80 FR 70298 - Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Short Inpatient Hospital Stays; Transition for Certain Medicare-Dependent, Small Rural Hospitals Under the Hospital Inpatient Prospective Payment System; Provider Administrative Appeals and Judicial Review
DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services
Federal Register Volume 80, Issue 219 (November 13, 2015)
Page Range
70298-70607
FR Document
2015-27943
This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2016 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. Further, this document includes certain finalized policies relating to the hospital inpatient prospective payment system: Changes to the 2- midnight rule under the short inpatient hospital stay policy; and a payment transition for hospitals that lost their status as a Medicare- dependent, small rural hospital (MDH) because they are no longer in a rural area due to the implementation of the new Office of Management and Budget delineations in FY 2015 and have not reclassified from urban to rural before January 1, 2016. In addition, this document contains a final rule that finalizes certain 2015 proposals, and addresses public comments received, relating to the changes in the Medicare regulations governing provider administrative appeals and judicial review relating to appropriate claims in provider cost reports.
Federal Register, Volume 80 Issue 219 (Friday, November 13, 2015)
[Federal Register Volume 80, Number 219 (Friday, November 13, 2015)]
[Rules and Regulations]
[Pages 70298-70607]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-27943]
[[Page 70297]]
Vol. 80
Friday,
No. 219
November 13, 2015
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, 412, et al.
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Short Inpatient Hospital Stays; Transition for Certain
Medicare-Dependent, Small Rural Hospitals Under the Hospital Inpatient
Prospective Payment System; Provider Administrative Appeals and
Judicial Review; Final Rule
Federal Register / Vol. 80 , No. 219 / Friday, November 13, 2015 /
Rules and Regulations
[[Page 70298]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 412, 413, 416, and 419
[CMS-1633-FC; CMS-1607-F2]
RIN 0938-AS42; 0938-AS11
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Short Inpatient Hospital Stays; Transition for Certain
Medicare-Dependent, Small Rural Hospitals Under the Hospital Inpatient
Prospective Payment System; Provider Administrative Appeals and
Judicial Review
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period; final rule.
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SUMMARY: This final rule with comment period revises the Medicare
hospital outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for CY 2016 to
implement applicable statutory requirements and changes arising from
our continuing experience with these systems. In this final rule with
comment period, we describe the changes to the amounts and factors used
to determine the payment rates for Medicare services paid under the
OPPS and those paid under the ASC payment system. In addition, this
final rule with comment period updates and refines the requirements for
the Hospital Outpatient Quality Reporting (OQR) Program and the ASC
Quality Reporting (ASCQR) Program.
Further, this document includes certain finalized policies relating
to the hospital inpatient prospective payment system: Changes to the 2-
midnight rule under the short inpatient hospital stay policy; and a
payment transition for hospitals that lost their status as a Medicare-
dependent, small rural hospital (MDH) because they are no longer in a
rural area due to the implementation of the new Office of Management
and Budget delineations in FY 2015 and have not reclassified from urban
to rural before January 1, 2016.
In addition, this document contains a final rule that finalizes
certain 2015 proposals, and addresses public comments received,
relating to the changes in the Medicare regulations governing provider
administrative appeals and judicial review relating to appropriate
claims in provider cost reports.
DATES: Effective Date: This final rule with comment period and final
rule are effective on January 1, 2016.
Comment Period: To be assured consideration, comments on the
payment classifications assigned to HCPCS codes identified in Addenda
B, AA, and BB with the ``NI'' comment indicator and on other areas
specified throughout this final rule with comment period must be
received at one of the addresses provided in the ADDRESSES section no
later than 5 p.m. EST on December 29, 2015.
Application Deadline--New Class of New Technology Intraocular
Lenses: Requests for review of applications for a new class of new
technology intraocular lenses must be received by 5 p.m. EST on March
1, 2016, at the following address: ASC/NTIOL, Division of Outpatient
Care, Mailstop C4-05-17, Centers for Medicare and Medicaid Services,
7500 Security Boulevard, Baltimore, MD 21244-1850.
ADDRESSES: In commenting, please refer to file code CMS-1633-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to http://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address only: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1633-FC, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address only: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1633-FC, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal Government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call the telephone number (410) 786-7195 in advance to schedule
your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Advisory Panel on Hospital Outpatient
Payment (HOP Panel), contact Carol Schwartz at (410) 786-0576.
Ambulatory Surgical Center (ASC) Payment System, contact Elisabeth
Daniel at (410) 786-0237.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia at (410) 786-7236.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Vinitha Meyyur at (410) 786-8819.
Blood and Blood Products, contact Lela Strong at (410) 786-3213.
Cancer Hospital Payments, contact David Rice at (410) 786-6004.
Chronic Care Management (CCM) Hospital Services, contact Twi
Jackson at (410) 786-1159.
CPT and Level II Alphanumeric HCPCS Codes--Process for Requesting
Comments, contact Marjorie Baldo at (410) 786-4617.
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver at (410) 786-9379.
Composite APCs (Extended Assessment and Management, Low Dose
Brachytherapy, Multiple Imaging), contact Twi Jackson at (410) 786-
1159.
Comprehensive APCs, contact Lela Strong at (410) 786-3213.
[[Page 70299]]
Hospital Observation Services, contact Twi Jackson at (410) 786-
1159.
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Elizabeth Bainger at
(410) 786-0529.
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Vinitha Meyyur at (410) 786-8819.
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Twi Jackson at (410) 786-1159.
Inpatient Only Procedures List, contact Lela Strong at (410) 786-
3213.
Medicare Cost Reports: Appropriate Claims and Provider Appeals,
contact Kellie Shannon at (410) 786-0416.
New Technology Intraocular Lenses (NTIOLs), contact John McInnes at
(410) 786-0791.
No Cost/Full Credit and Partial Credit Devices, contact Carol
Schwartz at (410) 786-0576.
OPPS Brachytherapy, contact Elisabeth Daniel at (410) 786-0237.
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact David Rice at (410) 786-6004.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Elisabeth Daniel at (410) 786-0237.
OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo at
(410) 786-4617.
OPPS Packaged Items/Services, contact Elisabeth Daniel at (410)
786-0237.
OPPS Pass-Through Devices and New Technology Procedures/Services,
contact Carol Schwartz at (410) 786-0576.
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova at (410) 786-2682.
Partial Hospitalization Program (PHP) and Community Mental Health
Center (CMHC) Issues, contact Dexter Dickey at (410) 786-6856.
Rural Hospital Payments, contact David Rice at (410) 786-6004.
Stereotactic Radiosurgery Services (SRS), contact Elisabeth Daniel
at (410) 786-0237.
Transition for Former Medicare-Dependent, Small Rural Hospitals,
contact Shevi Marciano at (410) 786-4487.
Two-Midnight Policy--General Issues, contact Twi Jackson at (410)
786-1159.
Two-Midnight Policy--Medical Review, contact Steven Rubio at (410)
786-1782.
All Other Issues Related to Hospital Outpatient and Ambulatory
Surgical Center Payments Not Previously Identified, contact Marjorie
Baldo at (410) 786-4617.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection, generally beginning approximately 3 weeks after publication
of the rule, at the headquarters of the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday
through Friday of each week from 8:30 a.m. to 4:00 p.m. EST. To
schedule an appointment to view public comments, phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the Internet at http://www.thefederalregister.org/fdsys/.
Addenda Available Only Through the Internet on the CMS Web site
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
proposed rule, all of the Addenda no longer appear in the Federal
Register as part of the annual OPPS/ASC proposed and final rules to
decrease administrative burden and reduce costs associated with
publishing lengthy tables. Instead, these Addenda are published and
available only on the CMS Web site. The Addenda relating to the OPPS
are available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. The Addenda relating to the
ASC payment system are available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/index.html.
Alphabetical List of Acronyms Appearing in This Federal Register
Document
AHA American Hospital Association
AMA American Medical Association
AMI Acute myocardial infarction
APC Ambulatory Payment Classification
APU Annual payment update
ASC Ambulatory surgical center
ASCQR Ambulatory Surgical Center Quality Reporting
ASP Average sales price
AWP Average wholesale price
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L.
106-113
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Pub. L. 106-554
BLS Bureau of Labor Statistics
CAH Critical access hospital
CAHPS Consumer Assessment of Healthcare Providers and Systems
CAP Competitive Acquisition Program
C-APC Comprehensive Ambulatory Payment Classification
CASPER Certification and Survey Provider Enhanced Reporting
CAUTI Catheter-associated urinary tract infection
CBSA Core-Based Statistical Area
CCM Chronic care management
CCN CMS Certification Number
CCR Cost-to-charge ratio
CDC Centers for Disease Control and Prevention
CED Coverage with Evidence Development
CERT Comprehensive Error Rate Testing
CFR Code of Federal Regulations
CI Comment indicator
CLABSI Central Line [Catheter] Associated Blood Stream Infection
CLFS Clinical Laboratory Fee Schedule
CMHC Community mental health center
CMS Centers for Medicare & Medicaid Services
CoP Condition of participation
CPI-U Consumer Price Index for All Urban Consumers
CPT Current Procedural Terminology (copyrighted by the American
Medical Association)
CR Change request
CRC Colorectal cancer
CSAC Consensus Standards Approval Committee
CT Computed tomography
CV Coefficient of variation
CY Calendar year
DFO Designated Federal Official
DIR Direct or indirect remuneration
DME Durable medical equipment
DMEPOS Durable Medical Equipment, Prosthetic, Orthotics, and
Supplies
DRA Deficit Reduction Act of 2005, Pub. L. 109-171
DSH Disproportionate share hospital
EACH Essential access community hospital
EAM Extended assessment and management
EBRT External beam radiotherapy
[[Page 70300]]
ECG Electrocardiogram
ED Emergency department
EDTC Emergency department transfer communication
EHR Electronic health record
EJR Expedited judicial review
E/M Evaluation and management
ESRD End-stage renal disease
ESRD QIP End-Stage Renal Disease Quality Improvement Program
FACA Federal Advisory Committee Act, Pub. L. 92-463
FDA Food and Drug Administration
FFS [Medicare] Fee-for-service
FTE Full-time equivalent
FY Fiscal year
GAO Government Accountability Office
GI Gastrointestinal
GME Graduate medical education
HAI Healthcare-associated infection
HCAHPS Hospital Consumer Assessment of Healthcare Providers and
Systems
HCERA Health Care and Education Reconciliation Act of 2010, Pub. L.
111-152
HCP Health care personnel
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HCUP Healthcare Cost and Utilization Project
HEU Highly enriched uranium
HH QRP Home Health Quality Reporting Program
HHS Department of Health and Human Services
HIE Health information exchange
HIPAA Health Insurance Portability and Accountability Act of 1996,
Pub. L. 104-191
HOP Hospital Outpatient Payment [Panel]
HOPD Hospital outpatient department
HOP QDRP Hospital Outpatient Quality Data Reporting Program
HPMS Health Plan Management System
IBD Inflammatory bowel disease
ICC Interclass correlation coefficient
ICD Implantable cardioverter defibrillator
ICD-9-CM International Classification of Diseases, Ninth Revision,
Clinical Modification
ICD-10 International Classification of Diseases, Tenth Revision
ICH In-center hemodialysis
IME Indirect medical education
IDTF Independent diagnostic testing facility
IGI IHS Global Insight, Inc.
IHS Indian Health Service
I/OCE Integrated Outpatient Code Editor
IOL Intraocular lens
IORT Intraoperative radiation treatment
IPFQR Inpatient Psychiatric Facility Quality Reporting
IPPS [Hospital] Inpatient Prospective Payment System
IQR [Hospital] Inpatient Quality Reporting
IRF Inpatient rehabilitation facility
IRF QRP Inpatient Rehabilitation Facility Quality Reporting Program
IT Information technology
LCD Local coverage determination
LDR Low dose rate
LTCH Long-term care hospital
LTCHQR Long-Term Care Hospital Quality Reporting
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015, Pub. L.
114-10
MAP Measure Application Partnership
MDH Medicare-dependent, small rural hospital
MedPAC Medicare Payment Advisory Commission
MEG Magnetoencephalography
MFP Multifactor productivity
MGCRB Medicare Geographic Classification Review Board
MIEA-TRHCA Medicare Improvements and Extension Act under Division B,
Title I of the Tax Relief Health Care Act of 2006, Pub. L. 109-432
MIPPA Medicare Improvements for Patients and Providers Act of 2008,
Pub. L. 110-275
MLR Medical loss ratio
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Pub. L. 108-173
MMEA Medicare and Medicaid Extenders Act of 2010, Pub. L. 111-309
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Pub. L.
