Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model; Request for Information on Rural Emergency Hospitals

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 416, 419, and 512

Office of the Secretary

45 CFR Part 180

[CMS-1753-P]

RIN 0938-AU43

Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model; Request for Information on Rural Emergency Hospitals

AGENCY:

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

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2022 based on our continuing experience with these systems. In this proposed rule, we describe the proposed changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program, update Hospital Price Transparency requirements, and update and refine the design of the Radiation Oncology Model. Finally, this proposed rule includes a Request for Information (RFI) focusing on the health and safety standards, quality measures and reporting requirements, and payment policies for Rural Emergency Hospitals (REHs), a new Medicare provider type. The RFI will be used to inform future rulemaking for REHs.

DATES:

To be assured consideration, comments must be received at one of the addresses provided below, by September 17, 2021.

ADDRESSES:

In commenting, please refer to file code CMS-1753-P when commenting on the issues in this proposed rule. 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-1753-P, 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-1753-P, 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 at

Scott.Talaga@cms.hhs.gov

or Mitali Dayal via email at

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 at

Joshua.McFeeters@cms.hhs.gov

.

Cancer Hospital Payments, contact Scott Talaga via email at

Scott.Talaga@cms.hhs.gov

.

CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email at

Chuck.Braver@cms.hhs.gov

.

Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Au'Sha Washington via email at

AuSha.Washington@cms.hhs.gov

.

Comprehensive APCs (C-APCs), contact Mitali Dayal via email at

Mitali.Dayal2@cms.hhs.gov

.

Hospital Inpatient Quality Reporting Program—Administration Issues, contact Julia Venanzi,

julia.venanzi@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 Janis Grady via email

Janis.Grady@cms.hhs.gov

.

Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Elise Barringer via email at

Elise.Barringer@cms.hhs.gov

.

Hospital Price Transparency, contact the Hospital Price Transparency email box at

PriceTransparencyHospitalCharges@cms.hhs.gov

.

Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via email at

Ausha.Washington@cms.hhs.gov

, or Allison Bramlett via email

Allison.Bramlett@cms.hhs.gov

, Lela Strong-Holloway via email

Lela.Strong@cms.hhs.gov

, or Abigail Cesnik at

Abigail.Cesnik@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 at

Elise.Barringer@cms.hhs.gov

.

New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email at

Scott.Talaga@cms.hhs.gov

.

No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email at

Scott.Talaga@cms.hhs.gov

.

OPPS Brachytherapy, contact Scott Talaga via email at

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 at

Erick.Chuang@cms.hhs.gov

, or Scott Talaga via email at

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 Cory Duke via email at

Cory.Duke@cms.hhs.gov

, or Au'Sha

Washington via email at

Ausha.Washington@cms.hhs.gov

.

OPPS New Technology Procedures/Services, contact the New Technology APC mailbox at

NewTechAPCapplications@cms.hhs.gov

.

OPPS Packaged Items/Services, contact Mitali Dayal via email at

Mitali.Dayal2@cms.hhs.gov

or Cory Duke via email at

Cory.Duke@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 at

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

.

Rural Hospital Payments, contact Josh McFeeters via email at

Joshua.McFeeters@cms.hhs.gov

.

Skin Substitutes, contact Josh McFeeters via email at

Joshua.McFeeters@cms.hhs.gov

.

Supervision of Outpatient Therapeutic Services in Hospitals and CAHs, contact Josh McFeeters via email at

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 at

Elise.Barringer@cms.hhs.gov

or at 410-786-9222.

RO Model, contact

RadiationTherapy@cms.hhs.gov

or at 844-711-2664, Option 5.

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 proposed rule, 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 on the CY 2021 OPPS/ASC Final Rule with Comment Period

II. Proposed Updates Affecting OPPS Payments

A. Proposed Recalibration of APC Relative Payment Weights

B. Proposed Conversion Factor Update

C. Proposed Wage Index Changes

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

E. Proposed 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. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2021

G. Proposed Hospital Outpatient Outlier Payments

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

I. Proposed Beneficiary Copayments

III. Proposed OPPS Ambulatory Payment Classification (APC) Group Policies

A. Proposed OPPS Treatment of New and Revised HCPCS Codes

B. Proposed OPPS Changes—Variations Within APCs

C. Proposed New Technology APCs

D. Proposed OPPS APC-Specific Policies

IV. Proposed OPPS Payment for Devices

A. Proposed Pass-Through Payments for Devices

B. Proposed Device-Intensive Procedures

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

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

B. Proposed 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. Proposed Estimate of Pass-Through Spending

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

VIII. Payment for Partial Hospitalization Services

A. Background

B. Proposed PHP APC Update for CY 2021

C. Proposed Outlier Policy for CMHCs

IX. Proposed Services That Would Be Paid Only as Inpatient Services

A. Background

B. Proposed Changes to the Inpatient Only (IPO) List

C. Comment Solicitation

X. Proposed Nonrecurring Policy Changes

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

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

XI. Proposed CY 2021 OPPS Payment Status and Comment Indicators

A. Proposed CY 2021 OPPS Payment Status Indicator Definitions

B. Proposed CY 2021 Comment Indicator Definitions

XII. MedPAC Recommendations

A. Proposed OPPS Payment Rates Update

B. Proposed ASC Conversion Factor Update

C. Proposed ASC Cost Data

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

A. Background

B. Proposed ASC Treatment of New and Revised Codes

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

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

E. Proposed New Technology Intraocular Lenses (NTIOLs)

F. Proposed ASC Payment and Comment Indicators

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

XIV. Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Outpatient Quality Programs—Request for Information

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

A. Background

B. Proposed Hospital OQR Program Quality Measures

C. Administrative Requirements

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

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

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

A. Background

B. Proposed ASCQR Program Quality Measures

C. Administrative Requirements

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

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

XVII. Request for Information on Rural Emergency Hospitals

A. Background

B. Solicitation of Public Comments

C. RO Model Proposed Regulations

XVIII. Radiation Oncology Model

A. Introduction

B. Background

XIX. Proposed Updates to Requirements for Hospitals To Make Public a List of Their Standard Charges

A. Introduction and Overview

B. Proposal To Increase the Civil Monetary Penalty Using a Scaling Factor

C. Proposal To Deem Certain State Forensic Hospitals as Having Met Requirements

D. Proposals Prohibiting Additional Barriers To Accessing the Machine-Readable File

E. Clarifications and Requests for Comment

XX. Additional Hospital Inpatient Quality Reporting (IQR) Program Policies

XXI. Additional Medicare Promoting Interoperability Program Policies

XXII. Files Available to the Public via the Internet

XXIII. 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 [placeholder for any rider]

E. Total Reduction in Burden Hours and in Costs

XXIV. Response to Comments

XXV. Economic Analyses

A. Statement of Need

B. Overall Impact for the Provisions of This Proposed Rule

C. Detailed Economic Analyses

D. Regulatory Review Costs

E. Regulatory Flexibility Act (RFA) Analysis

F. Unfunded Mandates Reform Act Analysis

G. Federalism Analysis

I. Summary and Background

A. Executive Summary of This Document

1. Purpose

In this proposed rule, we propose to update the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs), beginning January 1, 2022. 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 proposed rule 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 proposed rule. In addition, this proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

2. Summary of the Major Provisions

•

OPPS Update:

For 2022, we propose to increase the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.3 percent. This increase factor is based on the proposed hospital inpatient market basket percentage increase of 2.5 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a proposed productivity adjustment of 0.2 percentage point. 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) 2022 would be approximately $82.704 billion, an increase of approximately $10.757 billion compared to estimated CY 2021 OPPS payments.

