# Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; New Categories for Hospital Outpatient Department Prior Authorization Process; Clinical Laboratory Fee Schedule: Laboratory Date of Service Policy; Overall Hospital Quality Star Rating Methodology; Physician-Owned Hospitals; Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots, Radiation Oncology Model; and Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2020-26819 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** December 29, 2020 - **Citation:** 85 FR 85866 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 410, 411, 412, 414, 416, 419, 482, 485, 512 [CMS-1736-FC, 1736-IFC] RIN 0938-AU12 Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; New Categories for Hospital Outpatient Department Prior Authorization Process; Clinical Laboratory Fee Schedule: Laboratory Date of Service Policy; Overall Hospital Quality Star Rating Methodology; Physician-Owned Hospitals; Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots, Radiation Oncology Model; and Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19) AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and Human Services (HHS). ACTION: Final rule with comment period and interim final rule with comment period. SUMMARY: This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2021 based on our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In addition, this final rule with comment period establishes and updates the Overall Hospital Quality Star Rating beginning with the CY 2021; removes certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities,” and clarifies that certain beds are counted toward a hospital's baseline number of operating rooms, procedure rooms, and beds; adds two new service categories to the Hospital Outpatient Department (OPD) Prior Authorization Process; provides notice of the closure of two teaching hospitals and the opportunity to apply for available slots for purposes of indirect medical education (IME) and direct graduate medical education (DGME) payments; and revises the Clinical Laboratory Date of Service (DOS) policy. This interim final rule with comment period modifies the Radiation Oncology Model (RO Model) Model performance period for CY 2021, and establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking of COVID-19 therapeutic inventory and usage and for tracking of the incidence and impact of Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) during the ongoing COVID-19 public health emergency (PHE). DATES: Effective date: This rule is effective January 1, 2021, with the exceptions of amendatory instructions 21 and 23 (amending 42 CFR 482.42 and 485.640) and 25 through 31 (amending 42 CFR 512.205, 512.210, 512.217, 512.220, 512.245, 512.255, and 512.285), which are effective on December 4, 2021. Comment period: To be assured consideration, comments on the payment classifications assigned to the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes in this final rule with comment period (CMS-1736-FC) must be received at one of the addresses provided in the ADDRESSES section no later than 5 p.m. EST on January 4, 2021. To be assured consideration, comments on the Reporting Requirements for Hospitals and CAHs to Report Acute Respiratory Illness During the PHE for COVID-19, instructions 21 and 23 amending §§ 482.42 and 485.640, and the Radiation Oncology (RO) Model, instructions 25 through 31 amending 42 CFR 512.205, 512.210, 512.217, 512.220, 512.245, 512.255, and 512.285 in this interim final rule with comment period (CMS-1736-IFC) must be received at one of the addresses provided below, no later than 5 p.m. on February 2, 2021. Applicability dates: The provisions related to the Radiation Oncology (RO) Model contained in section XXI of this interim final rule with comment period are applicable beginning July 1, 2021. ADDRESSES: In commenting, please refer to file code CMS-1736-FC or CMS-1736-IFC as appropriate, when commenting on the issues in this final rule with comment period and interim final rule with comment period. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov . Follow the instructions under the “submit a comment” tab. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1736-FC or CMS-1736-IFC, P.O. Box 8010, Baltimore, MD 21244-1850. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1736-FC or CMS-1736-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at APCPanel@cms.hhs.gov . Ambulatory Surgical Center (ASC) Payment System, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov or Mitali Dayal via email Mitali.Dayal2@cms.hhs.gov . Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email at Anita.Bhatia@cms.hhs.gov . Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Cyra Duncan via email Cyra.Duncan@cms.hhs.gov . Blood and Blood Products, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov . Cancer Hospital Payments, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov . CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email Chuck.Braver@cms.hhs.gov . Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Au'Sha Washington via email AuSha.Washington@cms.hhs.gov. Comprehensive APCs (C-APCs), contact Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov , or Mitali Dayal via email Mitali.Dayal2@cms.hhs.gov . Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Shaili Patel via email Shaili.Patel@cms.hhs.gov . Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Nicole P. Crenshaw via email PNicole.Crenshaw@cms.hhs.gov . Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Elise Barringer via email Elise.Barringer@cms.hhs.gov . Hospital Quality Star Rating Methodology, contact Annese Abdullah-Mclaughlin via email Annese.Abdullah-Mclaughlin@cms.hhs.gov . Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via email Ausha.Washington@cms.hhs.gov , or Allison Bramlett via email Allison.Bramlett@cms.hhs.gov , or Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov . Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule), contact Elise Barringer via email Elise.Barringer@cms.hhs.gov . New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email Scott.Talaga@cms.hhs.gov . No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov . OPPS Brachytherapy, contact Scott Talaga via email Scott.Talaga@cms.hhs.gov . OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email Erick.Chuang@cms.hhs.gov , or Scott Talaga via email Scott.Talaga@cms.hhs.gov , or Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov . OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov , or Gil Ngan via email at Gil.Ngan@cms.hhs.gov or, or Cory Duke via email at Cory.Duke@cms.hhs.gov . OPPS New Technology Procedures/Services, contact the New Technology APC mailbox at NewTechAPCapplications@cms.hhs.gov . OPPS Packaged Items/Services, contact Lela Strong-Holloway via email Lela.Strong@cms.hhs.gov , or Mitali Dayal via email at Mitali.Dayal2@cms.hhs.gov . OPPS Pass-Through Devices, contact the Device Pass-Through mailbox at DevicePTapplications@cms.hhs.gov . OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email Marina.Kushnirova@cms.hhs.gov . Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at PHPPaymentPolicy@cms.hhs.gov . Prior Authorization Process and Requirements for Certain Covered Outpatient Department Services, contact Thomas Kessler via email at Thomas.Kessler@cms.hhs.gov . Rural Hospital Payments, contact Josh McFeeters via email at Joshua.McFeeters@cms.hhs.gov . Skin Substitutes, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov . Supervision of Outpatient Therapeutic Services in Hospitals and CAHs, contact Josh McFeeters via email Joshua.McFeeters@cms.hhs.gov . All Other Issues Related to Hospital Outpatient and Ambulatory Surgical Center Payments Not Previously Identified, contact Elise Barringer via email Elise.Barringer@cms.hhs.gov or at 410-786-9222. RO Model, contact RadiationTherapy@cms.hhs.gov or at 844-711-2664, Option 5. CAPT Scott Cooper, USPHS, (410) 786-9465, for the hospital and CAH COVID-19 Therapeutic Inventory and Usage reporting requirements and for the Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) reporting requirements. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov/ . Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. Addenda Available Only Through the Internet on the CMS Website In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the Federal Register as part of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC proposed rule, all of the Addenda no longer appear in the Federal Register as part of the annual OPPS/ASC proposed and final rules to decrease administrative burden and reduce costs associated with publishing lengthy tables. Instead, these Addenda are published and available only on the CMS website. The Addenda relating to the OPPS are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices . The Addenda relating to the ASC payment system are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices . Current Procedural Terminology (CPT) Copyright Notice Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2019 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR and Defense Federal Acquisition Regulations (DFAR) apply. Table of Contents I. Summary and Background A. Executive Summary of This Document B. Legislative and Regulatory Authority for the Hospital OPPS C. Excluded OPPS Services and Hospitals D. Prior Rulemaking E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel) F. Public Comments Received in Response to the CY 2021 OPPS/ASC Proposed Rule G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights B. Conversion Factor Update C. Wage Index Changes D. Statewide Average Default Cost-to-Charge Ratios (CCRs) E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2021 F. Payment Adjustment for Certain Cancer Hospitals for CY 2021 G. Hospital Outpatient Outlier Payments H. Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment I. Beneficiary Copayments III. OPPS Ambulatory Payment Classification (APC) Group Policies A. OPPS Treatment of New and Revised HCPCS Codes B. OPPS Changes—Variations Within APCs C. New Technology APCs D. OPPS APC-Specific Policies IV. OPPS Payment for Devices A. Pass-Through Payments for Devices B. Device-Intensive Procedures V. OPPS Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Payment Status VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices A. Background B. Estimate of Pass-Through Spending VII. OPPS Payment for Hospital Outpatient Visits and Critical Care Services VIII. Payment for Partial Hospitalization Services A. Background B. PHP APC Update for CY 2021 C. Outlier Policy for CMHCs IX. Services That Will Be Paid Only as Inpatient Services A. Background B. Changes to the Inpatient Only (IPO) List X. Nonrecurring Policy Changes A. Changes in the Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals (CAHs) B. Medical Review of Certain Inpatient Hospital Admissions Under Medicare Part A for CY 2021 and Subsequent Years XI. CY 2021 OPPS Payment Status and Comment Indicators A. CY 2021 OPPS Payment Status Indicator Definitions B. CY 2021 Comment Indicator Definitions XII. MedPAC Recommendations A. OPPS Payment Rates Update B. ASC Conversion Factor Update C. ASC Cost Data XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background B. ASC Treatment of New and Revised Codes C. Update to the List of ASC Covered Surgical Procedures and Covered Ancillary Services D. Update and Payment for ASC Covered Surgical Procedures and Covered Ancillary Services E. New Technology Intraocular Lenses (NTIOLs) F. ASC Payment and Comment Indicators G. Calculation of the ASC Payment Rates and the ASC Conversion Factor XIV. Requirements for the Hospital Outpatient Quality Reporting (OQR) Program A. Background B. Hospital OQR Program Quality Measures C. Administrative Requirements D. Form, Manner, and Timing of Data Submitted for the Hospital OQR Program E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2021 