110-173
MPFS Medicare Physician Fee Schedule
MR Medical review
MRA Magnetic resonance angiography
MRgFUS Magnetic Resonance Image Guided Focused Ultrasound
MRI Magnetic resonance imaging
MRSA Methicillin-Resistant Staphylococcus Aures
MS-DRG Medicare severity diagnosis-related group
MSIS Medicaid Statistical Information System
MUC Measure under consideration
NCCI National Correct Coding Initiative
NDC National Drug Code
NEMA National Electrical Manufacturers Association
NHSN National Healthcare Safety Network
NOS Not otherwise specified
NPI National Provider Identifier
NPR Notice of program reimbursement
NPWT Negative Pressure Wound Therapy
NQF National Quality Forum
NQS National Quality Strategy
NTIOL New technology intraocular lens
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act of 1996, Pub. L. 99-509
OIG [HHS] Office of the Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information
Technology
OPD [Hospital] Outpatient Department
OPO Organ Procurement Organization
OPPS [Hospital] Outpatient Prospective Payment System
OPSF Outpatient Provider-Specific File
OQR [Hospital] Outpatient Quality Reporting
OT Occupational therapy
PAMA Protecting Access to Medicare Act of 2014, Pub. L. 113-93
PCHQR PPS-Exempt Cancer Hospital Quality Reporting
PCR Payment-to-cost ratio
PDC Per day cost
PDE Prescription Drug Event
PE Practice expense
PEPPER Program Evaluation Payment Patterns Electronic Report
PHP Partial hospitalization program
PHSA Public Health Service Act, Pub. L. 96-88
PMA Premarket approval
PN Pneumonia
POS Place of service
PPI Producer Price Index
PPS Prospective payment system
PQRI Physician Quality Reporting Initiative
PQRS Physician Quality Reporting System
PRM Provider Reimbursement Manual
QDC Quality data code
QIO Quality Improvement Organization
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data for Annual Payment Update
RTI Research Triangle Institute, International
RVU Relative value unit
SAD Self-administered drug
SAMS Secure Access Management Services
SCH Sole community hospital
SCOD Specified covered outpatient drugs
SES Socioeconomic status
SI Status indicator
SIR Standardized infection ratio
SNF Skilled nursing facility
SRS Stereotactic radiosurgery
SSA Social Security Administration
SSI Surgical site infection
TEP Technical Expert Panel
TIP Transprostatic implant procedure
TOPs Transitional Outpatient Payments
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
WAC Wholesale acquisition cost
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
2. Summary of the Major Provisions
3. Summary of Costs and Benefits
B. Legislative and Regulatory Authority for the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
or the Panel)
1. Authority of the Panel
2. Establishment of the Panel
3. Panel Meetings and Organizational Structure
F. Public Comments Received on the CY 2015 OPPS/ASC Final Rule
With Comment Period
G. Public Comments Received on the CY 2016 OPPS/ASC Proposed
Rule
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
b. Use of Single and Multiple Procedure Claims
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
2. Data Development Process and Calculation of Costs Used for
Ratesetting
a. Claims Preparation
b. Splitting Claims and Creation of ``Pseudo'' Single Procedure
Claims
(1) Splitting Claims
[[Page 70301]]
(2) Creation of ``Pseudo'' Single Procedure Claims
c. Completion of Claim Records and Geometric Mean Cost
Calculations
(1) General Process
(2) Recommendations of the Panel Regarding Data Development
d. Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(2) Brachytherapy Sources
e. Comprehensive APCs (C-APCs) for CY 2016
(1) Background
(2) C-APCs To Be Paid Under the C-APC Payment Policy for CY 2016
(3) CY 2016 Policies for Specific C-APCs
f. Calculation of Composite APC Criteria-Based Costs
(1) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC
(2) Mental Health Services Composite APC
(3) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006,
8007, and 8008)
3. Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
b. Packaging Policies for CY 2016
(1) Ancillary Services
(2) Drugs and Biologicals That Function as Supplies When Used in
a Surgical Procedure
(3) Clinical Diagnostic Laboratory Tests
4. Calculation of OPPS Scaled Payment Weights
B. Conversion Factor Update
C. Wage Index Changes
D. Statewide Average Default CCRs
E. Adjustment for Rural SCHs and EACHs Under Section
1833(t)(13)(B) of the Act
F. OPPS Payment to Certain Cancer Hospitals Described by Section
1886(d)(1)(B)(v) of the Act
1. Background
2. Payment Adjustment for Certain Cancer Hospitals for CY 2016
G. Hospital Outpatient Outlier Payments
1. Background
2. Outlier Calculation
3. Final Outlier Calculation
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
I. Beneficiary Copayments
1. Background
2. OPPS Copayment Policy
3. Calculation of an Adjusted Copayment Amount for an APC Group
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New CPT and Level II HCPCS Codes
1. Treatment of New CY 2015 Level II HCPCS and CPT Codes
Effective April 1, 2015 and July 1, 2015 for Which We Solicited
Public Comments in the CY 2016 OPPS/ASC Proposed Rule
2. Process for New Level II HCPCS Codes That Became Effective
October 1, 2015 and New Level II HCPCS Codes That Will Be Effective
January 1, 2016 for Which We Are Soliciting Public Comments in this
CY 2016 OPPS/ASC Final Rule With Comment Period
3. Treatment of New and Revised CY 2016 Category I and III CPT
Codes That Will Be Effective January 1, 2016 for Which We Solicited
Public Comments in the CY 2016 OPPS/ASC Proposed Rule
B. OPPS Changes--Variations Within APCs
1. Background
2. Application of the 2 Times Rule
3. APC Exceptions to the 2 Times Rule
C. New Technology APCs
1. Background
2. Additional New Technology APC Groups
3. Procedures Assigned to New Technology APCs for CY 2016
a. Transprostatic Urethral Implant Procedure
b. Retinal Prosthesis Implant Procedure
D. OPPS Ambulatory Payment Classification (APC) Group Policies
1. Airway Endoscopy Procedures
2. Cardiovascular Procedures and Services
a. Cardiac Contractility Modulation (CCM) Therapy
b. Cardiac Rehabilitation
c. Cardiac Telemetry
3. Diagnostic Tests and Related Services
4. Excision/Biopsy and Incision and Drainage Procedures
5. Eye Surgery and Other Eye-Related Procedures
a. Implantable Miniature Telescope (CPT Code 0308T)
b. Other Ocular Procedures
6. Gastrointestinal (GI) Procedures
7. Gynecologic Procedures and Services
8. Imaging Services
6. Orthopedic Procedures
9. Skin Procedures
10. Pathology Services
11. Radiology Oncology Procedures and Services
a. Therapeutic Radiation Treatment Preparation
b. Radiation Therapy (Including Brachytherapy)
c. Fractionated Stereotactic Radiosurgery (SRS)
12. Skin Procedures
a. Negative Pressure Wound Therapy (NPWT)
b. Platelet Rich Plasma (PRP)
13. Urology and Related Services
14. Vascular Procedures (Excluding Endovascular Procedures)
15. Other Procedures and Services
a. Ear, Nose, Throat (ENT) Procedures
b. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS)
c. Stem Cell Transplant
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
1. Expiration of Transitional Pass-Through Payments for Certain
Devices
a. Background
b. CY 2016 Policy
2. Annual Rulemaking Process in Conjunction With Quarterly
Review Process for Device Pass-Through Payment Applications
a. Background
b. Revision to the Application Process for Device Pass-Through
Payments
c. Criterion for Newness
3. Provisions for Reducing Transitional Pass-Through Payments to
Offset Costs Packaged Into APC Groups
a. Background
b. CY 2016 Policy
B. Device-Intensive Procedures
1. Background
2. Changes to Device Edit Policy
3. Adjustment to OPPS Payment for No Cost/Full Credit and
Partial Credit Devices
a. Background
b. Policy for CY 2016
4. Adjustment to OPPS Payment for Discontinued Device-Intensive
Procedures
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
2. Drugs and Biologicals With Expiring Pass-Through Status in CY
2015
3. Drugs, Biologicals, and Radiopharmaceuticals With New or
Continuing Pass-Through Status in CY 2016
4. Provisions for Reducing Transitional Pass-Through Payments
for Policy-Packaged Drugs and Biologicals to Offset Costs Packaged
Into APC Groups
a. Background
b. Payment Offset Policy for Diagnostic Radiopharmaceuticals
c. Payment Offset Policy for Contrast Agents
d. Payment Offset Policy for Drugs, Biologicals, and
Radiopharmaceuticals That Function as Supplies When Used in a
Diagnostic Test or Procedure (Other Than Diagnostic
Radiopharmaceuticals and Contrast Agents and Drugs and Biologicals
That Function as Supplies When Used in a Surgical Procedure)
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Status
1. Background
2. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Background
b. Cost Threshold for Packaging of Payment for HCPCS Codes That
Describe Certain Drugs, Certain Biologicals, and Therapeutic
Radiopharmaceuticals (``Threshold-Packaged Drugs'')
c. High Cost/Low Cost Threshold for Packaged Skin Substitutes
d. Packaging Determination for HCPCS Codes That Describe the
Same Drug or Biological but Different Dosages
3. Payment for Drugs and Biologicals Without Pass-Through Status
That Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable and Packaged Drugs and Biologicals
b. CY 2016 Payment Policy
4. Payment Policy for Therapeutic Radiopharmaceuticals
5. Payment Adjustment Policy for Radioisotopes Derived From Non-
Highly Enriched Uranium Sources
6. Payment for Blood Clotting Factors
7. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes but Without OPPS Hospital
Claims Data
[[Page 70302]]
C. Self-Administered Drugs (SADs) Technical Correction
D. OPPS Payment for Biosimilar Biological Products
1. Background
2. Payment Policy for Biosimilar Biological Products
3. OPPS Transitional Pass-Through Payment Policy for Biosimilar
Biological Products
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Estimate of Pass-Through Spending
VII. OPPS Payment for Hospital Outpatient Visits
A. Payment for Hospital Outpatient Clinic and Emergency
Department Visits
B. Payment for Critical Care Services
C. Payment for Chronic Care Management Services
VIII. Payment for Partial Hospitalization Services
A. Background
B. PHP APC Update for CY 2016
1. PHP APC Geometric Mean Per Diem Costs
2. PHP Ratesetting Process
a. Development of PHP claims
b. Determination of CCRs for CMHCs and Hospital-Based PHPs
c. Identification of PHP Allowable Charges
d. Determination of PHP APC Per Diem Costs
e. Development of Service Days and Cost Modeling
f. Issues Regarding Correct Coding and Reasonable Charges
C. Separate Threshold for Outlier Payments to CMHCs
IX. Procedures That Will Be Paid Only as Inpatient Procedures
A. Background
B. Changes to the Inpatient Only List
X. Nonrecurring Policy Changes
A. Advance Care Planning Services
B. Changes for Payment for Computed Tomography (CT)
C. Lung Cancer Screening With Low Dose Computed Tomography
D. Payment for Procurement of Corneal Tissue Used in Procedures
in the HOPD and the ASC
1. Background
2. CY 2016 Change to Corneal Tissue Payment Policy in the HOPD
and the ASC
XI. CY 2016 OPPS Payment Status and Comment Indicators
A. CY 2016 OPPS Payment Status Indicator Definitions
B. CY 2016 Comment Indicator Definitions
XII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
1. Legislative History, Statutory Authority, and Prior
Rulemaking for the ASC Payment System
2. Policies Governing Changes to the Lists of Codes and Payment
Rates for ASC Covered Surgical Procedures and Covered Ancillary
Services
B. Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised
Category I and Category III CPT Codes and Level II HCPCS Codes
2. Treatment of New and Revised Level II HCPCS Codes and
Category III CPT Codes Implemented in April 2015 and July 2015 for
Which We Solicited Public Comments in the Proposed Rule
3. Process for Recognizing New and Revised Category I and
Category III CPT Codes That Will Be Effective January 1, 2016
a. Current Process for Accepting Comments on New and Revised CPT
Codes That are Effective January 1
b. Modification of the Current Process for Accepting Comments on
New and Revised Category I and III CPT Codes That are Effective
January 1
4. Process for New and Revised Level II HCPCS Codes That Will Be
Effective October 1, 2015 and January 1, 2016 for Which We Are
Soliciting Public Comments in This CY 2016 OPPS/ASC Final Rule With
Comment Period
C. Update to the Lists of ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
b. ASC Covered Surgical Procedures Designated as Device-
Intensive--Finalized Policy for CY 2015 and Policy for CY 2016
c. Adjustment to ASC Payments for No Cost/Full Credit and
Partial Credit Devices
d. Adjustment to ASC Payments for Discontinued Device-Intensive
Procedures
e. Additions to the List of ASC Covered Surgical Procedures
f. ASC Treatment of Surgical Procedures That Are Removed From
the OPPS Inpatient List for CY 2016
2. Covered Ancillary Services
a. List of Covered Ancillary Services
b. Exclusion of Corneal Tissue Procurement From the Covered
Ancillary Services List When Used for Nontransplant Procedures
c. Removal of Certain Services from the Covered Ancillary
Services List That are Not Used as Ancillary and Integral to a
Covered Surgical Procedure
D. ASC Payment for Covered Surgical Procedures and Covered
Ancillary Services
1. ASC Payment for Covered Surgical Procedures
a. Background
b. Update to ASC Covered Surgical Procedure Payment Rates for CY
2016
c. Waiver of Coinsurance and Deductible for Certain Preventive
Services
d. Payment for Cardiac Resynchronization Therapy Services
e. Payment for Low Dose Rate (LDR) Prostate Brachytherapy
Composite
2. Payment for Covered Ancillary Services
a. Background
b. Payment for Covered Ancillary Services for CY 2016
E. New Technology Intraocular Lenses (NTIOLs)
1. NTIOL Application Cycle
2. Requests to Establish New NTIOL Classes for CY 2016
3. Payment Adjustment
4. Newness Criterion
5. Announcement of CY 2016 Deadline for Submitting Requests for
CMS Review of Applications for a New Class of NTIOLs
F. ASC Payment and Comment Indicators
1. Background
2. ASC Payment and Comment Indicators
G. Calculation of the ASC Conversion Factor and the ASC Payment
Rates
1. Background
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2016 and
Future Years
b. Updating the ASC Conversion Factor
3. Display of CY 2016 ASC Payment Rates
XIII. Requirements for the Hospital Outpatient Quality Reporting
(OQR) Program
A. Background
1. Overview
2. Statutory History of the Hospital OQR Program
B. Hospital OQR Program Quality Measures
1. Considerations in the Selection of Hospital OQR Program
Quality Measures
2. Retention of Hospital OQR Program Measures Adopted in
Previous Payment Determinations
3. Removal of Quality Measures From the Hospital OQR Program
Measure Set
a. Considerations in Removing Quality Measures From the Hospital
OQR Program
b. Criteria for Removal of ``Topped-Out'' Measures
4. Hospital OQR Program Quality Measures Adopted in Previous
Rulemaking
5. Hospital OQR Program Quality Measure Removed for the CY 2017
Payment Determination and Subsequent Years
6. New Hospital OQR Program Quality Measures for the CY 2018 and
CY 2019 Payment Determinations and Subsequent Years
a. New Quality Measure for the CY 2018 Payment Determination and
Subsequent Years: OP-33: External Beam Radiotherapy (EBRT) for Bone
Metastases (NQF #1822)
b. Proposed New Hospital OQR Program Quality Measure for the CY
2019 Payment Determination and Subsequent Years: OP-34: Emergency
Department Transfer Communication (EDTC) (NQF #0291)
7. Hospital OQR Program Measures and Topics for Future
Consideration
8. Maintenance of Technical Specifications for Quality Measures
9. Public Display of Quality Measures
C. Administrative Requirements
1. QualityNet Account and Security Administrator
2. Requirements Regarding Participation Status
D. Form, Manner, and Timing of Data Submitted for the Hospital
OQR Program
1. Change Regarding Hospital OQR Program Annual Percentage
Update (APU) Determinations
2. Requirements for Chart-Abstracted Measures Where Patient-
Level Data Are Submitted Directly to CMS
[[Page 70303]]
3. Claims-Based Measure Data Requirements
4. Data Submission Requirements for Measure Data Submitted Via a
Web-Based Tool
a. Previously Finalized Measures
b. Data Submission Requirements for Web-Based Measure OP-33:
External Beam Radiotherapy (EBRT) for Bone Metastases (NQF #1822)
for the CY 2018 Payment Determination and Subsequent Years
c. Proposed Data Submission Requirements for Web-Based Measure
OP-34: Emergency Department Transfer Communication (EDTC) Measure
for the CY 2019 Payment Determination and Subsequent Years
5. Population and Sampling Data Requirements for the CY 2018
Payment Determination and Subsequent Years
6. Hospital OQR Program Validation Requirements for Chart-
Abstracted Measure Data Submitted Directly to CMS for the CY 2018
Payment Determination and Subsequent Years
7. Extension or Exemption Process for the CY 2018 Payment
Determination and Subsequent Years
8. Hospital OQR Program Reconsideration and Appeals Procedures
for the CY 2018 Payment Determination and Subsequent Years
E. Payment Reduction for Hospitals That Fail to Meet the
Hospital Outpatient Quality Reporting (OQR) Program Requirements for
the CY 2016 Payment Determination
1. Background
2. Reporting Ratio Application and Associated Adjustment Policy
for CY 2016
XIV. Requirements for the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
A. Background
1. Overview
2. Statutory History of the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
3. Regulatory History of the ASCQR Program
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality
Measures
2. Policies for Retention and Removal of Quality Measures From
the ASCQR Program
3. ASCQR Program Quality Measures Adopted in Previous Rulemaking
4. ASCQR Program Quality Measures for the CY 2018 Payment
Determination and Subsequent Years
5. ASCQR Program Measures for Future Consideration
a. Normothermia Outcome
b. Unplanned Anterior Vitrectomy
6. Maintenance of Technical Specifications for Quality Measures
7. Public Reporting of ASCQR Program Data
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security
Administrator
2. Requirements Regarding Participation Status
D. Form, Manner, and Timing of Data Submitted for the ASCQR
Program
1. Requirements Regarding Data Processing and Collection Periods
for Claims-Based Measures Using Quality Data Codes (QDCs)