We propose to continue 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.

•

Data used in CY 2022 OPPS/ASC Ratesetting:

To set CY 2022 OPPS and ASC payment rates, we would normally use the most updated claims and cost report data available. However, because the CY 2020 claims data includes services furnished during the COVID-19 PHE, which significantly affected outpatient service utilization, we have determined that CY 2019 data would better approximate expected CY 2022 outpatient service utilization than CY 2020 data. As a result, we are proposing to utilize CY 2019 data to set CY 2022 OPPS and ASC payment rates.

•

Partial Hospitalization Update:

For the CY 2022 OPPS/ASC proposed rule, CMS is proposing to use the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs, consistent with existing methodology, but with a cost floor that would maintain the per diem costs finalized in CY 2021. CMS is also proposing to use CY 2019 claims and cost report data for each provider type. This proposal is consistent with a broader CY 2022 OPPS ratesetting proposal to use claims and cost report data prior to the PHE.

•

Changes to the Inpatient Only (IPO) List:

For 2022, we propose to halt the elimination of the IPO list and, after clinical review of the services removed from the IPO list in CY 2021 against our longstanding criteria for removal, we propose to add the 298 services removed from the IPO list in CY 2021 back to the IPO list beginning in CY 2022. CMS is also proposing to codify in regulation the five longstanding criteria used to determine whether a procedure or service should be removed from the IPO list. In addition, we solicit comment on several policy modifications including whether CMS should maintain the longer-term objective of eliminating the IPO list or maintain the IPO list but continue to systematically scale the list back so that inpatient only designations are consistent with current standards of practice.

•

Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule):

For CY 2022,

we propose to exempt procedures that are removed from the inpatient only (IPO) list under the OPPS beginning on or 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) for a time period of 2 years.

• 340B

-Acquired Drugs:

We propose to continue 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 proposing to continue to exempt Rural SCHs, PPS-exempt cancer hospitals and children's hospitals from our 340B payment policy.

•

Device Pass-Through Payment Applications:

For CY 2022, we received eight applications for device pass-through payments. One of these applications (the Shockwave C

2

Coronary Intravascular Lithotripsy (IVL) catheter) received preliminary approval for pass-through payment status through our quarterly review process. We are soliciting public comment on all eight of these applications and final determinations on these applications will be made in the CY 2022 OPPS/ASC final rule.

•

Equitable Adjustment for Device Category, Drugs, and Biologicals with Expiring Pass-through Status:

As a result of our proposal to use CY 2019 claims data, rather than CY 2020 claims data, to inform CY 2022 ratesetting, we are proposing to use our equitable adjustment authority under 1833(t)(2)(E) to provide up to four quarters of separate payment for 27 drugs and biologicals and one device category whose pass-through payment status will expire between December 31, 2021 and September 30, 2022.

•

Cancer Hospital Payment Adjustment:

For 2022, we propose to continue 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, we propose that a target PCR of 0.89 would be used to determine the CY 2022 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 2022, we propose to increase payment rates under the ASC payment system by 2.3 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This proposed increase is based on a hospital market basket percentage increase of 2.5 percent reduced by a proposed productivity adjustment of 0.2 percentage point. Based on this proposed update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2022 would be approximately 5.16 billion, a decrease of approximately 20 million compared to estimated CY 2021 Medicare payments.

•

ASC Payment Policy for Non-Opioid Pain Management Drugs and Biologicals under Section 6082 of the SUPPORT Act (Section 1833(t)(22) of the Social Security Act):

Under section 1833(t)(22)(A) of the Act, the Secretary was required to conduct a review (part of which may include a request for information) of payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. Section 1833(t)(22)(A)(ii) provides that the Secretary may, as the Secretary determines appropriate, conduct subsequent reviews of such payment.

In accordance with our review, for CY 2022, we are proposing to continue to pay separately for two drugs currently receiving separate payment in the ASC setting as non-opioid pain management drugs that function as surgical supplies. For CY 2022, we propose to modify the current non-opioid pain management payment policy and regulatory text to require that evidence-based non opioid alternatives for pain management must have Food and Drug Administration (FDA) approval, an FDA-approved indication for pain management or analgesia, and for the drugs and biologicals to have a per-day cost in excess of the OPPS drug packaging threshold, which is proposed at $130 for CY 2022 and described in section V.B.1.a., to qualify under this policy. Further, we are soliciting comment on potential additional requirements the Secretary should consider establishing for this policy as well as whether any additional products meet the proposed criteria for CY 2022.

•

Changes to the List of ASC Covered Surgical Procedures:

For CY 2022, we are proposing to re-adopt the ASC Covered Procedures List (CPL) criteria that were in effect in CY 2020 and to remove 258 of the 267 procedures that were added to the ASC CPL in CY 2021. We are requesting comments on whether any of the 258 procedures meet the CY 2020 criteria that we are proposing to reinstate. We are also proposing to change the notification process adopted in CY 2021 to a nomination process, under which stakeholders could nominate procedures they believe meet the requirements to be added to the ASC CPL. The formal nomination process would begin in CY 2023.

Hospital Outpatient Quality Reporting (OQR) Program:

For the Hospital OQR Program, we are proposing changes for the CY 2023, CY 2024, CY 2025, and CY 2026 payment determinations and subsequent years. For the Hospital OQR Program measure set, we are proposing to: (1) Remove the OP-02: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival measure beginning with the CY 2025 payment determination; (2) remove the OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure beginning with the CY 2025 payment determination; (3) adopt the COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure beginning with the CY 2024 payment determination; (4) adopt the Breast Screening Recall Rates measure beginning with the CY 2023 payment determination; (5) adopt the ST-Segment Elevation Myocardial Infarction (STEMI) electronic clinical quality measure (eCQM) beginning with voluntary reporting for the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/CY 2026 payment determination; (6) make voluntary the reporting of the OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures beginning with the CY 2023 reporting period and mandatory beginning with the CY 2024 reporting period/CY 2026 payment determination; and (7) make mandatory the reporting of the OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery measure beginning with the CY 2025 payment determination. In addition, we are proposing data submission

requirements for the OAS CAHPS Survey-based measures and the COVID-19 Vaccination Coverage Among HCP measure. Similarly, we are proposing data submission and certification requirements for eCQMs and expanding our Extraordinary Circumstances Exemption (ECE) policy to these measures.

Beginning with the CY 2024 payment determination, we are proposing three updates to our validation requirements by proposing to: (1) Use electronic file submissions for chart-abstracted measure medical record requests; (2) change the chart validation requirements and methods; and (3) update the targeting criteria. We are also requesting comment from stakeholders on: (1) The potential future development and inclusion of a patient-reported outcomes measure following elective total hip and/or total knee arthroplasty (THA/TKA); (2) the possibility of expanding our current disparities methods to include reporting by race and ethnicity; and (3) the possibility of hospital collection of standardized demographic information for quality reporting and measure stratification. We are also requesting feedback across programs on potential actions and priority areas that would enable the continued transformation of our quality measurement toward greater digital capture of data and use of the FHIR standard.

