# Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, Including the Hospital Inpatient Quality Reporting Program; Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals; Prior Authorization; Requests for Information; Medicaid and CHIP Continuous Eligibility; Medicaid Clinic Services Four Walls Exceptions; Individuals Currently or Formerly in Custody of Penal Authorities; Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals; and All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-25521 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** November 27, 2024 - **Citation:** 89 FR 93912 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 406, 407, 410, 411, 416, 419, 435, 440, 457, 482, and 485 [CMS-1809-FC] RIN 0938-AV35 Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, Including the Hospital Inpatient Quality Reporting Program; Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals; Prior Authorization; Requests for Information; Medicaid and CHIP Continuous Eligibility; Medicaid Clinic Services Four Walls Exceptions; Individuals Currently or Formerly in Custody of Penal Authorities; Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals; and All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). ACTION: Final rule with comment period. SUMMARY: This final rule with comment period revises the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Medicare Ambulatory Surgical Center (ASC) payment system for calendar year 2025 based on our continuing experience with these systems. We describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule updates the requirements for the Hospital Outpatient Quality Reporting Program, Rural Emergency Hospital Quality Reporting Program, Ambulatory Surgical Center Quality Reporting Program, and Hospital Inpatient Quality Reporting Program. We also summarize information received in response to a Request for Information on potential modifications to the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. In this final rule, we are also finalizing our proposal to narrow the description of “custody” in the Medicare payment exclusion rule and to revise the special enrollment period criteria for formerly incarcerated individuals. We are also finalizing our Medicaid and Children's Health Insurance Program (CHIP) continuous eligibility provisions. We are also finalizing the proposal to reduce the review timeframe for standard prior authorization requests for certain covered outpatient department services paid under the OPPS from 10-business days to 7-calendar days. Further, this rule finalizes updates to the Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs) in an effort to advance the health and safety of pregnant, birthing, and postpartum women. This rule also finalizes our proposed policy to separately pay Indian Health Service (IHS) and Tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the all-inclusive rate (AIR) under the authorities used to calculate the AIR starting January 1, 2025. Finally, we are finalizing exceptions to the Medicaid clinic services four walls requirement for IHS and Tribal clinics, and, at state option, for behavioral health clinics and clinics located in rural areas. DATES: Effective date: The provisions of this rule are effective January 1, 2025. Implementation date: Except as set forth in this section, the regulations at §§ 482.43(c), 482.55(c), and 485.618(e) must be implemented by July 1, 2025; the regulations at §§ 482.59(a) and (b) and 485.649(a) and (b) must be implemented by January 1, 2026; and the regulations at §§ 482.21(b)(4) and (e), 482.59(c), 485.641(d)(4) and (e)(2), and 485.649(c) must be implemented by January 1, 2027. Comment period: To be assured consideration, comments must be received at one of the addresses provided below, by December 31, 2024. ADDRESSES: In commenting, please refer to file code CMS-1809-FC. 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 submit electronic comments on this regulation to https://www.regulations.gov . Follow the “Submit a comment” instructions. 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-1809-FC, P.O. Box 8010, Baltimore, MD 21244-8010. 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 to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1809-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Regulation coordination questions at OPPS-ASC-Rulemaking@cms.hhs.gov or Elise Barringer (410) 786, 9222. Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at APCPanel@cms.hhs.gov . Ambulatory Surgical Center Quality Reporting (ASCQR) Program policies, contact Anita Bhatia via email at Anita.Bhatia@cms.hhs.gov . Ambulatory Surgical Center Quality Reporting (ASCQR) Program measures, contact Marsha Hertzberg via email at Marsha.Hertzberg@cms.hhs.gov . All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs Provided by Indian Health Service (IHS) and Tribal Facilities, contact Nate Vercauteren via email at Nathan.Vercauteren@cms.hhs.gov . Blood and Blood Products, contact Au'Sha Washington via email at AuShaWashington@cms.hhs.gov or Nicole Marcos via email at Nicole.Marcos@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 Gil Ngan via email at Gil.Ngan@cms.hhs.gov . Medicaid Clinic Services Four Walls Exceptions, contact Sheri Gaskins via email at Sheri.Gaskins@cms.hhs.gov or Ryan Tisdale via email at Ryan.Tisdale@cms.hhs.gov . Composite APCs (Multiple Imaging and Mental Health) and Comprehensive APCs (C-APCs), via email at Elise Barringer via email at Elise.Barringer@cms.hhs.gov . Device-Intensive Status and No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov . Domestic Personal Protection Equipment RFI, contact Jesse Hawkins via email at jesse.hawkins@hhs.gov Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals, contact The Clinical Standards Group, HealthandSafetyInquiries@cms.hhs.gov Hospital Inpatient Quality Reporting (IQR) Program policies, contact Julia Venanzi via email at julia.venanzi@cms.hhs.gov . Hospital Inpatient Quality Reporting (IQR) Program measures, contact Melissa Hager via email at melissa.hager@cms.hhs.gov or Ngozi Uzokwe via email at ngozi.uzokwe@cms.hhs.gov . Hospital Outpatient Quality Reporting (OQR) Program policies, contact Kimberly Go via email at Kimberly.Go@cms.hhs.gov . Hospital Outpatient Quality Reporting (OQR) Program measures, contact Janis Grady via email at 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 . IHS Outpatient Encounter Rate available to all American Indian and Alaska Native (AI/AN) Outpatient Programs Request for Information, contact Lisa Parker via email at Lisa.Parker1@cms.hhs.gov . Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via email at Abigail.Cesnik@cms.hhs.gov . Medicaid and CHIP Continuous Eligibility Policy, contact Cassie Lagorio via email at Cassandra.Lagorio@cms.hhs.gov . New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email at Scott.Talaga@cms.hhs.gov . No Legal Obligation to Pay Payment Exclusion, contact Frederick Grabau via email at Frederick.Grabau@cms.hhs.gov . Non-Opioid Policy or Implementation of Section 4135 of the Consolidated Appropriations Act (CAA), 2023, contact Cory Duke via email at Cory.Duke@cms.hhs.gov . OPPS Brachytherapy, contact Cory Duke via email at Cory.Duke@cms.hhs.gov and 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 . OPPS Dental Policy, contact Nicole Marcos via email at Nicole.Marcos@cms.hhs.gov . OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Gil Ngan via email at Gil.Ngan@cms.hhs.gov , Cory Duke via email at Cory.Duke@cms.hhs.gov , or Tonya Gierke via email at Tonya.Gierke@cms.hhs.gov . OPPS New Technology Procedures/Services, contact the New Technology APC mailbox at NewTechAPCapplications@cms.hhs.gov . OPPS Packaged Items/Services, contact 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 . Outpatient Department Prior Authorization Process, contact Kelly Wojciechowski via email at Kelly.Wojciechowski@cms.hhs.gov . Overall Hospital Quality Star Rating Request for Information, contact Tyson Nakashima Sr. via email at Tyson.Nakashima@cms.hhs.gov . Partial Hospitalization Program (PHP), Intensive Outpatient (IOP), and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at PHPPaymentPolicy@cms.hhs.gov . Payment Policy for Devices in Category B Investigational Device Exemption Clinical Trials Policy and Drugs with a Medicare Coverage with Evidence Development (CED) Designation, contact Cory Duke via email at Cory.Duke@cms.hhs.gov and Nicole Marcos via email at Nicole.Marcos@cms.hhs.gov . Remote Services, contact Elise Barringer via email at Elise.Barringer@cms.hhs.gov or Nate Vercauteren via email at Nathan.Vercauteren@cms.hhs.gov . Rural Emergency Hospital Quality Reporting (REHQR) Program policies, contact Anita Bhatia via email at Anita.Bhatia@cms.hhs.gov . Rural Emergency Hospital Quality Reporting (REHQR) Program measures, contact Melissa Hager via email at Melissa.Hager@cms.hhs.gov . Special Enrollment Period for Formerly Incarcerated Individuals, contact Steve Manning via email at Steve.Manning@cms.hhs.gov . All Other Issues Related to Hospital Outpatient Payments Not Previously Identified, contact the OPPS mailbox at OutpatientPPS@cms.hhs.gov . All Other Issues Related to the Ambulatory Surgical Center Payments Not Previously Identified, contact the ASC mailbox at ASCPPS@cms.hhs.gov . 