2. Minimum Threshold, Minimum Case Volume, and Data Completeness
for Claims-Based Measures Using QDCs
3. Requirements for Data Submitted Via a CMS Online Data
Submission Tool
4. Claims-Based Measure Data Requirements for the ASC-12:
Facility 7-Day Risk-Standardized Hospital Visit Rate After
Outpatient Colonoscopy Measure for the CY 2018 Payment Determination
and Subsequent Years
5. Indian Health Service (IHS) Hospital Outpatient Departments
Not Considered ASCs for the Purpose of the ASCQR Program
6. ASCQR Program Validation of Claims-Based and CMS Web-Based
Measures
7. Extraordinary Circumstances Extensions or Exemptions for the
CY 2018 Payment Determination and Subsequent Years
8. ASCQR Program Reconsideration Procedures
E. Payment Reduction for ASCs That Fail to Meet the ASCQR
Program Requirements
XV. Short Inpatient Hospital Stays
A. Background for the 2-Midnight Rule
B. Policy Clarification for Medical Review of Inpatient Hospital
Admissions under Medicare Part A
XVI. Transition for Former Medicare-Dependent, Small Rural Hospitals
(MDHs) Under the Hospital Inpatient Prospective Payment System
A. Background on the Medicare-Dependent, Small Rural Hospital
(MDH) Program
B. Implementation of New OMB Delineations and Urban to Rural
Reclassifications
XVII. Final Rule: Appropriate Claims in Provider Cost Reports;
Administrative Appeals by Providers and Judicial Review
A. Proposed Changes Included in the FY 2015 IPPS/LTCH PPS
Proposed Rule
B. Summary of Related Changes Included in the FY 2015 IPPS/LTCH
PPS Final Rule
C. Specific Provisions of the FY 2015 IPPS/LTCH PPS Proposed
Rule
1. Background for Payments and Cost Reporting Requirements
2. Background for Administrative Appeals by Providers and
Judicial Review
3. Background for Appropriate Claims in Provider Cost Reports
D. Addition to the Cost Reporting Regulations of the Substantive
Reimbursement Requirement of an Appropriate Cost Report Claim
1. Proposed Provisions (New Sec. 413.24(j))
2. Statutory Authority and Rationale for Proposed Sec.
413.24(j)
3. Summary of Public Comments, CMS Responses, and Statement of
Finalized Policies for Sec. 413.24(j)
E. Revisions to the Provider Reimbursement Appeals Regulations
1. Elimination of the Jurisdictional Requirement of an
Appropriate Cost Report Claim
a. Proposed Revisions to Sec. Sec. 405.1835 and 405.1840
b. Summary of Public Comments and Our Responses and Finalized
Policies
2. Board Review of Compliance With Cost Report Claim
Requirements Under Sec. 413.24(j)
a. Proposed Addition of New Sec. 405.1873
b. Summary of Public Comments and Our Responses and Finalized
Policies
3. Related Revisions to Sec. 405.1875 Regarding Administrator
Review
4. Conforming Changes to the Board Appeals Regulations and
Corresponding Revisions to the Contractor Hearing Regulations
a. Technical Corrections to 42 CFR part 405, subpart R and All
Subparts of 42 CFR Part 413
b. Technical Corrections and Conforming Changes to Sec. Sec.
405.1801 and 405.1803
c. Technical Corrections and Conforming Changes to Sec. Sec.
405.1811, 405.1813, and 405.1814
d. Addition of New Sec. 405.1832
e. Revisions to Sec. 405.1834
f. Technical Corrections and Conforming Changes to Sec. Sec.
405.1836, 405.1837, and 405.1839
F. Collection of Information Requirements
G. Impact of Requiring Appropriate Claims in Provider Cost
Reports and Eliminating That Requirement for Administrative Appeals
by Providers
XVIII. Files Available to the Public Via the Internet
XIX. Collection of Information Requirements
A. Legislative Requirements for Solicitation of Comments
B. Associated Information Collections Not Specified in
Regulatory Text
1. Hospital OQR Program
2. ASCQR Program Requirements
XX. Response to Comments
XXI. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impacts for the OPPS and ASC Payment Provisions
4. Detailed Economic Analyses
a. Estimated Effects of OPPS Changes in This Final Rule With
Comment Period
(1) Limitations of Our Analysis
(2) Estimated Effects of OPPS Changes on Hospitals
(3) Estimated Effects of OPPS Changes on CMHCs
(4) Estimated Effect of OPPS Changes on Beneficiaries
(5) Estimated Effects of OPPS Changes on Other Providers
(6) Estimated Effects of OPPS Changes on the Medicare and
Medicaid Programs
(7) Alternative OPPS Policies Considered
b. Estimated Effects of CY 2016 ASC Payment System Policies
(1) Limitations of Our Analysis
(2) Estimated Effects of CY 2016 ASC Payment System Policies on
ASCs
(3) Estimated Effects of ASC Payment System Policies on
Beneficiaries
(4) Alternative ASC Payment Policies Considered
[[Page 70304]]
c. Accounting Statements and Tables
d. Effects of Requirements for the Hospital OQR Program
e. Effects of Policies for the ASCQR Program
f. Impact of the Policy Change for Medical Review of Inpatient
Hospital Admissions Under Medicare Part A
g. Impact of Transition for Former MDHs under the IPPS
B. Regulatory Flexibility Act (RFA) Analysis
C. Unfunded Mandates Reform Act Analysis
D. Conclusion
XXII. Federalism Analysis
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this document, 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, 2016. Section 1833(t) of the Social Security Act
(the Act) requires us to annually review and update the payment rates
for services payable under the Hospital Outpatient Prospective Payment
System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires
the Secretary to review certain components of the OPPS not less often
than annually, and to revise the groups, relative payment weights, and
other adjustments that take into account changes in medical practices,
changes in technologies, and the addition of new services, new cost
data, and other relevant information and factors. In addition, under
section 1833(i) of the Act, we annually review and update the ASC
payment rates. We describe these and various other statutory
authorities in the relevant sections of this final rule with comment
period. In addition, this document updates and refines the requirements
for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC
Quality Reporting (ASCQR) Program.
Further, we are making certain changes relating to the hospital
inpatient prospective payment system (IPPS): Changes to the 2-midnight
rule under the short inpatient hospital stay policy; and a payment
transition for hospitals that lost their MDH status because they are no
longer in a rural area due to the implementation of the new OMB
delineations in FY 2015 and have not reclassified from urban to rural
under 42 CFR 412.103 before January 1, 2016.
In addition, we are finalizing certain 2015 proposed policies, and
addressing public comments, relating to the changes in the Medicare
regulations governing provider administrative appeals and judicial
review relating to appropriate claims in provider cost reports.
2. Summary of the Major Provisions
OPPS Update: For CY 2016, we are decreasing the
payment rates under the OPPS by an Outpatient Department (OPD) fee
schedule increase factor of -0.3 percent. This increase factor is based
on the hospital inpatient market basket percentage increase of 2.4
percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS), minus the multifactor productivity
(MFP) adjustment of 0.5 percentage point, and minus a 0.2 percentage
point adjustment required by the Affordable Care Act. In addition, we
are applying a 2.0 percent reduction to the conversion factor to
redress the inflation in OPPS payment rates resulting from excess
packaged payment under the OPPS for laboratory tests that are excepted
from our final CY 2014 laboratory packaging policy, as discussed in
section II.B. of this final rule with comment period. Under this rule,
we estimate that total payments for CY 2016, including beneficiary
cost-sharing, to the approximate 4,000 facilities paid under the OPPS
(including general acute care hospitals, children's hospitals, cancer
hospitals, and community mental health centers (CMHCs)), will decrease
by approximately $133 million compared to CY 2015 payments, excluding
our estimated changes in enrollment, utilization, and case-mix.
We are continuing to implement the statutory 2.0 percentage point
reduction in payments for hospitals failing to meet the hospital
outpatient quality reporting requirements, by applying a proposed
reporting factor of 0.980 to the OPPS payments and copayments for all
applicable services.
Rural Adjustment: We are continuing the adjustment of 7.1
percent to the OPPS payments to certain rural sole community hospitals
(SCHs), including essential access community hospitals (EACHs). This
adjustment will apply to all services paid under the OPPS, excluding
separately payable drugs and biologicals, devices paid under the pass-
through payment policy, and items paid at charges reduced to cost.
Cancer Hospital Payment Adjustment: For CY 2016, we are
continuing to provide additional payments to cancer hospitals so that
the cancer hospital's payment-to-cost ratio (PCR) after the additional
payments is equal to the weighted average PCR for the other OPPS
hospitals using the most recently submitted or settled cost report
data. Based on those data, a target PCR of 0.92 will be used to
determine the CY 2016 cancer hospital payment adjustment to be paid at
cost report settlement. That is, the payment adjustments will be the
additional payments needed to result in a PCR equal to 0.92 for each
cancer hospital.
Payment of Drugs, Biologicals, and Radiopharmaceuticals:
For CY 2016, payment for the acquisition and pharmacy overhead costs of
separately payable drugs and biologicals that do not have pass-through
status are set at the statutory default of average sales price (ASP)
plus 6 percent.
Payment of Skin Substitutes: Payment for skin substitutes
will utilize the high/low cost APC structure based on exceeding a
threshold based on mean unit cost (MUC) or per day cost (PDC). Further,
for CY 2016, skin substitutes with pass-through payment status will be
assigned to the high cost category. Skin substitutes with pricing
information but without claims data to calculate either an MUC or PDC
will be assigned to either the high cost or low cost category based on
the product's ASP+6 percent payment rate. Moreover, any new skin
substitutes without pricing information will be assigned to the low
cost category until pricing information is available to compare to the
CY 2016 thresholds.
Payment of Biosimilar Biological Products: For CY 2016, we
are paying for biosimilar biological products based on the payment
allowance of the product as determined under section 1847A of the Act.
We also are extending pass-through payment eligibility to biosimilar
biological products and to set payment at the difference between the
amount paid under section 1842(o) of the Act (that is, the payment
allowance of the product as determined under section 1847A of the Act)
and the otherwise applicable HOPD fee schedule amount.
Packaging Policies: In CY 2015, we conditionally packaged
certain ancillary services when they are integral, ancillary,
supportive, dependent, or adjunctive to a primary service. For CY 2016,
we are expanding the set of conditionally packaged ancillary services
to include three new APCs.
Conditionally Packaged Outpatient Laboratory Tests: For CY
2016, we are conditionally packaging laboratory tests (regardless of
the date of service) on a claim with a service that is assigned status
indicator ``S,'' ``T,'' or ``V'' unless an exception applies or the
laboratory test is ``unrelated'' to the other HOPD
[[Page 70305]]
service or services on the claim. We are establishing a new status
indicator ``Q4'' for this purpose. When laboratory tests are the only
services on the claim, a separate payment at CLFS payment rates will be
made. The ``L1'' modifier will still be used for ``unrelated''
laboratory tests.
Comprehensive APCs: We implemented the comprehensive APCs
(C-APCs) policy for CY 2015 with a total of 25 C-APCs. In CY 2016, we
are not making extensive changes to the already established methodology
used for C-APCs. However, we are creating nine new C-APCs that meet the
previously established criteria.
APC Restructuring: Section 1833(t)(9)(A) of the Act
requires the Secretary to review certain components of the OPPS not
less often than annually, and to revise the groups, relative payment
weights, and other adjustments that take into account changes in
medical practices, changes in technologies, and the addition of new
services, new cost data, and other relevant information and factors.
For CY 2016, we conducted a comprehensive review of the structure of
the APCs and codes and are restructuring the OPPS APC groupings for
nine APC clinical families based on the following principles: (1)
Improved clinical homogeneity; (2) improved resource homogeneity; (3)
reduced resource overlap in longstanding APCs; and (4) greater
simplicity and improved understandability of the OPPS APC structure.
New Process for Device Pass-Through Payment: Beginning in
CY 2016, we are adding a rulemaking component to the current quarterly
device pass-through payment application process. Specifically, we are
supplementing the quarterly process by including a description of
applications received as well as our rationale for approving the
application in the next applicable OPPS proposed rule. Applications
that we do not approve based on the evidence available during the
quarterly review process will be described in the next applicable OPPS
proposed rule, unless the applicant withdraws its application. The
addition of rulemaking to the device pass-through application process
will help achieve the goals of increased transparency and stakeholder
input. In addition, this change will align a portion of the OPPS device
pass-through payment application process with the already established
IPPS application process for new medical services and new technology
add-on payments. We also are establishing policy that a device that
requires FDA premarket approval or clearance is eligible to apply for
device pass-through payment only if it is ``new,'' meaning that the
pass-through payment application is submitted within 3 years from the
date of the initial FDA premarket approval or clearance, or, in the
case of a delay of market availability, within 3 years of market
availability.