•

Ambulatory Surgical Center Quality Reporting (ASCQR) Program:

For the ASCQR Program, we are proposing changes for the CY 2024, CY 2025, and CY 2026 payment determinations and subsequent years. For the ASCQR Program measure set, we are proposing to: (1) Adopt the COVID-19 Vaccination Coverage Among HCP measure beginning with the CY 2024 payment determination; (2) resume data collection for four measures beginning with the CY 2025 payment determination: (a) ASC-1: Patient Burn; (b) ASC-2: Patient Fall; (c) ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and (d) ASC-4: All-Cause Hospital Transfer/Admission; (3) require the ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery measure beginning with the CY 2025 payment determination; and (4) require the ASC-15a-e: OAS CAHPS Survey-based measures with voluntary reporting beginning with the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/CY 2026 payment determination. In addition, we are proposing data submission requirements for the OAS CAHPS Survey-based measures and the COVID-19 Vaccination Coverage Among HCP measure.

We are requesting stakeholder comment on: (1) The potential future development and inclusion of a patient-reported outcomes measure following elective THA/TKA; (2) potential measurement approaches or social risk factors that influence health disparities in the ASC setting; and (3) the future inclusion of a measure to assess pain management surgical procedures performed in ASCs. In this proposed rule, we are also requesting feedback across programs on potential actions and priority areas that would enable the continued transformation of our quality measurement toward greater digital capture of data and use of the FHIR standard.

•

Hospital Inpatient Quality Reporting (IQR) Program Update:

In this proposed rule, we are requesting information from stakeholders on potential measure updates on reporting and submission requirements for the Safe Use of Opioids—Concurrent Prescribing eCQM.

•

Updates to Requirements for Hospitals to Make Public a List of Their Standard Charges:

We are proposing to amend several hospital price transparency policies codified at 45 CFR part 180 in order to encourage compliance. We are proposing to: (1) Increase the amount of the penalties for noncompliance through the use of a proposed scaling factor based on hospital bed count; (2) deem state forensic hospitals that meet certain requirements to be in compliance with the requirements of 45 CFR part 180; and (3) prohibit certain conduct that we have concluded are barriers to accessing the standard charge information. In addition, we clarify the expected output of hospital online price estimator tools when hospitals choose to use an online price estimator tool in lieu of posting its standard charges for the required shoppable services in a consumer-friendly format. Finally, we seek comment on a variety of issues that we may consider in future rulemaking, including improving standardization of the data disclosed by hospitals.

•

Request for Information on Rural Emergency Hospitals (REHs):

Congress enacted section 125 of the Consolidated Appropriations Act (CAA) of 2021, which establishes REHs as a new provider type. In accordance with the statutory requirements in the CAA, REHs will provide emergency department services, observation care, and, at the election of the REH, other medical and health services on an outpatient basis, as specified by the Secretary through rulemaking. Additionally, REHs must not provide acute care inpatient services, with the exception of skilled nursing facility services furnished in a distinct part unit. The REH must have a staffed emergency department 24 hours a day, 7 days a week, with staffing requirements similar to those for Critical Access Hospitals (CAHs). The CAA provides that the statutory provisions governing Medicare payment to REHs shall apply to items and services furnished on or after January 1, 2023. We are seeking public comment via a Request for Information on the health and safety standards, payment policies, the REH enrollment process, and quality measures and reporting requirements for REHs to inform our policy making as we establish this new provider type.

•

Radiation Oncology Model (RO Model):

Section 133 of the Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted on December 27, 2020, included a provision that prohibits the RO Model from beginning before January 1, 2022. This law supersedes the RO Model delayed start date established in the CY 2021 OPPS/ASC final rule. In this proposed rule, we are proposing provisions related to the additional delayed implementation due to the CAA, 2021, as well as modifications to certain RO Model policies not related to the delay. These proposals if finalized would necessitate modifying 42 CFR 512.205, 512.210, 512.217, 512.220, 512.230, 512.240, 512.245, 512.250, 512.255, 512.275, 512.280, and 512.285 and add 42 CFR 512.292 and 512.294.

•

Comment Solicitation on Temporary Policies for the PHE for COVID-19:

In response to the COVID-19 pandemic, CMS undertook emergency rulemaking to implement a number of flexibilities to address the pandemic, such as preventing spread of the infection and supporting diagnosis of COVID-19. While many of these flexibilities will expire at the conclusion of the PHE, we are seeking comment on whether there are certain policies that should be made permanent. Specifically, we are seeking comment on services furnished by hospital staff to beneficiaries in their homes through use of communication technology, direct supervision when the supervising practitioner is available through two-way, audio/video communication technology, and code and payment for COVID-19 specimen collection.

•

Changes to Beneficiary Coinsurance for Colorectal Cancer Screening Test:

Section 122 of the Consolidated Appropriations Act (CAA) of 2021 amends section 1833(a) of the Act to

offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. We propose that all surgical services furnished on the same date as a planned screening colonoscopy or planned flexible sigmoidoscopy could be viewed as being furnished in connection with, as a result of, and in the same clinical encounter as the screening test for purposes of determining the coinsurance required of Medicare beneficiaries for planned colorectal cancer screening tests that result in additional procedures furnished in the same clinical encounter.

3. Summary of Costs and Benefit

In sections XXIV. and XXV. of this proposed rule, we set forth a detailed analysis of the regulatory and federalism impacts that the changes would have on affected entities and beneficiaries. Key estimated impacts are described below.

a. Impacts of All OPPS Changes

Table U1 in section XXIV.B of this proposed rule 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 this proposed rule would result in a 1.8 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2021, including beneficiary cost-sharing, to the approximately 3,662 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) would increase by approximately $1.3 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 a 1.6 percent increase in CY 2021 payments to CMHCs relative to their CY 2020 payments.

b. Impacts of the Proposed Updated Wage Indexes

We estimate that our proposed update of the wage indexes based on the FY 2022 IPPS proposed rule wage indexes would result in no change for urban hospitals under the OPPS and no change 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 proposed rule.

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

There are no significant impacts of our CY 2022 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not proposing to make any change in policies for determining the rural hospital payment adjustments. While we propose to implement the reduction to the cancer hospital payment adjustment for CY 2022 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 2021, and therefore has no budget neutrality adjustment.

d. Impacts of the Proposed OPD Fee Schedule Increase Factor

For the CY 2021 OPPS/ASC, we propose to establish an OPD fee schedule increase factor of 2.3 percent and apply 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 2.3 percent and that rural hospitals would experience an increase in payments of 2.3 percent. Classifying hospitals by teaching status, we estimate nonteaching hospitals would experience an increase in payments of 2.5 percent, minor teaching hospitals would experience an increase in payments of 2.3 percent, and major teaching hospitals would experience an increase in payments of 2.2 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership would experience an increase of 2.3 percent in payments, while hospitals with government ownership would experience an increase of 2.4 percent in payments. We estimate that hospitals with proprietary ownership would experience an increase of 2.5 percent in payments.

e. Impacts of the Proposed 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 2022 payment rates, compared to estimated CY 2021 payment rates, generally ranges between an increase of 2 and 4 percent, depending on the service, with some exceptions. We estimate the impact of applying the hospital market basket update to ASC payment rates would increase payments by $90 million under the ASC payment system in CY 2022.

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; 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; the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), enacted on December 20, 2019; the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; and the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020.

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 this proposed rule. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B.

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

All services and items within an APC group are comparable clinically and with respect to resource use, 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.