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: https://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. Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a plain language summary of this rule may be found at https://www.regulations.gov/ . Severability of Provisions: We are clarifying and emphasizing our intent that if any provision of this final rule is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, or stayed pending further action, it shall be severable from other parts of this final rule, and from rules and regulations currently in effect, and not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other, dissimilar circumstances. If any provision is held to be invalid or unenforceable, the remaining provisions which could function independently should take effect and be given the maximum effect permitted by law. Through this rule, we adopt provisions that are intended to and will operate independently of each other, even if each serves the same general purpose or policy goal. Where a provision is necessarily dependent on another, the context generally makes that clear. 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 calendar year (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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices . The Addenda relating to the ASC payment system are available at: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-regulations-and-notices . Current Procedural Terminology (CPT) Copyright Notice Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2024 American Medical Association (AMA). All Rights Reserved. CPT is a registered trademark of the AMA. Applicable Federal Acquisition Regulations and Defense Federal Acquisition Regulations 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 2024 Proposed Rule G. Public Comments Received on the CY 2024 OPPS/ASC Final Rule With Comment Period II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights B. Conversion Factor Update C. Wage Index Changes D. Statewide Average Default Cost-to-Charge Ratios (CCRs) E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the Act for CY 2025 F. Payment Adjustment for Certain Cancer Hospitals for CY 2025 G. Hospital Outpatient Outlier Payments H. Calculation of an Adjusted Medicare Payment From the National Unadjusted Medicare Payment I. Beneficiary Copayments III. OPPS Ambulatory Payment Classification (APC) Group Policies A. OPPS Treatment of New and Revised HCPCS Codes B. OPPS Changes—Variations Within APCs C. New Technology APCs D. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs E. APC-Specific Policies IV. OPPS Payment for Devices A. Pass-Through Payment for Devices B. Device-Intensive Procedures V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals A. OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Payment Status VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, Biologicals, Radiopharmaceuticals, and Devices A. Amount of Additional Payment and Limit on Aggregate Annual Adjustment B. Final Estimate of Pass-Through Spending for CY 2025 VII. OPPS Payment for Hospital Outpatient Visits and Critical Care Services VIII. Payment for Partial Hospitalization and Intensive Outpatient Services A. Background B. Coding and Billing for PHP and IOP Services Under the OPPS C. CY 2025 Payment Rates for PHP and IOP D. Outlier Policy for CMHCs IX. Services That Will Be Paid Only as Inpatient Services A. Background B. Changes to the Inpatient Only (IPO) List X. Nonrecurring Policy Changes A. Remote Services B. Virtual Direct Supervision of Cardiac Rehabilitation (CR), Intensive Cardiac Rehabilitation (ICR), Pulmonary Rehabilitation (PR) Services and Diagnostic Services Furnished to Hospital Outpatients C. All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities D. Coverage Changes for Colorectal Cancer (CRC) Screening Services E. Request for Comment on Payment Adjustments under the IPPS and OPPS for Domestic Personal Protective Equipment F. Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital Outpatient Departments G. Payment Policy for Devices in Category B Investigational Device Exemption (IDE) Clinical Trials Policy and Drugs/Devices With a Medicare Coverage With Evidence Development (CED) Designation XI. CY 2025 OPPS Payment Status and Comment Indicators A. CY 2025 OPPS Payment Status Indicator Definitions B. CY 2025 Comment Indicator Definitions XII. MedPAC Recommendations A. OPPS Payment Rates Update B. Medicare Safety Net Index C. ASC Cost Data XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System A. Background, Legislative History, Statutory Authority, and Prior Rulemaking for the ASC Payment System B. ASC Treatment of New and Revised Codes C. Payment Policies Under the ASC Payment System D. Additions to ASC Covered Surgical Procedures and Covered Ancillary Services Lists E. ASC Payment Policy for Non-Opioid Post-Surgery Pain Management Drugs, Biologicals, and Devices F. Final CY 2025 Non-Opioid Policy for Pain Relief Under the OPPS and ASC Payment System G. New Technology Intraocular Lenses (NTIOLs) H. Calculation of the ASC Payment Rates and the ASC Conversion Factor XIV. Cross-Program Measures for the Hospital Outpatient Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs A. Background B. CMS Commitment To Advancing Health Equity Using Quality Measurement C. Modification of the Immediate Measure Removal Policy for the Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs Beginning With CY 2025 XV. Hospital Outpatient Quality Reporting (OQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data G. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR Program Requirements for the CY 2025 Payment Determination XVI. Rural Emergency Hospital Quality Reporting (REHQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data XVII. Ambulatory Surgical Center Quality Reporting (ASCQR) Program A. Background and Statutory Authority B. Program Measure Set Policies C. Program Measure Updates D. Administrative Requirements E. Form, Manner, and Timing of Data Submission F. Public Reporting of Measure Data G. Request for Information (RFI)—Development of Frameworks for Specialty Focused Reporting and Minimum Case Number for Required Reporting H. Payment Reduction for ASCs That Fail To Meet the ASCQR Program Requirements XVIII. Medicaid Clinic Services Four Walls Exceptions A. Background B. Summary of the Medicaid Clinic Services Four Walls Exceptions Proposed Provisions, Public Comments and Responses to Comments XIX. Changes to the Review Timeframes for the Hospital Outpatient Department (OPD) Prior Authorization Process XX. Provisions Related to Medicaid and the Children's Health Insurance Program (CHIP) A. Continuous Eligibility in Medicaid and CHIP (42 CFR 435.926 and 457.342) B. Summary of the Proposed Provisions, Public Comments and Responses to Comments on Medicaid and CHIP Continuous Eligibility XXI. Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals A. Background and Statutory Authority B. The U.S. Maternal Health Crisis C. Summary of the Proposed Provisions, Public Comments and Responses to Comments on Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals XXII. Hospital-Wide All-Cause Risk Standardized Mortality Measures in the Hospital Inpatient Quality Reporting Program A. Background B. Updates to the Form, Time, and Manner Requirements for the Hybrid Hospital-Wide All-Cause Readmission (HWR) and Hybrid Hospital-Wide All-Cause Risk Standardized Mortality (HWM) Measures for the FY 2026 and the FY 2027 Payment Determinations XXIII. Individuals Currently or Formerly in the Custody of Penal Authorities A. Medicare FFS No Legal Obligation to Pay Payment Exclusion and Incarceration (revisions to 42 CFR 411.4) B. Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals XXIV. Overall Hospital Quality Star Rating Modification To Emphasize the Safety of Care Measure Group: Request for Information (RFI) A. Summary B. Background C. Current Overall Hospital Quality Star Rating Methodology D. Safety of Care in Star Ratings E. Potential Future Options To Greater Emphasize Patient Safety in the Overall Hospital Quality Star Rating F. Solicitation of Public Comment XXV. Files Available to the Public via the Internet XXVI. Collection of Information Requirements A. ICRs for the Hospital Outpatient Quality Reporting (OQR) Program B. ICRs for the Rural Emergency Hospitals Quality Reporting (REHQR) Program C. ICRs for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program D. ICRs Related to Medicaid Clinic Services Four Walls Exceptions E. ICRs for Changes to the Review Timeframes for Hospital Outpatient Department (OPD) Prior Authorization Process F. ICRs for the Hospital Inpatient Quality Reporting (IQR) Program G. ICRs for Continuous Eligibility (42 CFR 435.926 and 457.342) H. ICRs Regarding Organization, Staffing and Delivery of Services for Hospitals (§ 482.59(a) and (b)) and CAHs (§ 485.649(a) and (b)) I. ICRs Regarding OB Staff Training for Hospitals (§ 482.59(c) and CAHs (§ 485.649(c)) J. ICRs Regarding Revisions to QAPI (§ 482.21) Standards for OB Services K. ICRS Regarding Emergency Services Readiness in Emergency Services (§ 482.55) for Hospitals L. Transfer Protocols in Discharge Planning (§ 482.43) for Hospitals M. Total Costs for all ICRs Related to Maternal Health XXVII. Response to Comments XXVIII. Economic Analyses A. Statement of Need B. Overall Impact of Provisions of This Final Rule With Comment Period C. Detailed Economic Analyses D. Regulatory Review Cost Estimation E. Regulatory Flexibility Act (RFA) Analysis F. Unfunded Mandates Reform Act Analysis G. Federalism H. Conclusion I. Waiver Fiscal Responsibility Act Requirements I. Summary and Background A. Executive Summary of This Document 1. Purpose We are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs), beginning January 1, 2025. 