Two-Midnight Rule: The 2-midnight rule was adopted
effective October 1, 2013. Under the 2-midnight rule, an inpatient
admission is generally appropriate for Medicare Part A payment if the
physician (or other qualified practitioner) admits the patient as an
inpatient based upon the expectation that the patient will need
hospital care that crosses at least 2 midnights. In assessing the
expected duration of necessary care, the physician (or other
practitioner) may take into account outpatient hospital care received
prior to inpatient admission. If the patient is expected to need less
than 2 midnights of care in the hospital, the services furnished should
generally be billed as outpatient services. In this final rule, we are
modifying our existing ``exceptions'' policy under which previously the
only exceptions to the 2-midnight benchmark were cases involving
services designated by CMS as inpatient only, and those published on
the CMS Web site or other subregulatory guidance. Specifically, we are
finalizing our proposal to also allow exceptions to the 2-midnight
benchmark to be determined on a case-by-case basis by the physician
responsible for the care of the beneficiary, subject to medical review.
However, we continue to expect that stays under 24 hours would rarely
qualify for an exception to the 2-midnight benchmark. In addition, we
revised our medical review strategy to have Quality Improvement
Organization (QIO) contractors conduct reviews of short inpatient stays
rather than the Medicare administrative contractors (MACs), and the
QIOs assumed medical responsibility for hospital stays affected by the
2-midnight rule on October 1, 2015.
Advanced Care Planning (ACP): For CY 2016, we are
conditionally packaging payment for the service described by CPT code
99497 (Advance care planning including the explanation and discussion
of advance directives such as standard forms (with completion of such
forms, when performed), by the physician or other qualified health care
professional; first 30 minutes, face-to-face with the patient, family
member(s), and/or surrogate). Consequently, this code is assigned to a
conditionally packaged payment status indicator of ``Q1.'' When this
service is furnished with another service paid under the OPPS, payment
will be package; when it is the only service furnished, payment will be
made separately. CPT code 99498 (Advance care planning including the
explanation and discussion of advance directives such as standard forms
(with completion of such forms, when performed), by the physician or
other qualified health care professional; each additional 30 minutes
(List separately in addition to code for primary procedure)) is an add-
on code and therefore payment for the service described by this code is
unconditionally packaged (assigned status indicator ``N'') in the OPPS
in accordance with 42 CFR 419.2(b)(18).
Chronic Care Management (CCM): For CY 2016, we are adding
additional requirements for hospitals to bill and receive OPPS payment
for CCM services described by CPT code 99490. These requirements
include scope of service elements analogous to the scope of service
elements finalized as requirements in the CY 2015 Medicare Physician
Fee Schedule (MPFS) final rule with comment period (79 FR 6715 through
67728).
National Electrical Manufacturers Association (NEMA)
Modifier: Effective for services furnished on or after January 1, 2016,
section 218(a) of the PAMA amended section 1834 of the Act by
establishing a new subsection 1834(p), which reduces payment for the
technical component (TC) (and the TC of the global fee) under the MPFS
and the OPPS (5 percent in 2016 and 15 percent in 2017 and subsequent
years) for applicable computed tomography (CT) services identified by
certain CPT HCPCS codes furnished using equipment that does not meet
each of the attributes of the National Electrical Manufacturers
Association (NEMA) Standard XR-29-2013, entitled ``Standard Attributes
on CT Equipment Related to Dose Optimization and Management.'' The
provision requires that information be provided and attested to by a
supplier and a hospital outpatient department that indicates whether an
applicable CT service was furnished that was not consistent with the
NEMA CT equipment standard. To implement this provision, we are
establishing a new modifier that will be reported with specific CPT
codes, effective January 1, 2016.
New Process for Requesting Comments on New and Revised
Category I and III CPT Codes: In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66842 through 66844), we finalized a revised
process of
[[Page 70306]]
assigning APC and status indicators for new and revised Category I and
III CPT codes that will be effective January 1. Specifically, we stated
that we would include the proposed APC and status indicator assignments
for the vast majority of new and revised CPT codes before they are used
for payment purposes under the OPPS if the AMA provides CMS with the
codes in time for the OPPS/ASC proposed rule. For the CY 2016 OPPS
update, we received the CY 2016 CPT codes from AMA for inclusion in the
CY 2016 OPPS/ASC proposed rule. We received public comments on the
proposed OPPS status indicators for the new CY 2016 CPT codes, which we
address in this final rule with comment period.
Ambulatory Surgical Center Payment Update: For CY 2016, we
are increasing payment rates under the ASC payment system by 0.3
percent for ASCs that meet the quality reporting requirements under the
ASCQR Program. This increase is based on a projected CPI-U update of
0.8 percent minus a multifactor productivity adjustment required by the
Affordable Care Act of 0.5 percentage point. Based on this update, we
estimate that total payments to ASCs (including beneficiary cost-
sharing and estimated changes in enrollment, utilization, and case-
mix), for CY 2016 will be approximately $4.221 billion, an increase of
approximately $128 million compared to estimated CY 2015 Medicare
payments. In addition, we are establishing a revised process of
assigning ASC payment indicators for new and revised Category I and III
CPT codes that would be effective January 1, similar to the OPPS
process we finalized in the CY 2015 OPPS/ASC final rule with comment
period. Specifically, we are including the proposed ASC payment
indicator assignments in the OPPS/ASC proposed rule for the vast
majority of new and revised CPT codes before they are used for payment
purposes under the ASC payment system if the American Medical
Association (AMA) provides CMS with the codes in time for the OPPS/ASC
proposed rule. We received public comments on the proposed ASC payment
indicators for the new CY 2016 CPT codes, which we address in this
final rule with comment period.
Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program, we are establishing requirements for the CY
2017 payment determination and subsequent years and the CY 2018 payment
determination and subsequent years. For CY 2017 and subsequent years,
we are: (1) Removing the OP-15: Use of Brain Computed Tomography (CT)
in the Emergency Department for Atraumatic Headache measure, effective
January 1, 2016 (no data for this measure will be used for any payment
determination); (2) changing the deadline for withdrawing from the
Hospital OQR Program from November 1 to August 31 and revising the
related regulations to reflect this change; (3) transitioning to a new
payment determination timeframe that will use only three quarters of
data for the CY 2017 payment determination; (4) making conforming
changes to our validation scoring process to reflect changes in the APU
determination timeframe; (5) changing the data submission timeframe for
measures submitted via the CMS Web-based tool (QualityNet Web site) to
January 1 through May 15; (6) fixing a typographical error to correct
the name of our extension and exception policy to extension and
exemption policy; (7) changing the deadline for submitting a
reconsideration request to the first business day on or after March 17
of the affected payment year; and (8) amending 42 CFR 419.46(f)(1) and
42 CFR 419.46(e)(2) to replace the term ``fiscal year'' with the term
``calendar year.''
For CY 2018 and subsequent years, we are (1) adding a new measure:
OP-33: External Beam Radiotherapy (EBRT) for Bone Metastases (NQF
#1822) with a modification to the proposed manner of data submission,
and (2) shifting the quarters on which we base payment determinations
to again include four quarters of data.
In addition, we are exploring use of electronic clinical quality
measures (eCQMs) and whether, in future rulemaking, we will propose
that hospitals have the option to voluntarily submit data for the OP-
18: Median Time from ED Arrival to ED Departure for Discharged ED
Patients measure electronically possibly beginning with the CY 2019
payment determination.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program, we are aligning our policies regarding
paid claims to be included in the calculation for all claims-based
measures, modifying the submission date for reconsideration requests,
modifying our policy for the facility identifier for public reporting
of ASCQR Program data, and finalizing our policy to not consider IHS
hospital outpatient departments that bill as ASCs to be ASCs for
purposes of the ASCQR Program. In addition, we are continuing to use
the existing submission deadlines for data submitted via an online data
submission tool. We also are codifying a number of existing and new
policies. We also address public comments that we solicited in the
proposed rule on the possible inclusion of two measures in the ASCQR
Program measure set in the future.
3. Summary of Costs and Benefits
In sections XXI. and XXII. of this final rule with comment period,
we set forth a detailed analysis of the regulatory and Federalism
impacts that the changes will have on affected entities and
beneficiaries. Key estimated impacts are described below.
a. Impacts of the OPPS Update
(1) Impacts of All OPPS Changes
Table 70 in section XXI. of this final rule with comment period
displays the distributional impact of all the OPPS changes on various
groups of hospitals and CMHCs for CY 2016 compared to all estimated
OPPS payments in CY 2015. We estimate that the policies finalized in
this final rule with comment period will result in a 0.4 percent
overall decrease in OPPS payments to providers. We estimate that total
OPPS payments for CY 2016, including beneficiary cost-sharing, to the
approximate 4,000 facilities paid under the OPPS (including general
acute care hospitals, children's hospitals, cancer hospitals, and
CMHCs) will decrease by approximately $133 million compared to CY 2015
payments, excluding our estimated changes in enrollment, utilization,
and case-mix.
We estimated the isolated impact of our OPPS policies on CMHCs
because CMHCs are only paid for partial hospitalization services under
the OPPS. Continuing the provider-specific structure that we adopted
beginning in CY 2011 and basing payment fully on the type of provider
furnishing the service, we estimate a 23.1 percent increase in CY 2016
payments to CMHCs relative to their CY 2015 payments.
(2) Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the FY
2016 IPPS final wage indexes results in no change for urban hospitals
and a 0.4 percent decrease for rural hospitals under the OPPS. These
wage indexes include the continued implementation of the OMB labor
market area delineations based on 2010 Decennial Census data.
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(3) Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
There are no significant impacts of our CY 2016 payment policies
for hospitals that are eligible for the rural adjustment or for the
cancer hospital payment adjustment. We are not making any change in
policies for determining the rural and cancer hospital payment
adjustments, and the adjustment amounts do not significantly impact the
budget neutrality adjustments for these policies.
(4) Impacts of the OPD Fee Schedule Increase Factor
As a result of the OPD fee schedule increase factor, the 2.0
percent reduction to the conversion factor to redress the inflation in
OPPS payment rates resulting from excess packaged payment under the
OPPS for laboratory tests that are excepted from our final CY 2014
laboratory packaging policy, and other budget neutrality adjustments,
we estimate that urban and rural hospitals will experience decreases of
approximately 0.4 percent for urban hospitals and 0.6 percent for rural
hospitals. Classifying hospitals by teaching status or type of
ownership suggests that these hospitals will receive similar decreases.
b. Impacts of the ASC Payment Update
For impact purposes, the surgical procedures on the ASC list of
covered procedures are aggregated into surgical specialty groups using
CPT and HCPCS code range definitions. The percentage change in
estimated total payments by specialty groups under the CY 2016 payment
rates compared to estimated CY 2015 payment rates ranges between 5
percent for auditory system services and -5 percent for hematologic and
lymphatic system procedures.
c. Impacts of the Hospital OQR Program
We do not expect our CY 2016 policies to significantly affect the
number of hospitals that do not receive a full annual payment update.
d. Impacts of the ASCQR Program
We do not expect our CY 2016 policies to significantly affect the
number of ASCs that do not receive a full annual payment update.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Social Security Act was enacted, Medicare
payment for hospital outpatient services was based on hospital-specific
costs. In an effort to ensure that Medicare and its beneficiaries pay
appropriately for services and to encourage more efficient delivery of
care, the Congress mandated replacement of the reasonable cost-based
payment methodology with a prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
1833(t) to the Act authorizing implementation of a PPS for hospital
outpatient services. The OPPS was first implemented for services
furnished on or after August 1, 2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: The Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
112-96), enacted on February 22, 2012; 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; and the Medicare Access and CHIP
Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16,
2015.
Under the OPPS, we pay for hospital Part B services on a rate-per-
service basis that varies according to the APC group to which the
service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C. of this 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 (section 1833(t)(2)(B) of
the Act). In accordance with section 1833(t)(2) of the Act, subject to
certain exceptions, items and services within an APC group cannot be
considered comparable with respect to the use of resources if the
highest median cost (or mean cost, if elected by the Secretary) for an
item or service in the APC group is more than 2 times greater than the
lowest median cost (or mean cost, if elected by the Secretary) for an
item or service within the same APC group (referred to as the ``2 times
rule''). In implementing this provision, we generally use the cost of
the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow
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us to provide appropriate and consistent payment for designated new
procedures that are not yet reflected in our claims data. Similar to
pass-through payments, an assignment to a New Technology APC is
temporary; that is, we retain a service within a New Technology APC
until we acquire sufficient data to assign it to a clinically
appropriate APC group.
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee Schedule (CLFS); services for
beneficiaries with end-stage renal disease (ESRD) that are paid under
the ESRD prospective payment system; and services and procedures that
require an inpatient stay that are paid under the hospital IPPS. We set
forth the services that are excluded from payment under the OPPS in
regulations at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals include: critical access hospitals (CAHs); hospitals located
in Maryland and paid under the Maryland All-Payer Model; hospitals
located outside of the 50 States, the District of Columbia, and Puerto
Rico; and Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, relative payment weights, and other adjustments that take into
account changes in medical practices, changes in technologies, and the
addition of new services, new cost data, and other relevant information
and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Pub. L. 106-113, and redesignated by section 202(a)(2) of Pub. L. 106-
113, requires that we consult with an external advisory panel of
experts to annually review the clinical integrity of the payment groups
and their weights under the OPPS. In CY 2000, based on section
1833(t)(9)(A) of the Act and section 222 of the Public Health Service
(PHS) Act, the Secretary established the Advisory Panel on Ambulatory
Payment Classification Groups (APC Panel) to fulfill this requirement.
