reporting Period” and “EHR Reporting Period for a Payment Adjustment Year”
2. Clinical Quality Measurement
E. Proposal to Require Modified Stage 2 for New Participants in 2017
F. Proposed Significant Hardship Exception for New Participants Transitioning to MIPS in 2017
G. Proposed Modifications To Measure Calculations for Actions Outside the EHR Reporting Period
XIX. Proposed Additional Hospital Value-Based Purchasing (VBP) Program Policies
A. Background
B. Proposed Removal of the HCAHPS Pain Management Dimension From the Hospital VBP Program
1. Background of the HCAHPS Survey in the Hospital VBP Program
2. Background of the Patient- and Caregiver-Centered Experience of Care/Care Coordination Domain Performance Scoring Methodology
3. Proposed Removal of the HCAHPS Pain Management Dimension From the Hospital VBP Program Beginning With the FY 2018 Program Year
XX. Files Available to the Public Via the Internet
XXI. Collection of Information Requirements
A. Legislative Requirements for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
D. ICRs Relating to Proposed Changes in Transplant Enforcement Performance Thresholds
E. ICRs for Proposed Changes to Organ Procurement Organizations (OPOs)
F. ICRs Relating to Proposed Changes to Medicare Electronic Health Record (EHR) Incentive Program
G. ICRs Relating to Proposed Additional Hospital VBP Program Policies
H. ICRs for Site Neutral OPPS Payments for Off-Campus Provider-Based Departments Proposals for CY 2017
XXII. Response to Comments
XXIII. 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 Proposed OPPS Changes in This Proposed Rule
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed OPPS Changes on Hospitals
(3) Estimated Effects of Proposed OPPS Changes on CMHCs
(4) Estimated Effect of Proposed OPPS Changes on Beneficiaries
(5) Estimated Effects of Proposed OPPS Changes on Other Providers
(6) Estimated Effects of Proposed OPPS Changes on the Medicare and Medicaid Programs
(7) Alternative OPPS Policies Considered
b. Estimated Effects of Proposed CY 2017 ASC Payment System Policies
(1) Limitations of Our Analysis
(2) Estimated Effects of Proposed CY 2017 ASC Payment System Policies on ASCs
(3) Estimated Effects of Proposed ASC Payment System Policies on Beneficiaries
(4) Alternative ASC Payment Policies Considered
c. Accounting Statements and Tables
d. Effects of Proposed Requirements for the Hospital OQR Program
e. Effects of Proposed Policies for the ASCQR Program
f. Effects of Proposed Changes to Transplant Performance Thresholds
g. Effects of Proposed Changes Relating to Organ Procurement Organizations (OPOs)
h. Effects of Proposed Changes Relating to Medicare Electronic Health Record (EHR) Incentive Program
i. Effects of Proposed Requirements for the Hospital VBP Program
j. Effects of Proposed Implementation of Section 603 of the Bipartisan Budget Act of 2015 Relating to Payment for Certain Items and Services Furnished by Certain Off-Campus Departments of a Provider
B. Regulatory Flexibility Act (RFA) Analysis
C. Unfunded Mandates Reform Act Analysis
D. Conclusion
XXIV. Federalism Analysis
Regulation Text
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this proposed rule, we are proposing to update the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) beginning January 1, 2017. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the payment rates for services payable under the Hospital Outpatient Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS not less often than annually, and to revise the groups, relative payment weights, and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i) of the Act, we annually review and update the ASC payment rates. We describe these and various other statutory authorities in the relevant sections of this proposed rule. In addition, this proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.
In addition, we are proposing changes to the conditions for coverage (CfCs) for organ procurement organizations (OPOs); revisions to the outcome requirements for solid organ transplant programs transplant enforcement and for transplant documentation requirements; a technical correction to enforcement provisions for organ transplant centers; modifications to the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs to reduce hospital administrative burden and to allow hospitals to focus more on patient care; and the removal of the HCAHPS Pain Management dimension from the Hospital Value-Based Purchasing (VBP) Program.
Further, we are proposing policies to implement section 603 of the Bipartisan Budget Act of 2015 relating to payment for certain items and services furnished by certain off-campus outpatient departments of a provider.
2. Summary of the Major Provisions
•
OPPS Update:
For CY 2017, we are proposing to increase the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 1.55 percent. This proposed increase factor is based on the proposed hospital inpatient market basket percentage increase of 2.8 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the proposed multifactor productivity (MFP) adjustment of 0.5 percentage point, and minus a 0.75 percentage point adjustment required by the Affordable Care Act. Based on this proposed update, we estimate that proposed total payments to OPPS providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix), for CY 2017 would be approximately $63 billion, an increase of approximately $5.1 billion compared to estimated CY 2016 OPPS payments.
We are proposing to continue 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 proposed reporting factor of 0.980 to the OPPS payments and copayments for all applicable services.
•
Rural Adjustment:
We are proposing to continue the adjustment of 7.1 percent to the OPPS payments to certain rural sole community hospitals (SCHs), including essential access community hospitals (EACHs). This proposed adjustment would 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 2017, we are proposing to continue 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 proposed target PCR of 0.92 would be used to determine the CY 2017 cancer hospital payment adjustment to be paid at cost report settlement. That is, the proposed payment adjustments would be the additional payments needed to result in a PCR equal to 0.92 for each cancer hospital.
•
Comprehensive APCs:
For CY 2017, we are not proposing extensive changes to the already established methodology
used for C-APCs. However, we are proposing to create 25 new C-APCs that meet the previously established criteria, which, when combined with the existing 37 C-APCs, would bring the total number to 62 C-APCs as of January 1, 2017.
•
Chronic Care Management (CCM):
For CY 2017, we are proposing some minor changes to certain CCM scope of service elements. Refer to the CY 2017 MPFS proposed rule for a detailed discussion of these changes to the scope of service elements for CCM. We are proposing that these changes will also apply to CCM furnished to hospital outpatients.
•
Device-Intensive Procedures:
For CY 2017, we are proposing that the payment rate for any device-intensive procedure that is assigned to an APC with fewer than 100 total claims for all procedures in the APC be based on the median cost instead of the geometric mean cost. We believe that this approach will mitigate significant year-to-year payment rate fluctuations while preserving accurate claims-data-based payment rates for low volume device-intensive procedures. In addition, we are proposing to revise the device intensive calculation methodology and calculate the device offset amount at the HCPCS code level rather than at the APC level to ensure that device intensive status is properly assigned to all device-intensive procedures.
•
Outpatient Laboratory Tests:
For CY 2017, we are proposing to discontinue the use of the “L1” modifier to identify unrelated laboratory tests on claims. In addition, we are proposing to expand the laboratory packaging exclusion that currently applies to Molecular Pathology tests to all laboratory tests designated as advanced diagnostic laboratory tests (ADLTs) that meet the criteria of section 1834A(d)(5)(A) of the Act.
•
Packaging Policies:
The OPPS currently packages many categories of items and services that are typically provided as part of the outpatient hospital service (for example, operating and recovery room, anesthesia, among others). Packaging encourages hospital efficiency, flexibility, and long-term cost containment, and it also promotes the stability of payment for services over time. In CY 2014 and 2015, we added several new categories of packaged items and services. Among these were laboratory tests, ancillary services, services described by add-on codes, and drugs used in a diagnostic test or surgical procedure. For CY 2017, we are proposing to align the packaging logic for all of the conditional packaging status indicators so that packaging would occur at the claim level (instead of based on the date of service) to promote consistency and ensure that items and services that are provided during a hospital stay that may span more than one day are appropriately packaged according to OPPS packaging policies.
•
Payment Modifier for X-ray Films:
Section 502(b) of Division O, Title V of the Consolidated Appropriations Act, 2016 (Pub. L. 114-113) amended section 1833(t)(16) of the Act by adding new subparagraph (F). New section 1833(t)(16)(F)(i) of the Act provides that, effective for services furnished during 2017 or any subsequent year, the payment under the OPPS for imaging services that are X-rays taken using film (including the X-ray component of a packaged service) that would otherwise be made under the OPPS (without application of this paragraph and before application of any other adjustment) shall be reduced by 20 percent. We are proposing that, effective for services furnished on or after January 1, 2017, hospitals would be required to use a modifier on claims for X-rays that are taken using film. The use of this proposed modifier would result in a 20-percent payment reduction for the X-ray service, as specified under section 1833(t)(16)(F)(i) of the Act, of the determined OPPS payment amount (without application of paragraph (F) and before any other adjustments under section 1833(t)).
•
Payment for Certain Items and Services Furnished by Certain Off-Campus Departments of a Provider:
We are proposing to implement section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74). This provision requires that certain items and services furnished in certain off-campus provider-based departments (PBDs) (collectively referenced as nonexcepted items and services) shall not be considered covered OPD services for purposes of OPPS payment and those items and services will instead be paid “under the applicable payment system” beginning January 1, 2017. We are making several proposals relating to which off-campus PBDs and which items and services furnished by such off-campus PBDs may be exempt from application of payment changes under this provision.