Payment Determination XV. Requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program A. Background B. ASCQR Program Quality Measures C. Administrative Requirements D. Form, Manner, and Timing of Data Submitted for the ASCQR Program E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements XVI. Overall Hospital Quality Star Rating Methodology for Public Release in CY 2021 and Subsequent Years A. Background B. Critical Access Hospitals in the Overall Star Rating C. Veterans Health Administration Hospitals in the Overall Star Rating D. History of the Overall Hospital Quality Star Rating E. Current and Proposed Overall Star Rating Methodology F. Preview Period G. Overall Star Rating Suppressions XVII. Addition of New Service Categories for Hospital Outpatient Department (OPD) Prior Authorization Process A. Background B. Controlling Unnecessary Increases in the Volume of Covered OPD Services XVIII. Clinical Laboratory Fee Schedule: Revisions to the Laboratory Date of Service Policy A. Background on the Medicare Part B Laboratory Date of Service Policy B. Medicare DOS Policy and the “14-Day Rule” C. Billing and Payment for Laboratory Services Under the OPPS D. ADLTs Under the New Private Payor Rate-Based CLFS E. Additional Laboratory DOS Policy Exception for the Hospital Outpatient Setting F. Revision to the Laboratory DOS Policy for Cancer-Related Protein-Based MAAAs XIX. Physician-Owned Hospitals A. Background B. Prohibition on Facility Expansion C. Deference to State Law for Purposes of Determining the Number of Beds for Which a Hospital Is Licensed XX. Notice of Closure of Two Teaching Hospitals and Opportunity To Apply for Available Slots A. Background Section B. Notice of Closure of Westlake Community Hospital, Located in Melrose Park, IL, and the Application Process—Round 18 C. Notice of Closure of Astria Regional Medical Center, Located in Yakima, WA, and the Application Process—Round 19 D. Application Process for Available Resident Slots XXI. Radiation Oncology (RO) Model A. Model Performance Period for the Radiation Oncology Model B. Waiver of Proposed Rulemaking XXII. Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage and To Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19) XXIII. Files Available to the Public via the Internet XXIV. Collection of Information Requirements A. Statutory Requirement for Solicitation of Comments B. ICRs for the Hospital OQR Program C. ICRs for the ASCQR Program D. ICRs for Addition of New Service Categories for Hospital Outpatient Department (OPD) Prior Authorization Process E. ICRs for the Overall Hospital Quality Star Ratings F. ICRs for Physician-Owned Hospitals XXV. Waiver of the 30-Day and 60-Day Delayed Effective Dates for the Final Rule With Comment Period and Waiver of Proposed Rulemaking for Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Therapeutic Inventory and Usage and to Report Acute Respiratory Illness During the PHE for COVID-19 Interim Final Rule With Comment Period (IFC) A. Waiver of the 30-Day and 60-Day Delayed Effective Dates for the Final Rule With Comment Period B. Waiver of Proposed Rulemaking for Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report Acute Respiratory Illness During the PHE for COVID-19 Interim Final Rule With Comment Period (IFC) XXVI. Response to Comments XXVII. Economic Analyses A. Statement of Need B. Overall Impact for the Provisions of This Final Rule With Comment Period C. Detailed Economic Analyses D. Regulatory Review Costs E. Regulatory Flexibility Act (RFA) Analysis F. Unfunded Mandates Reform Act Analysis G. Reducing Regulation and Controlling Regulatory Costs H. Conclusion XXVIII. Federalism Analysis I. Summary and Background A. Executive Summary of This Document 1. Purpose In this final rule with comment period and interim final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs), beginning January 1, 2021. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the payment rates for services payable under the Hospital Outpatient Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS not less often than annually, and to revise the groups, the relative payment weights, and the wage and other adjustments that take into account changes in medical practices, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i)(D)(v) of the Act, we annually review and update the ASC payment rates. This final rule with comment period also includes additional policy changes made in accordance with our experience with the OPPS and the ASC payment system and recent changes in our statutory authority. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. 2. Summary of the Major Provisions • OPPS Update: For CY 2021, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.4 percent. This increase factor is based on the final hospital inpatient market basket percentage increase of 2.4 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS). Based on this update, we estimate that total payments to OPPS providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for calendar year (CY) 2021 would be approximately $83.888 billion, an increase of approximately $7.541 billion compared to estimated CY 2020 OPPS payments. We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals that fail to meet the hospital outpatient quality reporting requirements by applying a reporting factor of 0.9805 to the OPPS payments and copayments for all applicable services. • Partial Hospitalization Update: For CY 2021 OPPS/ASC final rule with comment period, CMS is maintaining the unified rate structure established in CY 2017, with a single PHP APC for each provider type for days with 3 or more services per day. We are using the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs, consistent with existing policy, using updated data for each provider type. Accordingly, we are calculating the CY 2021 PHP APC per diem rates for HB PHPs and CMHC PHPs based on updated cost and claims data. Given that the final calculated geometric mean per diem costs are much higher than the proposed cost floors, we are not extending the cost floors to CY 2021 and subsequent years. • Changes to the Inpatient Only (IPO) List: For CY 2021, we are eliminating the IPO list over the course of 3 calendar years beginning with the removal of 266 musculoskeletal-related services. We are also removing 32 additional HCPCS codes from the IPO list for CY 2021 based on public comments. • Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule): For CY 2021, we are finalizing a policy to exempt procedures that are removed from the inpatient only (IPO) list under the OPPS beginning on January 1, 2021 from site-of-service claim denials, Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO) referrals to Recovery Audit Contractor (RAC) for persistent noncompliance with the 2-midnight rule, and RAC reviews for “patient status” (that is, site-of-service) until such procedures are more commonly billed in the outpatient setting. • 340B —Acquired Drugs: We are continuing our current policy of paying an adjusted amount of ASP minus 22.5 percent for drugs and biologicals acquired under the 340B program. We are continuing to exempt Rural SCHs, PPS-exempt cancer hospitals and children's hospitals from our 340B payment policy. • Comprehensive APCs: For CY 2021, we are creating two new comprehensive APCs (C-APCs): C-APC 5378 (Level 8 Urology and Related Services) and C-APC 5465 (Level 5 Neurostimulator and Related Procedures). Adding these C-APCs increases the total number of C-APCs to 69. • Device Pass-Through Payment Applications: For CY 2021, we evaluated five applications for device pass-through payments. Two of these applications (CUSTOMFLEX® ARTIFICIALIRIS and EXALT TM Model D Single-Use Duodenoscope) received preliminary approval for pass-through payment status through our quarterly review process. Based on our review and public comments received, we are continuing the pass-through payment status for CUSTOMFLEX® ARTIFICIALIRIS and EXALT TM Model D Single-Use Duodenoscope and approving the remaining three applications for device pass-through payment status. • Changes to the Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals: For CY 2021 and subsequent years, we are changing the minimum default level of supervision for non-surgical extended duration therapeutic services (NSEDTS) to general supervision for the entire service, including the initiation portion of the service, for which we had previously required direct supervision. This is consistent with the minimum required level of general supervision that currently applies for most outpatient hospital therapeutic services. We are finalizing our proposed policy to permit direct supervision of pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation services using virtual presence of the physician through audio/video real-time communications technology subject to the clinical judgment of the supervising physician until the later of the end of the calendar year in which the PHE ends or December 31, 2021. • Cancer Hospital Payment Adjustment: For CY 2021, we are continuing to provide additional payments to cancer hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. However, section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. Based on the data and the required 1.0 percentage point reduction, a target PCR of 0.89 will be used to determine the CY 2021 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.89 for each cancer hospital. • ASC Payment Update: For CYs 2019 through 2023, we adopted a policy to update the ASC payment system using the hospital market basket update. Using the hospital market basket methodology, for CY 2021, we are increasing payment rates under the ASC payment system by 2.4 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a hospital market basket percentage increase of 2.4 percent minus a multifactor productivity adjustment of 0.0 percentage point. Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2021 would be approximately 5.42 billion, an increase of approximately 120 million compared to estimated CY 2020 Medicare payments. • Changes to the List of ASC Covered Surgical Procedures: For CY 2021, we are adding eleven procedures to the ASC covered procedures list (CPL), including total hip arthroplasty (CPT 27130). Additionally, we are revising the criteria we use to add covered surgical procedures to the ASC CPL, providing that certain criteria we used to add covered surgical procedures to the ASC CPL in the past will now be factors for physicians to consider in deciding whether a specific beneficiary should receive a covered surgical procedure in an ASC, and adopting a notification process for surgical procedures the public believes can be added to the ASC CPL under the criteria we are retaining. Using our revised criteria, we are adding an additional 267 surgical procedures to the ASC CPL beginning in CY 2021. • Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs: For the Hospital OQR and ASCQR Programs, we are updating and refining requirements to further meaningful measurement and reporting for quality of care provided in these outpatient settings while limiting compliance burden. We are revising and codifying previously finalized administrative procedures and are codifying an expanded review and corrections process to further the programs' alignment while clarifying program requirements. We are not making any measure additions or removals for either program. • Overall Hospital Quality Star Ratings: We are establishing and updating the methodology that will be used to calculate the Overall Hospital Quality Star Ratings beginning with 2021 and for subsequent years. We are updating and simplifying how the ratings are calculated, with policies such as adopting a simple average of measure scores instead of the latent variable model and reducing the total number of measure groups from seven to five measure groups due to the removal of measures