In CY 2011, based on section 222 of the PHS Act which gives
discretionary authority to the Secretary to convene advisory councils
and committees, the Secretary expanded the panel's scope to include the
supervision of hospital outpatient therapeutic services in addition to
the APC groups and weights. To reflect this new role of the panel, the
Secretary changed the panel's name to the Advisory Panel on Hospital
Outpatient Payment (the HOP Panel, or the Panel). The Panel is not
restricted to using data compiled by CMS, and in conducting its review,
it may use data collected or developed by organizations outside the
Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the HOP Panel, and at that time named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise), reviews clinical data, and advises CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that:
The Panel continues to be technical in nature; is governed by the
provisions of the FACA; may convene up to three meetings per year; has
a Designated Federal Official (DFO); and is chaired by a Federal
Official designated by the Secretary. The Panel's charter was amended
on November 15, 2011, renaming the Panel and expanding the Panel's
authority to include supervision of hospital outpatient therapeutic
services and to add Critical Access Hospital (CAH) representation to
its membership. The current charter was renewed on November 6, 2014 (80
FR 23009) and the number of panel members was revised from up to 19 to
up to 15 members.
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held multiple meetings, with the last meeting taking
place on August 24, 2015. Prior to each meeting, we publish a notice in
the Federal Register to announce the meeting and, when necessary, to
solicit nominations for Panel membership and to announce new members.
The Panel has established an operational structure that, in part,
currently includes the use of three subcommittees to facilitate its
required review process. The three current subcommittees are the Data
Subcommittee, the Visits and Observation Subcommittee, and the
Subcommittee for APC Groups and Status Indicator (SI) Assignments.
The Data Subcommittee is responsible for studying the data issues
confronting the Panel and for recommending options for resolving them.
The Visits and Observation Subcommittee reviews and makes
recommendations to the Panel on all technical issues pertaining to
observation services and hospital
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outpatient visits paid under the OPPS (for example, APC configurations
and APC relative payment weights). The Subcommittee for APC Groups and
SI Assignments advises the Panel on the following issues: The
appropriate status indicators to be assigned to HCPCS codes, including
but not limited to whether a HCPCS code or a category of codes should
be packaged or separately paid; and the appropriate APC assignment of
HCPCS codes regarding services for which separate payment is made.
Each of these subcommittees was established by a majority vote from
the full Panel during a scheduled Panel meeting, and the Panel
recommended at the August 24, 2015 meeting that the subcommittees
continue. We accepted this recommendation.
Discussions of the other recommendations made by the Panel at the
August 24, 2015 Panel meeting are included in the sections of this
final rule with comment period that are specific to each
recommendation. For discussions of earlier Panel meetings and
recommendations, we refer readers to previously published OPPS/ASC
proposed and final rules, the CMS Web site mentioned earlier in this
section, and the FACA database at: http://facadatabase.gov/.
F. Public Comments Received on the CY 2015 OPPS/ASC Final Rule With
Comment Period
We received approximately 38 timely pieces of correspondence on the
CY 2015 OPPS/ASC final rule with comment period that appeared in the
Federal Register on November 10, 2014 (79 FR 66770), as well as in the
correction notice that was published on February 24, 2015 (80 FR 9629),
some of which contained comments on the interim APC assignments and/or
status indicators of new or replacement HCPCS codes (identified with
comment indicator ``NI'' in Addenda B, AA, and BB to that final rule).
Summaries of the public comments on new or replacement codes are set
forth in this CY 2016 OPPS/ASC final rule with comment period under the
appropriate subject-matter headings.
G. Public Comments Received on the CY 2016 OPPS/ASC Proposed Rule
We received approximately 670 timely pieces of correspondence on
the CY 2016 OPPS/ASC proposed rule that appeared in the Federal
Register on July 8, 2015 (80 FR 39200). We note that we received some
public comments that were outside the scope of the proposed rule. Out-
of-scope public comments are not addressed in this CY 2016 OPPS/ASC
final rule with comment period. Summaries of the public comments that
are within the scope of the proposed rule and our responses are set
forth in the various sections of this final rule with comment period
under the appropriate headings.
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for APCs. In the April 7, 2000 OPPS final rule with comment period (65
FR 18482), we explained in detail how we calculated the relative
payment weights that were implemented on August 1, 2000 for each APC
group.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39210), for the CY
2016 OPPS, we proposed to recalibrate the APC relative payment weights
for services furnished on or after January 1, 2016, and before January
1, 2017 (CY 2016), using the same basic methodology that we described
in the CY 2015 OPPS/ASC final rule with comment period. That is, we
proposed to recalibrate the relative payment weights for each APC based
on claims and cost report data for hospital outpatient department
(HOPD) services, using the most recent available data to construct a
database for calculating APC group weights. Therefore, for the purpose
of recalibrating the proposed APC relative payment weights for CY 2016,
we used approximately 151 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, 2014, and
before January 1, 2015. For this final rule with comment period, for
the purpose of recalibrating the final APC relative payment weights for
CY 2016, we used approximately 163 million final action claims (claims
for which all disputes and adjustments have been resolved and payment
has been made) for HOPD services furnished on or after January 1, 2014,
and before January 1, 2015. For exact numbers of claims used, we refer
readers to the claims accounting narrative under supporting
documentation for the CY 2016 OPPS/ASC proposed rule and this final
rule with comment period on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Of the approximately 163 million final action claims for services
provided in hospital outpatient settings used to calculate the CY 2016
OPPS payment rates for this final rule with comment period,
approximately 125 million claims were the type of bill potentially
appropriate for use in setting rates for OPPS services (but did not
necessarily contain services payable under the OPPS). Of the
approximately 125 million claims, approximately 3 million claims were
not for services paid under the OPPS or were excluded as not
appropriate for use (for example, erroneous cost-to-charge ratios
(CCRs) or no HCPCS codes reported on the claim). From the remaining
approximately 122 million claims, we created approximately 95 million
single records, of which approximately 43 million were ``pseudo''
single or ``single session'' claims (created from approximately 52
million multiple procedure claims using the process we discuss later in
this section). Approximately 3 million claims were trimmed out on cost
or units in excess of +/-3 standard deviations from the geometric mean
or other trims, yielding approximately 92 million single claims for
ratesetting. As described in section II.A.2. of this final rule with
comment period, our data development process is designed with the goal
of using appropriate cost information in setting the APC relative
payment weights. The bypass process is described in section II.A.1.b.
of this final rule with comment period. This section discusses how we
develop ``pseudo'' single procedure claims (as defined below), with the
intention of using more appropriate data from the available claims. In
some cases, the bypass process allows us to use some portion of the
submitted claim for cost estimation purposes, while the remaining
information on the claim continues to be unusable. Consistent with the
goal of using appropriate information in our data development process,
we only use claims (or portions of each claim) that are appropriate for
ratesetting purposes.
The final APC relative weights and payments for CY 2016 in Addenda
A and B to this final rule with comment period (which are available via
the Internet on the CMS Web site) were calculated using claims from CY
2014 that were processed through June 30, 2015. While prior to CY 2013
we historically based the payments on median hospital costs for
services in the APC groups, beginning with the CY 2013 OPPS, we
established the cost-based relative payment weights for the OPPS using
geometric mean costs, as
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discussed in the CY 2013 OPPS/ASC final rule with comment period (77 FR
68259 through 68271). For the CY 2016 OPPS, as we proposed, we used
this same methodology, basing payments on geometric mean costs. Under
this methodology, we select claims for services paid under the OPPS and
match these claims to the most recent cost report filed by the
individual hospitals represented in our claims data. We continue to
believe that it is appropriate to use the most current full calendar
year claims data and the most recently submitted cost reports to
calculate the relative costs underpinning the APC relative payment
weights and the CY 2016 payment rates.
b. Use of Single and Multiple Procedure Claims
For CY 2016, in general, we proposed to continue to use single
procedure claims to set the costs on which the APC relative payment
weights are based. We generally use single procedure claims to set the
estimated costs for APCs because we believe that the OPPS relative
weights on which payment rates are based should be derived from the
costs of furnishing one unit of one procedure and because, in many
circumstances, we are unable to ensure that packaged costs can be
appropriately allocated across multiple procedures performed on the
same date of service.
It is generally desirable to use the data from as many claims as
possible to recalibrate the APC relative payment weights, including
those claims for multiple procedures. As we have for several years, we
proposed to use date of service stratification and a list of codes to
be bypassed to convert multiple procedure claims to ``pseudo'' single
procedure claims. Through bypassing specified codes that we believe do
not have significant packaged costs, we are able to use more data from
multiple procedure claims. In many cases, this enabled us to create
multiple ``pseudo'' single procedure claims from claims that were
submitted as multiple procedure claims spanning multiple dates of
service, or claims that contained numerous separately paid procedures
reported on the same date on one claim. We refer to these newly created
single procedure claims as ``pseudo'' single procedure claims. The
history of our use of a bypass list to generate ``pseudo'' single
procedure claims is well-documented, most recently in the CY 2015 OPPS/
ASC final rule with comment period (79 FR 66780 through 66783). In
addition, for CY 2008 (72 FR 66614 through 66664), we increased
packaging and created the first composite APCs, and continued those
policies through CY 2015. Increased packaging and creation of composite
APCs also increased the number of bills that we were able to use for
ratesetting by enabling us to use claims that contained multiple major
procedures that previously would not have been usable. Further, for CY
2009, we expanded the composite APC model to one additional clinical
area, multiple imaging services (73 FR 68559 through 68569), which also
increased the number of bills we were able to use in developing the
OPPS relative weights on which payments are based. We have continued
the composite APCs for multiple imaging services through CY 2015, and
we proposed to continue this policy for CY 2016. We refer readers to
section II.A.2.f. of the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66810 through 66816) for a discussion of the use of
claims in modeling the costs for composite APCs and to section II.A.3.
of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817
through 66823) for a discussion of our packaging policies for CY 2015.
In addition, we proposed to establish additional packaging policies for
the CY 2016 OPPS, as discussed in section II.A.3. of this final rule
with comment period.
In the proposed rule, we proposed to continue to apply these
processes to enable us to use as much claims data as possible for
ratesetting for the CY 2016 OPPS. This methodology enabled us to
create, for the proposed rule, approximately 38 million ``pseudo''
single procedure claims, including multiple imaging composite ``single
session'' bills (we refer readers to section II.A.2.f.(4) of the
proposed rule for further discussion), to add to the approximately 49
million ``natural'' single procedure claims.
In addition, we proposed to continue our broader initiative to
review, revise, and reorganize APCs across the OPPS to collectively
group services that are clinically similar and have similar resource
costs within the same APC. The restructuring of APCs are discussed in
the applicable sections of this final rule with comment period. In
conjunction with this initiative, we proposed to renumber the APCs
(except for the composite APCs) primarily to achieve consecutive
numbering of APCs within each clinical family of APCs, as discussed in
section III.D. of this final rule with comment period. For the proposed
rule, we provided a crosswalk from the existing APC numbers to the
proposed new APC renumber in Addendum Q to the proposed rule (which is
available via the Internet on the CMS Web site).
For CY 2016, in the proposed rule, we proposed to bypass 197 HCPCS
codes that were identified in Addendum N to the proposed rule (which is
available via the Internet on the CMS Web site). Since the inception of
the bypass list, which is the list of codes to be bypassed to convert
multiple procedure claims to ``pseudo'' single procedure claims, we
have calculated the percent of ``natural'' single claims that contained
packaging for each HCPCS code and the amount of packaging on each
``natural'' single claim for each code. Each year, we generally retain
the codes on the previous year's bypass list and use the updated year's
data (for CY 2016, data available for the proposed rule from CY 2014
claims processed through December 31, 2014) to determine whether it
would be appropriate to add additional codes to the previous year's
bypass list. For CY 2016, we proposed to continue to bypass all of the
HCPCS codes on the CY 2015 OPPS bypass list, with the exception of
HCPCS codes that we proposed to delete for CY 2016, which were listed
in Table 1 of the proposed rule. (We refer readers to Addendum N to the
CY 2015 OPPS/ASC final rule with comment period for the CY 2015 OPPS
bypass list. Addendum N is available via the Internet on the CMS Web
site.) We also proposed to remove HCPCS codes that are not separately
paid under the OPPS because the purpose of the bypass list is to obtain
more data for those codes relevant to ratesetting. Some of the codes we
proposed to remove from the CY 2016 bypass list were affected by the CY
2016 proposed packaging policy, discussed in section II.A.3. of this
final rule with comment period. Some of the codes we proposed to remove
have packaged cost patterns associated with their natural single major
claims that would no longer meet the bypass list criterion of 5 percent
or fewer of the single major claims having packaged costs on the claim.
In addition, we proposed to add to the bypass list for CY 2016 HCPCS
codes that are not on the CY 2015 bypass list that, using the proposed
rule data (CY 2014 claims), met the empirical criteria for the bypass
list that are summarized below. Finally, to remain consistent with the
CY 2016 proposal to continue to develop OPPS relative payment weights
based on geometric mean costs, we also proposed to establish that the
packaged cost criterion would continue to be based on the geometric
mean cost. The entire list proposed for CY 2016 (including the codes
that remain on the bypass list from prior years) was open to public
comment in the CY 2016 OPPS/ASC
[[Page 70311]]
proposed rule. Because we must make some assumptions about packaging in
the multiple procedure claims in order to assess a HCPCS code for
addition to the bypass list, we assumed that the representation of
packaging on ``natural'' single procedure claims for any given code is
comparable to packaging for that code in the multiple procedure claims.
The proposed criteria for the bypass list were:
There are 100 or more ``natural'' single procedure claims
for the code. This number of single procedure claims ensures that
observed outcomes are sufficiently representative of packaging that
might occur in the multiple claims.
Five percent or fewer of the ``natural'' single procedure
claims for the code have packaged costs on that single procedure claim
for the code. This criterion results in limiting the amount of
packaging being redistributed to the separately payable procedures
remaining on the claim after the bypass code is removed and ensures
that the costs associated with the bypass code represent the cost of
the bypassed service.
The geometric mean cost of packaging observed in the
``natural'' single procedure claims is equal to or less than $55. This
criterion also limits the amount of error in redistributed costs.
During the assessment of claims against the bypass criteria, we do not
know the dollar value of the packaged cost that should be appropriately
attributed to the other procedures on the claim. Therefore, ensuring
that redistributed costs associated with a bypass code are small in
amount and volume protects the validity of cost estimates for low cost
services billed with the bypassed service.
We note that, as we did for CY 2015, we proposed to continue to
establish the CY 2016 OPPS relative payment weights based on geometric
mean costs. To remain consistent in the metric used for identifying
cost patterns, we proposed to use the geometric mean cost of packaging
to identify potential codes to add to the bypass list.