Discussions of the other recommendations made by the Panel at the August 31, 2020 Panel meeting, namely APC assignments for certain CPT codes, a comprehensive APC for skin substitute products, a comprehensive APC for autologous hematopoietic stem cell transplantation, and packaging policies, were discussed in relevant specific sections in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85866). 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 on the CY 2020 OPPS/ASC Final Rule With Comment Period

We received approximately 32 timely pieces of correspondence on the CY 2021 OPPS/ASC final rule with comment period that appeared in the

Federal Register

on December 2, 2020 (85 FR 85866), 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).

II. Proposed Updates Affecting OPPS Payments

A. Proposed Recalibration of APC Relative Payment Weights

1. Database Construction

a. Use of CY 2019 Data in the CY 2022 OPPS Ratesetting

We primarily use two data sources in OPPS ratesetting: Claims data and cost report data. Our goal is always to use the best available data overall for ratesetting. Ordinarily, the best available full year of claims data would be 2 years prior to the calendar year that is the subject of the rulemaking. As discussed in further detail in Section X.E. of this CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 data as a result of the COVID-19 PHE, in general, we are proposing to use CY 2019 claims data and the data components related to it in establishing the CY 2022 OPPS.

b. 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 2022 OPPS, we propose to recalibrate the APC relative payment weights for services furnished on or after January 1, 2022, and before January 1, 2023 (CY 2022), using the same basic methodology that we described in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85873), using CY 2019 claims data. That is, we propose to recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services to construct a database for calculating APC group weights.

For the purpose of recalibrating the proposed APC relative payment weights for CY 2022, we began with approximately 180 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 93 million final action claims to develop the proposed CY 2022 OPPS payment weights. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for this proposed rule on the CMS website at:

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html

.

Addendum N to this proposed rule (which is available via the internet on the CMS website) includes the proposed list of bypass codes for CY 2022. The proposed list of bypass codes contains codes that are reported on claims for services in CY 2019 and, therefore, includes codes that were in effect in CY 2019 and used for billing. We propose to retain deleted bypass codes on the proposed CY 2022 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 2022 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the proposed multiple imaging composite APCs are identified by asterisks (*) in the third column of Addendum N to the proposed rule. HCPCS codes that we propose to add for CY 2022 are identified by asterisks (*) in the fourth column of Addendum N.

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

For 2022, we propose 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 2022 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 hospital cost reports available for the CY 2021 OPPS/ASC final rule with comment period ratesetting, which, in most cases, are from CY 2019. For the proposed CY 2022 OPPS payment rates, we used the set of CY 2019 claims processed through June 30, 2020. 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 2022 OPPS payment rates) and updates to the NUBC 2020 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 this proposed rule.

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 comments we received from our CY 2014 OPPS/ASC proposed rule, we finalized a policy in 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. As finalized in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), beginning in CY 2021, we use 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 CT and MRI APCs.

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

In this section of this proposed rule, we discuss the use of claims to calculate the OPPS payment rates for CY 2022.

The Hospital OPPS page on the CMS website on which this proposed rule is posted (

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html

) provides an accounting of claims used in the development of the proposed payment rates. That accounting provides additional detail regarding the number of claims derived at each stage of the process. In addition, 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 proposed payment rates for this CY 2022 OPPS/ASC proposed rule.

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 2022, we propose to continue to use geometric mean costs to calculate the relative weights on which the proposed CY 2022 OPPS payment rates are based.

We used the methodology described in sections II.A.2.a. through II.A.2.c. of this proposed rule to calculate the costs we used to establish the proposed relative payment weights used in calculating the OPPS payment rates for CY 2022 shown in Addenda A and B to this proposed rule (which are available via the internet on the CMS website). We refer readers to section II.A.4. of this proposed rule for a discussion of the conversion of APC costs to scaled payment weights.

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 2022 OPPS, we will continue to remove claim lines with modifier “PN” from the ratesetting process.

For details of the claims accounting process used in this proposed rule, we refer readers to the claims accounting narrative under supporting documentation for this CY 2022 OPPS/ASC proposed rule on the CMS website at:

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html

.

a. Proposed Calculation of Single Procedure APC Criteria-Based Costs

(1) Blood and Blood Products

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 propose 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 propose 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 propose 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 propose to calculate the costs upon which the proposed CY 2022 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 using this methodology in CY 2022 would result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general.

We note that 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 propose to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products would be reflected in the overall costs of the C-APCs (and, as a result, in the proposed payment rates of the C-APCs), we propose 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 66795 through 66796) for

more information about our policy not to make separate payments for blood and blood products when they appear on the same claims as services assigned to a C-APC).

We refer readers to Addendum B of this proposed rule (which is available via the internet on the CMS website) for the proposed CY 2022 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 2022, we propose to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology.

(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 2022, except where otherwise indicated, we propose to use the costs derived from CY 2019 claims data to set the proposed CY 2022 payment rates for brachytherapy sources because CY 2019 is the year of data we propose to use to set the proposed payment rates for most other items and services that would be paid under the CY 2022 OPPS. With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and brachytherapy source C2636 (Brachytherapy linear source, non-stranded, palladium-103, per 1 mm), we propose to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we propose for other items and services paid under the OPPS, as discussed in section II.A.2. of this proposed rule. We also propose 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 propose 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 propose 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 2022 payment rates for brachytherapy sources are included in Addendum B to this 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. Similarly, in the absence of sufficient claims data to establish an APC payment rate, in the CY 2021 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 to maintain the CY 2019 payment rate of $4.69 per mm

2

for HCPCS code C2645 for CY 2021.

As discussed in Section X.E. of this CY 2022 OPPS/ASC proposed rule, given our concerns with CY 2020 data as a result of the COVID-19 PHE, in general we are proposing to use CY 2019 claims data and the data components related to it in establishing the CY 2022 OPPS. Therefore, we are proposing to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate of $4.69 per mm

2

for HCPCS code C2645 for CY 2022.

Additionally, for CY 2022 and subsequent calendar years, as discussed in Section X.C., we are proposing to establish a Low Volume APC policy for New Technology APCs, clinical APCs, and brachytherapy APCs. For these

APCs with fewer than 100 single claims that can be used for ratesetting purposes in the existing claims year, we are proposing to use up to four years of claims data to establish a payment rate for each item or service as we currently do for low volume services assigned to New Technology APCs. Further, we propose to calculate the cost for Low Volume APCs based on the greatest of the arithmetic mean cost, median cost, or geometric mean cost. We are proposing to designate 5 brachytherapy APCs as Low Volume APCs for CY 2022. For more information on our Low Volume APC proposal, see Section X.C. of this CY 2022 OPPS/ASC proposed rule.

We continue to invite hospitals and other parties to submit recommendations to us for new codes to describe new brachytherapy sources. Such recommendations should be directed 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 2022

(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). 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). Most recently, in the CY 2021 OPPS/ASC final rule, we created two new C-APCs, increasing the total number to 69 C-APCs (85 FR 85885).

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 this proposed rule (which is available via the internet on the CMS website).

In the interim final rule 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 following two 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 FDA letter of authorization for the emergency use of 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 November 6, 2020 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 set 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 this 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 2022, we propose 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 list the complexity adjustments for “J1” and add-on code combinations for CY 2022, along with all of the other proposed complexity adjustments, in Addendum J to this CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website).

Addendum J to this 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 this 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 this 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.