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 of the Department of Health and Human Services (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 practice, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i)(D)(v) of the Act, we annually review and update the ASC payment rates. This final rule with comment period also includes additional policy changes made in accordance with our experience with the OPPS and the ASC payment system and recent changes in our statutory authority. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. Also, this final rule with comment period updates the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the Rural Emergency Hospital Quality Reporting (REHQR) Program, the Ambulatory Surgical Center Quality Reporting (ASCQR) Program, and the Hospital Inpatient Quality Reporting (IQR) Program. We summarize information received in response to a Request for Information on potential modifications of the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. Given that the maternal health crisis in the United States is among the highest in high-income countries and also disproportionately impacts racial and ethnic minorities, we are finalizing updates to the CoPs for hospitals and CAHs in an effort to advance the health and safety of pregnant, birthing, and post-partum women. We are also finalizing an implementation approach in phases that allows additional time for hospitals and CAHs to comply with the requirements of the rule. In addition, we are narrowing the description of “custody” for the purposes of Medicare's no legal obligation to pay payment exclusion at § 411.4(b), providing an illustrative list of individuals who are not considered to be in custody, adding a definition of “penal authority,” reorganizing the regulation, and making certain technical edits. This rule also revises the eligibility requirements in the special enrollment period (SEP) for formerly incarcerated individuals at §§ 406.27(d) (Premium Part A) and 407.23(d) (Part B) to tie the eligibility for this SEP to the determination made by the Social Security Administration (SSA) that they are no longer incarcerated for releases beginning on January 1, 2025, and limit the current eligibility criteria for the SEP, with reference to “custody” associated with § 411.4(b) to releases between January 1, 2023, and December 31, 2024. Additionally, we are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 to require States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. Finally, we are finalizing our proposed exceptions to the Medicaid clinic services benefit four walls requirement, to authorize Medicaid payment for clinic services provided outside the four walls of the clinic for IHS/Tribal clinics, and at State option, behavioral health clinics and clinics located in rural areas. Our current regulation at 42 CFR 440.90(b) includes an exception to the four walls requirement under the Medicaid clinic services benefit only for clinic services furnished to individuals who are unhoused. We believe finalizing these additional exceptions will help maintain and improve access for the populations served by IHS/Tribal clinics, behavioral health clinics, and clinics located in rural areas. 2. Summary of the Major Provisions • OPPS Update: For CY 2025, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 2.9 percent. This increase factor is based on the final inpatient hospital market basket percentage increase of 3.4 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a final productivity adjustment of 0.5 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) 2025 will be approximately $87.7 billion, an increase of approximately $4.7 billion compared to estimated CY 2024 OPPS payments. We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals that fail to meet the hospital outpatient quality reporting requirements by applying a reporting factor of 0.9806 to the OPPS payments and copayments for all applicable services. • ASC Payment Update: For CYs 2019 through 2023, we adopted a policy to update the ASC payment system using the hospital market basket update. In light of the impact of the COVID-19 public health emergency (PHE) on healthcare utilization, we extended our policy to update the ASC payment system using the hospital market basket update an additional 2 years—through CYs 2024 and 2025. Using the hospital market basket methodology, for CY 2025, we increased payment rates under the ASC payment system by 2.9 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a final hospital market basket percentage increase of 3.4 percent reduced by a productivity adjustment of 0.5 percentage point. Based on this final update, we estimate that total payments to ASCs (including beneficiary cost sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2025 will be approximately $7.4 billion, an increase of approximately $308 million compared to estimated CY 2024 Medicare payments. • Device Pass-Through Payment Applications: For CY 2025, we received 14 complete applications for device pass-through payments. We sought public comment on these applications and make final determinations on these applications in this final rule with comment period. • Changes to the List of ASC Covered Surgical Procedures and Ancillary Services Lists: For CY 2025, we are adding 21 medical and dental procedures to the ASC covered procedures list (CPL) and ancillary services lists, based upon existing criteria at § 416.166. • Changes to the Inpatient Only (IPO) List: For CY 2025, we are finalizing adding three liver allograft services for which codes were newly created by the AMA CPT Editorial Panel for CY 2025 to the IPO list. Additionally, we are finalizing removing a pelvic fixation code (CPT code 22848) from the IPO list for CY 2025. • Remote Services: For CY 2025, we are clarifying our policies for remotely furnished outpatient therapy services, Diabetes Self-Management Training and Medical Nutrition Therapy services and mental health services furnished remotely to beneficiaries in their homes by hospital staff to maintain alignment across payment systems. • Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Hospitals: For CY 2025, we are finalizing our policy to separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR under the authorities used to calculate the AIR. • Clinical Trials Coding and Payment: We are finalizing a clarification to our Category B clinical trials coding and payment policy for devices and procedures to specify that our policy applies only to IDE studies with a control arm and where a payment adjustment is necessary to preserve the scientific validity of such a study. We are not finalizing our proposal to extend our coding and payment policy to drugs and devices that are being studied in clinical trials under a Coverage with Evidence Development (CED) National Coverage Determination (NCD), 1 for which the trial includes a treatment and control arm for CY 2025. We are taking additional time to consider the broad implications of a payment methodology for clinical trials for CED drugs and devices. 1 https://www.cms.gov/medicare/coverage/evidence. • Payment for HIV Pre-Exposure Prophylaxis (PrEP) in Hospital Outpatient Departments: For CY 2025, we are finalizing paying for HIV PrEP drugs covered as an additional preventive service and related services under the OPPS. We are finalizing a site neutral policy where products are generally paid similar rates under the OPPS and Physician Fee Schedule. • Diagnostic Radiopharmaceuticals Separate Payment: We are finalizing a policy to pay separately for diagnostic radiopharmaceuticals with per day costs above a threshold of $630, which is approximately two times the volume weighted average cost amount currently associated with diagnostic radiopharmaceuticals in the Nuclear Medicine APCs. We also are finalizing updating the $630 threshold in CY 2026 and subsequent years by the Producer Price Index (PPI) for Pharmaceutical Preparations. Finally, we are finalizing payment for separately payable diagnostic radiopharmaceuticals based on their Mean Unit Cost (MUC) derived from OPPS claims for CY 2025. • Exclusion of Cell and Gene Therapies from Comprehensive Ambulatory Payment Classification (C-APC) Packaging: We are finalizing a policy to exclude qualifying cell and gene therapies from C-APC packaging. • Add-on Payment for Radiopharmaceutical Technetium-99m (Tc-99m) Derived from Domestically Produced Mo-99: For CY 2025, an add-on payment applies to radiopharmaceuticals that use Tc-99m produced without use of highly enriched uranium (HEU). For CY 2026, we are finalizing replacing the add-on