In response to public comments on the CY 2010 OPPS/ASC proposed
rule requesting that the packaged cost threshold be updated, we
considered whether it would be appropriate to update the $50 packaged
cost threshold for inflation when examining potential bypass list
additions. As discussed in the CY 2010 OPPS/ASC final rule with comment
period (74 FR 60328), the real value of this packaged cost threshold
criterion has declined due to inflation, making the packaged cost
threshold more restrictive over time when considering additions to the
bypass list. Therefore, adjusting the threshold by the market basket
increase would prevent continuing decline in the threshold's real
value. Based on the same rationale described for the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66781), we proposed for CY 2016
to continue to update the packaged cost threshold by the market basket
increase. By applying the final CY 2015 market basket increase of 2.2
percent (79 FR 66825) to the prior nonrounded dollar threshold of
$55.66 (79 FR 66781), we determined that the proposed threshold would
remain for CY 2016 at $55 ($56.88 rounded to $55, the nearest $5
increment). Therefore, we proposed to set the geometric mean packaged
cost threshold based on the CY 2014 claims data at $55 for a code to be
considered for addition to the CY 2016 OPPS bypass list.
For inclusion on the bypass list, a code cannot be a code for an
unlisted service. Unlisted codes do not describe a specific service
and, therefore, their costs would not be appropriate for bypass list
purposes.
In addition, we proposed to continue to include on the bypass list
HCPCS codes that we believe have minimal associated packaging, based on
our clinical assessment of the complete CY 2016 OPPS proposal. Some of
these codes were identified by CMS, and some were identified in prior
years by commenters with specialized knowledge of the packaging
associated with specific services. We also proposed to continue to
include certain HCPCS codes on the bypass list in order to purposefully
direct the assignment of packaged costs to a companion code where
services always appear together and where there would otherwise be few
single procedure claims available for ratesetting. For example, we have
previously discussed our reasoning for adding HCPCS code G0390 (Trauma
response team associated with hospital critical care service) to the
bypass list (73 FR 68513).
As a result of the multiple imaging composite APCs that we
established in CY 2009, the program logic for creating ``pseudo''
single procedure claims from bypassed codes that are also members of
multiple imaging composite APCs changed. When creating the set of
``pseudo'' single procedure claims, claims that contain ``overlap
bypass codes'' (those HCPCS codes that are both on the bypass list and
are members of the multiple imaging composite APCs) were identified
first. These HCPCS codes were then processed to create multiple imaging
composite ``single session'' claims, that is, claims containing HCPCS
codes from only one imaging family, thus suppressing the initial use of
these codes as bypass codes. However, these ``overlap bypass codes''
were retained on the bypass list because, at the end of the ``pseudo''
single processing logic, we reassessed the claims without suppression
of the ``overlap bypass codes'' under our longstanding ``pseudo''
single process to determine whether we could convert additional claims
to ``pseudo'' single procedure claims. (We refer readers to section
II.A.2.b. of the proposed rule and this final rule with comment period
for further discussion of the treatment of ``overlap bypass codes.'')
This process also created multiple imaging composite ``single session''
claims that could be used for calculating composite APC costs.
``Overlap bypass codes'' that are members of the proposed multiple
imaging composite APCs were identified by asterisks (*) in Addendum N
to the proposed rule (which is available via the Internet on the CMS
Web site).
Addendum N to the proposed rule included the proposed list of
bypass codes for CY 2016. The proposed list of bypass codes contains
codes that were reported on claims for services in CY 2014 and,
therefore, includes codes that were in effect in CY 2014 and used for
billing but were deleted for CY 2015. We retained these deleted bypass
codes on the proposed CY 2016 bypass list because these codes existed
in CY 2014 and were covered OPD services in that period, and CY 2014
claims data are used to calculate CY 2016 payment rates. Keeping these
deleted bypass codes on the bypass list potentially allowed us to
create more ``pseudo'' single procedure claims for ratesetting
purposes. ``Overlap bypass codes'' that were members of the proposed
multiple imaging composite APCs were identified by asterisks (*) in the
third column of Addendum N to the proposed rule. HCPCS codes that we
proposed to add for CY 2016 were identified by asterisks (*) in the
fourth column of Addendum N.
We did not receive any public comments on our proposals for use of
single and multiple procedure code claims for ratesetting. Therefore,
we are adopting as final the proposed ``pseudo'' single claims process
and the final CY 2016 bypass list of 197 HCPCS codes, as displayed in
Addendum N to this final rule with comment period (which is available
via the Internet on the CMS Web site). Table 1 below contains the list
of codes that we are removing from the CY 2016 bypass list.
[[Page 70312]]
Table 1--HCPCS Codes Removed from the CY 2016 Bypass List
------------------------------------------------------------------------
HCPCS code HCPCS short descriptor
------------------------------------------------------------------------
11057................................. Trim skin lesions over 4.
57454................................. Bx/curett of cervix w/scope.
88348................................. Electron microscopy.
92240................................. Icg angiography.
92546................................. Sinusoidal rotational test.
------------------------------------------------------------------------
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
In the CY 2016 OPPS/ASC proposed rule (80 FR 39213), 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 2016 APC
payment rates were based, we calculated hospital-specific overall
ancillary CCRs and hospital-specific departmental CCRs for each
hospital for which we had CY 2014 claims data by comparing these claims
data to the most recently available hospital cost reports, which, in
most cases, were from CY 2013. For the CY 2016 OPPS proposed rates, we
used the set of claims processed during CY 2014. We applied the
hospital-specific CCR to the hospital's charges at the most detailed
level possible, based on a revenue code-to-cost center crosswalk that
contains a hierarchy of CCRs used to estimate costs from charges for
each revenue code. That crosswalk is available for review and
continuous comment on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
To ensure the completeness of the revenue code-to-cost center
crosswalk, we reviewed changes to the list of revenue codes for CY 2014
(the year of claims data we used to calculate the proposed CY 2016 OPPS
payment rates) and found that the National Uniform Billing Committee
(NUBC) did not add any new revenue codes to the NUBC 2014 Data
Specifications Manual.
In accordance with our longstanding policy, we calculated CCRs for
the standard and nonstandard cost centers accepted by the electronic
cost report database. In general, the most detailed level at which we
calculated CCRs was the hospital-specific departmental level. For a
discussion of the hospital-specific overall ancillary CCR calculation,
we refer readers to the CY 2007 OPPS/ASC final rule with comment period
(71 FR 67983 through 67985). The calculation of blood costs is a
longstanding exception (since the CY 2005 OPPS) to this general
methodology for calculation of CCRs used for converting charges to
costs on each claim. This exception is discussed in detail in the CY
2007 OPPS/ASC final rule with comment period and discussed further in
section II.A.2.d.(1) of the proposed rule and this final rule with
comment period.
For the CCR calculation process, we used the same general approach
that we used in developing the final APC rates for CY 2007 and
thereafter, using the revised CCR calculation that excluded the costs
of paramedical education programs and weighted the outpatient charges
by the volume of outpatient services furnished by the hospital. We
refer readers to the CY 2007 OPPS/ASC final rule with comment period
for more information (71 FR 67983 through 67985). We first limited the
population of cost reports to only those hospitals that filed
outpatient claims in CY 2014 before determining whether the CCRs for
such hospitals were valid.
We then calculated the CCRs for each cost center and the overall
ancillary CCR for each hospital for which we had claims data. We did
this using hospital-specific data from the Hospital Cost Report
Information System (HCRIS). We used the most recent available cost
report data, which, in most cases, were from cost reports with cost
reporting periods beginning in CY 2013. For the proposed rule, we used
the most recently submitted cost reports to calculate the CCRs to be
used to calculate costs for the proposed CY 2016 OPPS payment rates. If
the most recently available cost report was submitted but not settled,
we looked at the last settled cost report to determine the ratio of
submitted to settled cost using the overall ancillary CCR, and we then
adjusted the most recent available submitted, but not settled, cost
report using that ratio. We then calculated both an overall ancillary
CCR and cost center-specific CCRs for each hospital. We used the
overall ancillary CCR referenced above for all purposes that require
use of an overall ancillary CCR. We proposed to continue this
longstanding methodology for the calculation of costs for CY 2016.
Since the implementation of the OPPS, some commenters have raised
concerns about potential bias in the OPPS cost-based weights due to
``charge compression,'' which is the practice of applying a lower
charge markup to higher cost services and a higher charge markup to
lower cost services. As a result, the cost-based weights may reflect
some aggregation bias, undervaluing high-cost items and overvaluing
low-cost items when an estimate of average markup, embodied in a single
CCR, is applied to items of widely varying costs in the same cost
center. This issue was evaluated in a report by the Research Triangle
Institute, International (RTI). The RTI final report can be found on
RTI's Web site at: http://www.rti.org/reports/cms/HHSM-500-2005-0029I/PDF/Refining_Cost_to_Charge_ratios_200807_Final.pdf. For a complete
discussion of the RTI recommendations, public comments, and our
responses, we refer readers to the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68519 through 68527).
We addressed the RTI finding that there was aggregation bias in
both the IPPS and the OPPS cost estimation of expensive and inexpensive
medical supplies in the FY 2009 IPPS final rule (73 FR 48458 through
45467). Specifically, we created one cost center for ``Medical Supplies
Charged to Patients'' and one cost center for ``Implantable Devices
Charged to Patients,'' essentially splitting the then current cost
center for ``Medical Supplies Charged to Patients'' into one cost
center for low-cost medical supplies and another cost center for high-
cost implantable devices in order to mitigate some of the effects of
charge compression. In determining the items that should be reported in
these respective cost centers, we adopted commenters' recommendations
that hospitals should use revenue codes established by the AHA's NUBC
to determine the items that should be reported in the ``Medical
Supplies Charged to Patients'' and the ``Implantable Devices Charged to
Patients'' cost centers. For a complete discussion of the rationale for
the creation of the new cost center for ``Implantable Devices Charged
to Patients,'' a summary of public comments received, and our responses
to those public comments, we refer readers to the FY 2009 IPPS final
rule.
The cost center for ``Implantable Devices Charged to Patients'' has
been available for use for cost reporting periods beginning on or after
May 1, 2009. In the CY 2013 OPPS/ASC final rule with comment period, we
determined that a significant volume of hospitals were utilizing the
``Implantable Devices Charged to Patients'' cost center. Because a
sufficient amount of data from which to generate a meaningful analysis
was available, we established in the CY 2013 OPPS/ASC final rule with
comment period a policy to create a distinct CCR using the
``Implantable Devices Charged to Patients'' cost center (77 FR 68225).
We retained this policy through CY
[[Page 70313]]
2015, and we proposed to continue this practice for the CY 2016 OPPS.
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through
50080), we finalized our proposal to create new standard cost centers
for ``Computed Tomography (CT),'' ``Magnetic Resonance Imaging (MRI),''
and ``Cardiac Catheterization,'' and to require that hospitals report
the costs and charges for these services under these new cost centers
on the revised Medicare cost report Form CMS 2552-10. As we discussed
in the FY 2009 IPPS and CY 2009 OPPS/ASC proposed and final rules, RTI
also found that the costs and charges of CT scans, MRIs, and cardiac
catheterization differ significantly from the costs and charges of
other services included in the standard associated cost center. RTI
concluded that both the IPPS and the OPPS relative payment weights
would better estimate the costs of those services if CMS were to add
standard costs centers for CT scans, MRIs, and cardiac catheterization
in order for hospitals to report separately the costs and charges for
those services and in order for CMS to calculate unique CCRs to
estimate the cost from charges on claims data. We refer readers to the
FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080) for a more
detailed discussion on the reasons for the creation of standard cost
centers for CT scans, MRIs, and cardiac catheterization. The new
standard cost centers for CT scans, MRIs, and cardiac catheterization
were effective for cost report periods beginning on or after May 1,
2010, on the revised cost report Form CMS-2552-10.
Using the June 2015 HCRIS update to estimate costs in the final CY
2016 OPPS ratesetting process, of the 3,830 impact providers, we were
able to calculate a valid implantable device CCR for 2,969 hospitals
(78 percent), a valid MRI CCR for 2,080 hospitals (54 percent), a valid
CT scan CCR for 2,166 hospitals (57 percent), and a valid Cardiac
Catheterization CCR for 1,434 hospitals (37 percent).
In our CY 2014 OPPS/ASC proposed rule discussion (78 FR 43549), we
noted that, for CY 2014, the estimated changes in geometric mean
estimated APC cost of using data from the new standard cost centers for
CT scans and MRIs appeared consistent with RTI's analysis of cost
report and claims data in the July 2008 final report (pages 5 and 6).
RTI concluded that ``in hospitals that aggregate data for CT scanning,
MRI, or nuclear medicine services with the standard line for Diagnostic
Radiology, costs for these services all appear substantially
overstated, while the costs for plain films, ultrasound and other
imaging procedures are correspondingly understated.'' We also noted
that there were limited additional impacts in the implantable device-
related APCs from adopting the new cost report Form CMS 2552-10 because
we had used data from the standard cost center for implantable medical
devices beginning in CY 2013 OPPS ratesetting, as discussed above.
As we indicated in prior rulemaking (77 FR 68223 through 68225),
once we determined that cost report data for the new standard cost
centers were sufficiently available, we would analyze that data and, if
appropriate, we would propose to use the distinct CCRs for new standard
cost centers described above in the calculation of the OPPS relative
payment weights. As stated in the CY 2014 OPPS/ASC final rule with
comment period (78 FR 74847), we conducted our analysis and concluded
that we should develop distinct CCRs for each of the new cost centers
and use them in ratesetting. Therefore, we began in the CY 2014 OPPS,
continued in the CY 2015 OPPS, and we proposed to retain this practice
for the CY 2016 OPPS, to calculate the OPPS relative payment weights
using distinct CCRs for cardiac catheterization, CT scan, MRI, and
implantable medical devices. Section XIX. of the proposed rule and
section XXI. of this final rule with comment period include the impacts
of calculating the CY 2016 OPPS relative payment weights using these
standard cost centers that were adopted in CY 2014.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74847), we finalized a policy to remove claims from providers that use
a cost allocation method of ``square feet'' to calculate CCRs used to
estimate costs associated with the CT and MRI APCs. This change allows
hospitals additional time to use one of the more accurate cost
allocation methods, and thereby improve the accuracy of the CCRs on
which the OPPS relative payment weights are developed. In Table 2
below, we display CCR values for providers based on various cost
allocation methods.