In addition, we are proposing that the Medicare Physician Fee Schedule (MPFS) will be the “applicable payment system” for the majority of the items and services furnished by nonexcepted off-campus PBDs. We are proposing that physicians furnishing services in these departments would be paid based on the professional claim and would be paid at the nonfacility rate for services which they are permitted to bill. We are proposing to pay physicians at the nonfacility rate because we are not able to operationalize a mechanism to provide payment to the off-campus PBD for nonexcepted items and services under a payment system other than the OPPS at this time. We are clarifying that, for CY 2017, provided an off-campus PBD can meet all Federal and other requirements, a hospital also has the option of enrolling the off-campus PBD as the provider/supplier it wishes to bill as in order to meet the requirements of that payment system (such as an ASC or a group practice to be paid under the MPFS, in which case the physician would be paid at the facility rate). We intend that this payment proposal would be a transitional policy, applicable in CY 2017 only, while we continue to explore operational changes that would allow a nonexcepted off-campus PBD to bill Medicare under an applicable payment system, which, in the majority of cases, we expect will be the MPFS.
•
Ambulatory Surgical Center Payment Update:
For CY 2017, we are proposing to increase payment rates under the ASC payment system by 1.2 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This proposed increase is based on a projected CPI-U update of 1.7 percent minus a multifactor productivity adjustment required by the Affordable Care Act of 0.5 percentage point. Based on this proposed update, we estimate that proposed total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix), for CY 2017 would be approximately $4.42 billion, an increase of approximately $214 million compared to estimated CY 2016 Medicare payments.
•
Hospital Outpatient Quality Reporting (OQR) Program:
For the Hospital OQR Program, we are making proposals for the CY 2018 payment determination, the CY 2019 payment determination and the CY 2020 payment determination and subsequent years. For the CY 2018 payment determination and subsequent years, we are proposing to publicly display data on the Hospital Compare Web site, or other CMS Web site, as soon as possible after measure data have been submitted to CMS. In addition, we are proposing that hospitals will generally have approximately 30 days to preview their data. We are also proposing to announce the timeframes for the preview period on a CMS Web site and/or on our applicable listservs. For the CY 2019
payment determination and subsequent years, we are proposing to change the timeframe for extraordinary circumstances exemptions (ECE) from 45 days to 90 days from the date that the extraordinary circumstance occurred. For the CY 2020 payment determination and subsequent years, we are proposing to adopt a total of seven measures: Two claims-based measures and five Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures. The two proposed claims-based measures are: (1) OP-35: Admissions and Emergency Department Visits for Patients Receiving Outpatient Chemotherapy and (2) OP-36: Hospital Visits after Hospital Outpatient Surgery (NQF #2687). The five proposed survey-based measures are: (1) OP-37a: OAS CAHPS—About Facilities and Staff; (2) OP-37b: OAS CAHPS—Communication About Procedure; (3) OP-37c: OAS CAHPS—Preparation for Discharge and Recovery; (4) OP-37d: OAS CAHPS—Overall Rating of Facility; and (5) OP-37e: OAS CAHPS—Recommendation of Facility.
•
Ambulatory Surgical Center Quality Reporting (ASCQR) Program:
For the ASCQR Program, we are making proposals for the CY 2018 payment determination, 2019 payment determination and CY 2020 payment determination and subsequent years. For the CY 2018 payment determination and subsequent years, we are proposing to publicly display data on the Hospital Compare Web site, or other CMS Web site, as soon as possible after measure data have been submitted to CMS. In addition, we are proposing that ASCs will generally have approximately 30 days to preview their data. We are also proposing to announce the timeframes for the preview period on a CMS Web site and/or on our applicable listservs. For the CY 2019 payment determination and subsequent years, we are proposing to change the submission deadline from August 15 in the year prior to the affected payment determination year to May 15 for all data submitted via a CMS Web-based tool. We also are proposing to extend the submission deadline for Extraordinary Circumstance Extensions and Exemptions requests. For the CY 2020 payment determination and subsequent years, we are proposing to adopt a total of seven measures: Two measures collected via a CMS Web-based tool and five Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures. The two proposed measures that require data to be submitted directly to CMS via a CMS Web-based tool are: (1) ASC-13: Normothermia Outcome and (2) ASC-14: Unplanned Anterior Vitrectomy. The five proposed survey-based measures are: (1) ASC-15a: OAS CAHPS—About Facilities and Staff; (2) ASC-15b: OAS CAHPS—Communication About Procedure; (3) ASC-15c: OAS CAHPS—Preparation for Discharge and Recovery; (4) ASC-15d: OAS CAHPS—Overall Rating of Facility; and (5) ASC-15e: OAS CAHPS—Recommendation of Facility.
•
Hospital Value-Based Purchasing (VBP) Program Update:
Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year. In this proposed rule, we are proposing to remove the HCAHPS Pain Management dimension of the Hospital VBP Program, beginning with the FY 2018 program year.
•
Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs:
In this proposed rule, we are proposing changes to the objectives and measures of meaningful use for Modified Stage 2 and Stage 3 starting with the EHR reporting periods in calendar year 2017. Under both Modified Stage 2 in 2017 and Stage 3 in 2017 and 2018, for eligible hospitals and CAHs attesting under the Medicare EHR Incentive Program, we are proposing to eliminate the Clinical Decision Support (CDS) and Computerized Provider Order Entry (CPOE) objectives and measures, and lower the reporting thresholds for a subset of the remaining objectives and measures, generally to the Modified Stage 2 thresholds. The proposal to reduce measure thresholds is intended to respond to input we have received from hospitals, hospital associations, health systems, and vendors expressing concerns about the established measures. The proposed requirements focus on reducing hospital administrative burden, allowing eligible hospitals and CAHs attesting under the Medicare EHR Incentive Program to focus more on providing quality patient care, as well as focus on updating and optimizing CEHRT functionalities to sufficiently meet the requirements of the EHR Incentive Program and prepare for Stage 3 of meaningful use.
In addition, we are proposing changes to the EHR reporting period in calendar year 2016 for eligible professionals, eligible hospitals, and CAHs; reporting requirements for eligible professionals, eligible hospitals, and CAHs that are new participants in 2017; and the policy on measure calculations for actions outside the EHR reporting period. Finally, we are proposing a one-time significant hardship exception from the 2018 payment adjustment for certain eligible professionals who are new participants in the EHR Incentive Program in 2017 and are transitioning to the Merit-Based Incentive Payment System in 2017. We believe these proposals are responsive to additional stakeholder feedback received through both correspondence and in-person meetings and would result in continued advancement of certified EHR technology utilization, particularly among those eligible professionals, eligible hospitals and CAHs that have not previously achieved meaningful use, and result in a program more focused on supporting interoperability and data sharing for all participants under the Medicare and Medicaid EHR Incentive Programs.
•
Transplant Performance Thresholds.
With respect to solid organ transplant programs, we are proposing to restore the effective tolerance range for clinical outcomes that was allowed in our original 2007 rule. These outcomes requirements in the Medicare Conditions of Participation (CoPs) have been affected by the nationwide improvement in transplant outcomes, making it now more difficult for transplant programs to maintain compliance with, in effect, increasingly stringent Medicare standards for patient and graft survival.
•
Organ Procurement Organizations (OPOs) Changes.
In this proposed rule, we are proposing to: Change the current “eligible death” definition to be consistent with the OPTN definition; modify CMS current outcome measures to be consistent with yield calculations currently utilized by the SRTR; and modify current requirements for documentation of donor information which is sent to the transplant center along with the organ.
3. Summary of Costs and Benefits
In sections XXIII. and XXIV. of this proposed rule, we set forth a detailed analysis of the regulatory and Federalism impacts that the proposed changes would have on affected entities and beneficiaries. Key estimated impacts are described below.
a. Impacts of the Proposed OPPS Update
(1) Impacts of All OPPS Proposed Changes
Table 30 in section XXIII. of this proposed rule displays the distributional impact of all the proposed OPPS changes on various groups of hospitals and CMHCs for CY 2017
compared to all estimated OPPS payments in CY 2016. We estimate that the proposed policies in this proposed rule would result in a 1.6 percent overall increase in OPPS payments to providers. We estimate that proposed total OPPS payments for CY 2017, including beneficiary cost-sharing, to the approximate 3,900 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) would increase by approximately $671 million compared to CY 2016 payments, excluding our estimated changes in enrollment, utilization, and case-mix.
We estimated the isolated impact of our proposed 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 an 8.4 percent decrease in CY 2017 payments to CMHCs relative to their CY 2016 payments.