payment for radiopharmaceuticals produced without the use of Tc-99m derived from non-HEU sources with an add-on payment for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99. • Changes to the Review Timeframes for the Hospital Outpatient Department (OPD) Prior Authorization Process: We are changing the current review timeframe for prior authorization requests for OPD services from 10-business days to 7-calendar days for standard reviews. • Health Equity Measures for the Hospital Outpatient Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs: We are finalizing: (1) adoption of the Hospital Commitment to Health Equity (HCHE) measure in the Hospital OQR and the REHQR Programs, and adoption of the Facility Commitment to Health Equity (FCHE) measure in the ASCQR Program, beginning with the CY 2025 reporting period/CY 2027 payment or program determinations; (2) adoption of the Screening for Social Drivers of Health (SDOH) measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determinations; and (3) adoption of the Screen Positive Rate for SDOH measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determinations. • Modification of the Immediate Measure Removal Policy for the Hospital OQR and ASCQR Programs: We are finalizing modification of the immediate measure removal policy to an immediate measure suspension policy to increase transparency regarding the process for removing adopted measures in the Hospital OQR and ASCQR Programs beginning with CY 2025. • Hospital Outpatient Quality Reporting (OQR) Program: In addition to the cross-program measures and policies, we are finalizing: (1) adoption of the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, Patient Reported Outcome-Based Performance Measure (Information Transfer PRO-PM) beginning with voluntary reporting for the CY 2026 reporting period followed by mandatory reporting beginning with the CY 2027 reporting period/CY 2029 payment determination; (2) removal of the MRI Lumbar Spine for Low Back Pain measure beginning with the CY 2025 reporting period/CY 2027 payment determination; (3) removal of the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure beginning with the CY 2025 reporting period/CY 2027 payment determination; (4) the requirement that electronic health record (EHR) technology be certified to all electronic clinical quality measures (eCQMs) available to report beginning with the CY 2025 reporting period/CY 2027 payment determination; and (5) public reporting of the Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients measure—Psychiatric/Mental Health Patients stratification on Care Compare beginning with CY 2025. • Rural Emergency Hospital Quality Reporting (REHQR) Program: In addition to the cross-program measures, we are finalizing: (1) extension of the reporting period for the Risk-Standardized Hospital Visits Within 7 Days After Hospital Outpatient Surgery measure from 1 year to 2 years beginning with the CY 2027 program determination; and (2) when, after status conversion, REHs are required to report data under the REHQR Program. • Ambulatory Surgical Center Quality Reporting (ASCQR) Program: In addition to finalizing the cross-program measures and policies, we summarize comments received on the potential development of frameworks for specialty focused reporting and minimum case number for required reporting under the ASCQR Program. • Hospital Inpatient Quality Reporting (IQR) Program: We are finalizing the voluntary reporting of the core clinical data elements (CCDEs) and linking variables for both the Hybrid Hospital-Wide Readmission (HWR) and Hybrid Hospital-Wide Standardized Mortality (HWM) measures, for the performance period of July 1, 2023, through June 30, 2024, impacting the FY 2026 payment determination for the Hospital IQR Program. Additionally, we are extending voluntary reporting of CCDEs and linking variables for an additional year for the performance period of July 1, 2024, through June 30, 2025, impacting the FY 2027 payment determination for the Hospital IQR Program. • Overall Hospital Quality Star Rating: We summarize comments received on potential modifications to the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. • Medicare FFS No Legal Obligation to Pay Payment Exclusion and Incarceration: We are narrowing the description of “custody” for purposes of Medicare's no legal obligation to pay payment exclusion at § 411.4(b), stating explicitly in regulatory text that individuals who are released to the community pending trial (including those in pretrial community supervision and those released pursuant to cash bail), on parole, probation, or home detention, or required to reside in halfway houses are not considered to be in “custody” for purposes of the payment exclusion, adding a definition of “penal authority,” reorganizing the regulation, and making certain technical edits. • Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals: We are finalizing the eligibility requirements in the special enrollment period (SEP) for formerly incarcerated individuals at §§ 406.27(d) and 407.23(d) to remove the reference to “custody” associated with § 411.4(b) and instead tie the eligibility for this SEP to the determination made by SSA that they are no longer incarcerated. We are also expanding the SEP eligibility criteria to include individuals released from confinement to residency in halfway houses. • Continuous Eligibility in Medicaid and CHIP: We are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 for States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. Specifically, we are finalizing the removal of the option to provide continuous eligibility to a subgroup of Medicaid and CHIP enrollees and for a time period of less than 12 months. For CHIP, we are finalizing the removal of the option to disenroll children from CHIP during a continuous eligibility period for failure to pay premiums. • Medicaid Clinic Services Four Walls Exceptions: We are finalizing three exceptions to the Medicaid clinic services benefit four walls requirement at 42 CFR 440.90. Our current regulation at 42 CFR 440.90(b) allows for Medicaid payment for clinic services furnished outside of the four walls of the clinic only to individuals who are unhoused. Our final rule adds a mandatory exception to the four walls requirement for IHS/Tribal clinics at 42 CFR 440.90(c) and optional exceptions for behavioral health clinics and clinics located in rural areas at 42 CFR 440.90(d) and (e), respectively. • Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals: We are finalizing new Conditions of Participation (CoPs) for hospitals and CAHs for obstetrical services, including new requirements for maternal quality assessment and performance improvement (QAPI), as well as baseline standards for the organization, staffing, and delivery of care within obstetrical units, and staff training on evidence-based best practices every 2 years. We are finalizing revisions to the emergency services CoP related to emergency readiness for hospitals and CAHs that provide emergency services. In addition, we are finalizing revisions to the Discharge Planning CoP for all hospitals related to transfer protocols. Further, we are finalizing a phased-in implementation to provide hospitals and CAHs with additional time to come into compliance with the requirements. Lastly, we sought comments in the proposed rule on whether these requirements should also apply to rural emergency hospitals (REHs), which we discuss below. 3. Summary of Costs and Benefits In section XXVIII of this final rule with comment period, we set forth a detailed analysis of the regulatory and federalism impacts that the proposed changes would have on affected entities and beneficiaries. Key estimated impacts are described below. a. Impacts of All OPPS Changes Table 201 in section XXVIII.C of this final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2025 compared to all estimated OPPS payments in CY 2024. We estimate that the final policies in this final rule with comment period would result in a 3.0 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2025, including beneficiary cost-sharing, to the approximately 3,500 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) would increase by approximately $1.98 billion compared to CY 2024 payments, excluding our estimated changes in enrollment, utilization, and case-mix. We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs have historically only been paid for partial hospitalization services under the OPPS. Beginning CY 2024, they are also paid for intensive outpatient program (IOP) 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 11.9 percent increase in CY 2025 payments to CMHCs relative to their CY 2024 payments. b. Impacts of the Updated Wage Indexes We estimate that our update of the wage indexes based on the fiscal year (FY) 2025 IPPS final rule wage indexes will result in a 0.1 percent increase for urban hospitals under the OPPS and a 0.9 percent increase for rural hospitals. These wage indexes include continued implementation of the Office of Management and Budget (OMB) labor market area delineations based on 2020 Decennial Census data, with updates, as discussed in section II.C of this final rule with comment period. c. Impacts of the Rural Adjustment and the Cancer Hospital Payment Adjustment For CY 2025, we are continuing to provide additional payments to cancer hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. Section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. In light of the COVID-19 PHE impact on claims and cost data used to calculate the target PCR, we had maintained the CY 2021 target PCR of 0.89 through CYs 2022 and 2023. However, in CY 2024, we finalized a policy to reduce the target PCR by 1.0 percentage point each calendar year until the target PCR equals the PCR of non-cancer hospitals using the most recently submitted or settled cost report data. For CY 2024, we finalized a target PCR of 0.88. For CY 2025, we are finalizing a target PCR of 0.87 to determine the CY 2025 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments would be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital. d. Impacts of the OPD Fee Schedule Increase Factor For the CY 2025 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 2.9 percent and applying that increase factor to the conversion factor for CY 2025. 