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

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

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

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

(3) Additional C-APCs for CY 2022

For CY 2022 and subsequent years, we propose to continue to apply the C-APC payment policy methodology. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583) for a discussion of the C-APC payment policy methodology and revisions.

Each year, in accordance with section 1833(t)(9)(A) of the Act, we review and revise the services within each APC group and the APC assignments under the OPPS. As a result of our annual review of the services and the APC assignments under the OPPS, we are not proposing to convert any standard APCs to C-APCs in CY 2022, thus we propose that the number of C-APCs for CY 2022 would be the same as the number for CY 2021, which is 69 C-APCs.

Table 1 lists the proposed C-APCs for CY 2022, all of which were established in past rules. All C-APCs are displayed in Addendum J to this proposed rule (which is available via the internet on the CMS website). Addendum J to this proposed rule also contains all of the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information.

BILLING CODE 4120-01-P

EP04AU21.000

EP04AU21.001

BILLING CODE 4120-01-C

c. Proposed Calculation of Composite APC Criteria-Based Costs

As discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66613), we believe it is important that the OPPS enhance incentives for hospitals to provide necessary, high quality care as efficiently as possible. For CY 2008, we developed composite APCs to provide a single payment for groups of services that are typically performed together during a single clinical encounter and that result in the provision of a complete service.

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

(1) Mental Health Services Composite APC

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

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

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

We propose that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be paid through composite APC 8010 for CY 2022. In addition, we propose to set the proposed payment rate for composite APC 8010 at the same payment rate that we proposed for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the proposed payment rate for composite APC 8010.

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

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

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

• APC 8004 (Ultrasound Composite);

• APC 8005 (CT and CTA without Contrast Composite);

• APC 8006 (CT and CTA with Contrast Composite);

• APC 8007 (MRI and MRA without Contrast Composite); and

• APC 8008 (MRI and MRA with Contrast Composite).

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

We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging

procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569).

For CY 2022, we propose to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology. We continue to believe that this policy would reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.

For CY 2022, except where otherwise indicated, we propose to use the costs derived from CY 2019 claims data to set the proposed CY 2022 payment rates. Therefore, for CY 2022, the payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) are based on proposed geometric mean costs calculated from CY 2019 claims available for this CY 2022 OPPS/ASC proposed rule that qualified for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we have used to calculate the geometric mean costs for these composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), are identified by asterisks in Addendum N to this CY 2022 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and are discussed in more detail in section II.A.1.b. of this CY 2022 OPPS/ASC proposed rule.

For this CY 2022 OPPS/ASC proposed rule, we were able to identify approximately 1.04 million “single session” claims out of an estimated 2.2 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 47 percent of all eligible claims, to calculate the proposed CY 2022 geometric mean costs for the multiple imaging composite APCs. Table 2 of this CY 2022 OPPS/ASC proposed rule lists the proposed HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2022.

BILLING CODE 4120-01-P

EP04AU21.002

EP04AU21.003

EP04AU21.004

EP04AU21.005

BILLING CODE 4120-01-C

3. Proposed Changes to Packaged Items and Services

a. Background and Rationale for Packaging in the OPPS

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

Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services

or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC final rule with comment period (82 FR 59250), the CY 2019 OPPS/ASC final rule with comment period (83 FR 58854), the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173), and the CY 2021 OPPS/ASC final rule with comment period (85 FR 85894). As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, categories of items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make payments for all services under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule, which pays separately for each coded item. As a part of this effort, we have continued to examine the payment for items and services provided under the OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system.

For CY 2022, we examined the items and services currently provided under the OPPS, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment would be appropriately packaged into payment for the primary service that they support. Specifically, we examined the HCPCS code definitions (including CPT code descriptors) and hospital outpatient department billing patterns to determine whether there were categories of codes for which packaging would be appropriate according to existing OPPS packaging policies or a logical expansion of those existing OPPS packaging policies.

For CY 2022, we propose no changes to the overall packaging policy previously discussed. We propose to continue to conditionally package the costs of selected newly identified ancillary services into payment for a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. Below we discuss a proposed change to an ASC payment system packaging policy for CY 2022 and solicit comment on potential additional changes to that policy and application of that policy to the OPPS.

b. Proposed Payment Policy for Non-Opioid Pain Management Drugs and Biologicals That Function as Surgical Supplies Under the ASC Payment System

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

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

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

In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855), we explained that, in addition to stakeholder feedback regarding OPPS packaging policies, the President's Commission on Combating Drug Addiction and the Opioid Crisis (the Commission)

1

had recently recommended that CMS examine payment policies for certain drugs that function as a supply, specifically non-opioid pain management treatments. The Commission was established in 2017 to study the scope and effectiveness of the Federal response to drug addiction and the opioid crisis and to make recommendations to the President for improving the Federal response to the crisis. The Commission's report included a recommendation for CMS to “. . . review and modify ratesetting policies that discourage the use of non-opioid treatments for pain, such as certain bundled payments that make alternative treatment options cost prohibitive for hospitals and doctors, particularly those options for treating immediate postsurgical pain. . . .” We explained that, as discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37068 through 37071), in response to stakeholder comments on the CY 2018 OPPS/ASC proposed rule and in light of the recommendations regarding payment policies for certain drugs, we had recently evaluated the impact of our packaging policy for drugs that function as a supply when used in a surgical

procedure on the utilization of these drugs in both the hospital outpatient department and the ASC setting. We stated that, although we found increases in utilization of Exparel when it was paid under the OPPS, we noticed decreased utilization of Exparel under the ASC payment system. Accordingly, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 58855 through 58860), we finalized a policy to unpackage and pay separately at ASP plus 6 percent for non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2019, due to decreased utilization in the ASC setting. Historically, we stated that we consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy (79 FR 66875).

1

https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis.

On October 24, 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act (Pub. L. 115-271) was enacted. Section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a) of the SUPPORT Act, states that the Secretary must review payments under the OPPS for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. As part of this review, under section 1833(t)(22)(A)(iii) of the Act, the Secretary must consider the extent to which revisions to such payments (such as the creation of additional groups of covered OPD services to separately classify those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce the payment incentives for using opioids instead of non-opioid alternatives for pain management. In conducting this review and considering any revisions, the Secretary must focus on covered OPD services (or groups of services) assigned to C-APCs, APCs that include surgical services, or services determined by the Secretary that generally involve treatment for pain management. If the Secretary identifies revisions to payments pursuant to section 1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act requires the Secretary to, as determined appropriate, begin making revisions for services furnished on or after January 1, 2020. Revisions under this paragraph are required to be treated as adjustments for purposes of paragraph (9)(B), which requires any adjustments to be made in a budget neutral manner. Section 1833(i)(8), as added by section 6082(b) of the SUPPORT Act, requires the Secretary to conduct a similar type of review as required for the OPPS and to make revisions to the ASC payment system in an appropriate manner, as determined by the Secretary.

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

In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896 to 85899), we continued the policy to pay separately at ASP plus 6 percent for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting and to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting for CY 2021. For CY 2021, only two drug products met the criteria as non-opioid pain management drugs that function as surgical supplies in the ASC setting, and thus receive separate payment under the ASC payment system. These drugs are Exparel and Omidria.