(2) Impacts of the Proposed Updated Wage Indexes
We estimate that our proposed update of the wage indexes based on the FY 2017 IPPS proposed rule wage indexes results in no change for urban hospitals and a 0.3 percent increase for rural hospitals under the OPPS. These wage indexes include the continued implementation of the OMB labor market area delineations based on 2010 Decennial Census data.
(3) Impacts of the Proposed Rural Adjustment and the Cancer Hospital Payment Adjustment
There are no significant impacts of our proposed CY 2017 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not proposing to make 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 Proposed OPD Fee Schedule Increase Factor
We estimate that, for most hospitals, the application of the proposed OPD fee schedule increase factor of 1.6 percent to the conversion factor for CY 2017 would mitigate the impacts of the budget neutrality adjustments. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that rural and urban hospitals would experience increases of approximately 1.6 percent for urban hospitals and 2.3 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 Proposed 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 proposed percentage change in estimated total payments by specialty groups under the proposed CY 2017 payment rates compared to estimated CY 2016 payment rates ranges between 6 percent for musculoskeletal system procedures and −2 percent for integumentary system procedures.
c. Impacts of the Hospital OQR Program
We do not expect our proposed CY 2017 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 proposed CY 2017 policies to significantly affect the number of ASCs that do not receive a full annual payment update.
e. Impacts for Proposed Implementation of Section 603 of the Bipartisan Budget Act of 2015
We estimate that implementation of section 603 will reduce net OPPS payments by $500 million in CY 2017, relative to a baseline where section 603 was not implemented in CY 2017. We estimate that section 603 would increase payments to physicians under the MPFS by $170 million in CY 2017, resulting in a net Medicare Part B impact from the provision of reducing CY 2017 Part B expenditures by $330 million. These estimates include both the FFS impact of the provision and the Medicare Advantage impact of the provision. These estimates also reflect that the reduced spending from implementation of section 603 results in a lower Part B premium; the reduced Part B spending is slightly offset by lower aggregate Part B premium collections.
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; the American Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 2015; and the Consolidated
Appropriations Act, 2016 (Pub. L. 114-113), enacted on December 18, 2015.
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 proposed rule. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B.
The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage 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 in Maryland and paid under the Maryland All-Payer Model; hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico; and Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the
Federal Register
a final rule with comment period (65 FR 18434) to implement a prospective payment system for hospital outpatient services. The hospital OPPS was first implemented for services furnished on or after August 1, 2000. Section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS, not less often than annually, and to revise the groups, relative payment weights, and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors.
Since initially implementing the OPPS, we have published final rules in the
Federal Register
annually to implement statutory requirements and changes arising from our continuing experience with this system. These rules can be viewed on the CMS Web site at:
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, and at that time named the APC Panel. This expert panel is composed of appropriate representatives
of providers (currently employed full-time, not as consultants, in their respective areas of expertise), reviews clinical data, and advises CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that: The Panel 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 Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add Critical Access Hospital (CAH) representation to its membership. The current charter was renewed on November 6, 2014 (80 FR 23009) and the number of panel members was revised from up to 19 to up to 15 members.
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/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html
.
3. Panel Meetings and Organizational Structure
The Panel has held multiple meetings, with the last meeting taking place on March 14, 2016. Prior to each meeting, we publish a notice in the
Federal Register
to announce the meeting and, when necessary, to solicit nominations for Panel membership, to announce new members and to announce any other changes that the public should be aware of. Beginning in CY 2017, we will transition to one meeting per year, which will be scheduled in the summer (81 FR 31941).
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 status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid; and the appropriate APC assignment 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 March 14, 2016 meeting that the subcommittees continue. We accepted this recommendation.
Discussions of the other recommendations made by the Panel at the March 14, 2016 Panel meeting are included in the sections of this proposed rule that are specific to each recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS Web site mentioned earlier in this section, and the FACA database at:
http://facadatabase.gov/
.
F. Public Comments Received on the CY 2016 OPPS/ASC Final Rule With Comment Period
We received 25 timely pieces of correspondence on the CY 2016 OPPS/ASC final rule with comment period that appeared in the
Federal Register
on November 13, 2015 (80 FR 70298), some of which contained comments on the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes (identified with comment indicator “NI” in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule). Summaries of the public comments on new or replacement Level II HCPCS codes will be set forth in the CY 2017 final rule with comment period under the appropriate subject matter headings.
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for APCs. In the April 7, 2000 OPPS final rule with comment period (65 FR 18482), we explained in detail how we calculated the relative payment weights that were implemented on August 1, 2000 for each APC group.
For CY 2017, we are proposing to recalibrate the APC relative payment weights for services furnished on or after January 1, 2017, and before January 1, 2018 (CY 2017), using the same basic methodology that we described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70309 through 70321). That is, we are proposing 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. For this proposed rule, for the purpose of recalibrating the proposed APC relative payment weights for CY 2017, we used approximately 163 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2015, and before January 1, 2016. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for this CY 2017 OPPS/ASC proposed rule on the CMS Web site at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html
.
Addendum N to this proposed rule includes the proposed list of bypass codes for CY 2017. The proposed list of bypass codes contains codes that were reported on claims for services in CY 2015 and, therefore, includes codes that were in effect in CY 2015 and used for billing but were deleted for CY 2016. We are retaining these deleted bypass codes on the proposed CY 2017 bypass list because these codes existed in CY 2015 and were covered OPD services in that period, and CY 2015 claims data are used to calculate CY 2017 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo”
single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the proposed multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to this proposed rule. HCPCS codes that we are proposing to add for CY 2017 are identified by asterisks (*) in the fourth column of Addendum N.
We are proposing a CY 2017 bypass list of 194 HCPCS codes, as displayed in Addendum N to this proposed rule (which is available via the Internet on the CMS Web site). Table 1 below contains the list of codes that we are proposing to remove from the CY 2017 bypass list.
Table 1—HCPCS Codes Proposed to be removed from the CY 2017 Bypass List
HCPCS Code
HCPCS short descriptor
95925
Somatosensory testing.
95808
Polysom any age 1-3> param.
90845
Psychoanalysis.
96151
Assess hlth/behave subseq.
31505
Diagnostic laryngoscopy.
95872
Muscle test one fiber.
b. Proposed Calculation and Use of Cost-To-Charge Ratios (CCRs)
For CY 2017, we are proposing 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 2017 APC payment rates are based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2015 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2014. For the proposed CY 2017 OPPS payment rates, we used the set of claims processed during CY 2015. 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 2015 (the year of claims data we used to calculate the proposed CY 2017 OPPS payment rates) and found that the National Uniform Billing Committee (NUBC) did not add any new revenue codes to the NUBC 2015 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.b.(1) of this proposed rule.
2. Proposed Data Development Process and Calculation of Costs Used for Ratesetting
In this section of this proposed rule, we discuss the use of claims to calculate the proposed OPPS payment rates for CY 2017. The Hospital OPPS page on the CMS Web site on which this proposed rule 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 proposed 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 2015 claims that were used to calculate the proposed payment rates for the CY 2017 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 2017, we are proposing to continue to use geometric mean costs to calculate the relative weights on which the proposed CY 2017 OPPS payment rates are based.
We used the methodology described in sections II.A.2.a. through II.A.2.d. of this proposed rule to calculate the costs we used to establish the proposed relative payment weights used in calculating the proposed OPPS payment rates for CY 2017 shown in Addenda A and B to this proposed rule (which are available via the Internet on the CMS Web site). We refer readers to section II.A.4. of this proposed rule for a discussion of the conversion of APC costs to scaled payment weights.
For details of the claims process used in this proposed rule, we refer readers to the claims accounting narrative under supporting documentation for this CY 2017 OPPS/ASC proposed rule on the CMS Web site at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html
.
a. Recommendations of the Advisory Panel on Hospital Outpatient Payment (the Panel) Regarding Data Development
At the March 14, 2016 meeting of the Panel, we discussed our standard analysis of APCs, specifically those APCs for which geometric mean costs in the CY 2015 claims data through September 2015 varied significantly from the CY 2014 claims data used for the CY 2016 OPPS/ASC final rule with comment period. At the March 14, 2016 Panel meeting, the Panel made three recommendations related to the data process. The Panel's data-related recommendations and our responses follow.
Recommendation:
The Panel recommends that CMS provide the data subcommittee a list of APCs fluctuating significantly in costs prior to each HOP Panel meeting.
CMS Response:
We are accepting this recommendation.
Recommendation:
The Panel recommends that the work of the data subcommittee continue.
CMS Response:
We are accepting this recommendation.
Recommendation:
The Panel recommends that Michael Schroyer continue serving as subcommittee Chair for the August 2016 HOP Panel.
CMS Response:
We are accepting this recommendation.
b. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(a) Methodology
Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered. Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs.