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 3.2 percent and that rural hospitals will experience an increase in payments of 3.2 percent. Classifying hospitals by teaching status, we estimate non-teaching hospitals will experience an increase in payments of 3.3 percent, minor teaching hospitals will experience an increase in payments of 3.5 percent, and major teaching hospitals will experience an increase in payments of 2.7 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership will experience an increase of 3.1 percent in payments, while hospitals with government ownership will experience an increase of 2.6 percent in payments. We estimate that hospitals with proprietary ownership will experience an increase of 4.9 percent in payments. e. Impacts of the ASC Payment Update For impact purposes, the surgical procedures on the ASC covered surgical procedure list are aggregated into surgical specialty groups using CPT and HCPCS code range definitions. The percentage change in estimated total payments by specialty groups under the CY 2025 payment rates, compared to estimated CY 2024 payment rates, generally ranges between an increase of 3 percent and an increase of 4 percent, depending on the service, with some exceptions. We estimate the impact of applying the inpatient hospital market basket update to ASC payment rates will increase payments by $193 million under the ASC payment system in CY 2025. f. Impacts of Medicaid Clinic Services Four Walls Exceptions We estimate that the finalized exceptions to the four walls requirement under the Medicaid clinic services benefit for IHS/Tribal clinics, behavioral health clinics, and clinics located in rural areas will increase total expenditures by $1.18 billion from FY 2025 through 2029. Our estimate includes a Federal impact of $1.15 billion and impact to States of $30 million. These estimates are discussed in more detail in section XXVIII of this final rule. g. Impacts of Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals We are finalizing maternal health focused revisions to the CoPs for hospitals and CAHs, which are estimated to increase burden on hospitals and CAHs by $423 million annually with total costs estimated at $4.23 billion over 10 years. We expect an average annual cost of $67,103 per hospital and CAH. As discussed in detail in section XXVIII of this final rule with comment period, we expect the benefits of these policies to include reduced maternal morbidity and mortality, leading to financial benefits for patients, their families, and payors. We also expect that the policies are likely to reduce inequality in maternal health outcomes among pregnant and postpartum women from different groups and lead to overall improvements in patient care. h. Impacts of the Medicaid and CHIP Continuous Eligibility Requirements We are finalizing our proposed revisions to Medicaid and CHIP regulations to codify the requirement within the CAA, 2023 for States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. For CHIP, we are finalizing the removal of the option to disenroll children from CHIP during a continuous eligibility period for failure to pay premiums. Requiring 12months of continuous eligibility in Medicaid and CHIP is estimated to increase annual average enrollment in Medicaid and CHIP by approximately 124,000 by 2028 (75,000 in Medicaid and 49,000 in CHIP). The total estimated impact of this requirement over 5 years is $2,466 million, including Federal impact of $1,592 million and State impact of $874 million. 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 (HCERA, 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; the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020; the Inflation Reduction Act, 2022 (Pub. L. 117-169), enacted on August 16, 2022; and the Consolidated Appropriations Act (CAA), 2023 (Pub. L. 117-238), enacted December 29, 2022. 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 final rule with comment period. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under 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; • Indian Health Service (IHS) hospitals; and • Rural emergency hospitals (REH). 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/payment/prospective-payment-systems/hospital-outpatient/regulations-notices . 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 (the PHS Act), which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel). 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 21, 2022, 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 26, 2024. The recommendations of the Panel for the most recent meeting are available on the CMS website at: https://www.cms.gov/medicare/regulations-guidance/advisory-committees/hospital-outpatient-payment . 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 2022, we published a Federal Register notice requesting nominations to fill vacancies on the Panel (87 FR 68499). CMS is currently accepting nominations at: https://mearis.cms.gov . 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 21, 2023, meeting that the subcommittees continue. We accepted this recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS website mentioned earlier in this section, and the FACA database at https://facadatabase.gov. F. Public Comments Received on the CY 2025 Proposed Rule We received approximately 3,500 timely pieces of correspondence on the CY 2025 OPPS/ASC proposed rule that appeared in the Federal Register on July 22, 2024 (89 FR 59186). We received comments from elected officials, providers and suppliers, practitioners, and advocacy groups. We provide summaries of the public comments, and our responses are set forth in the various sections of this final rule with comment period under the appropriate headings. We note that we received some public comments that were outside the scope of the CY 2025 OPPS/ASC proposed rule. Out-of-scope-public comments are not addressed in this CY 2025 OPPS/ASC final rule with comment period. G. Public Comments Received on the CY 2024 OPPS/ASC Final Rule With Comment Period We received approximately 180 timely pieces of correspondence on the CY 2024 OPPS/ASC final rule with comment period that appeared in the Federal Register on November 22, 2023 (88 FR 81540). II. Updates Affecting OPPS Payments A. Recalibration of APC Relative Payment Weights 1. Database Construction a. Database Source and Methodology Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for Ambulatory Payment Classifications (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 2025 OPPS, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2025, and before January 1, 2026 (CY 2025), using the same basic methodology that we described in the CY 2024 OPPS/ASC final rule with comment period (88 FR 81549 through 81552), using CY 2023 claims data. That is, we proposed to recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services to construct a database for calculating APC group weights. For the purpose of recalibrating the proposed APC relative payment weights for CY 2025, we began with approximately 145 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, 2023, and before January 1, 2024, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 73 million final action claims to develop the proposed CY 2025 OPPS payment weights. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for the CY 2025 OPPS/ASC proposed rule on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient . Addendum N to the CY 2025 OPPS/ASC proposed rule (which is available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices ) includes the proposed list of bypass codes for CY 2025. The proposed list of bypass codes contains codes that are reported on claims for services in CY 2023 and, therefore, includes codes that were in effect in CY 2023 and used for billing. We proposed to retain these deleted bypass codes on the proposed CY 2025 bypass list because these codes existed in CY 2023 and were covered OPD services in that period, and CY 2023 claims data were used to calculate proposed CY 2025 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 CY 2025 OPPS/ASC proposed rule. HCPCS codes that we proposed to add for CY 2025 are identified by asterisks (*) in the fourth column of Addendum N. We did not receive any public comments on our general proposal to recalibrate the relative payment weights for each APC based on claims and cost report data for HOPD services or on our proposed bypass code process. We are finalizing as proposed the “pseudo” single claims process and the final CY 2025 list of bypass codes, as displayed in Addendum N to this final rule with comment period (which is available via the internet on the CMS website). For this final rule with comment period, for the purpose of recalibrating the final APC relative payment weights for CY 2025, we used approximately 78 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, 2023, and before January 1, 2024. For the 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 final rule with comment period on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient . b. Calculation and Use of Cost-to-Charge Ratios (CCRs) For CY 2025, we proposed to continue to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the proposed CY 2025 APC payment rates are based, we calculated hospital-specific departmental CCRs for each hospital for which we had CY 2023 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2022. For the proposed CY 2025 OPPS payment rates, we used the set of claims processed during CY 2023. 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 2023 (the year of claims data we used to calculate the proposed CY 2025 OPPS payment rates) and updates to the National Uniform Billing Committee (NUBC) 2023 Data specifications Manual. That crosswalk is available for review and continuous comment on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient . In accordance with our longstanding policy, similar to our finalized policy for CY 2024 OPPS ratesetting, we proposed to calculate CCRs for the standard cost centers—cost centers with a predefined label—and nonstandard cost centers—cost centers defined by a hospital—accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital-specific departmental level. While we generally view the use of additional cost data as improving our OPPS ratesetting process, we have historically not included cost report lines for certain nonstandard cost centers in the OPPS ratesetting database construction when hospitals have reported these nonstandard cost centers on cost report lines that do not correspond to the cost center number. We believe it is important to further investigate the accuracy of these cost report data before including such data in the ratesetting process. Further, we believe it is appropriate to gather additional information from the public as well before including them in OPPS ratesetting. For CY 2025, we proposed not to include the nonstandard cost centers reported in this way in the OPPS ratesetting database construction. We did not receive any public comments on the general CCR process and therefore, we are finalizing our proposal for CY 2025 to use the hospital-specific overall ancillary and departmental CRs to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk and the proposed methodology. 2. Final Data Development and Calculation of Costs Used for Ratesetting In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2025. The Hospital OPPS page on the CMS website on which this final rule with comment period is posted ( https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient ) 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, https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient , 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 International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnosis codes and revenue code payment amounts. This file is derived from the CY 2023 claims that are used to calculate the proposed payment rates for the CY 2025 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. We used the methodology described in sections II.A.2.a through II.A.2.c of this final rule with comment period to calculate the costs we used to establish the proposed relative payment weights used in calculating the OPPS payment rates for CY 2025 shown in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices ). We refer readers to section II.A.4 of this final rule with comment period for a discussion of the conversion of APC costs to scaled payment weights. 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 items and 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 2025 OPPS, we proposed to continue to remove claim lines with modifier “PN” from the ratesetting process. We did not receive any public comments on our proposal and are finalizing our proposal to continue to remove claim lines reported with modifier “PN” from the ratesetting process. For details of the claims accounting process used in this CY 2025 OPPS/ASC final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this final rule with comment period on the CMS website at: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient . a. Calculation of Single Procedure APC Criteria-Based Costs (1) Blood and Blood Products (a) Methodology Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered. Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs. In the CY 2025 OPPS/ASC proposed rule, we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology (88 FR 49562), 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. To address the differences in CCRs and to better reflect hospitals' costs, our methodology simulates 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 and applies this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports. We propose to calculate the costs upon which the proposed 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 stated in the CY 2025 OPPS/ASC proposed rule that we continue to believe that the hospital-specific, simulated, blood-specific CCR methodology takes into account the unique charging and cost accounting structure of each hospital, as it 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. This methodology also yields more accurate estimated costs for these products and results in payment rates for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and for these blood products in general. We refer readers to Addendum B to this final rule with comment period (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices ) for the final CY 2025 payment rates for blood and blood products (which are generally identified with status indicator “R”). For a more detailed discussion of payments for blood and blood products through APCs, we refer readers to: • the CY 2005 OPPS proposed rule (69 FR 50524 and 50525) for a more comprehensive discussion of the blood-specific CCR methodology; • the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807 through 66810) for a detailed history of the OPPS payment for blood and blood products; and • the CY 2015 OPPS/ASC final rule with comment period (79 FR 66795 and 66796) for additional discussion of 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. Comment: We received one comment regarding the cost calculations for blood and blood products. The commenter stated that current payment rates do not always cover the cost to process, store, and transport the unit of blood. The commenter recommended that CMS utilize the average wholesale price (AWP) as the payment rate for blood products, in addition to basing payment rates on the hospital CCRs, as they believed using AWP would help eliminate outliers and produce more accurate payment calculations. The commenter explained that cost reporting methodologies may vary among hospitals. For example, some cost centers may combine blood products with blood bank testing which could skew the CCRs for that cost center, which would then impact the payment rates. Response: We thank the commenter for their input and will keep it in mind for future rulemaking. However, we note that reflecting the range and variation of billing patterns across hospitals, as reflected in their claims, is part of establishing prospective payment rates. Additionally, we do not believe at this time that using AWP to set the payment rate for blood products would necessarily result in more accurate payment calculations, because AWP does not factor in volume discounts or rebates and, therefore, may not reflect the true cost of the product. Comment: One commenter supported our proposal to continue to pay separately for blood and blood products. Response: We thank the commenter for their support. After consideration of the public comments we received, we are finalizing our proposals for blood and blood products using our blood-specific CCR methodology without modification. Please refer to Addendum B to this final rule with comment period, which is available on the CMS website, for the final CY 2025 payment rates for blood and blood products. (b) New HCPCS Code for Red Blood Cell Product (HCPCS Code P9027) Effective October 1, 2024, the HCPCS workgroup created HCPCS code P9027 (Red blood cells, leukocytes reduced, oxygen/carbon dioxide reduced, each unit). HCPCS code P9027 may be used to bill for a blood product that utilizes a two-stage process to remove oxygen and maintain a deoxygenated state throughout its storage