through the Meaningful Measure Initiative. Additionally, we are increasing the comparability of star ratings by peer grouping hospitals by the number of measure groups. These changes will simplify the methodology, and therefore, reduce provider burden, improve the predictability of the star ratings, and increase the comparability between hospital star ratings. We did not finalize our proposals related to stratification of the Readmissions group by dual-eligible patients. • Addition of New Service Categories for Hospital Outpatient Department Prior Authorization Process: We are adding the following two categories of services to the prior authorization process for hospital outpatient departments beginning for dates of service on or after July 1, 2021: (1) Cervical fusion with disc removal and (2) implanted spinal neurostimulators. • Clinical Laboratory Date of Service (DOS) Policy: We are excluding certain protein-based Multianalyte Assays with Algorithmic Analyses (MAAAs), which are not generally performed in the HOPD setting, from the OPPS packaging policy and adding them to the laboratory DOS exception at 42 CFR 414.510(b)(5). • Physician-Owned Hospitals: We are removing unnecessary regulatory restrictions on high Medicaid facilities and including beds in a physician-owned hospital's baseline consistent with state law. • Radiation Oncology Model (RO Model): On September 29, 2020, we published a final rule in the Federal Register (85 FR 61114) entitled “Specialty Care Models to Improve Quality of Care and Reduce Expenditures” that finalized the Radiation Oncology Model (RO Model). To ensure that participation in the RO Model during the public health emergency (PHE) for the Coronavirus disease 2019 (COVID-19) pandemic does not further strain RO participants' capacity, we are revising the RO Model's Model performance period to begin on July 1, 2021 and end December 31, 2025 in this interim final rule with comment period. We are requesting comments on this change. • Reporting Requirements for Hospitals and Critical Access Hospitals (CAHs) to Report COVID-19 Therapeutic Inventory and Usage and to Report Acute Respiratory Illness During the Public Health Emergency (PHE) for Coronavirus Disease 2019 (COVID-19): This interim final rule with comment period establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking COVID-19 therapeutic inventory and usage and for tracking the incidence and impact of Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection) during the ongoing COVID-19 PHE; and for providing this information and data to the Secretary of Health and Human Services (Secretary) in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the Public Health Emergency (PHE). 3. Summary of Costs and Benefit In section XXVII and XXVIII of this final rule with comment period and interim final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts are described below. a. Impacts of All OPPS Changes Table 79 in section XXVII.C of the CY 2021 OPPS/ASC final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2021 compared to all estimated OPPS payments in CY 2020. We estimate that the policies in the CY 2021 OPPS/ASC final rule with comment period will result in a 2.4 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2021, including beneficiary cost-sharing, to the approximately 3,665 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will increase by approximately $1.61 billion compared to CY 2020 payments, excluding our estimated changes in enrollment, utilization, and case-mix. We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs are only paid for partial hospitalization services under the OPPS. Continuing the provider-specific structure we adopted beginning in CY 2011, and basing payment fully on the type of provider furnishing the service, we estimate an 11.9 percent increase in CY 2021 payments to CMHCs relative to their CY 2020 payments. b. Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes based on the FY 2021 IPPS final rule wage indexes will result in an estimated increase in payments of 0.2 percent for urban hospitals under the OPPS and an estimated increase in payments of 0.4 percent for rural hospitals. These wage indexes include the continued implementation of the OMB labor market area delineations based on 2010 Decennial Census data, with updates, as discussed in section II.C. of this final rule with comment period. c. Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment There are no significant impacts of our CY 2021 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not making any change in policies for determining the rural hospital payment adjustments. While we are implementing the reduction to the cancer hospital payment adjustment for CY 2021 required by section 1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st Century Cures Act, the target payment-to-cost ratio (PCR) for CY 2021 is 0.89, equivalent to the 0.89 target PCR for CY 2020, and therefore has no budget neutrality adjustment. d. Impacts of the OPD Fee Schedule Increase Factor For the CY 2021 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 2.4 percent and applying that increase factor to the conversion factor for CY 2021. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that urban hospitals will experience an increase in payments of approximately 2.6 percent and that rural hospitals would experience an increase in payments of 2.9 percent. Classifying hospitals by teaching status, we estimate nonteaching hospitals will experience an increase in payments of 2.9 percent, minor teaching hospitals will experience an increase in payments of 3.0 percent, and major teaching hospitals will experience an increase in payments of 2.0 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 2.6 percent in payments, while hospitals with government ownership will experience an increase of 2.2 percent in payments. We estimate that hospitals with proprietary ownership will experience an increase of 3.5 percent in payments. e. Impacts of the ASC Payment Update For impact purposes, the surgical procedures on the ASC covered surgical procedure list are aggregated into surgical specialty groups using CPT and HCPCS code range definitions. The percentage change in estimated total payments by specialty groups under the CY 2021 payment rates, compared to estimated CY 2020 payment rates, generally ranges between an increase of 2 and 5 percent, depending on the service, with some exceptions. We estimate the impact of applying the hospital market basket update to ASC payment rates will be an increase in payments of $120 million under the ASC payment system in CY 2021. B. Legislative and Regulatory Authority for the Hospital OPPS When Title XVIII of the Act was enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section 1833(t) to the Act, authorizing implementation of a PPS for hospital outpatient services. The OPPS was first implemented for services furnished on or after August 1, 2000. Implementing regulations for the OPPS are located at 42 CFR parts 410 and 419. The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. The following Acts made additional changes to the OPPS: The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554); The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 2006; the Medicare Improvements and Extension Act under Division B of Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) (Pub. L. 109-432), enacted on December 20, 2006; the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), enacted on December 29, 2007; the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July 15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-148), enacted on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on March 30, 2010 (these two public laws are collectively known as the Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010 (MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L. 112-96), enacted on February 22, 2012; the American Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016; the Consolidated Appropriations Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271), enacted on October 24, 2018. Under the OPPS, we generally pay for hospital Part B services on a rate-per-service basis that varies according to the APC group to which the service is assigned. We use the Healthcare Common Procedure Coding System (HCPCS) (which includes certain Current Procedural Terminology (CPT) codes) to identify and group the services within each APC. The OPPS includes payment for most hospital outpatient services, except those identified in section I.C. of the CY 2021 OPPS/ASC final rule. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B. The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located. All services and items within an APC group are comparable clinically and with respect to resource use, as required by section 1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of the Act, subject to certain exceptions, items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median cost (or mean cost, if elected by the Secretary) for an item or service in the APC group is more than 2 times greater than the lowest median cost (or mean cost, if elected by the Secretary) for an item or service within the same APC group (referred to as the “2 times rule”). In implementing this provision, we generally use the cost of the item or service assigned to an APC group. For new technology items and services, special payments under the OPPS may be made in one of two ways. Section 1833(t)(6) of the Act provides for temporary additional payments, which we refer to as “transitional pass-through payments,” for at least 2 but not more than 3 years for certain drugs, biological agents, brachytherapy devices used for the treatment of cancer, and categories of other medical devices. For new technology services that are not eligible for transitional pass-through payments, and for which we lack sufficient clinical information and cost data to appropriately assign them to a clinical APC group, we have established special APC groups based on costs, which we refer to as New Technology APCs. These New Technology APCs are designated by cost bands which allow us to provide appropriate and consistent payment for designated new procedures that are not yet reflected in our claims data. Similar to pass-through payments, an assignment to a New Technology APC is temporary; that is, we retain a service within a New Technology APC until we acquire sufficient data to assign it to a clinically appropriate APC group. C. Excluded OPPS Services and Hospitals Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services. The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS); services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system; and services and procedures that require an inpatient stay that are paid under the hospital IPPS. In addition, section 1833(t)(1)(B)(v) of the Act does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017 by an off-campus outpatient department of a provider (as defined in subparagraph (B) of paragraph (21)). We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22. Under § 419.20(b) of the regulations, we specify the types of hospitals that are excluded from payment under the OPPS. These excluded hospitals are: • Critical access hospitals (CAHs); • Hospitals located in Maryland and paid under Maryland's All-Payer or Total Cost of Care Model; • Hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico; and • Indian Health Service (IHS) hospitals. D. Prior Rulemaking On April 7, 2000, we published in the Federal Register a final rule with comment period (65 FR 18434) to implement a prospective payment system for hospital outpatient services. The hospital OPPS was first implemented for services furnished on or after August 1, 2000. Section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS, not less often than annually, and to revise the groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practices, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Since initially implementing the OPPS, we have published final rules in the Federal Register annually to implement statutory requirements and changes arising from our continuing experience with this system. These rules can be viewed on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html . E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel) 1. Authority of the Panel Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 106-113, requires that we consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to annually review (and advise the Secretary concerning) the clinical integrity of the payment groups and their weights under the OPPS. In CY 2000, based on section 1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) to fulfill this requirement. In CY 2011, based on section 222 of the Public Health Service Act, which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not restricted to using data compiled by CMS, and in conducting its review, it may use data collected or developed by organizations outside the Department. 