For CY 2017, we are proposing to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. This methodology has been our standard ratesetting methodology for blood and blood products since CY 2005. It was developed in response to data analysis indicating that there was a significant difference in CCRs for those hospitals with and without blood-specific cost centers, and past public comments indicating that the former OPPS policy of defaulting to the overall hospital CCR for hospitals not reporting a blood-specific cost center often resulted in an underestimation of the true hospital costs for blood and blood products. Specifically, in order to address the differences in CCRs and to better reflect hospitals' costs, we are proposing to continue to simulate blood CCRs for each hospital that does not report a blood cost center by calculating the ratio of the blood-specific CCRs to hospitals' overall CCRs for those hospitals that do report costs and charges for blood cost centers. We also are proposing to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports in order to simulate blood-specific CCRs for those hospitals. We are proposing to calculate the costs upon which the proposed CY 2017 payment rates for blood and blood products are based using the actual blood-specific CCR for hospitals that reported costs and charges for a blood cost center and a hospital-specific, simulated blood-specific CCR for hospitals that did not report costs and charges for a blood cost center.
We continue to believe that the hospital-specific, simulated blood-specific CCR methodology better responds to the absence of a blood-specific CCR for a hospital than alternative methodologies, such as defaulting to the overall hospital CCR or applying an average blood-specific CCR across hospitals. Because this methodology takes into account the unique charging and cost accounting structure of each hospital, we believe that it yields more accurate estimated costs for these products. We continue to believe that this methodology in CY 2017 would result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general.
We note that, as discussed in section II.A.2.e. of the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66798 through 66810), and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70325 through 70339), we defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Under this policy, we include the costs of blood and blood products when calculating the overall costs of these C-APCs. We are proposing to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products will be reflected in the overall costs of the C-APCs (and, as a result, in the proposed payment rates of the C-APCs), we are proposing to not make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)).
We are inviting public comments on these proposals. We refer readers to Addendum B to this proposed rule (which is available via the Internet on the CMS Web site) for the proposed CY 2017 payment rates for blood and blood products (which are identified with status indicator “R”). For a more detailed discussion of the blood-specific CCR methodology, we refer readers to the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full history of OPPS payment for blood and blood products, we refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810).
(b) Solicitation of Public Comments
As discussed in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323), we are in the process of examining the current set of HCPCS P-codes for blood products, which became effective many years ago. Because these HCPCS P-codes were created many years ago, we are considering whether this code set could benefit from some code descriptor revisions, updating, and/or consolidation to make these codes properly reflect current product descriptions and utilization while minimizing redundancy and potentially outdated descriptors. We are requesting public comments regarding the adequacy and necessity (in terms of the existing granularity) of the current descriptors for the HCPCS P-codes describing blood products. Specifically, there are three main categories of blood products: Red blood cells; platelets; and plasma. In each of these categories, there are terms that describe various treatments or preparations of the blood products, with each, in several cases, represented individually and in combination. For example, for pheresis platelets, there are codes for “leukocyte reduced,” “irradiated,” “leukocyte reduced + irradiated,” “leukocyte reduced + irradiated + CMV-negative,” among others. We are asking the blood product stakeholder community whether the current blood product HCPCS P-code descriptors with the associated granularity best describe the state of the current technology for blood products that hospitals currently provide to hospital outpatients. In several cases, the hospital costs as calculated from the CMS claims data are similar for blood products of the same type (for example, pheresis platelets) that have different code descriptors, which indicates to us that there is not a significant difference in the resources needed to produce the similar products. Again, we are inviting public comments on the current set of active HCPCS P-codes that describe blood products regarding how the code descriptors could be revised and updated (if necessary) to reflect the current blood products provided to hospital outpatients. The current set of active HCPCS P-codes that describe blood
products can be found in Addendum B to this proposed rule (which is available via the Internet on the CMS Web site).
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of additional groups of covered OPD services that classify devices of brachytherapy consisting of a seed or seeds (or radioactive source) (“brachytherapy sources”) separately from other services or groups of services. The statute provides certain criteria for the additional groups. For the history of OPPS payment for brachytherapy sources, we refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC final rule with comment period (77 FR 68240 through 68241). As we have stated in prior OPPS updates, we believe that adopting the general OPPS prospective payment methodology for brachytherapy sources is appropriate for a number of reasons (77 FR 68240). The general OPPS methodology uses costs based on claims data to set the relative payment weights for hospital outpatient services. This payment methodology results in more consistent, predictable, and equitable payment amounts per source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed to payment based on hospitals' charges adjusted to cost, also would provide hospitals with incentives for efficiency in the provision of brachytherapy services to Medicare beneficiaries. Moreover, this approach is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 through 70325) for further discussion of the history of OPPS payment for brachytherapy sources.
In this proposed rule, for CY 2017, we are proposing to use the costs derived from CY 2015 claims data to set the proposed CY 2017 payment rates for brachytherapy sources because CY 2015 is the same year of data we are proposing to use to set the proposed payment rates for most other items and services that would be paid under the CY 2017 OPPS. We are proposing to base the proposed payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we are proposing for other items and services paid under the OPPS, as discussed in section II.A.2. of this proposed rule. We also are proposing to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We are proposing to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 and C2699, at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per source basis (as opposed to, for example, a per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). For CY 2017 and subsequent years, we also are proposing to continue the policy we first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding payment for new brachytherapy sources for which we have no claims data, based on the same reasons we discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66786; which was delayed until January 1, 2010 by section 142 of Public Law 110-275). Specifically, this policy is intended to enable us to assign new HCPCS codes for new brachytherapy sources to their own APCs, with prospective payment rates set based on our consideration of external data and other relevant information regarding the expected costs of the sources to hospitals.
The proposed CY 2017 payment rates for brachytherapy sources are included in Addendum B to this proposed rule (which is available via the Internet on the CMS Web site) and are identified with status indicator “U”. We note that, for CY 2017, we are proposing to assign new proposed status indicator “E2” (Items and Services for Which Pricing Information and Claims Data Are Not Available) to HCPCS code C2644 (Brachytherapy cesium-131 chloride) because this code was not reported on CY 2015 claims. Therefore, we are unable to calculate a proposed payment rate based on the general OPPS ratesetting methodology described earlier. Although HCPCS code C2644 became effective July 1, 2014, and although we would expect that if a hospital furnished a brachytherapy source described by this code in CY 2015, HCPCS code C2644 should appear on the CY 2015 claims, there are no CY 2015 claims reporting this code. In addition, unlike new brachytherapy sources HCPCS codes, we will not consider external data to determine a proposed payment rate for HCPCS code C2644 for CY 2017. Therefore, we are proposing to assign new proposed status indicator “E2” to HCPCS code C2644.
We are inviting public comments on this proposed policy. We also are requesting recommendations for new HCPCS codes to describe new brachytherapy sources consisting of a radioactive isotope, including a detailed rationale to support recommended new sources.
We continue to invite hospitals and other parties to submit recommendations to us for new codes to describe new brachytherapy sources. Such recommendations should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis.
c. Proposed Comprehensive APCs (C-APCs) for CY 2017
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. The policy was finalized in CY 2014, but the effective date was delayed until January 1, 2015, to allow additional time for further analysis, opportunity for public comment, and systems preparation. The comprehensive APC (C-APC) policy was implemented effective January 1, 2015, with modifications and clarifications in response to public comments received regarding specific provisions of the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established C-APCs as a category broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70332), we finalized 10 additional C-APCs to be paid under the existing C-APC payment policy.
Under this policy, we designated a service described by a HCPCS code assigned to a C-APC as the primary service when the service is identified by OPPS status indicator “J1”. When such a primary service is reported on a hospital outpatient claim, taking into consideration the few exceptions that are discussed below, we make payment for all other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services. This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level.
Services excluded from the C-APC policy include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act; pass-through drugs and devices, which also require separate payment under section 1833(t)(6) of the Act; self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act; and certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to this proposed rule (which is available via the Internet on the CMS Web site).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/ASC final rule with comment period for the C-APCs and modified and implemented beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR 66800):
Basic Methodology.
As stated in the CY 2015 OPPS/ASC final rule with comment period, we define the C-APC payment policy as including all covered OPD services on a hospital outpatient claim reporting a primary service that is assigned to status indicator “J1,” excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS. Services and procedures described by HCPCS codes assigned to status indicator “J1” are assigned to C-APCs based on our usual APC assignment methodology by evaluating the geometric mean costs of the primary service claims to establish resource similarity and the clinical characteristics of each procedure to establish clinical similarity within each APC. In the CY 2016 OPPS/ASC final rule with comment period, we expanded the C-APC payment methodology with the establishment of status indicator “J2”. The assignment of status indicator “J2” to a specific combination of services performed in combination with each other, as opposed to a single, primary service, allows for all other OPPS payable services and items reported on the claim (excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS) to be deemed adjunctive services representing components of a comprehensive service and resulting in a single prospective payment for the comprehensive service based on the costs of all reported services on the claim (80 FR 70333 through 70336).
Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service (78 FR 74865 and 79 FR 66800).
In addition, payment for outpatient department services that are similar to therapy services and delivered either by therapists or nontherapists is included as part of the payment for the packaged complete comprehensive service. These services that are provided during the perioperative period are adjunctive services and are deemed to be not therapy services as described in section 1834(k) of the Act, regardless of whether the services are delivered by therapists or other nontherapist health care workers. We have previously noted that therapy services are those provided by therapists under a plan of care in accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid for under section 1834(k) of the Act, subject to annual therapy caps as applicable (78 FR 74867 and 79 FR 66800). However, certain other services similar to therapy services are considered and paid for as outpatient department services. Payment for these nontherapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are outpatient department services and not therapy services. Therefore, the requirement for functional reporting under the regulations at 42 CFR 410.59(a)(4) and 42 CFR 410.60(a)(4) does not apply. We refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 3523) for further instructions on reporting these services in the context of a C-APC service.
Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of a single primary service assigned to status indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801). We sum all line item charges for services included on the C-APC claim, convert the charges to costs, and calculate the comprehensive geometric mean cost of one unit of each service assigned to status indicator “J1.” (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all of the items and services included in the C-APC service payment bundle.) Charges for services that would otherwise be separately payable are added to the charges for the primary service. This process differs from our traditional cost accounting methodology only in that all such services on the claim are packaged (except certain services as described above). We apply our standard data trims, excluding claims with extremely high primary units or extreme costs.
The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to their comprehensive geometric mean costs. For the minority of claims
reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services reported on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity.
Complexity Adjustments.
We use complexity adjustments to provide increased payment for certain comprehensive services. We apply a complexity adjustment by promoting qualifying “J1” service code combinations or code combinations of “J1” services and certain add-on codes (as described further below) from the originating C-APC (the C-APC to which the designated primary service is first assigned) to the next higher paying C-APC in the same clinical family of C-APCs. We implement this type of complexity adjustment when the code combination represents a complex, costly form or version of the primary service according to the following criteria:
• Frequency of 25 or more claims reporting the code combination (frequency threshold); and
• Violation of the 2 times rule in the originating C-APC (cost threshold).
After designating a single primary service for a claim, we evaluate that service in combination with each of the other procedure codes reported on the claim assigned to status indicator “J1” (or certain add-on codes) to determine if they meet the complexity adjustment criteria. For new HCPCS codes, we determine initial C-APC assignments and complexity adjustments using the best available information, crosswalking the new HCPCS codes to predecessor codes when appropriate.
Once we have determined that a particular code combination of “J1” services (or combinations of “J1” services reported in conjunction with certain add-on codes) represents a complex version of the primary service because it is sufficiently costly, frequent, and a subset of the primary comprehensive service overall according to the criteria described above, we promote the complex version of the primary service as described by the code combination to the next higher cost C-APC within the clinical family unless the primary service is already assigned to the highest cost APC within the C-APC clinical family or assigned to the only C-APC in a clinical family. We do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. Therefore, the highest payment for any code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802).
We package payment for all add-on codes into the payment for the C-APC. However, certain primary service-add-on combinations may qualify for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70331), all add-on codes that can be appropriately reported in combination with a base code that describes a primary “J1”service are evaluated for a complexity adjustment.
To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2017, we are proposing to apply the frequency and cost criteria thresholds discussed above, testing claims reporting one unit of a single primary service assigned to status indicator “J1” and any number of units of a single add-on code. If the frequency and cost criteria thresholds for a complexity adjustment are met, and reassignment to the next higher cost APC in the clinical family is appropriate, we make a complexity adjustment for the code combination; that is, we reassign the primary service code reported in conjunction with the add-on code combination to a higher cost C-APC within the same clinical family of C-APCs. If any add-on code combination reported in conjunction with the primary service code does not qualify for a complexity adjustment, payment for these services is packaged within the payment for the complete comprehensive service. We list the complexity adjustments proposed for add-on code combinations for CY 2017, along with all of the other proposed complexity adjustments, in Addendum J to this proposed rule (which is available via the Internet on the CMS Web site). For CY 2017, we are proposing to discontinue the requirement that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described earlier) also not create a 2 times rule violation in the higher level or receiving APC (80 FR 70328). We believe that this requirement is not useful because most code combinations fall below our established frequency threshold for considering 2 times rule violations, which is described in section III.B. of this proposed rule. Therefore, because the 2 times rule would not typically apply to complexity-adjusted code combinations, we are proposing to discontinue this requirement.
We are providing in Addendum J to this proposed rule a breakdown of cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to this proposed rule also contains summary cost statistics for each of the code combinations that describe a complex code combination that would qualify for a complexity adjustment and are proposed to be reassigned to the next higher cost C-APC within the clinical family. The combined statistics for all proposed reassigned complex code combinations are represented by an alphanumeric code with the first 4 digits of the designated primary service followed by a letter. For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all code combinations that are proposed to be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to this proposed rule allows stakeholders the opportunity to better assess the impact associated with the proposed reassignment of each of the code combinations eligible for a complexity adjustment.
(2) Proposed C-APCs for CY 2017
(a) Proposed Additional C-APCs for CY 2017
For CY 2017 and subsequent years, we are proposing to continue to apply the C-APC payment policy methodology made effective in CY 2015, as described in detail below. We are proposing to continue to define the services assigned to C-APCs as primary services or a specific combination of services performed in combination with each other. We also are proposing to
define a C-APC as a classification for the provision of a primary service or specific combination of services and all adjunctive services and supplies provided to support the delivery of the primary or specific combination of services. We also are proposing to continue to follow the C-APC payment policy methodology of packaging all covered OPD services on a hospital outpatient claim reporting a primary service that is assigned to status indicator “J1” or reporting the specific combination of services assigned to status indicator “J2,” excluding services that are not covered OPD services or that cannot by statute be paid under the OPPS.
As a result of our annual review of the services and APC assignments under the OPPS, we are proposing 25 additional C-APCs to be paid under the existing C-APC payment policy beginning in CY 2017. The proposed CY 2017 C-APCs are listed in Table 2 below. All C-APCs, including those effective in CY 2016 and those being proposed for CY 2017, also are displayed in Addendum J to this proposed rule. Addendum J to this proposed rule (which is available via the Internet on the CMS Web site) also contains all of the data related to the C-APC payment policy methodology, including the list of proposed complexity adjustments and other information.
Table 2—Proposed CY 2017 C-APCs
C-APC
CY 2017 APC title
Clinical family
Proposed new
C-APC
5072
Level 2 Excision/Biopsy/Incision and Drainage
EBIDX
(*)
5073
Level 3 Excision/Biopsy/Incision and Drainage
EBIDX
(*)
5091
Level 1 Breast/Lymphatic Surgery and Related Procedures
BREAS
(*)
5092
Level 2 Breast/Lymphatic Surgery and Related Procedures
BREAS
(*)
5093
Level 3 Breast/Lymphatic Surgery & Related Procedures
BREAS
5094
Level 4 Breast/Lymphatic Surgery & Related Procedures
BREAS
5112
Level 2 Musculoskeletal Procedures
ORTHO
(*)
5113
Level 3 Musculoskeletal Procedures
ORTHO
(*)
5114
Level 4 Musculoskeletal Procedures
ORTHO
5115
Level 5 Musculoskeletal Procedures
ORTHO
5116
Level 6 Musculoskeletal Procedures
ORTHO
5153
Level 3 Airway Endoscopy
AENDO
(*)
5154
Level 4 Airway Endoscopy
AENDO
(*)
5155
Level 5 Airway Endoscopy
AENDO
(*)
5164
Level 4 ENT Procedures
ENTXX
(*)
5165
Level 5 ENT Procedures
ENTXX
5166
Cochlear Implant Procedure
COCHL
5191
Level 1 Endovascular Procedures
VASCX
(*)
5192
Level 2 Endovascular Procedures
VASCX
5193
Level 3 Endovascular Procedures
VASCX
5194
Level 4 Endovascular Procedures
VASCX
5200
Implantation Wireless PA Pressure Monitor
WPMXX
(*)
5211
Level 1 Electrophysiologic Procedures
EPHYS
5212
Level 2 Electrophysiologic Procedures
EPHYS
5213
Level 3 Electrophysiologic Procedures
EPHYS
5222
Level 2 Pacemaker and Similar Procedures
AICDP
5223
Level 3 Pacemaker and Similar Procedures
AICDP
5224
Level 4 Pacemaker and Similar Procedures
AICDP
5231
Level 1 ICD and Similar Procedures
AICDP
5232
Level 2 ICD and Similar Procedures
AICDP
5244
Level 4 Blood Product Exchange and Related Services
SCTXX
(*)
5302
Level 2 Upper GI Procedures
GIXXX
(*)
5303
Level 3 Upper GI Procedures
GIXXX
(*)
5313
Level 3 Lower GI Procedures
GIXXX
(*)
5331
Complex GI Procedures
GIXXX
5341
Abdominal/Peritoneal/Biliary and Related Procedures
GIXXX
(*)
5361
Level 1 Laparoscopy & Related Services
LAPXX
5362
Level 2 Laparoscopy & Related Services
LAPXX
5373
Level 3 Urology & Related Services
UROXX
(*)
5374
Level 4 Urology & Related Services
UROXX
(*)
5375
Level 5 Urology & Related Services
UROXX
5376
Level 6 Urology & Related Services
UROXX
5377
Level 7 Urology & Related Services
UROXX
5414
Level 4 Gynecologic Procedures
GYNXX
(*)
5415
Level 5 Gynecologic Procedures
GYNXX
5416
Level 6 Gynecologic Procedures
GYNXX
5431
Level 1 Nerve Procedures
NERVE
(*)
5432
Level 2 Nerve Procedures
NERVE
(*)
5462
Level 2 Neurostimulator & Related Procedures
NSTIM
5463
Level 3 Neurostimulator & Related Procedures
NSTIM
5464
Level 4 Neurostimulator & Related Procedures
NSTIM
5471
Implantation of Drug Infusion Device
PUMPS
5491
Level 1 Intraocular Procedures
INEYE
(*)
5492
Level 2 Intraocular Procedures
INEYE
5493
Level 3 Intraocular Procedures
INEYE
5494
Level 4 Intraocular Procedures
INEYE
5495
Level 5 Intraocular Procedures
INEYE
5503
Level 3 Extraocular, Repair, and Plastic Eye Procedures
EXEYE
(*)
5504
Level 4 Extraocular, Repair, and Plastic Eye Procedures
EXEYE
(*)
5627
Level 7 Radiation Therapy
RADTX
5881
Ancillary Outpatient Services When Patient Dies
N/A
8011
Comprehensive Observation Services
N/A
* Proposed New C-APC for CY 2017.