Table 2--CCR Statiscal Values Based on Use of Different Cost Allocation Methods
----------------------------------------------------------------------------------------------------------------
CT MRI
Cost allocation method -------------------------------------------------------------------
Median CCR Mean CCR Median CCR Mean CCR
----------------------------------------------------------------------------------------------------------------
All Providers............................... 0.0436 0.0582 0.0874 0.1111
Square Feet Only............................ 0.0361 0.0507 0.0780 0.1026
Direct Assign............................... 0.0638 0.0716 0.1076 0.1273
Dollar Value................................ 0.0508 0.0667 0.0972 0.1204
Direct Assign and Dollar Value.............. 0.0508 0.0668 0.0976 0.1203
----------------------------------------------------------------------------------------------------------------
As part of this transitional policy to estimate the CT and MRI APC
relative payment weights using only cost data from providers that do
not use ``square feet'' as the cost allocation statistic, we adopted a
policy in the CY 2014 OPPS/ASC final rule with comment period that we
will sunset this policy in 4 years once the updated cost report data
become available for ratesetting purposes. We stated that we believe 4
years is sufficient time for hospitals that have not done so to
transition to a more accurate cost allocation method and for the
related data to be available for ratesetting purposes. Therefore, in CY
2018, we will estimate the CT and MRI APC relative payment weights
using cost data from all providers, regardless of the cost allocation
statistic employed. In Table 3 below, we display the impact of
excluding claims based on the ``square feet'' cost allocation method
from estimates of CT and MRI costs in CY 2016.
[[Page 70314]]
Table 3--Percent Change in Estimated Cost for CT and MRI APCs When
Excluding Claims From Providers Using ``Square Feet'' as the Cost
Allocation Method
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC descriptor Percent change
------------------------------------------------------------------------
5570 *..................... Computed Tomography without 15.4
Contrast.
5571 *..................... Level 1 Computed Tomography 10.2
with Contrast and Computed
Tomography Angiography.
5572 *..................... Level 2 Computed Tomography 10.5
with Contrast and Computed
Tomography Angiography.
5581 *..................... Magnetic Resonance Imaging 8.1
and Magnetic Resonance
Angiography without
Contrast.
5582 *..................... Magnetic Resonance Imaging 6.2
and Magnetic Resonance
Angiography with Contrast.
8005....................... CT & CTA without Contrast 13.7
Composite.
8006....................... CT & CTA with Contrast 9.8
Composite.
8007....................... MRI & MRA without Contrast 6.9
Composite.
8008....................... MRI & MRA with Contrast 6.8
Composite.
------------------------------------------------------------------------
* Renumbered APC for CY 2016.
In summary, we proposed to continue to use data from the
``Implantable Devices Charged to Patients'' and ``Cardiac
Catheterization'' cost centers to create distinct CCRs for use in
calculating the OPPS relative payment weights for the CY 2016 OPPS. For
the ``Magnetic Resonance Imaging (MRI)'' and ``Computed Tomography (CT)
Scan'' APCs identified in Table 3 of the proposed rule, we proposed to
continue our policy of removing claims from cost modeling for those
providers using ``square feet'' as the cost allocation statistic for CY
2016.
Comment: Several commenters supported CMS' proposal to continue
removing claims submitted by providers that use the ``square feet''
cost allocation methodology from cost modeling for the CT and MRI APCs.
A few commenters suggested that CMS continue its policy of removing
claims from providers that use this method for the CY 2018 OPPS update
and subsequent calendar years.
Response: We appreciate the commenters' support. As described in
the CY 2014 OPPS/ASC final rule with comment period (78 FR 74847), the
current policy of calculating CT and MRI APC relative payment weights
using only data from providers that do not use the ``square feet'' cost
allocation method was part of a transitional policy to allow providers
to adopt cost allocation methods that improve data and payment
accuracy. In the CY 2014 OPPS/ASC final rule with comment period, we
noted that we would sunset that policy in 4 years and estimate the CY
2018 CT and MRI APC relative payment weights using cost data from all
providers, regardless of which cost allocation method the provider
employed. While some commenters believe that we should continue this
transition policy of excluding ``square feet'' data from OPPS
ratesetting for the CY 2018 OPPS update and subsequent calendar years,
we believe that we have given providers sufficient time to adopt one of
the more precise cost allocation methodologies.
After consideration of the public comments we received, we are
finalizing our proposal to continue to use data from the ``Implantable
Devices Charged to Patients'' and ``Cardiac Catheterization'' cost
centers to create distinct CCRs for use in calculating the OPPS
relative payment weights for the CY 2016 OPPS. For the ``Magnetic
Resonance Imaging (MRI)'' and ``Computed Tomography (CT) Scan'' APCs
identified in Table 3 above, we are continuing our policy of removing
claims from providers that use the ``square feet'' cost allocation
methodology for CY 2016 CT and MRI APC cost modeling.
2. Data Development Process and Calculation of Costs Used for
Ratesetting
In this section of this final rule with comment period, we discuss
the use of claims to calculate the OPPS payment rates for CY 2016. The
Hospital OPPS page on the CMS Web site on which this final rule with
comment period is posted (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an
accounting of claims used in the development of the payment rates. That
accounting provides additional detail regarding the number of claims
derived at each stage of the process. In addition, below in this
section we discuss the file of claims that comprises the data set that
is available for purchase under a CMS data use agreement. The CMS Web
site, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes information about purchasing
the ``OPPS Limited Data Set,'' which now includes the additional
variables previously available only in the OPPS Identifiable Data Set,
including ICD-9-CM diagnosis codes and revenue code payment amounts.
This file is derived from the CY 2014 claims that were used to
calculate the proposed and final payment rates for the CY 2016 OPPS.
In the history of the OPPS, we have traditionally established the
scaled relative weights on which payments are based using APC median
costs, which is a process described in the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74188). However, as discussed in more detail
in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68259 through 68271), we finalized the use of geometric
mean costs to calculate the relative weights on which the CY 2013 OPPS
payment rates were based. While this policy changed the cost metric on
which the relative payments are based, the data process in general
remained the same, under the methodologies that we used to obtain
appropriate claims data and accurate cost information in determining
estimated service cost. For CY 2016, we proposed to continue to use
geometric mean costs to calculate the relative weights on which the CY
2016 OPPS payment rates are based.
We used the methodology described in sections II.A.2.a. through
II.A.2.f. of this final rule with comment period to calculate the costs
we used to establish the relative payment weights used in calculating
the OPPS payment rates for CY 2016 shown in Addenda A and B to this
final rule with comment period (which are available via the Internet on
the CMS Web site). We refer readers to section II.A.4. of the proposed
rule and this final rule with comment period for a discussion of the
conversion of APC costs to scaled payment weights.
Comment: A few commenters suggested that CMS increase the
transparency of its cost estimation process and provide additional
detail on how various types of HCPCS code are treated within CMS'
claims processing.
Response: We thank the commenters for these suggestions. We have
updated the claims accounting narrative for this
[[Page 70315]]
final rule with comment period to include additional information on the
requested various types of HCPCS code where feasible. This updated
claims accounting narrative is available on the 2016 OPPS Final Rule
page of the CMS Web site (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html).
Comment: One commenter suggested that CMS present proposals for
significant payment changes, such as expanded packaging, APC
configurations, or new comprehensive APCs, at least 1 year before
issuance of a proposed rule. The commenter believed that this would
increase the transparency of policy changes and facilitate stakeholder
review and analysis of the proposed changes.
Response: We thank the commenter for this suggestion. We believe
that, for each proposed policy change, we assess the appropriate
timeframe for implementation and will continue to do so in the future.
We understand that modeling the OPPS is time-consuming and technically
complex, and we strive to aid these efforts by providing numerous data
files, public use files, and narrative descriptions of the claims
accounting process for each rule.
a. Claims Preparation
For the proposed rule, we used the CY 2014 hospital outpatient
claims processed through December 31, 2014, to calculate the geometric
mean costs of APCs that underpin the proposed relative payment weights
for CY 2016. For this final rule with comment period, we used the CY
2014 hospital outpatient claims processed through June 30, 2015, to
calculate the geometric mean costs of APCs that underpin the final
relative payment weights for CY 2016. To begin the calculation of the
relative payment weights for CY 2016, we selected all claims for
outpatient services furnished in CY 2014 from the national claims
history file. This is not the population of claims paid under the OPPS,
but all outpatient claims (including, for example, critical access
hospital (CAH) claims and hospital claims for clinical laboratory tests
for persons who are neither inpatients nor outpatients of the
hospital).
We then excluded claims with condition codes 04, 20, 21, and 77
because these claims are submitted by providers to Medicare with the
knowledge that no payment would be made. For example, providers submit
claims with a condition code 21 to elicit an official denial notice
from Medicare to document that a service is not covered under the OPPS.
We then excluded claims for services furnished in Maryland, Guam, the
U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands
because hospitals in those geographic areas are not paid under the
OPPS, and, therefore, we do not use claims for services furnished in
these areas in ratesetting.
We divided the remaining claims into the three groups shown below.
Groups 2 and 3 comprise the 125 million claims that contain hospital
bill types paid under the OPPS.
1. Claims that were not bill types 12X (Hospital Inpatient
(Medicare Part B only)), 13X (Hospital Outpatient), 14X (Hospital--
Laboratory Services Provided to Nonpatients), or 76X (Clinic--Community
Mental Health Center). Other bill types are not paid under the OPPS;
therefore, these claims were not used to set OPPS payment rates.
2. Claims that were bill types 12X, 13X or 14X. Claims with bill
types 12X and 13X are hospital outpatient claims. Claims with bill type
14X are laboratory specimen claims.
3. Claims that were bill type 76X (CMHC).
To convert charges on the claims to estimated cost, we multiplied
the charges on each claim by the appropriate hospital-specific CCR
associated with the revenue code for the charge as discussed in section
II.A.1.c. of this final rule with comment period. We then flagged and
excluded CAH claims (which are not paid under the OPPS) and claims from
hospitals with invalid CCRs. The latter included claims from hospitals
without a CCR; those from hospitals paid an all-inclusive rate; those
from hospitals with obviously erroneous CCRs (greater than 90 or less
than 0.0001); and those from hospitals with overall ancillary CCRs that
were identified as outliers (that exceeded 3 standard
deviations from the geometric mean after removing error CCRs). In
addition, we trimmed the CCRs at the cost center (that is,
departmental) level by removing the CCRs for each cost center as
outliers if they exceeded 3 standard deviations from the
geometric mean. We used a four-tiered hierarchy of cost center CCRs,
which is the revenue code-to-cost center crosswalk, to match a cost
center to every possible revenue code appearing in the outpatient
claims that is relevant to OPPS services, with the top tier being the
most common cost center and the last tier being the default CCR. If a
hospital's cost center CCR was deleted by trimming, we set the CCR for
that cost center to ``missing'' so that another cost center CCR in the
revenue center hierarchy could apply. If no other cost center CCR could
apply to the revenue code on the claim, we used the hospital's overall
ancillary CCR for the revenue code in question as the default CCR. For
example, if a visit was reported under the clinic revenue code but the
hospital did not have a clinic cost center, we mapped the hospital-
specific overall ancillary CCR to the clinic revenue code. The revenue
code-to-cost center crosswalk is available for inspection on the CMS
Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Revenue codes that we do not
use in establishing relative costs or to model impacts are identified
with an ``N'' in the revenue code-to-cost center crosswalk.
We applied the CCRs as described above to claims with bill type
12X, 13X, or 14X, excluding all claims from CAHs and hospitals in
Maryland, Guam, the U.S. Virgin Islands, American Samoa, and the
Northern Mariana Islands and excluding all claims from hospitals for
which CCRs were flagged as invalid.
We identified claims with condition code 41 as partial
hospitalization services of hospitals and moved them to another file.
We note that the separate file containing partial hospitalization
claims is included in the files that are available for purchase as
discussed above.
We then excluded claims without a HCPCS code. We moved to another
file claims that contained only influenza and pneumococcal pneumonia
(PPV) vaccines. Influenza and PPV vaccines are paid at reasonable cost;
therefore, these claims are not used to set OPPS rates.
We next copied line-item costs for drugs, blood, and brachytherapy
sources to a separate file (the lines stay on the claim, but are copied
onto another file). No claims were deleted when we copied these lines
onto another file. These line-items are used to calculate a per unit
arithmetic and geometric mean and median cost and a per day arithmetic
and geometric mean and median cost for drugs and nonimplantable
biologicals, therapeutic radiopharmaceutical agents, and brachytherapy
sources, as well as other information used to set payment rates, such
as a unit-to-day ratio for drugs.
Prior to CY 2013, our payment policy for nonpass-through separately
paid drugs and biologicals was based on a redistribution methodology
that accounted for pharmacy overhead by allocating cost from packaged
drugs to separately paid drugs. This methodology typically would have
required us to reduce the cost associated
[[Page 70316]]
with packaged coded and uncoded drugs in order to allocate that cost.
However, for CY 2013, we paid for separately payable drugs and
biologicals under the OPPS at ASP+6 percent, based upon the statutory
default described in section 1833(t)(14)(A)(iii)(II) of the Act. Under
that policy, we did not redistribute the pharmacy overhead costs from
packaged drugs to separately paid drugs. We retained the CY 2013
payment policy for separately payable drugs and biologicals through CY
2015, and as we proposed, we are continuing this payment policy for CY
2016. We refer readers to section V.B.3. of this final rule with
comment period for a complete discussion of our CY 2016 payment policy
for separately paid drugs and biologicals.
We then removed line-items that were not paid during claims
processing, presumably for a line-item rejection or denial. The number
of edits for valid OPPS payment in the Integrated Outpatient Code
Editor (I/OCE) and elsewhere has grown significantly in the past few
years, especially with the implementation of the full spectrum of
National Correct Coding Initiative (NCCI) edits. To ensure that we are
using valid claims that represent the cost of payable services to set
payment rates, we removed line-items with an OPPS status indicator that
were not paid during claims processing in the claim year, but have a
status indicator of ``S,'' ``T,'' and ``V'' in the prospective year's
payment system. This logic preserves charges for services that would
not have been paid in the claim year but for which some estimate of
cost is needed for the prospective year, such as services newly removed
from the inpatient list for CY 2015 that were assigned status indicator
``C'' in the claim year. It also preserves charges for packaged
services so that the costs can be included in the cost of the services
with which they are reported, even if the CPT codes for the packaged
services were not paid because the service is part of another service
that was reported on the same claim or the code otherwise violates
claims processing edits.