2. Establishment of the Panel On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and, at that time, named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) who review clinical data and advise CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that the Panel— • May advise on the clinical integrity of Ambulatory Payment Classification (APC) groups and their associated weights; • May advise on the appropriate supervision level for hospital outpatient services; • May advise on OPPS APC rates for ASC covered surgical procedures; • Continues to be technical in nature; • Is governed by the provisions of the FACA; • Has a Designated Federal Official (DFO); and • Is chaired by a Federal Official designated by the Secretary. The Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add critical access hospital (CAH) representation to its membership. The Panel's charter was also amended on November 6, 2014 (80 FR 23009), and the number of members was revised from up to 19 to up to 15 members. The Panel's current charter was approved on November 20, 2020, for a 2-year period. The current Panel membership and other information pertaining to the Panel, including its charter, Federal Register notices, membership, meeting dates, agenda topics, and meeting reports, can be viewed on the CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html . 3. Panel Meetings and Organizational Structure The Panel has held many meetings, with the last meeting taking place on August 31, 2020. Prior to each meeting, we publish a notice in the Federal Register to announce the meeting, new members, and any other changes of which the public should be aware. Beginning in CY 2017, we have transitioned to one meeting per year (81 FR 31941). In CY 2018, we published a Federal Register notice requesting nominations to fill vacancies on the Panel (83 FR 3715). As published in this notice, CMS is accepting nominations on a continuous basis. In addition, the Panel has established an administrative structure that, in part, currently includes the use of three subcommittee workgroups to provide preparatory meeting and subject support to the larger panel. The three current subcommittees include the following: • APC Groups and Status Indicator Assignments Subcommittee, which advises and provides recommendations to the Panel on the appropriate status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid, as well as the appropriate APC assignment of HCPCS codes regarding services for which separate payment is made; • Data Subcommittee, which is responsible for studying the data issues confronting the Panel and for recommending options for resolving them; and • Visits and Observation Subcommittee, which reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS. Each of these workgroup subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 31, 2020, meeting that the subcommittees continue. We accepted this recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS website mentioned earlier in this section, and the FACA database at http://facadatabase.gov . F. Public Comments Received in Response to the CY 2021 OPPS/ASC Proposed Rule We received approximately 1,350 timely pieces of correspondence on the CY 2021 OPPS/ASC proposed rule that appeared in the Federal Register on August 12, 2020 (85 FR 48772). We note that we received some public comments that were outside the scope of the CY 2021 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2021 OPPS/ASC final rule with comment period. Summaries of those public comments that are within the scope of the proposed rule and our responses are set forth in the various sections of this final rule with comment period under the appropriate headings. G. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With Comment Period We received approximately 22 timely pieces of correspondence on the CY 2020 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 12, 2019 (84 FR 61142), most of which were outside of the scope of the final rule. In-scope comments related to the interim APC assignments and/or status indicators of new or replacement Level II HCPCS codes (identified with comment indicator “NI” in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that final rule). Summaries of the public comments on topics that were open to comment and our responses to them are set forth in various sections of this final rule with comment period under the appropriate subject-matter headings. Summaries of the public comments on new or replacement Level II HCPCS codes are set forth in the CY 2021 OPPS/ASC proposed rule and this final rule with comment period under the appropriate subject matter headings. II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights 1. Database Construction a. Database Source and Methodology Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for APCs. In the April 7, 2000 OPPS final rule with comment period (65 FR 18482), we explained in detail how we calculated the relative payment weights that were implemented on August 1, 2000 for each APC group. For the CY 2021 OPPS/ASC proposed rule (85 FR 48779), we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2021, and before January 1, 2022 (CY 2021), using the same basic methodology that we described in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61149), using updated CY 2019 claims data. That is, as we proposed, we recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services, using the most recent available data to construct a database for calculating APC group weights. For the purpose of recalibrating the proposed APC relative payment weights for CY 2021, we began with approximately 167 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2019, and before January 1, 2020, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 87 million final action claims to develop the proposed CY 2021 OPPS payment weights. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for the CY 2021 OPPS/ASC proposed rule on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html . Addendum N to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) included the proposed list of bypass codes for CY 2021. The proposed list of bypass codes contained codes that were reported on claims for services in CY 2019 and, therefore, included codes that were in effect in CY 2019 and used for billing, but were deleted for CY 2020. We retained these deleted bypass codes on the proposed CY 2021 bypass list because these codes existed in CY 2019 and were covered OPD services in that period, and CY 2019 claims data were used to calculate proposed CY 2021 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the proposed multiple imaging composite APCs were identified by asterisks (*) in the third column of Addendum N to the proposed rule. HCPCS codes that we proposed to add for CY 2021 were identified by asterisks (*) in the fourth column of Addendum N. b. Calculation and Use of Cost-to-Charge Ratios (CCRs) For CY 2021, in the CY 2020 OPPS/ASC proposed rule (85 FR 48779), we proposed to continue to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the CY 2021 APC payment rates are based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2019 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2018. For the proposed CY 2021 OPPS payment rates, we used the set of claims processed during CY 2019. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2019 (the year of claims data we used to calculate the proposed CY 2021 OPPS payment rates) and updates to the NUBC 2019 Data Specifications Manual. That crosswalk is available for review and continuous comment on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. In accordance with our longstanding policy, we calculate CCRs for the standard and nonstandard cost centers accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital-specific departmental level. For a discussion of the hospital-specific overall ancillary CCR calculation, we refer readers to the CY 2007 OPPS/ASC final rule with comment period (71 FR 67983 through 67985). The calculation of blood costs is a longstanding exception (since the CY 2005 OPPS) to this general methodology for calculation of CCRs used for converting charges to costs on each claim. This exception is discussed in detail in the CY 2007 OPPS/ASC final rule with comment period and discussed further in section II.A.2.a.(1) of the proposed rule and this final rule with comment period. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840 through 74847), we finalized our policy of creating new cost centers and distinct CCRs for implantable devices, magnetic resonance imaging (MRIs), computed tomography (CT) scans, and cardiac catheterization. However, in response to the CY 2014 OPPS/ASC proposed rule, commenters reported that some hospitals used a less precise “square feet” allocation methodology for the costs of large moveable equipment like CT scan and MRI machines. They indicated that while we recommended using two alternative allocation methods, “direct assignment” or “dollar value,” as a more accurate methodology for directly assigning equipment costs, industry analysis suggested that approximately only half of the reported cost centers for CT scans and MRIs rely on these preferred methodologies. In response to concerns from commenters, we finalized a policy for the CY 2014 OPPS/ASC final rule with comment period (78 FR 74847) to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the APCs for CT and MRI. Further, we finalized a transitional policy to estimate the imaging APC relative payment weights using only CT and MRI cost data from providers that do not use “square feet” as the cost allocation statistic. We provided that this finalized policy would sunset in 4 years to provide sufficient time for hospitals to transition to a more accurate cost allocation method and for the related data to be available for ratesetting purposes (78 FR 74847). Therefore, beginning in CY 2018 with the sunset of the transition policy, we would estimate the imaging APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed. However, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228 and 59229) and in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58831), we finalized a policy to extend the transition policy for 1 additional year and we continued to remove claims from providers that use a cost allocation method of “square feet” to calculate CT and MRI CCRs for the CY 2018 OPPS and the CY 2019 OPPS. As we discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228), some stakeholders have raised concerns regarding using claims from all providers to calculate CT and MRI CCRs, regardless of the cost allocations statistic employed (78 FR 74840 through 74847). Stakeholders noted that providers continue to use the “square feet” cost allocation method