C-APC Clinical Family Descriptor Key:
AENDO = Airway Endoscopy.
AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices.
BREAS = Breast Surgery.
COCHL = Cochlear Implant.
EBIDX = Excision/Biopsy/Incision and Drainage.
ENTXX = ENT Procedures.
EPHYS = Cardiac Electrophysiology.
EXEYE = Extraocular Ophthalmic Surgery.
GIXXX = Gastrointestinal Procedures.
GYNXX = Gynecologic Procedures.
INEYE = Intraocular Surgery.
LAPXX = Laparoscopic Procedures.
NERVE = Nerve Procedures.
NSTIM = Neurostimulators.
ORTHO = Orthopedic Surgery.
PUMPS = Implantable Drug Delivery Systems.
RADTX = Radiation Oncology.
SCTXX = Stem Cell Transplant.
UROXX = Urologic Procedures.
VASCX = Vascular Procedures.
WPMXX = Wireless PA Pressure Monitor.
(b) Proposed New Allogeneic Hematopoietic Stem Cell Transplantation (HSCT) C-APC
Allogeneic hematopoietic stem cell transplantation (HSCT) involves the intravenous infusion of hematopoietic stem cells derived from the bone marrow, umbilical cord blood, or peripheral blood of a donor to a recipient. Allogeneic hematopoietic stem cell collection procedures, which are performed not on the beneficiary but on a donor, cannot be paid separately under the OPPS because hospitals may bill and receive payment only for services provided to a Medicare beneficiary who is the recipient of the HSCT and whose illness is being treated with the transplant. Currently, under the OPPS, payment for these acquisition services is packaged into the APC payment for the allogeneic HSCT when the transplant occurs in the hospital outpatient setting (74 FR 60575). In the CY 2016 OPPS/ASC final rule with comment period, we assigned allogeneic HSCT to APC 5281 (Apheresis and Stem Cell Procedures), which has a CY 2016 OPPS payment rate of $3,015.
As provided in the Medicare Claims Processing Manual, Pub. 100-04, Chapter 4, section 231.11, donor acquisition charges for allogeneic HSCT may include, but are not limited to, charges for the costs of several services. These services include, but are not necessarily limited to, National Marrow Donor Program fees, if applicable, tissue typing of donor and recipient, donor evaluation, physician pre-procedure donor evaluation services, costs associated with the collection procedure (for example, general routine and special care services, procedure/operating room and other ancillary services, apheresis services, among others), post-operative/post-procedure evaluation of donor, and the preparation and processing of stem cells.
When the allogeneic stem cell transplant occurs in the hospital outpatient setting, providers are instructed to report stem cell donor acquisition charges for allogeneic HSCT separately in Field 42 on Form CMS-1450 (or UB-04) by using revenue code 0819 (Organ Acquisition: Other Donor). Revenue code 0819 charges should include all services required to acquire hematopoietic stem cells from a donor, as defined earlier, and should be reported on the same date of service as the transplant procedure in order to be appropriately packaged for payment purposes. Revenue code 0819 maps to cost center code 086XX (Other organ acquisition where XX is “00” through “19”) and is reported on line 112 (or applicable subscripts of line 112) of the Medicare cost report.
In recent years, we have received comments from stakeholders detailing concerns about the accuracy of ratesetting for allogeneic HSCT (79 FR 40950 through 40951; 79 FR 66809; and 80 FR 70414 through 70415). Stakeholders have presented several issues that could result in an inappropriate estimation of provider costs for these procedures, including outpatient allogeneic HCST reported on claims being identified as multiple procedure claims that are unusable under the standard OPPS ratesetting methodology. Stakeholders also have indicated that the requirement for the reporting of revenue code 0819 on claims reporting allogeneic HSCTs and the lack of a dedicated cost center for stem cell transplantation donor acquisition costs have led to an overly broad CCR being applied to these procedures, which comprise a very low volume of the services reported within the currently assigned cost center. In addition, commenters noted that it is likely that there are services being reported with the same revenue code (0819) and mapped to the same cost center code (086XX) as allogeneic HSCT donor acquisition charges that are unrelated to these services. Lastly, providers have commented that the donor acquisition costs of allogeneic HSCT are much higher relative to their charges when compared to the other items and services that are reported in the current cost center. Providers also have stated that hospitals have difficulty applying an appropriate markup to donor acquisition charges that will sufficiently generate a cost that approximates the total cost of donor acquisition. Through our examination of
the CY 2016 claims data, we believe that the issues presented above provide a persuasive rationale for payment adjustment for donor acquisition costs for allogeneic HCST.
Stakeholders suggested that the establishment of a C-APC for stem cell transplant services would improve payment adequacy by allowing the use of multiple procedure claims, provided CMS also create a separate and distinct CCR for donor search and acquisition charges so that they are not diluted by lower cost services. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70414 through 70415), we stated that we would not create a new C-APC for stem cell transplant procedures at that time and that we would instead continue to pay for the services through the assigned APCs while continuing to monitor the issue.
Based on our current analysis of this longstanding issue and stakeholder input, for CY 2017, we are proposing to create a new C-APC 5244 (Level 4 Blood Product Exchange and Related Services) and to assign procedures described by CPT code 38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation per donor) to this C-APC and to assign status indicator “J1” to the code. The creation of a new C-APC for allogeneic HSCT and the assignment of status indicator “J1” to CPT code 38240 would allow for the costs for all covered OPD services, including donor acquisition services, included on the claim to be packaged into the C-APC payment rate. These costs also will be analyzed using our comprehensive cost accounting methodology to establish future C-APC payment rates. We are proposing to establish a payment rate for proposed new C-APC 5244 of $15,267 for CY 2017.
In order to develop an accurate estimate of allogeneic HSCT donor acquisition costs for future ratesetting, for CY 2017 and subsequent years, we are proposing to update the Medicare hospital cost report (Form CMS-2552-10) by adding a new standard cost center 112.50, “Allogeneic Stem Cell Acquisition,” to Worksheet A (and applicable worksheets) with the standard cost center code of “11250.” The proposed new cost center, line 112.50, would be used for the recording of any acquisition costs related to allogeneic stem cell transplants as defined in Section 231.11, Chapter 4, of the Medicare Claims Processing Manual (Pub. 100-04). Acquisition charges for allogeneic stem cell transplants apply only to allogeneic transplants for which stem cells are obtained from a donor (rather than from the recipient). Acquisition charges do not apply to autologous transplants (transplanted stem cells are obtained from the recipient) because autologous transplants involve services provided to a beneficiary only (and not to a donor), for which the hospital may bill and receive payment. Acquisition costs for allogeneic stem cells are included in the prospective payment. This cost center flows through cost finding and accumulates any appropriate overhead costs.