period, thereby preventing oxidative damage to red blood cells. We note that because HCPCS code P9027 was created after the CY 2025 OPPS/ASC proposed rule was issued, we did not include a proposal regarding the APC assignment for HCPCS code P9027 in the CY 2025 OPPS/ASC proposed rule. Due to its effective date, we assigned HCPCS code P9027 to APC 9541 with an SI = R (Blood and Blood Products) in Change Request 13784. The payment rate for HCPCS code P9027, effective October 1, 2024, is $252.48. While we usually calculate payment rates for blood and blood products using our blood-specific CCR methodology, when there is no claims data on the charges and costs for blood products upon which to apply our blood-specific CCR methodology, we establish a payment rate for the new blood product based on a crosswalk to an existing blood product HCPCS code that we believe provides the best proxy for the costs of the new blood product. Because we did not have any claims data on HCPCS code P9027 ahead of its October 1, 2024, effective date, we used a crosswalk code to assign a payment rate for HCPCS code P9027. Specifically, we found that HCPCS code P9040 (Red blood cells, leukocytes reduced, irradiated, each unit) with a CY 2024 payment rate of $252.48 was sufficiently similar to P9027 to serve as a crosswalk for purposes of a payment rate assignment. Comment: We received a comment from the manufacturer of the blood product described by P9027. HCPCS code P9027 may be used to bill for the blood product involving the Hemanext ONE System. The commenter provided estimated cost information regarding the blood product, including an expected average per-unit anticipated hospital cost of $510. The manufacturer provided the estimated costs based on total blood establishment manufacturing costs, including the costs to manufacture a single unit of the starting materials, the sales price for the Hemanext ONE System, and the blood establishment labor, overhead, administrative, and shipping costs. The commenter noted that they believe their red blood cell product is potentially transformative and would provide improved health outcomes. The commenter stated that they believe the product whose CY 2024 Medicare payment rate reasonably approximates the projected average hospital acquisition cost for HCPCS P9027 is HCPCS code P9057 (Red blood cells, frozen/deglycerolized/washed/leukocytes reduced, irradiated, each unit), with a CY 2024 payment rate of $493.21 per unit. As such, the commenter recommends that CMS crosswalk the payment rate for HCPCS P9057 to HCPCS P9027. The commenter believes that a crosswalk to any other red blood cell product will result in a payment rate that does not cover the acquisition cost for HCPCS P9027 and creates patient access barriers. Response: We thank the commenter for their comment. Based on the additional cost information provided by the manufacturer, we believe that HCPCS code P9040 is not the best proxy for the costs of the blood product described by HCPCS code P9027. However, we disagree with the commenter that HCPCS code P9057 is the most appropriate crosswalk for new HCPCS code P9027 because the payment rate for HCPCS code P9057 reflects additional processes that are not reflected in the code descriptor for HCPCS code P9027. Given this difference in process, and the associated differences in estimated costs, we believe HCPCS code P9035 is a more appropriate proxy for the costs associated with HCPCS code P9027. Therefore, we are establishing an interim payment rate for HCPCS code P9027 based on a crosswalk to existing blood product HCPCS code P9035. Table 1 lists the new HCPCS code P9027 and its payment crosswalk. ER27NO24.000 The interim payment rate for HCPCS code P9027 is open for public comment in this CY 2025 final rule with comment period. Specifically, HCPCS code P9027 is flagged with comment indicator “NI” in Addendum B to this final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2025 and are seeking public comments on the APC and status indicator assignments. Once we have claims data for this new HCPCS P-code, we will calculate a payment rate using the claims data that should be available for these new codes beginning in CY 2027, which is our practice for other blood products for which claims data have been available for 2 years. (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—cancer treatment through solid source radioactive implants—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 and 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 2025, except where otherwise indicated, we proposed to continue our policy and use the costs derived from CY 2023 claims data to set the proposed CY 2025 payment rates for brachytherapy sources because CY 2023 is the year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2025 OPPS. With the exception of the proposed payment rate for brachytherapy source C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and the proposed payment rates for low-volume brachytherapy APCs discussed in section III.D of the CY 2025 OPPS/ASC proposed rule, we proposed to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we proposed for other items and services paid under the OPPS, as discussed in section II.A.2 of the CY 2025 OPPS/ASC proposed rule. We also proposed for CY 2025 and subsequent years 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). For CY 2025 and subsequent years, we proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not otherwise specified, per source) and C2699 (Brachytherapy source, non-stranded, not otherwise specified, per source), at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per-source basis (as opposed to, for example, per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). For CY 2025 and subsequent years, we also proposed to continue the policy we first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding payment for new brachytherapy sources for which we have no claims data, based on the same reasons we discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66786; which was delayed until January 1, 2010, by section 142 of Pub. L. 110-275). Specifically, this policy is intended to enable us to assign new HCPCS codes for new brachytherapy sources to their own APCs, with prospective payment rates set based on our consideration of external data and other relevant information regarding the expected costs of the sources to hospitals. The proposed CY 2025 payment rates for brachytherapy sources are included on Addendum B to the CY 2025 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and identified with status indicator “U.” For CY 2018, we assigned status indicator “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) in the absence of claims data and established a payment rate using external data (invoice price) at $4.69 per mm 2 for the brachytherapy source's APC-APC 2648 (Brachytx planar, p-103). 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 for APC 2648 (Brachytx planar, p103). Our CY 2018 claims data available for the CY 2020 OPPS/ASC final rule with comment period (84 FR 61142) included two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per mm 2 . In response to comments from interested parties, we agreed 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, CY 2022, CY 2023, and CY 2024 OPPS/ASC final rules with comment period (85 FR 85879 through 85880, 86 FR 63469, 87 FR 71760-71761, and 88 FR 81553), 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 CYs 2021 through 2024. There were no CY 2023 claims available that reported HCPCS code C2645 for the CY 2025 OPPS/ASC proposed rule. Therefore, in the absence of claims data, we proposed to continue to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 payment rate of $4.69 per mm 2 for HCPCS code C2645, which we proposed to be assigned to APC 2648 (Brachytx planar, p-103), for CY 2025. Additionally, for CY 2022 and subsequent calendar years, we adopted a Universal Low Volume APC policy for clinical and brachytherapy APCs. As discussed in further detail in section X.C of the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743 through 63747), we adopted this policy to mitigate wide variation in payment rates that occur from year to year for APCs with low utilization. Such volatility in payment rates from year to year can result in even lower utilization and potential barriers to access. Brachytherapy APCs that have fewer than 100 single claims used for ratesetting purposes are designated as Low Volume APCs unless an alternative payment rate is applied, such as the use of our equitable adjustment authority under section 1833(t)(2)(E) of the Act in the case of APC 2648 (Brachytx planar, p-103), for which HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) is the only code assigned as discussed previously in this section. For CY 2025, we proposed to designate six brachytherapy APCs as Low Volume APCs as these APCs meet our criteria to be designated as Low Volume APCs. For more information on the brachytherapy APCs we proposed to designate as Low Volume APCs, see section III.D of the CY 2025 OPPS/ASC proposed rule. Comment: We received support from commenters for our proposal to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 payment rate of $4.69 per mm 2 for HCPCS code C2645, which we proposed to assign to APC 2648 (Brachytx planar, p-103) for CY 2025. Response: We thank the commenters for their support. After consideration of the public comment we received, we are finalizing, without modification, that we will use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to maintain the CY 2024 payment rate of $4.69 per mm 2 for HCPCS code C2645, which we are assigning to APC 2648 (Brachytx planar, p-103), for CY 2025. The final CY 2025 payment rates for brachytherapy sources are included in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) and are identified with status indicator “U.” We continue to invite interested parties to submit recommendations 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 2025 (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 and 66810). We have gradually added new C-APCs since the policy was implemented beginning in CY 2015, with the number of C-APCs now totaling 72 (80 FR 70332; 81 FR 79584 and 79585; 83 FR 58844 through 58846; 84 FR 61158 through 61166; 85 FR 85885; 86 FR 63474; 87 FR 71769; and 88 FR 81562). 