(2) CY 2022 Evaluation of Payments for Opioids and Non-Opioid Alternatives for Pain Management and Comment Solicitation on Extending the Policy to the OPPS

As noted in the background above, over the past several years we have reviewed non-opioid alternatives and evaluated the impact of our packaging policies on access to these products. In our previous evaluations, we used currently available data to analyze the payment and utilization patterns associated with specific non-opioid alternatives, including drugs that function as a supply, nerve blocks, and neuromodulation products, to determine whether our packaging policies may have reduced the use of non-opioid alternatives. In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896 to 85899), we stated that we would continue to analyze the issue of access to non-opioid pain management alternatives in the HOPD and the ASC settings as part of any reviews we conduct under section 1833(t)(22)(A)(ii), with a specific focus on whether there is evidence that our current payment policies are creating access barriers for other non-opioid pain management alternatives for which there is evidence-based support that these products help to deter or avoid prescription opioid use and opioid use disorder.

For CY 2022, we conducted a subsequent review of payments for opioids and non-opioid alternatives as authorized by section 1833(t)(22)(A)(ii). We analyzed utilization patterns in both the HOPD and ASC settings for multiple non-opioid pain management drugs, including the two drugs that are receiving separate payment when furnished in the ASC setting under our current policy for CY 2021: Exparel and Omidria. The results of our CY 2022 review were similar to the results of our

reviews in previous years. Generally, utilization of non-opioid pain management drugs continued to increase year after year in the HOPD setting, where payment for these non-opioid alternatives is packaged with the payment for the associated surgical procedure. In the ASC setting, where Exparel and Omidria are separately paid, we also saw utilization increases for these two drugs. However, in the ASC setting, the rate of increase in utilization is much more substantial than in the HOPD setting. In particular, in the HOPD setting where payment for Exparel is packaged, utilization of Exparel increased from 19.7 million units in 2019 to 21.8 million units in 2020, whereas utilization of Exparel increased from 1.5 million units in 2019 to 3.3 million units in 2020 in the ASC setting, where Exparel is separately paid. We note that a number of reasons could explain this discrepancy other than our policy to pay separately for Exparel under the ASC payment system, including evolving clinical practice in the ASC setting, which could increase the number of surgeries performed in ASCs for which Exparel is an appropriate pain management drug.

We have consistently explained, including as recently as in the CY 2021 OPPS/ASC final rule with comment period (85 FR 85894), that our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. For example, where there are a variety of devices, drugs, items, and supplies that could be used to furnish a service, some of which are more costly than others, packaging encourages hospitals to use the most cost-efficient item that meets the patient's needs, rather than to routinely use a more expensive item, which may occur if separate payment is provided for the item. We have not found conclusive evidence to support the notion that the OPPS packaging policy, under which non-opioid drugs and biologicals are packaged when they function as a supply in a surgical procedure, has created financial incentives to use opioids instead of evidence-based non-opioid alternatives for pain management. For example, we have not observed decreased utilization of non-opioid alternatives for pain management in the HOPD setting. Therefore, for CY 2022, we are proposing to continue to package payment for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures in the hospital outpatient department setting.

As explained earlier in this section, while packaging encourages efficiency and is a fundamental component of a prospective payment system, where there is an overriding policy objective to reduce disincentives for use of non-opioid products to the extent possible, we believe it may be appropriate to establish payment that reduces disincentives for use of non-opioid drugs and biologicals for pain management when there is evidence that use of those products reduces unnecessary opioid use. For these reasons, we are soliciting comment as to whether we should expand our current policy that only applies in the ASC setting—to pay separately at ASP plus 6 percent for non-opioid pain management drugs that function as surgical supplies in the performance of surgical procedures when they are furnished in the ASC setting—to the HOPD setting. We are interested in learning from stakeholders whether similar disincentives for the use of non-opioid pain management drugs and biologicals identified in the ASC setting exist in the HOPD setting. Previously, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 59067), we identified several disincentives that were unique to the ASC setting compared to the HOPD setting, including the fact that ASCs tend to provide specialized care and a more limited range of services in comparison to hospital outpatient departments. Also, ASCs are paid, in aggregate, approximately 55 percent of the OPPS rate. Therefore, fluctuations in payment rates for specific services may affect these providers more acutely than hospital outpatient departments; and ASCs may be less likely to choose to furnish non-opioid postsurgical pain management treatments, which are typically more expensive than opioids, as a result. Additionally, we are seeking comment on what evidence supports the expansion of this policy to the HOPD setting, including the clinical benefit that Medicare beneficiaries may receive from the availability of separate or modified payment for these products in the HOPD setting.

Finally, we are seeking comment on if we should treat products the same depending on the setting, ASC or HOPD. For example, we are seeking comment on whether products should have the same eligibility requirements to qualify for revised payment in the ASC and the HOPD settings. We are additionally seeking comment on how the additional comment solicitations described below, which refer to the ASC setting, could also be applied to the HOPD setting.

(3) Proposed Criteria for Eligibility for Separate Payment Under the ASC Payment System for Non-Opioid Pain Management Drugs and Biologicals That Function as Surgical Supplies

As described in section 1833(t)(22)(A)(i) of the Act, the Secretary shall conduct a review of payments for opioids and evidence-based non-opioid alternatives for pain management with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. In any future reviews the Secretary may determine appropriate to conduct under section 1833(t)(22)(A)(ii) of the Act, we believe it is important to establish the evidence-base for non-opioid alternatives for pain management when evaluating whether current payment policies result in an incentive for providers to use opioids instead of such evidence-based non-opioid alternatives for pain management. Accordingly, for CY 2022 and subsequent years, we are proposing two criteria that non-opioid pain management drugs and biologicals would be required to meet to be eligible for a payment revision under the ASC payment system in accordance with section 1833(t)(22)(C). The proposed criteria are intended to identify non-opioid pain management drugs and biologicals that function as supplies in surgical procedures for which revised payment under the ASC payment system would be appropriate.

Specifically, for CY 2022, we are proposing the following criteria that non-opioid pain management drugs and biologicals would be required to meet to be eligible for separate payment under the ASC payment system in accordance with section 1833(t)(22)(C):

Criterion 1: FDA Approval and Indication for Pain Management or Analgesia

We propose that the drug or biological product must be safe and effective, as determined by the FDA. We propose that the drug must be approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), generic drug application under an abbreviated new drug application under section 505(j), or, in the case of a biological product, be licensed under section 351 of the Public Health Service Act. We further propose that the drug or biological must also have an FDA-approved indication for pain management or analgesia. We believe FDA approval is an appropriate requirement for a drug or biological to

be eligible for this policy because the FDA reviews drugs and biologicals for safety and effectiveness, which would allow us to identify safe and effective non-opioid products to which this separate payment policy should apply. Given that the FDA has an existing and detailed review process already in place to review drugs and biologicals, we believe it would be appropriate and administratively efficient to utilize FDA approval as a requirement to ensure that the drugs and biologicals approved under this policy are generally safe and effective for beneficiaries. We believe the vast majority of drugs and biologicals on the market have undergone FDA review and approval, and we do not anticipate this criterion would prevent otherwise eligible drugs or biologicals from qualifying. In addition, section 1833(t)(22)(C) of the Act, our current policy, and our proposed policy all focus on pain management products. Specifically, section 1833(t)(22)(C) of the Act refers to reviews of opioid and evidence-based non opioid products for pain management. Therefore, we propose to require an FDA-approved indication for pain management or analgesia for a drug or biological to qualify as a pain management product. The FDA approval process would allow us to confirm that a drug or biological is, in fact, a non-opioid. Drugs and biologicals that are approved as opioids or opioid agonists, or that receive an opioid-related approval from the FDA would not be eligible for separate payment under this policy.