In conjunction with our proposed addition of the new “Allogeneic Stem Cell Acquisition” standard cost center, we are proposing to use the newly created revenue code 0815 (Allogeneic Stem Cell Acquisition Services) to identify hospital charges for stem cell acquisition for allogeneic bone marrow/stem cell transplants. Specifically, for CY 2017 and subsequent years, we are proposing to require hospitals to identify stem cell acquisition charges for allogeneic bone marrow/stem cell transplants separately in Field 42 on Form CMS-1450 (or UB-04), when an allogeneic stem cell transplant occurs. Revenue code 0815 charges should include all services required to acquire stem cells from a donor, as defined above, and should be reported on the same date of service as the transplant procedure in order to be appropriately packaged for payment purposes. The proposed new revenue code 0815 would map to the proposed new line 112.50 (with the cost center code of “11250”) on the Form CMS-2552-10 cost report. In addition, for CY 2017 and subsequent years, we are proposing to no longer use revenue code 0819 for the identification of stem cell acquisition charges for allogeneic bone marrow/stem cell transplants. We are inviting public comments on these proposals.
d. Proposed Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66613), we believe it is important that the OPPS enhance incentives for hospitals to provide necessary, high quality care as efficiently as possible. For CY 2008, we developed composite APCs to provide a single payment for groups of services that are typically performed together during a single clinical encounter and that result in the provision of a complete service. Combining payment for multiple, independent services into a single OPPS payment in this way enables hospitals to manage their resources with maximum flexibility by monitoring and adjusting the volume and efficiency of services themselves. An additional advantage to the composite APC model is that we can use data from correctly coded multiple procedure claims to calculate payment rates for the specified combinations of services, rather than relying upon single procedure claims which may be low in volume and/or incorrectly coded. Under the OPPS, we currently have composite policies for low dose rate (LDR) prostate brachytherapy, mental health services, and multiple imaging services. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for a full discussion of the development of the composite APC methodology (72 FR 66611 through 66614 and 66650 through 66652) and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) for more recent background.
In this proposed rule, for CY 2017 and subsequent years, we are proposing to continue our composite APC payment policies for LDR prostate brachytherapy services, mental health services, and multiple imaging services, as discussed below.
(1) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC
LDR prostate brachytherapy is a treatment for prostate cancer in which hollow needles or catheters are inserted into the prostate, followed by permanent implantation of radioactive sources into the prostate through the needles/catheters. At least two CPT codes are used to report the composite treatment service because there are separate codes that describe placement of the needles/catheters and the application of the brachytherapy sources: CPT code 55875 (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy) and CPT code 77778 (Interstitial radiation source application; complex), which are generally present together on claims for the same date of service in the same operative session. In order to base payment on claims for the most common clinical scenario, and to further our goal of providing payment under the OPPS for a larger bundle of component services provided in a single hospital encounter, beginning in CY 2008, we began providing a single payment for LDR prostate brachytherapy when the composite service, reported as CPT codes 55875 and 77778, is furnished in a single hospital encounter. We base the payment for composite APC 8001 (LDR Prostate Brachytherapy Composite) on the geometric mean cost derived from claims for the same date of service that contain both CPT codes 55875 and 77778 and that do not contain other separately paid codes that
are not on the bypass list. We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66652 through 66655) for a full history of OPPS payment for LDR prostate brachytherapy services and a detailed description of how we developed the LDR prostate brachytherapy composite APC.
In this proposed rule, for CY 2017, we are proposing to continue to pay for LDR prostate brachytherapy services using the composite APC payment methodology proposed and implemented for CY 2008 through CY 2016. That is, we are proposing to use CY 2015 claims reporting charges for both CPT codes 55875 and 77778 on the same date of service with no other separately paid procedure codes (other than those on the bypass list) to calculate the proposed payment rate for composite APC 8001. Consistent with our CY 2008 through CY 2016 practice, in this proposed rule, we are proposing not to use the claims that meet these criteria in the calculation of the geometric mean costs of procedures or services assigned to APC 5375 (Level IV Cystourethroscopy and Other Genitourinary Procedures) and APC 5641 (Complex Interstitial Radiation Source Application), the APCs to which CPT codes 55875 and 77778 are assigned, respectively. We are proposing to continue to calculate the proposed geometric mean costs of procedures or services assigned to APCs 5375 and 5641 using single and “pseudo” single procedure claims. We continue to believe that composite APC 8001 contributes to our goal of creating hospital incentives for efficiency and cost containment, while providing hospitals with the most flexibility to manage their resources. We also continue to believe that data from claims reporting both services required for LDR prostate brachytherapy provide the most accurate geometric mean cost upon which to base the proposed composite APC payment rate.
Using a partial year of CY 2015 claims data available for this CY 2017 proposed rule, we were able to use 202 claims that contained both CPT codes 55875 and 77778 to calculate the proposed geometric mean cost of approximately $3,581 for these procedures upon which the proposed CY 2017 payment rate for composite APC 8001 is based.
(2) Mental Health Services Composite APC
In this proposed rule, for CY 2017, we are proposing to continue our longstanding policy of limiting the aggregate payment for specified less resource-intensive mental health services furnished on the same date to the payment for a day of partial hospitalization services provided by a hospital, which we consider to be the most resource-intensive of all outpatient mental health services. We refer readers to the April 7, 2000 OPPS final rule with comment period (65 FR 18452 through 18455) for the initial discussion of this longstanding policy and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74168) for more recent background.
Specifically, we are proposing that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on one date of service based on the payment rates associated with the APCs for the individual services exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be assigned to composite APC 8010 (Mental Health Services Composite). We also are proposing to continue to set the payment rate for composite APC 8010 at the same payment rate that we are proposing to establish for APC 5862 (Level 2 Partial Hospitalization (4 or more services) for hospital-based PHPs), which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the payment rate for composite APC 8010. Under this policy, the I/OCE would continue to determine whether to pay for these specified mental health services individually, or to make a single payment at the same payment rate established for APC 5862 for all of the specified mental health services furnished by the hospital on that single date of service. We continue to believe that the costs associated with administering a partial hospitalization program at a hospital represent the most resource-intensive of all outpatient mental health services. Therefore, we do not believe that we should pay more for mental health services under the OPPS than the highest partial hospitalization per diem payment rate for hospitals.
(3) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008)
Effective January 1, 2009, we provide a single payment each time a hospital submits a claim for more than one imaging procedure within an imaging family on the same date of service, in order to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session (73 FR 41448 through 41450). We utilize three imaging families based on imaging modality for purposes of this methodology: (1) Ultrasound; (2) computed tomography (CT) and computed tomographic angiography (CTA); and (3) magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes subject to the multiple imaging composite policy and their respective families are listed in Table 12 of the CY 2014 OPPS/ASC final rule with comment period (78 FR 74920 through 74924).
While there are three imaging families, there are five multiple imaging composite APCs due to the statutory requirement under section 1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging services provided with and without contrast. While the ultrasound procedures included under the policy do not involve contrast, both CT/CTA and MRI/MRA scans can be provided either with or without contrast. The five multiple imaging composite APCs established in CY 2009 are:
• APC 8004 (Ultrasound Composite);
• APC 8005 (CT and CTA without Contrast Composite);
• APC 8006 (CT and CTA with Contrast Composite);
• APC 8007 (MRI and MRA without Contrast Composite); and
• APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the “with contrast” composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC.
We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569).
In this proposed rule, for CY 2017 and subsequent years, we are proposing to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service
using the multiple imaging composite APC payment methodology. We continue to believe that this policy will reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.
The proposed CY 2017 payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) are based on proposed geometric mean costs calculated from a partial year of CY 2015 claims data available for this proposed rule that qualified for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we used to calculate the final CY 2014 and CY 2015 geometric mean costs for these composite APCs, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), are identified by asterisks in Addendum N to this CY 2017 proposed rule (which is available via the Internet on the CMS Web site) and are discussed in more detail in section II.A.1.b. of this proposed rule.
For this CY 2017 OPPS/ASC proposed rule, we were able to identify approximately 599,294 “single session” claims out of an estimated 1.6 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 38 percent of all eligible claims, to calculate the proposed CY 2017 geometric mean costs for the multiple imaging composite APCs. Table 3 below lists the proposed HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2017.
Table 3—Proposed OPPS Imaging Families and Multiple Imaging Procedure Composite APCs
Family 1—Ultrasound
CY 2017 APC 8004
(ultrasound composite)
CY 2017 Approximate
APC geometric mean cost = $303
76604
Us exam, chest.
76700
Us exam, abdom, complete.
76705
Echo exam of abdomen.
76770
Us exam abdo back wall, comp.
76775
Us exam abdo back wall, lim.
76776
Us exam k transpl w/Doppler.
76831
Echo exam, uterus.
76856
Us exam, pelvic, complete.
76870
Us exam, scrotum.
76857
Us exam, pelvic, limited.