and that including claims from such providers would cause significant reductions in the imaging APC payment rates. Table 1 demonstrates the relative effect on imaging APC payments after removing cost data for providers that report CT and MRI standard cost centers using “square feet” as the cost allocation method by extracting HCRIS data on Worksheet B-1. Table 2 provides statistical values based on the CT and MRI standard cost center CCRs using the different cost allocation methods. ER29DE20.000 ER29DE20.001 Our analysis shows that since the CY 2014 OPPS in which we established the transition policy, the number of valid MRI CCRs has increased by 18.7 percent to 2,199 providers and the number of valid CT CCRs has increased by 16.5 percent to 2,280 providers. Table 1 displays the impact on OPPS payment rates for CY 2021 if claims from providers that report using the “square feet” cost allocation method were removed. This can be attributed to the generally lower CCR values from providers that use a “square feet” cost allocation method as shown in Table 1. We note that the CT and MRI cost center CCRs have been available for ratesetting since the CY 2014 OPPS in which we established the transition policy. Since the initial 4-year transition, we had extended the transition an additional 2 years to offer providers flexibility in applying cost allocation methodologies for CT and MRI cost centers other than “square feet.” In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), we finalized a 2-year phased-in approach, as suggested by some commenters, that applied 50 percent of the payment impact from ending the transition in CY 2020 and 100 percent of the payment impact from ending the transition in CY 2021. We believe we have provided sufficient time for providers to adopt an alternative cost allocation methodology for CT and MRI cost centers if they intended to do so and many providers continue to use the “square feet” cost allocation methodology, which we believe indicates that these providers believe this methodology is a sufficient method for attributing costs to this cost center. Additionally, we generally believe that increasing the amount of claims data available for use in ratesetting improves our ratesetting process. Therefore, as finalized in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), in the CY 2021 OPPS we are using all claims with valid CT and MRI cost center CCRs, including those that use a “square feet” cost allocation method, to estimate costs for the APCs for CT and MRI identified in Table 1. The Deficit Reduction Act (DRA) of 2005 requires Medicare to limit Medicare payment for certain imaging services covered by the Physician Fee Schedule (PFS) to not exceed what Medicare pays for these services under the OPPS. As required by law, for certain imaging services paid for under the PFS, we cap the technical component of the PFS payment amount for the applicable year at the OPPS payment amount (71 FR 69659 through 69661). As we stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74845), we have noted the potential impact the CT and MRI CCRs may have on other payment systems. We understand that payment reductions for imaging services under the OPPS could have significant payment impacts under the PFS where the technical component payment for many imaging services is capped at the OPPS amount. We will continue to monitor OPPS imaging payments in the future and consider potential impacts of payment changes on the PFS and the ASC payment system. Comment: Several commenters requested that CMS not use the CT and MRI-specific cost centers and instead estimate cost using the single diagnostic radiology cost center, believing that this will solve the inaccurate reporting of costs for CT and MR services. Commenters stated that many hospitals have “near zero” CT and MRI CCRs and the existing cost centers are inaccurate, too low, and depressing the valuation of APCs that include CT and MRI services. One commenter recommended that CMS establish detailed instructions for nonstandard cost centers to improve the accuracy of the cost center data used to calculate CT and MRI CCRs. Commenters also noted that the impact of our proposal may diminish beneficiary access to medical imaging services for beneficiaries, specifically noting low OPPS payments for cardiac computed tomography angiography (CCTA). Several commenters noted that the use of separate CT and MRI CCRs creates unintended consequences on the technical component of CT and MRI codes in the Medicare Physician Fee Schedule and on the payment rate under the ASC payment system for these codes. Response: We appreciate the thoughtful comments and analysis regarding the use of the CT and MRI cost center CCRs. However, as discussed in the CY 2020 OPPS/ASC final rule (84 FR 61152), we finalized a policy to end the transition policy and use all data submitted (including all providers, regardless of cost allocation method) in the CY 2021 OPPS. We did not propose to make any changes in the CY 2021 OPPS and are not modifying the policy at this time. 2. Final Data Development and Calculation of Costs Used for Ratesetting In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2021. The Hospital OPPS page on the CMS website on which this final rule with comment period is posted ( http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html ) provides an accounting of claims used in the development of the final payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, later in this section we discuss the file of claims that comprises the data set that is available upon payment of an administrative fee under a CMS data use agreement. The CMS website, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html , includes information about obtaining the “OPPS Limited Data Set,” which now includes the additional variables previously available only in the OPPS Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue code payment amounts. This file is derived from the CY 2019 claims that were used to calculate the final payment rates for this CY 2021 OPPS/ASC final rule with comment period. Previously, the OPPS established the scaled relative weights, on which payments are based using APC median costs, a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based. While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same, under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. For CY 2021, we are finalizing our proposal to continue to use geometric mean costs to calculate the relative weights on which the final CY 2021 OPPS payment rates are based. We used the methodology described in sections II.A.2.a. through II.A.2.c. of the CY 2021 OPPS/ASC final rule with comment period to calculate the costs we used to establish the relative payment weights used in calculating the OPPS payment rates for CY 2021 shown in Addenda A and B to the CY 2021 OPPS/ASC final rule with comment period (which are available via the internet on the CMS website). We referred readers to section II.A.4. of the CY 2021 OPPS/ASC final rule with comment period for a discussion of the conversion of APC costs to scaled payment weights. We note that under the OPPS, CY 2019 was the first year in which the claims data used for setting payment rates (CY 2017 data) contained lines with the modifier “PN”, which indicates nonexcepted items and services furnished and billed by off-campus provider-based departments (PBDs) of hospitals. Because nonexcepted services are not paid under the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58832), we finalized a policy to remove those claim lines reported with modifier “PN” from the claims data used in ratesetting for the CY 2019 OPPS and subsequent years. For the CY 2021 OPPS, we will continue to remove these claim lines with modifier “PN” from the ratesetting process. For details of the claims accounting process used in the CY 2021 OPPS/ASC final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this CY 2021 OPPS/ASC final rule with comment period on the CMS website at: http://www.cms .gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. a. Calculation of Single Procedure APC Criteria-Based Costs (1) Blood and Blood Products (a) Methodology Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered. Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs. We proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. This methodology has been our standard ratesetting methodology for blood and blood products since CY 2005. It was developed in response to data analysis indicating that there was a significant difference in CCRs for those hospitals with and without blood-specific cost centers, and past public comments indicating that the former OPPS policy of defaulting to the overall hospital CCR for hospitals not reporting a blood- specific cost center often resulted in an underestimation of the true hospital costs for blood and blood products. Specifically, to address the differences in CCRs and to better reflect hospitals' costs, we proposed to continue to simulate blood CCRs for each hospital that does not report a blood cost center by calculating the ratio of the blood-specific CCRs to hospitals' overall CCRs for those hospitals that do report costs and charges for blood cost centers. We also proposed to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports to simulate blood-specific CCRs for those hospitals. We proposed to calculate the costs upon which the proposed CY 2021 payment rates for blood and blood products are based using the actual blood-specific CCR for hospitals that reported costs and charges for a blood cost center and a hospital-specific, simulated blood-specific CCR for hospitals that did not report costs and charges for a blood cost center. We continue to believe that the hospital-specific, simulated blood-specific, CCR methodology better responds to the absence of a blood-specific CCR for a hospital than alternative methodologies, such as defaulting to the overall hospital CCR or applying an average blood-specific CCR across hospitals. Because this methodology takes into account the unique charging and cost accounting structure of each hospital, we believe that it yields more accurate estimated costs for these products. We continue to believe that this methodology in CY 2021 will result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general. We note that we defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Under this policy, we include the costs of blood and blood products when calculating the overall costs of these C-APCs. We proposed to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products will be reflected in the overall costs of the C-APCs (and, as a result, in the proposed payment rates of the C-APCs), we proposed not to make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)). We refer readers to Addendum B the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) for the proposed CY 2021 payment rates for blood and blood products (which are generally identified with status indicator “R”). For a more detailed discussion of the blood-specific CCR methodology, we refer readers to the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full history of OPPS payment for blood and blood products, we refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810). For CY 2021, we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology. We did not receive any comments on our proposal to establish payment rates for blood and blood products using our blood-specific CCR methodology and we are finalizing this policy as proposed. (b) Payment for Blood Not Otherwise Classified (NOC) Code Recently, providers and stakeholders in the blood products field have reported that product development for new blood products has accelerated. There may be several additional new blood products entering the market by the end of CY 2021, compared to only one or two new products entering the market over