Criterion 2: Cost of the Product

Currently, under the OPPS, drugs that are not policy-packaged are subject to the drug packaging threshold. In accordance with section 1833(t)(16)(B) of the Act, the threshold for establishing separate APCs for payment of drugs and biologicals was set at $50 per administration during CYs 2005 and 2006. We set the packaging threshold for establishing separate APCs for drugs and biologicals through annual notice and comment rulemaking. (Please see section V.B.1.a. of this proposed rule for additional details on the drug packaging threshold policy). The proposed per-day drug packaging threshold for CY 2022 is $130.

As our second criterion, we are proposing that a drug or biological would only be eligible for a payment revision under the ASC payment system in accordance with section 1833(t)(22)(C) if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. of this rule. We believe this is an appropriate requirement because we believe that not all non-opioid alternative treatments are equally disincentivized by our packaging policies. In particular, the cost of non-opioid drugs and biologicals below the packaging threshold of $130 per day does not generally have a significant impact on the overall procedure costs, and we believe use of these drugs and biologicals is unlikely to be disincentivized by CMS packaging policies. However, when the per-day cost of the drug is above the drug packaging threshold, the cost of these drugs or biologicals generally has a significant impact on the overall procedure costs. Section 1833(t)(22)(A)(i) of the Act discusses financial incentives to use opioids instead of non-opioid alternative treatments. As such, we do not believe non-opioid pain management drugs that are lower in cost are generally disincentivized by our packaging policies, as their cost is more easily absorbed into the payment for the primary procedure in which they are used when compared to drugs and biologicals above the threshold. We are proposing to use the existing OPPS drug packaging threshold as it is familiar to stakeholders and its application to drugs and biologicals under this policy creates uniformity across the OPPS and ASC payment systems. Therefore, CMS is proposing that drugs and biologicals would be required to have a per-day cost that exceeds the drug packaging threshold that CMS sets annually through notice and comment rulemaking.

We also believe the use of this threshold as an eligibility criterion for drugs under consideration for a payment revision under this policy is appropriate, as it conforms with the broader goals of the OPPS and ASC payment systems. Like other prospective payment systems, the OPPS relies on the concept of averaging to establish a payment rate for services. The payment may be more or less than the estimated cost of providing a specific service or a bundle of specific services for a particular beneficiary. The OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies, including the drug packaging threshold, support our strategic goal of using larger payment bundles to maximize hospitals' incentives to provide care in the most efficient manner. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. For the reasons mentioned above, we believe it to be appropriate to package drugs under consideration for this policy which fall below the OPPS drug packaging threshold.

We propose that non-opioid drugs and biologicals currently receiving transitional drug pass-through status in the OPPS would not be candidates for this policy as they are already paid separately under the OPPS and ASC payment system. Please see section V.A., Proposed OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals, of this proposed rule for additional details on transitional pass-through payments for drugs and biologicals. We propose that once transitional drug pass-through status expires, the non-opioid drug or biological may qualify for separate payment under the ASC payment system if it meets the proposed eligibility requirements.

We seek comment on whether there are any other non-opioid drug or biological products that would meet the proposed criteria if finalized.

(4) Proposed Regulation Text Changes

We propose to codify our proposed criteria for separate payment for qualifying non-opioid pain management drugs and biologicals that function as surgical supplies in the regulation text for the ASC payment system in a new § 416.174. In particular, we propose to provide in a new § 416.174(a)(1) that non-opioid pain management drugs or biologicals that function as a supply in a surgical procedure are eligible for separate payment if they are approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), generic drug application under an abbreviated new drug application under section 505(j), or, in the case of a biological product, are licensed under section 351 of the Public Health Service Act. Section 416.174(a)(1) would also provide that the drug or biological must have an FDA-approved indication for pain management or analgesia. New § 416.174(a)(2) would require that the per-day cost of the drug or biological must exceed the OPPS drug packaging threshold set annually through notice and comment rulemaking.

We also propose to amend § 416.164(b)(6) to provide that non-opioid pain management drugs and biologicals that function as a supply when used in a surgical procedure as determined by CMS under § 416.174 are ancillary items that are integral to a

covered surgical procedure and for which separate payment is allowed. We also propose to amend § 416.171(b)(1) to provide that the payment rate for non-opioid pain management drugs and biologicals that function as a supply when used in a surgical procedure as determined by CMS under § 416.174 are paid an amount derived from the payment rate for the equivalent item or service under the OPPS, and if such a payment amount is unavailable, are contractor priced.

(5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria, and Other Non-Opioid Products for Pain Management

As discussed in the CY 2021 OPPS/ASC final rule with comment period, there are two products receiving separate payment in the ASC setting under our current policy to pay separately for non-opioid pain management treatments that function as surgical supplies when furnished in the ASC setting (85 FR 86171). These two products are Exparel (

HCPCS Code C9290, Injection, bupivacaine liposome, 1 mg

) and Omidria (HCPCS Code J1097,

phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml

). Based on the current information available to us, as we explain below, we are proposing that both products would be eligible for separate payment in CY 2022 under our proposed policy. We have included our initial evaluation of these two products below.

(a) Eligibility for Separate Payment in CY 2022 for Exparel Under the Proposed Eligibility Criteria

We are proposing that Exparel would continue to receive separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply for CY 2022. Based on CMS's internal review, we believe Exparel meets criterion 1. Exparel was approved by the FDA with a New Drug Application (NDA #022496) on 10/28/2011.

2

Exparel's FDA-approved indication is “in patients 6 years of age and older for single-dose infiltration to produce postsurgical local analgesia (1). In adults as an interscalene brachial plexus nerve block to produce postsurgical regional analgesia”.

3

No component of Exparel is opioid-based. Accordingly, we propose that Exparel meets criterion one.

2

Exparel. FDA Letter. 28 October 2011.

https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf

.

3

Exparel. FDA Package Insert. 22 March 2021.

https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf

.

As discussed in section (3) above, for criterion two we are proposing that a drug or biological would only be eligible for separate payment under this policy if its per-day cost exceeds the drug packaging threshold described in section V.B.1.a. of this rule. The proposed per day cost threshold for CY 2022 is $130. Using the methodology described at V.B.1.a., the per day cost of Exparel exceeds the $130 per day cost threshold. Therefore, we propose that Exparel meets criterion two.

Therefore, we are proposing that Exparel meets criteria one and two, and should receive separate payment under the ASC payment system for CY 2022.

(b) Eligibility for Separate Payment for Omidria in CY 2022 Under the Proposed Eligibility Criteria

We are proposing that Omidria would continue to receive separate payment in the ASC setting as a non-opioid pain management drug that functions as a surgical supply for CY 2022. Based on our internal review, we believe Omidria would meet criterion one. Omidria was approved by the FDA with a New Drug Application (NDA #205388) on 5/30/2014.

4

Additionally, Omidria's FDA-approved indication is as “an alpha 1-adrenergic receptor agonist and nonselective cyclooxygenase inhibitor indicated for: Maintaining pupil size by preventing intraoperative miosis; Reducing postoperative pain”.

5

No component of Omidria is opioid-based. Therefore, we propose that Omidria would meet proposed criterion one.