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. One example of a primary service would be a partial mastectomy and an example of a secondary service packaged into that primary service would be a radiation therapy procedure. 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 and 66801). A list of services excluded from the C-APC policy is included in Addendum J to this final rule (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices ). If a service does not appear on this list of excluded services, payment for it will be packaged into the payment for the primary C-APC service when it appears on an outpatient claim with a primary C-APC service. The C-APC policy payment methodology set forth in the CY 2014 OPPS/ASC final rule with comment period 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,” 2 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. 2 Status indicator “J1” denotes Hospital Part B Services Paid Through a Comprehensive APC. Further information can be found in CY 2025 Addendum D1. 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.” 3 Specifically, we make a payment through C-APC 8011 for a claim that: 3 Status indicator “J2” denotes Hospital Part B Services That May Be Paid Through a Comprehensive APC. Further information can be found in CY 2025 Addendum D1. • 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 one 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, such as speech language pathology, 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, 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. 4 4 https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf . 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 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 final rule with comment period, in the originating C-APC (cost threshold). These criteria identify paired code combinations that occur commonly and exhibit materially greater resource requirements than the primary service. The CY 2017 OPPS/ASC final rule with comment period (81 FR 79582) included a revision to the complexity adjustment eligibility criteria. Specifically, we finalized a policy to discontinue the requirement that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described above) also not create a 2 times rule violation in the higher level or receiving APC. After designating a single primary service for a claim, we evaluate that service in combination with each of the other procedure codes reported on the claim assigned to status indicator “J1” (or certain add-on codes) to determine if there are paired code combinations that meet the complexity adjustment criteria. For a new HCPCS code, we determine initial C-APC assignment and qualification for a complexity adjustment using the best available information, crosswalking the new HCPCS code to a predecessor code(s) when appropriate. Once we have determined that a particular code combination of “J1” services (or combinations of “J1” services reported in conjunction with certain add-on codes) represents a complex version of the primary service because it is sufficiently costly, frequent, and a subset of the primary comprehensive service overall according to the criteria described above, we promote the claim including the complex version of the primary service as described by the code combination to the next higher cost C-APC within the clinical family, unless the primary service is already assigned to the highest cost APC within the C-APC clinical family or assigned to the only C-APC in a clinical family. We do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. Therefore, the highest payment for any claim including a code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802). We package payment for all add-on codes into the payment for the C-APC. However, certain primary service add-on combinations may qualify for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70331), all add-on codes that can be appropriately reported in combination with a base code that describes a primary “J1” service are evaluated for a complexity adjustment. To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2025, we 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 2025, along with all the other final complexity adjustments, in Addendum J to this final rule with comment period (which is available via the internet on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices ). Addendum J to this final rule with comment period 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 final rule with comment period 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 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 four 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 will be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to this final rule with comment period allows interested parties the opportunity to better assess the impact associated with the assignment of claims with each of the paired code combinations eligible for a complexity adjustment. Comment: We received support from commenters for a variety of existing and proposed complexity adjustments. Response: We thank the commenters for their support. Comment: Multiple commenters requested that CMS apply a complexity adjustment to additional code combinations. The specific C-APC complexity adjustment code combinations requested by the commenters for CY 2025 are listed in Table 2. BILLING CODE 4120-01-P ER27NO24.001 ER27NO24.002 BILLING CODE 4120-01-C Response: We reviewed each of the requested code combinations suggested by commenters, listed in Table 2, against our complexity adjustment criteria. The code combination for primary HCPCS code 28296 with secondary HCPCS code 28270 meets our cost and frequency criteria, qualifying for a complexity adjustment for CY 2025. All the remaining code combinations listed failed to meet our cost or frequency criteria and do not qualify for complexity adjustments for CY 2025. Addendum J to this final rule with comment period includes the cost statistics for each code combination that was evaluated for a complexity adjustment. Comment: Commenters requested that CMS modify, waive, or eliminate the established C-APC complexity adjustment eligibility criteria of 25 or more claims reporting the code combination (frequency) and a violation of the 2 times rule in the originating C-APC (cost) to allow additional code combinations to qualify for complexity adjustments. These commenters were concerned that C-APC packaging and a lack of complexity adjustment would limit access to procedures. Specifically, some commenters expressed concern that CMS's methodology for determining complexity adjustments is unnecessarily restrictive, particularly the 25-claim threshold, and suggested that CMS eliminate the 25-claim threshold and implement a complexity adjustment whenever a code pair exceeds the cost threshold. Some commenters were concerned that when multiple “J1” primary services are reported on a claim, along with an add-on service, the add-on service is not evaluated for a complexity adjustment. Commenters cited examples where significant claims volume from add-on services may not be incorporated into the complexity adjustment evaluation. Commenters also reiterated requests to broaden the complexity adjustment policy and allow clusters of procedures, consisting of a “J1” code pair and multiple other associated add-on codes used in combination with that “J1” code pair, to qualify for complexity adjustments. Commenters stated that there are certain complex procedures that include numerous add-on codes and this approach would allow more accurate reflection of the cost of medical practice when multiple procedures are performed together. They noted that lack of additional payment for these code combinations can present a financial challenge for the providers who perform these more resource intensive services. Response: We appreciate these comments. At this time, we do not believe changes to the C-APC complexity adjustment criteria are necessary or that we should make exception [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-25521. Public record. Not legal advice.