the previous 15 to 20 years. To encourage providers to use these new products, providers and stakeholders requested that we establish a new HCPCS code to allow for payment for unclassified blood products prior to these products receiving their own HCPCS code. Under the OPPS, unclassified procedures are generally assigned to the lowest APC payment level of an APC family. However, since blood products are each assigned to their own unique APC, the concept of a lowest APC payment level does not apply in this context. Starting January 1, 2020, we established a new HCPCS code, P9099 (Blood component or product not otherwise classified) which allows providers to report unclassified blood products. We assigned HCPCS code P9099 to status indicator “E2” (Not payable by Medicare when submitted on an outpatient claim) for CY 2020. We took this action because HCPCS code P9099 potentially could be reported for multiple products with different costs during the same period of time. Therefore, we could not identify an individual blood product HCPCS code that would have a similar cost to HCPCS code P9099, and were not able to crosswalk a payment rate from an established blood product HCPCS code to HCPCS code P9099. Some stakeholders expressed concerns that assigning HCPCS code P9099 to a non-payable status in the OPPS meant that hospitals would receive no payment when they used unclassified blood products. Also, claim lines billed with P9099 are rejected by Medicare, which prevents providers from tracking the utilization of unclassified blood products. Because of the challenges of determining an appropriate payment rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC proposed rule that we were considering packaging the cost of unclassified blood products into their affiliated primary medical procedure. Although we typically do not package blood products under the OPPS, for unclassified blood products, we stated that we do not believe it is possible to accurately determine an appropriate rate that would apply for all of the products (potentially several, with varying costs) that may be reported using HCPCS code P9099. Packaging the cost of unclassified blood products into the payment for the primary medical service by assigning HCPCS code P9099 a status indicator of “N” would allow providers to report the cost of unclassified blood products to Medicare. Over time, the costs of unspecified blood products would be reflected in the payment rate for the primary medical service if the blood product remains unclassified. However, we stated that we expect that most blood products would seek and be granted more specific coding such that the unclassified HCPCS code P9099 would no longer be applicable. We also explained that we believe that packaging the costs of unclassified blood products would be an improvement over the current non-payable status for HCPCS code P9099 as it would allow for tracking of the costs and utilization of unclassified blood products. Another option we considered for the CY 2021 OPPS/ASC proposed rule, but ultimately rejected was similar to our policy under the OPPS to assign NOC codes to the lowest APC within the appropriate clinical family. We stated that we could have cross-walked and assigned the same payment rate for HCPCS code P9099 as HCPCS code P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml), which is the lowest cost blood product with a proposed CY 2021 payment rate of $8.02 per unit. This option would have provided a small, separate payment for each unclassified blood product service, and, similar to our proposal to package the costs of HCPCS code P9099 into their primary procedure, would have allowed for tracking of the cost and utilization for unclassified blood products. However, given that the cross-walked payment rate is potentially significantly lower than the cost of the product, we concluded that providers may find that packaging the cost of unclassified blood products into another medical service may generate more payment for the products over time. Thus, for CY 2021, we proposed to package the cost of unclassified blood products reported by HCPCS code P9099 into the cost of the associated primary procedure. We proposed to change the status indicator for HCPCS code P9099 from “E2” (not payable by Medicare in the OPPS) to “N” (payment is packaged into other services in the OPPS). In addition, we also sought comment on the alternative proposal to make HCPCS code P9099 separately payable with a payment rate equivalent to the payment rate for the lowest cost blood product, HCPCS code P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml), with a proposed CY 2021 payment rate of $8.02 per unit. We stated that if we were to adopt this option as our final policy, we would also change the status indicator for HCPCS code P9099 from “E2” (not payable by Medicare in the OPPS) to “R” (blood and blood products, paid under OPPS). Comment: Multiple commenters opposed our proposal to reassign HCPCS code P9099 to status indicator “N” and package the payment for unclassified blood products into the associated primary procedure. Commenters were concerned that because blood products are usually separately paid in the OPPS, APC payment rates for the associated procedures would not reflect the cost of the unclassified blood products, and that it would take a long time before providers would see any changes in payments that would include the cost of unclassified blood products. One commenter was also concerned that packaging the cost of unclassified blood products would make providers less likely to report HCPCS code P9099, making it harder to track the utilization of unclassified blood products, and reluctant to use blood products that would not receive separate payment. Response: We agree with the concerns expressed by the commenters, and we have considered these concerns in determining the payment policy for the blood NOC code. Comment: One commenter supported our proposal to reassign HCPCS code P9099 to status indicator “N” and package the payment for unclassified blood products into the associated primary procedure. The commenter also encouraged us to work with manufacturers and blood product stakeholders to move quickly to establish individual HCPCS codes for these new blood products. Response: We appreciate the commenter's support for our proposal and we also support the request that codes be established in a timely manner for unclassified blood products. Comment: Multiple commenters opposed our alternative proposal to pay services billed with HCPCS code P9099 at the lowest payment rate for a blood product in the OPPS, which is $7.79 per unit. The commenters believe the payment rate will be too low for new, unclassified blood products and may discourage manufacturers from pursuing new innovations in the blood products field. Response: We understand the concerns of the commenters who believe paying for unclassified blood products at the lowest payment rate for a separately payable blood product in the OPPS does not provide adequate payment for new, unclassified blood products. However, our goal is to limit the time it is necessary for providers to report HCPCS code P9099 until a new blood product has an individual HCPCS code established for the product. Once a new blood product has an individual HCPCS code, it will allow for a payment for the new service that is better aligned with its costs and make it easier to track utilization for the service. Establishing a payment rate for the blood NOC code that is equal to the payment rate for the lowest payment rate for a separately payable blood product is consistent with OPPS policy for other major categories of medical care where the payment rate for the unclassified service is equal to the lowest-paying APC in an APC series for that category of service. Comment: The CMS HOP Panel and multiple commenters requested that unclassified blood products be separately paid using a weighted average of the payment rates of all separately payable blood products in the OPPS. The average payment rate would be weighted by the number of units billed for each service in the OPPS. Commenters believe a weighted average would be consistent with OPPS policy to provide separate payment for all blood products and would encourage the use of HCPCS code P9099 to track the utilization of unclassified blood products until the new products could receive individual HCPCS codes. The weighted average also would provide a higher payment for services billed with HCPCS code P9099 than the alternative proposal of assigning the lowest payment rate for a separately payable blood product as payment for unclassified blood products. Other commenters suggested that unclassified blood products be paid either at charges reduced to cost or at reasonable cost to appropriately compensate providers billing unclassified blood products. Response: Providing payment for HCPCS code P9099 through a weighted average payment, charges reduced to cost, or reasonable cost could provide incentives to discourage manufacturers of new blood products from seeking individual HCPCS codes for their products. A weighted average payment would encourage manufacturers of relatively inexpensive unclassified blood products not to seek a HCPCS code for their products because the payment using P9099 for the products would be substantially higher than payment the products would receive once an individual code is established for the blood products. In addition, the level of payment from a weighted average payment may reduce the urgency of manufacturers to seek an individual HCPCS cost even for higher-cost products, which would delay our ability to track payment for individual blood products. We have similar concerns about paying unclassified blood products using either charges reduced to cost or reasonable cost. Although these payment methods would accurately reflect the cost of unclassified blood products to providers, there would be no incentive for providers to manage their costs when using unclassified blood products, and no incentives for the manufacturers to seek individual HCPCS codes for the unclassified blood products. The OPPS is a prospective payment system, and we want to limit rather than expand the types of services within the OPPS that do not receive prospective payment. After reviewing the public comments, we are not finalizing our original proposal to package HCPCS code P9099 into the associated primary procedure. Instead, we are finalizing our alternative proposal to make HCPCS code P9099 separately payable, assign it a status indicator of “R”, and pay the code at a rate equal to the lowest paid separately payable blood product in the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per unit. Our alternative proposal aligns with our general policy in the OPPS to pay NOC codes at the lowest available APC rate for a service category, while providing a payment for unclassified blood products when a service is reported on the claim. We believe our alternative proposal is superior to our original proposal, which would not have provided any separate payment for blood products reported using HCPCS code P9099. Our alternative proposal also provides incentives for manufacturers to seek individual HCPCS codes for new blood products, which helps us to track the utilization of these new blood products and establish a payment rate for these new products that better reflects their cost. We decided to finalize our alternative proposal, as it gives providers some payment for unclassified blood products, is consistent with OPPS policy for other major categories of medical care where the payment rate for the unclassified service is based on the lowest-paying APC in an APC series for that category of service, while maintaining incentives for manufacturers to establish individual HCPCS codes for their new blood products in a timely manner. (2) Brachytherapy Sources Section 1833(t)(2)(H) of