4

Omidria. FDA Letter. 30 May 2014.

https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf

.

5

Omidria. FDA Package Insert. 08 December 2017.

https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf

.

Using the methodology described at V.B.1.a., the per day cost of Omidria exceeds the $130 per day cost threshold. Therefore, we propose that Omidria meets criterion two. Therefore, we are proposing that Omidria meets criteria one and two, and should receive separate payment under the ASC payment system for CY 2022.

(6) Comment Solicitation on Policy Modifications and Potential Additional Criteria for Revised Payment for Non-Opioid Pain Management Treatments

In addition to the proposed eligibility criteria above, we are also soliciting comment on potential policy modifications and additional criteria that may help further align this policy with the intent of section 1833(t)(22) of the Act. Below we discuss potential additional criteria. We note that, depending on the public comments we receive and our continued consideration of these potential criteria, we may adopt these criteria as part of our final policy and include them in the final regulation text; accordingly, we are providing substantial details, explanations, and considerations about these potential criteria. We welcome input from stakeholders on these and any additional policy modifications or criteria they believe would enhance our proposed policy. We are also soliciting comment on other barriers to access to non-opioid pain management products that may exist, and to what extent our policies under the OPPS or ASC payment system could be modified to address these barriers.

(a) Utilization of the Product

We have historically used utilization as a metric to determine whether a change in our payment policy was necessary to determine whether our policies create a disincentive to use non-opioid alternatives. For example, as previously discussed, Exparel's decreasing utilization in the ASC setting caused us to propose to pay separately for non-opioid pain management drugs that function as surgical supplies in the ASC setting. We have used currently available claims data in prior years to analyze the payment and utilization patterns associated with specific non-opioid alternatives to determine whether our packaging policies may have reduced the use of non-opioid alternatives. We believe that higher utilization may be a potential indicator that the packaged payment is not causing an access to care issue and that the payment rate for the primary procedure adequately reflects the cost of the drug or biological. We also believe decreased utilization could potentially indicate that our packaging policy is discouraging use of drug or biological and that providers are choosing less expensive treatments. We note that it is difficult to attribute product-specific changes in utilization to our packaging policies alone. Nonetheless, while we acknowledge certain limitations of utilization data, we believe analyzing utilization either on a product-specific basis or on a broader basis could be an important criterion in determining whether separate payment is warranted for a non-opioid pain management alternative.

Therefore, we are soliciting comment on whether specific evidence of reduced utilization should be part of our evaluation and determination of whether a non-opioid pain management product should qualify for modified

payment. This data may help to demonstrate that our packaging policies are causing an access issue for these products. Additionally, we realize that new products to the market may not have utilization data available, or reliable utilization data may be difficult to obtain for some products; therefore, we are also requesting comment on whether utilization data requirements should vary based on the newness of a product or its FDA marketing approval date.

(b) FDA Indication for Pain Management or Analgesia for the Drug or Biological Product

As previously discussed, section 1833(t)(22)(A) of the Act specifically refers to reviews of opioid and evidence-based non opioid products for pain management. We believe the majority of drugs and biologicals that would meet the requirements of our proposed policy would already have FDA approval as a pain management drug or as an analgesic. However, we acknowledge there may be other non-opioid products that would benefit from inclusion under this policy, but do not have a specific FDA-approved indication for pain management or analgesia, and would not satisfy criterion 1. Therefore, we are soliciting comment on whether we should allow certain FDA-approved drugs and biologicals to be eligible for separate payment under this policy without a specific FDA-approved indication for pain management or as an analgesic drug. In lieu of an FDA indication for pain management or analgesia, we are seeking comment on whether it would be appropriate to approve a product for inclusion under this policy if the pain-management or analgesia attributes of the drug or biological are recognized by a medical compendium. Similarly, we are seeking comment as to whether we should consider specialty society or national organization (such as a national surgery organization) recommendations of non-opioid pain management products that function as surgical supplies and reduce opioid use in the ASC setting, as evidence that a product meets criterion one, where a drug or biological does not have an FDA indication for pain management or analgesia.

(c) Peer-Reviewed Literature Requirement Comment Solicitation

We note that section 1833(t)(22)(B) requires the Secretary to focus on covered OPD services (or groups of services) assigned to a comprehensive ambulatory payment classification, ambulatory payment classifications that primarily include surgical services, and other services determined by the Secretary that generally involve treatment for pain management. We are also soliciting comment as to whether we should only adopt a payment revision to drugs and biologicals that function as surgical supplies in the ASC setting when those products have evidence in peer reviewed literature supporting that the product actually decreases opioid. We believe this may be appropriate to ensure Medicare payment policies would not financially incentivize use of opioids rather than evidence-based non-opioid alternative treatments, as required by section 1833(t)(22)(A)(iii) of the Act. Specifically, we are seeking comment as to whether the drug or biological's use in a surgical procedure as a non-opioid pain management product should be supported by peer-reviewed literature demonstrating a clinically significant decrease in opioid usage compared to the standard of care, and we are seeking comment on whether such decreases in opioid usage should be sustained decreases that continue into the post-operative period.

Additionally, we are seeking input from commenters as to what they believe the requirements for peer-reviewed literature requirements should be. For example, we are seeking stakeholder feedback as to whether peer-reviewed literature should demonstrate that use of the drug or biological results in at least one, or several, of the following: Decreased post-operative opioid use following surgery; decreased opioid misuse following surgery; or decreased opioid use disorder and dependency following surgery.

Additionally, we ask stakeholders if specific thresholds are necessary to determine whether these decreases are statistically and clinically significant and whether the decreases should simply be measured against placebo or the standard of care. We also request information on how stakeholders would define the standard of care in these circumstances. When evaluating literature, we would expect to examine the study methods, sample size, limitations, possible conflicts of interest, patient populations studied, and how the evidence supports the conclusion that the product can serve as a non-opioid pain management product and provide a clinically significant reduction in opioid use that continues into the post-operative period. However, we welcome input from stakeholders about additional aspects of these studies that they believe CMS should focus on for this potential criterion. Additionally, we would expect to use our discretion to assess whether the submitted studies meet these criteria, as well as for clinical applicability, literature integrity, and potential biases in consultation with our clinical advisors.

In order to provide stakeholders with some examples of what supporting evidence CMS may consider for this potential criterion, we believe it would be helpful for CMS to receive literature demonstrating that use of a non-opioid drug or biological results in a statistically and clinically significant decreased day supply of outpatient opioids prescribed after surgery discharge compared to the generally accepted standard of care, or a statistically and clinically significant decreased morphine milligram equivalents (MME) per opioid dose prescribed after surgery discharge compared to the generally accepted standard of care. We would consider the generally accepted standard of care to include pain management therapy a patient would receive in the absence of the non-opioid alternative, such as the use of localized analgesia and/or an opioid. As previously discussed, we would then expect the use of a non-opioid pain management drug or biological to result in a decline in opioids used compared to the pain management therapy a patient would receive in the absence of the non-opioid alternative. We would expect this decline in opioids to include a decreased number of opioids received by a patient intraoperatively, post-operatively, and most significantly at discharge. We are soliciting comment on additional examples or measures that would be beneficial for CMS to take into consideration. Additionally, we are seeking comment on whether we should require a specific objective measure for this criterion. We also seek input on how to assess whether changes are statistically and clinically significant. We request comment on whether stakeholder

This text is long and has been trimmed here. Open the source document for the complete record.