Family 2—CT and CTA with and without Contrast
CY 2017 APC 8005
(CT and CTA without contrast composite)*
CY 2017 Approximate
APC geometric mean cost = $292
70450
Ct head/brain w/o dye.
70480
Ct orbit/ear/fossa w/o dye.
70486
Ct maxillofacial w/o dye.
70490
Ct soft tissue neck w/o dye.
71250
Ct thorax w/o dye.
72125
Ct neck spine w/o dye.
72128
Ct chest spine w/o dye.
72131
Ct lumbar spine w/o dye.
72192
Ct pelvis w/o dye.
73200
Ct upper extremity w/o dye.
73700
Ct lower extremity w/o dye.
74150
Ct abdomen w/o dye.
74261
Ct colonography, w/o dye.
74176
Ct angio abd & pelvis.
CY 2017 APC 8006
(CT and CTA with contrast composite)
CY 2017 Approximate
APC geometric mean cost = $515
70487
Ct maxillofacial w/dye.
70460
Ct head/brain w/dye.
70470
Ct head/brain w/o & w/dye.
70481
Ct orbit/ear/fossa w/dye.
70482
Ct orbit/ear/fossa w/o & w/dye.
70488
Ct maxillofacial w/o & w/dye.
70491
Ct soft tissue neck w/dye.
70492
Ct sft tsue nck w/o & w/dye.
70496
Ct angiography, head.
70498
Ct angiography, neck.
71260
Ct thorax w/dye.
71270
Ct thorax w/o & w/dye.
71275
Ct angiography, chest.
72126
Ct neck spine w/dye.
72127
Ct neck spine w/o & w/dye.
72129
Ct chest spine w/dye.
72130
Ct chest spine w/o & w/dye.
72132
Ct lumbar spine w/dye.
72133
Ct lumbar spine w/o & w/dye.
72191
Ct angiograph pelv w/o & w/dye.
72193
Ct pelvis w/dye.
72194
Ct pelvis w/o & w/dye.
73201
Ct upper extremity w/dye.
73202
Ct uppr extremity w/o & w/dye.
73206
Ct angio upr extrm w/o & w/dye.
73701
Ct lower extremity w/dye.
73702
Ct lwr extremity w/o & w/dye.
73706
Ct angio lwr extr w/o & w/dye.
74160
Ct abdomen w/dye.
74170
Ct abdomen w/o & w/dye.
74175
Ct angio abdom w/o & w/dye.
74262
Ct colonography, w/dye.
75635
Ct angio abdominal arteries.
74177
Ct angio abd & pelv w/contrast.
74178
Ct angio abd & pelv 1+ regns.
* If a “without contrast” CT or CTA procedure is performed during the same session as a “with contrast” CT or CTA procedure, the I/OCE assigns the procedure to APC 8006 rather than APC 8005.
Family 3—MRI and MRA with and without Contrast
CY 2017 APC 8007
(MRI and MRA without contrast composite)*
CY 2017 Approximate
APC geometric mean cost = $587
70336
Magnetic image, jaw joint.
70540
Mri orbit/face/neck w/o dye.
70544
Mr angiography head w/o dye.
70547
Mr angiography neck w/o dye.
70551
Mri brain w/o dye.
70554
Fmri brain by tech.
71550
Mri chest w/o dye.
72141
Mri neck spine w/o dye.
72146
Mri chest spine w/o dye.
72148
Mri lumbar spine w/o dye.
72195
Mri pelvis w/o dye.
73218
Mri upper extremity w/o dye.
73221
Mri joint upr extrem w/o dye.
73718
Mri lower extremity w/o dye.
73721
Mri jnt of lwr extre w/o dye.
74181
Mri abdomen w/o dye.
75557
Cardiac mri for morph.
75559
Cardiac mri w/stress img.
C8901
MRA w/o cont, abd.
C8904
MRI w/o cont, breast, uni.
C8907
MRI w/o cont, breast, bi.
C8910
MRA w/o cont, chest.
C8913
MRA w/o cont, lwr ext.
C8919
MRA w/o cont, pelvis.
C8932
MRA, w/o dye, spinal canal.
C8935
MRA, w/o dye, upper extr.
CY 2017 APC 8008
(MRI and MRA with contrast composite)
CY 2017 approximate
APC geometric mean cost = $900
70549
Mr angiograph neck w/o & w/dye.
70542
Mri orbit/face/neck w/dye.
70543
Mri orbt/fac/nck w/o & w/dye.
70545
Mr angiography head w/dye.
70546
Mr angiograph head w/o & w/dye.
70547
Mr angiography neck w/o dye.
70548
Mr angiography neck w/dye.
70552
Mri brain w/dye.
70553
Mri brain w/o & w/dye.
71551
Mri chest w/dye.
71552
Mri chest w/o & w/dye.
72142
Mri neck spine w/dye.
72147
Mri chest spine w/dye.
72149
Mri lumbar spine w/dye.
72156
Mri neck spine w/o & w/dye.
72157
Mri chest spine w/o & w/dye.
72158
Mri lumbar spine w/o & w/dye.
72196
Mri pelvis w/dye.
72197
Mri pelvis w/o & w/dye.
73219
Mri upper extremity w/dye.
73220
Mri uppr extremity w/o & w/dye.
73222
Mri joint upr extrem w/dye.
73223
Mri joint upr extr w/o & w/dye.
73719
Mri lower extremity w/dye.
73720
Mri lwr extremity w/o & w/dye.
73722
Mri joint of lwr extr w/dye.
73723
Mri joint lwr extr w/o & w/dye.
74182
Mri abdomen w/dye.
74183
Mri abdomen w/o & w/dye.
75561
Cardiac mri for morph w/dye.
75563
Card mri w/stress img & dye.
C8900
MRA w/cont, abd.
C8902
MRA w/o fol w/cont, abd.
C8903
MRI w/cont, breast, uni.
C8905
MRI w/o fol w/cont, brst, un.
C8906
MRI w/cont, breast, bi.
C8908
MRI w/o fol w/cont, breast,.
C8909
MRA w/cont, chest.
C8911
MRA w/o fol w/cont, chest.
C8912
MRA w/cont, lwr ext.
C8914
MRA w/o fol w/cont, lwr ext.
C8918
MRA w/cont, pelvis.
C8920
MRA w/o fol w/cont, pelvis.
C8931
MRA, w/dye, spinal canal.
C8933
MRA, w/o&w/dye, spinal canal.
C8934
MRA, w/dye, upper extremity.
C8936
MRA, w/o&w/dye, upper extr.
* If a “without contrast” MRI or MRA procedure is performed during the same session as a “with contrast” MRI or MRA procedure, the I/OCE assigns the procedure to APC 8008 rather than APC 8007.
3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the concept of averaging to establish a payment rate for services. The payment may be more or less than the estimated cost of providing a specific service or a bundle of specific services for a particular patient. The OPPS packages payment for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. For example, where there are a variety of devices, drugs, items, and supplies that could be used to furnish a service, some of which are more costly than others, packaging encourages hospitals to use the most cost-efficient item that meets the patient's needs, rather than to routinely use a more expensive item, which often results if separate payment is provided for the item.
Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payment for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817), and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70343). As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make OPPS payments for all services paid under the OPPS more consistent with those of a
prospective payment system and less like those of a per service fee schedule, which pays separately for each coded item. As a part of this effort, we have continued to examine the payment for items and services provided under the OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system.
For CY 2017, we have examined our OPPS packaging policies, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services that are packaged into payment for the primary service that they support. In this CY 2017 proposed rule, we are proposing some modifications to our packaging policies and to package the costs of two drugs that function as supplies in a surgical procedure.
b. Proposed Clinical Diagnostic Laboratory Test Packaging Policy
(1) Background
In CY 2014, we finalized a policy to package payment for most clinical diagnostic laboratory tests in the OPPS (78 FR 74939 through 74942, and 42 CFR 419.2(b)(17)). In CY 2016, we made some minor modifications to this policy (80 FR 70348 through 70350). Under current policy, certain clinical diagnostic laboratory tests that are listed on the Clinical Laboratory Fee Schedule (CLFS) are packaged in the OPPS as integral, ancillary, supportive, dependent, or adjunctive to the primary service or services provided in the hospital outpatient setting. Specifically, we conditionally package laboratory tests and only pay separately for laboratory tests when (1) they are the only services provided to a beneficiary on a claim; (2) they are “unrelated” laboratory tests, meaning they are on the same claim as other hospital outpatient services, but are ordered for a different diagnosis than the other hospital outpatient services and are ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services; (3) they are molecular pathology tests; or (4) the laboratory tests are considered preventive services.
(2) Proposed “Unrelated” Laboratory Test Exception
Laboratory tests are separately paid in the HOPD when they are considered “unrelated” laboratory tests. Unrelated laboratory tests are tests on the same claim as other hospital outpatient servic
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