the Act mandates the creation of additional groups of covered OPD services that classify devices of brachytherapy consisting of a seed or seeds (or radioactive source) (“brachytherapy sources”) separately from other services or groups of services. The statute provides certain criteria for the additional groups. For the history of OPPS payment for brachytherapy sources, we refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC final rule with comment period (77 FR 68240 through 68241). As we have stated in prior OPPS updates, we believe that adopting the general OPPS prospective payment methodology for brachytherapy sources is appropriate for a number of reasons (77 FR 68240). The general OPPS methodology uses costs based on claims data to set the relative payment weights for hospital outpatient services. This payment methodology results in more consistent, predictable, and equitable payment amounts per source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed to payment based on hospitals' charges adjusted to cost, also would provide hospitals with incentives for efficiency in the provision of brachytherapy services to Medicare beneficiaries. Moreover, this approach is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 through 70325) for further discussion of the history of OPPS payment for brachytherapy sources. For CY 2021, except where otherwise indicated, we proposed to use the costs derived from CY 2019 claims data to set the proposed CY 2021 payment rates for brachytherapy sources because CY 2019 is the year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2021 OPPS. With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter), we proposed to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we proposed for other items and services paid under the OPPS, as discussed in section II.A.2. of the CY 2021 OPPS/ASC proposed rule. We also proposed to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not otherwise specified, per source) and C2699 (Brachytherapy source, non-stranded, not otherwise specified, per source), at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per source basis (as opposed to, for example, a per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). We also proposed to continue the policy we first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding payment for new brachytherapy sources for which we have no claims data, based on the same reasons we discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66786; which was delayed until January 1, 2010 by section 142 of Pub. L. 110-275). Specifically, this policy is intended to enable us to assign new HCPCS codes for new brachytherapy sources to their own APCs, with prospective payment rates set based on our consideration of external data and other relevant information regarding the expected costs of the sources to hospitals. The proposed CY 2021 payment rates for brachytherapy sources are included in Addendum B to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and identified with status indicator “U”. For CY 2018, we assigned status indicator “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) in the absence of claims data and established a payment rate using external data (invoice price) at $4.69 per mm 2 . For CY 2019, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm 2 . Our CY 2018 claims data available for the final CY 2020 OPPS/ASC final rule with comment period, included two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per mm 2 . In response to comments from stakeholders, we agreed with commenters that given the limited claims data available and a new outpatient indication for C2645, a payment rate for HCPCS code C2645 based on the geometric mean cost of 1.02 per mm 2 may not adequately reflect the cost of HCPCS code C2645. In the CY 2020 OPPS/ASC final rule with comment period, we finalized our policy to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to maintain the CY 2019 payment rate of $4.69 per mm 2 for HCPCS code C2645 for CY 2020. For CY 2021, we proposed to continue to assign status indicator “U” to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter). For CY 2020, in the absence of sufficient claims data, we continued to establish a payment rate for C2645 at $4.69 per mm 2 . Our CY 2019 claims data available for the proposed CY 2021 rule included one claim with over 4,000 units of HCPCS code C2645. The geometric mean cost of HCPCS code C2645 from this one claim is $1.07 per mm 2 for CY 2019. We do not believe that this one claim is adequate to establish an APC payment rate for HCPCS code C2645 and to discontinue our use of external data for this brachytherapy source. Therefore, for CY 2021, we proposed to continue assigning the brachytherapy source described by HCPCS code C2645 a payment rate of $4.69 mm 2 for CY 2021 through use of our equitable adjustment authority. Comment: One commenter recommended that we should review outpatient claims data for low-volume brachytherapy sources and consider removing outliers to ensure appropriate and stable brachytherapy source reimbursement in future years. The commenter contends that brachytherapy source payments have fluctuated significantly since 2013 and may create barriers to access for individual cancer patients. Response: We thank the commenter for their recommendation. As we have stated in past rulemaking, the OPPS relies on the concept of averaging, where the payment may be more or less than the estimated cost of providing a service for a particular patient; however, with the exception of outlier cases, we believe that such a prospective payment is adequate to ensure access to appropriate care. We acknowledge that payment for brachytherapy sources based on geometric mean costs from a small set of claims may be more variable on a year-to-year basis when compared to the geometric mean costs for brachytherapy sources from a larger claims set. We will take the commenter's recommendation into consideration in future rulemaking. Comment: One commenter recommended that we exclude erroneous claims data for C2642 (Brachytherapy source, stranded, cesium-131, per source) from a particular hospital. The commenter stated the hospital reported costs per source of $42.59 for C2642. Further, the commenter argued the proposed payment rate for C2642 as a result of including the hospital's claims information would threaten access to cancer therapy and would be less than the actual amount paid by any hospital for this source over the past decade. Response: In our review of CY 2019 brachytherapy claims used for CY 2021 OPPS ratesetting, we did not find any erroneous billing of C2642 with respect to the particular hospital mentioned by the commenter. OPPS relative payment weights based on geometric mean costs capture the range of costs associated with services that are introduced slowly into the system on a case-by-case or hospital-by-hospital basis. For these reasons we believe it would be inappropriate to remove any outliers when determining brachytherapy geometric mean costs and payment rates for C2642. After consideration of the public comments we received, we are finalizing our proposal to assign the brachytherapy source described by HCPCS code C2645 a payment rate of $4.69 per mm 2 for CY 2021 through use of our equitable adjustment authority. We continue to invite hospitals and other parties to submit recommendations to us for new codes to describe new brachytherapy sources. Such recommendations should be direction via email to outpatientpps@cms.hhs.gov or by mail to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244. We will continue to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis. b. Comprehensive APCs (C-APCs) for CY 2021 (1) Background In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. The policy was finalized in CY 2014, but the effective date was delayed until January 1, 2015, to allow additional time for further analysis, opportunity for public comment, and systems preparation. The comprehensive APC (C-APC) policy was implemented effective January 1, 2015, with modifications and clarifications in response to public comments received regarding specific provisions of the C-APC policy (79 FR 66798 through 66810). A C-APC is defined as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established C-APCs as a category broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70332), we finalized 10 additional C-APCs to be paid under the existing C-APC payment policy and added 1 additional level to both the Orthopedic Surgery and Vascular Procedures clinical families, which increased the total number of C-APCs to 37 for CY 2016. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 through 79585), we finalized another 25 C-APCs for a total of 62 C-APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC final rule with comment period, we created 3 new C-APCs, increasing the total number to 65 (83 FR 58844 through 58846). Most recently in the CY 2020 OPPS/ASC final rule with comment period, we created two new C-APCs, increasing the total number to 67 C-APCs (84 FR 61158 through 61166). Under our C-APC policy, we designate a service described by a HCPCS code assigned to a C-APC as the primary service when the service is identified by OPPS status indicator “J1”. When such a primary service is reported on a hospital outpatient claim, taking into consideration the few exceptions that are discussed below, we make payment for all other items and services reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services. This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level. Services excluded from the C-APC policy under the OPPS include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which also require separate payment under section 1833(t)(6) of the Act; self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act; and certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website). In the interim final with request for comments (IFC) entitled, “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency”, published on November 6, 2020, we stated that effective for services furnished on or after the effective date of the IFC and until the end of the PHE for COVID-19, there is an exception to the OPPS C-APC policy to ensure separate payment for new COVID-19 treatments that meet certain criteria (85 FR 71158 through 71160). Under this exception, any new COVID-19 treatment that meets the two following criteria will, for the remainder of the PHE for COVID-19, always be separately paid and will not be packaged into a C-APC when it is provided on the same claim as the primary C-APC service. First, the treatment must be a drug or biological product (which could include a blood product) authorized to treat COVID-19, as indicated in section “I. Criteria for Issuance of Authorization” of the letter of authorization for the drug or biological product, or the drug or biological product must be approved by the FDA for treating COVID-19. Second, the emergency use authorization (EUA) for the drug or biological product (which could include a blood product) must authorize the use of the product in the outpatient setting or not limit its use to the inpatient setting, or the product must be approved by the FDA to treat COVID-19 disease and not limit its use to the inpatient setting. For further information regarding the exception to the C-APC policy for COVID-19 treatments, please refer to the IFC (85 FR 71158 through 71160). The C-APC policy payment methodology set forth in the CY 2014 OPPS/ASC final rule with comment period for the C-APCs and modified and implemented beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR 66800): Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule with comment period, we define the C-APC payment policy as including all covered OPD services on a hospital outpatient claim reporting a primary service that is assigned to status indicator “J1”, excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS. Services and procedures described by HCPCS codes assigned to status indicator “J1” are assigned to C-APCs based on our usual APC assignment methodology by evaluating the geometric mean costs of the primary service claims to establish resource similarity and the clinical characteristics of each procedure to establish clinical similarity within each APC. In the CY 2016 OPPS/ASC final rule with comment period, we expanded the C-APC payment methodology to qualifying extended assessment and management encounters through the “Comprehensive Observation Services” C-APC (C-APC 8011). Services within this APC are assigned status indicator “J2”. Specifically, we make a payment through C-APC 8011 for a claim that: • Does not contain a procedure described by a HCPCS code to which we have assigned status indicator “T;” • Contains 8 or more units of services described by HCPCS code G0378 (Hospital observation services, per hour); • Contains services provided on the same date of service or 1 day before the date of service for HCPCS code G0378 that are described by one of the following codes: HCPCS code G0379 (Direct admission of patient for hospital observation care) on the same date of service as HCPCS code G0378; CPT code 99281 (Emergency department visit for the evaluation and management of a patient (Level 1)); CPT code 99282 (Emergency department visit for the evaluation and management of a patient (Level 2)); CPT code 99283 (Emergency department visit for the evaluation and management of a patient (Level 3)); CPT code 99284 (Emergency department visit for the evaluation and management of a patient (Level 4)); CPT code 99285 (Emergency department visit for the evaluation and management of a patient (Level 5)) or HCPCS code G0380 (Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B emergency department visit (Level 2)); HCPCS code G0382 (Type B emergency department visit (Level 3)); HCPCS code G0383 (Type B emergency department visit (Level 4)); HCPCS code G0384 (Type B emergency department visit (Level 5)); CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient); and • Does not contain services described by a HCPCS code to which we have assigned status indicator “J1”. The assignment of status indicator “J2” to a specific combination of services performed in combination with each other allows for all other OPPS payable services and items reported on the claim (excluding services that are not covered OPD services or that cannot by statute be paid for under the OPPS) to be deemed adjunctive services representing components of a comprehensive service and resulting in a single prospective payment for the comprehensive service based on the costs of all reported services on the claim (80 FR 70333 through 70336). Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service (78 FR 74865 and 79 FR 66800). In addition, payment for hospital outpatient department services that are similar to therapy services and delivered either by therapists or nontherapists is included as part of the payment for the packaged complete comprehensive service. These services that are provided during the perioperative period are adjunctive services and are deemed not to be therapy services as described in section 1834(k) of the Act, regardless of whether the services are delivered by therapists or other nontherapist health care workers. We have previously noted that therapy services are those provided by therapists under a plan of care in accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid for under section 1834(k) of the Act, subject to annual therapy caps as applicable (78 FR 74867 and 79 FR 66800). However, certain other services similar to therapy services are considered and paid for as hospital outpatient department services. Payment for these nontherapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are hospital outpatient department services and not therapy services. We refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 3523) for further instructions on reporting these services in the context of a C-APC service. Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies. We define each hospital outpatient claim reporting a single unit of a single primary service assigned to status indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801). Line item charges for services included on the C-APC claim are converted to line item costs, which are then summed to develop the estimated APC costs. These claims are then assigned one unit of the service with status indicator “J1” and later used to develop the geometric mean costs for the C-APC relative payment weights. (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all of the items and services included in the C-APC service payment bundle.) Charges for services that would otherwise be separately payable are added to the charges for the primary service. This process differs from our traditional cost accounting methodology only in that all such services on the claim are packaged (except certain services as described above). We apply our standard data trims, which exclude claims with extremely high primary units or extreme costs. The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity. Complexity Adjustments. We use complexity adjustments to provide increased payment for certain comprehensive services. We apply a complexity adjustment by promoting qualifying paired “J1” service code combinations or paired code combinations of “J1” services and certain add-on codes (as described further below) from the originating C-APC (the C-APC to which the designated primary service is first assigned) to the next higher paying C-APC in the same clinical family of C-APCs. We apply this type of complexity adjustment when the paired code combination represents a complex, costly form or version of the primary service according to the following criteria: • Frequency of 25 or more claims reporting the code combination (frequency threshold); and • Violation of the 2 times rule, as stated in section 1833(t)(2) of the Act and section III.B.2. of the CY 2021 OPPS/ASC proposed rule, in the originating C-APC (cost threshold). These criteria identify paired code combinations that occur commonly and exhibit materially greater resource requirements than the primary service. The CY 2017 OPPS/ASC final rule with comment period (81 FR 79582) included a revision to the complexity adjustment eligibility criteria. Specifically, we finalized a policy to discontinue the requirement that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described above) also not create a 2 times rule violation in the higher level or receiving APC. After designating a single primary service for a claim, we evaluate that service in combination with each of the other procedure codes reported on the claim assigned to status indicator “J1” (or certain add-on codes) to determine if there are paired code combinations that meet the complexity adjustment criteria. For a new HCPCS code, we determine initial C-APC assignment and qualification for a complexity adjustment using the best available information, crosswalking the new HCPCS code to a predecessor code(s) when appropriate. Once we have determined that a particular code combination of “J1” services (or combinations of “J1” services reported in conjunction with certain add-on codes) represents a complex version of the primary service because it is sufficiently costly, frequent, and a subset of the primary comprehensive service overall according to the criteria described above, we promote the claim including the complex version of the primary service as described by the code combination to the next higher cost C-APC within the clinical family, unless the primary service is already assigned to the highest cost APC within the C-APC clinical family or assigned to the only C-APC in a clinical family. We do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. Therefore, the highest payment for any claim including a code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802). We package payment for all add-on codes into the payment for the C-APC. However, certain primary service add-on combinations may qualify for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70331), all add-on codes that can be appropriately reported in combination with a base code that describes a primary “J1” service are evaluated for a complexity adjustment. To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2021, we proposed to apply the frequency and cost criteria thresholds discussed above, testing claims reporting one unit of a single primary service assigned to status indicator “J1” and any number of units of a single add-on code for the primary “J1” service. If the frequency and cost criteria thresholds for a complexity adjustment are met and reassignment to the next higher cost APC in the clinical family is appropriate (based on meeting the criteria outlined above), we make a complexity adjustment for the code combination; that is, we reassign the primary service code reported in conjunction with the add-on code to the next higher cost C-APC within the same clinical family of C-APCs. As previously stated, we package payment for add-on codes into the C-APC payment rate. If any add-on code reported in conjunction with the “J1” primary service code does not qualify for a complexity adjustment, payment for the add-on service continues to be packaged into the payment for the primary service and is not reassigned to the next higher cost C-APC. We listed the complexity adjustments for “J1” and add-on code combinations for CY 2021, along with all of the other proposed complexity adjustments, in Addendum J to the CY 2021 OPPS/ASC proposed rule (which is available via the internet on the CMS website). Addendum J to the CY 2021 OPPS/ASC proposed rule includes the cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to the CY 2021 OPPS/ASC proposed rule also contains summary cost statistics for each of the paired code combinations that describe a complex code combination that would qualify for a complexity adjustment and are proposed to be reassigned to the next higher cost C-APC within the clinical family. The combined statistics for all proposed reassigned complex code combinations are represented by an alphanumeric code with the first 4 digits of the designated primary service followed by a letter. For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all paired code combinations that are proposed to be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to the CY 2021 OPPS/ASC proposed rule allows stakeholders the opportunity to better assess the impact associated with the proposed reassignment of claims with each of the paired code combinations eligible for a complexity adjustment. Comment: A commenter stated that CMS should not use claims data from complexity adjustment code pairs in calculating the geometric mean cost for the next higher paying APC to which the complexity adjusted code pair is assigned and that doing so can decrease the geometric mean cost of APCs with a low number of claims, specifically C-APC 5493—Level 3 Intraocular Procedures. The commenter stated that CMS did not intend to include the costs of complexity-adjusted code pairs in calculating the geometric mean cost for the higher-paying APCs to which the complexity-adjustment code pair is assigned when the C-APC complexity adjustment policy was initially established and that complexity adjustments were intended as payment adjustments for complex versions of the comprehensive service only. To further support their claim that CMS intended for complexity adjustments to only provide higher payment for claims including complex comprehensive services, the commenter noted that, unlike other HCPCS codes with a significant number of claims assigned to an APC [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2020-26819. Public record. Not legal advice.