For CY 2016, we proposed to continue the policy we implemented for
CY 2013 and retained in subsequent years to exclude line-item data for
pass-through drugs and biologicals (status indicator ``G'' for CY 2013)
and nonpass-through drugs and biologicals (status indicator ``K'' for
CY 2013) where the charges reported on the claim for the line were
either denied or rejected during claims processing. Removing lines that
were eligible for payment but were not paid ensures that we are using
appropriate data. The trim avoids using cost data on lines that we
believe were defective or invalid because those rejected or denied
lines did not meet the Medicare requirements for payment. For example,
edits may reject a line for a separately paid drug because the number
of units billed exceeded the number of units that would be reasonable
and, therefore, is likely a billing error (for example, a line
reporting 55 units of a drug for which 5 units is known to be a fatal
dose). As with our trimming in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66788) of line-items with a status indicator of
``S,'' ``T,'' or ``V,'' we believe that unpaid line-items represent
services that are invalidly reported and, therefore, should not be used
for ratesetting (we note that the deletion of status indicator ``X''
was finalized in the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66821)). We believe that removing lines with valid status
indicators that were edited and not paid during claims processing
increases the accuracy of the data used for ratesetting purposes.
For the CY 2016 OPPS, as part of our proposal and adoption of our
proposal to continue packaging payment for clinical diagnostic
laboratory tests, as we proposed, we also are applying the line item
trim to these services if they did not receive payment in the claims
year. Removing these lines ensures that, in establishing the CY 2016
OPPS relative payment weights, we appropriately allocate the costs
associated with packaging these services. Additional details and a
summary of public comments received and our responses regarding
packaging payment for clinical laboratory tests can be found in section
II.A.3.b.(3) of this final rule with comment period.
b. Splitting Claims and Creation of ``Pseudo'' Single Procedure Claims
(1) Splitting Claims
In the CY 2016 OPPS/ASC proposed rule (80 FR 39217), for the CY
2016 OPPS, we proposed to then split the remaining claims into five
groups: Single majors; multiple majors; single minors; multiple minors;
and other claims. (Specific definitions of these groups are presented
below.) We note that, in the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66819 through 66821), we deleted status indicator ``X''
and revised the title and description of status indicator ``Q1'' to
reflect that deletion. We also finalized the creation of status
indicator ``J1'' in the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66800 through 66809) to reflect the comprehensive APCs (C-APCs).
For CY 2016, we proposed to define major procedures as any procedure
described by a HCPCS code that is assigned a status indicator of
``J1,'' ``J2,'' ``S,'' ``T,'' or ``V,'' to define minor procedures as
any procedure described by a HCPCS code that is assigned a status
indicator of ``F,'' ``G,'' ``H,'' ``K,'' ``L,'' ``R,'' ``U,'' or ``N,''
and to classify ``other'' procedures as any procedure described by a
HCPCS code that is assigned a status indicator other than one that we
have classified as major or minor. For CY 2016, we proposed to continue
to assign status indicator ``R'' to HCPCS codes for blood and blood
products; status indicator ``U'' to HCPCS codes for brachytherapy
sources; status indicator ``Q1'' to all HCPCS ``STV-packaged codes'';
status indicator ``Q2'' to all HCPCS ``T-packaged codes''; status
indicator ``Q3'' to all HCPCS codes that may be paid through a
composite APC based on composite-specific criteria or paid separately
through single code APCs when the criteria are not met; and new status
indicator ``Q4'' to HCPCS codes for laboratory tests that will be
conditionally packaged on a claim with a service that is assigned
status indicator ``S,'' ``T,'' or ``V'' unless an exception applies or
the laboratory test is ``unrelated'' to the other HOPD service or
services on the claim. For more information on status indicator ``Q4,''
we refer readers to section II.A.3.b.(3) of this final rule with
comment period.
As discussed in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68709), we established status indicators ``Q1,'' ``Q2,'' and
``Q3'' to facilitate identification of the different categories of
codes. We proposed to treat these codes in the same manner for data
purposes for CY 2016 as we have treated them since CY 2008.
Specifically, for CY 2016, we are continuing to evaluate whether the
criteria for separate payment of codes with a status indicator of
``Q1'' or ``Q2'' are met in determining whether they are treated as
major or minor codes. Claims containing codes with a status indicator
of ``Q1'' or ``Q2'' are processed through the data system either with
status indicator ``N'' to indicate that the services are packaged for
payment or, if they meet the criteria for separate payment, they are
assigned the status indicator of the APC to which they are assigned and
are considered as ``pseudo'' single procedure claims for major codes.
Claims containing codes that are assigned status indicator ``Q3'' are
paid under individual APCs unless they occur in the combinations that
qualify for payment as composite APCs
[[Page 70317]]
and, therefore, they are assigned the status indicator of the
individual APC to which they are assigned through the data process and
are treated as major codes during both the split and ``pseudo'' single
creation process. The calculation of the geometric mean costs for
composite APCs from multiple procedure major claims is discussed in
section II.A.2.f. of this final rule with comment period. HCPCS codes
with status indicator ``Q4'' only appear in the OPPS model if they are
packaged on a claim with a service that is assigned status indicator
``S,'' ``T,'' or ``V.''
Specifically, we proposed to divide the remaining claims into the
following five groups:
1. Single Procedure Major Claims: Claims with a single separately
payable procedure (that is, status indicator ``S,'' ``T,'' or ``V''
which includes codes with status indicator ``Q3''); claims with status
indicator ``J1'' or ``J2,'' which receive special processing for C-
APCs, as discussed in section II.A.2.e. of this final rule with comment
period; claims with one unit of a status indicator ``Q1'' code (``STV-
packaged'') where there was no code with status indicator ``S,'' ``T,''
or ``V'' on the same claim on the same date; or claims with one unit of
a status indicator ``Q2'' code (``T-packaged'') where there was no code
with a status indicator ``T'' on the same claim on the same date.
2. Multiple Procedure Major Claims: Claims with more than one
separately payable procedure (that is, status indicator ``S,'' ``T,''
or ``V'' which includes codes with status indicator ``Q3''), or
multiple units of one payable procedure. These claims include those
codes with a status indicator ``Q2'' code (``T-packaged'') where there
was no procedure with a status indicator ``T'' on the same claim on the
same date of service but where there was another separately paid
procedure on the same claim with the same date of service (that is,
another code with status indicator ``S'' or ``V''). We also include in
this set claims that contained one unit of one code when the bilateral
modifier was appended to the code and the code was conditionally or
independently bilateral. In these cases, the claims represented more
than one unit of the service described by the code, notwithstanding
that only one unit was billed.
3. Single Procedure Minor Claims: Claims with a single HCPCS code
that was assigned status indicator ``F,'' ``G,'' ``H,'' ``K,'' ``L,''
``R,'' ``U,'' or ``N'' and not status indicator ``Q1'' (``STV-
packaged'') or status indicator ``Q2'' (``T-packaged'') code.
4. Multiple Procedure Minor Claims: Claims with multiple HCPCS
codes that are assigned status indicator ``F,'' ``G,'' ``H,'' ``K,''
``L,'' ``R,'' ``U,'' or ``N;'' claims that contain more than one code
with status indicator ``Q1'' (``STV-packaged'') or more than one unit
of a code with status indicator ``Q1'' but no codes with status
indicator ``S,'' ``T,'' or ``V'' on the same date of service; or claims
that contain more than one code with status indicator ``Q2'' (T-
packaged), or ``Q2'' and ``Q1,'' or more than one unit of a code with
status indicator ``Q2'' but no code with status indicator ``T'' on the
same date of service.
5. Non-OPPS Claims: Claims that contain no services payable under
the OPPS (that is, all status indicators other than those listed for
major or minor status). These claims were excluded from the files used
for the OPPS. Non-OPPS claims have codes paid under other fee
schedules, for example, durable medical equipment, and do not contain a
code for a separately payable or packaged OPPS service. Non-OPPS claims
include claims for therapy services paid sometimes under the OPPS but
billed, in these non-OPPS cases, with revenue codes indicating that the
therapy services would be paid under the Medicare Physician Fee
Schedule (MPFS).
The claims listed in numbers 1, 2, 3, and 4 above are included in
the data file that can be purchased as described above. Claims that
contain codes to which we have assigned status indicators ``Q1''
(``STV-packaged'') and ``Q2'' (``T-packaged'') appear in the data for
the single major file, the multiple major file, and the multiple minor
file used for ratesetting. Claims that contain codes to which we have
assigned status indicator ``Q3'' (composite APC members) appear in both
the data of the single and multiple major files used in this final rule
with comment period, depending on the specific composite calculation.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39217), we proposed to
adjust the claims sorting process to determine whether a claim has a
bilateral procedure modifier (Modifier 50) before claims are assigned
to one of the five claims categories. This proposed adjustment shifts
some claims that might otherwise be considered a single major procedure
claim to the multiple major procedure claim category due to the
presence of the bilateral modifier. We stated that we believe that this
proposed adjustment more accurately sorts claims that have a bilateral
modifier.
We did not receive any public comments on the proposed process to
categorize claims used in CY 2016 OPPS cost modeling. Therefore, we are
finalizing our policy as proposed.
(2) Creation of ``Pseudo'' Single Procedure Claims
To develop ``pseudo'' single procedure claims for the proposed
rule, we examined both the multiple procedure major claims and the
multiple procedure minor claims. We first examined the multiple major
procedure claims for dates of service to determine if we could break
them into ``pseudo'' single procedure claims using the dates of service
for all lines on the claim. If we could create claims with single major
procedures by using dates of service, we created a single procedure
claim record for each separately payable procedure on a different date
of service (that is, a ``pseudo'' single procedure claim).
We also proposed to use the bypass codes listed in Addendum N to
the proposed rule (which is available via the Internet on the CMS Web
site) and discussed in section II.A.1.b. of the proposed rule and this
final rule with comment period to remove separately payable procedures
which we determined contained limited or no packaged costs or that were
otherwise suitable for inclusion on the bypass list from a multiple
procedure bill. As discussed above, we ignored the ``overlap bypass
codes,'' that is, those HCPCS codes that were both on the bypass list
and are members of the multiple imaging composite APCs, in this initial
assessment for ``pseudo'' single procedure claims. The proposed CY 2016
``overlap bypass codes'' were listed in Addendum N to the proposed rule
(which is available via the Internet on the CMS Web site). When one of
the two separately payable procedures on a multiple procedure claim was
on the bypass list, we split the claim into two ``pseudo'' single
procedure claim records. The single procedure claim record that
contained the bypass code did not retain packaged services. The single
procedure claim record that contained the other separately payable
procedure (but no bypass code) retained the packaged revenue code
charges and the packaged HCPCS code charges. We also removed lines that
contained multiple units of codes on the bypass list and treated them
as ``pseudo'' single procedure claims by dividing the cost for the
multiple units by the number of units on the line. If one unit of a
single, separately payable procedure code remained on the claim after
removal of the multiple units of the bypass code, we created a
``pseudo'' single procedure claim from that residual claim record,
[[Page 70318]]
which retained the costs of packaged revenue codes and packaged HCPCS
codes. This enabled us to use claims that would otherwise be multiple
procedure claims and could not be used.
We then assessed the claims to determine if the criteria for the
multiple imaging composite APCs, discussed in section II.A.2.f.(3) of
the proposed rule and this final rule with comment period, were met. If
the criteria for the imaging composite APCs were met, we created a
``single session'' claim for the applicable imaging composite service
and determined whether we could use the claim in ratesetting. For HCPCS
codes that are both conditionally packaged and are members of a
multiple imaging composite APC, we first assessed whether the code
would be packaged and, if so, the code ceased to be available for
further assessment as part of the composite APC. Because the packaged
code will not be a separately payable procedure, we considered it to be
unavailable for use in setting the composite APC costs on which the CY
2016 OPPS relative payment weights are based. Having identified
``single session'' claims for the imaging composite APCs, we reassessed
the claim to determine if, after removal of all lines for bypass codes,
including the ``overlap bypass codes,'' a single unit of a single
separately payable code remained on the claim. If so, we attributed the
packaged costs on the claim to the single unit of the single remaining
separately payable code other than the bypass code to create a
``pseudo'' single procedure claim. We also identified line-items of
overlap bypass codes as a ``pseudo'' single procedure claim. This
allowed us to use more claims data for ratesetting purposes.
We also examined the multiple procedure minor claims to determine
whether we could create ``pseudo'' single procedure claims.
Specifically, where the claim contained multiple codes with status
indicator ``Q1'' (``STV-packaged'') on the same date of service or
contained multiple units of a single code with status indicator ``Q1,''
we selected the status indicator ``Q1'' HCPCS code that had the highest
CY 2015 relative payment weight, and set the units to one on that HCPCS
code to reflect our policy of paying only one unit of a code with a
status indicator of ``Q1.'' We then packaged all costs for the
following into a single cost for the ``Q1'' HCPCS code that had the
highest CY 2015 relative payment weight to create a ``pseudo'' single
procedure claim for that code: additional units of the status indicator
``Q1'' HCPCS code with the highest CY 2015 relative payment weight;
other codes with status indicator ``Q1''; and all other packaged HCPCS
codes and packaged revenue code costs. We changed the status indicator
for the selected code from the data status indicator of ``N'' to the
status indicator of the APC to which the selected procedure was
assigned for further data processing and considered this claim as a
major procedure claim. We used this claim in the calculation of the APC
geometric mean cost for the status indicator ``Q1'' HCPCS code.
Similarly, we proposed that if a multiple procedure minor claim
contained multiple codes with status indicator ``Q2'' (``T-packaged'')
or multiple units of a single code with status indicator ``Q2,'' we
selected the status indicator ``Q2'' HCPCS code that had the highest CY
2015 relative payment weight and set the units to one on that HCPCS
code to reflect our policy of paying only one unit of a code with a
status indicator of ``Q2.'' We then packaged all costs for the
following into a single cost for the ``Q2'' HCPCS code that had the
highest CY 2015 relative payment weight to create a ``pseudo'' single
procedure claim for that code: Additional units of the status indicator
``Q2'' HCPCS code with the highest CY 2015 relative payment weight;
other codes with status indicator ``Q2''; and other packaged HCPCS
codes and packaged revenue code costs. We changed the status indicator
for the selected code from a data status indicator of ``N'' to the
status indicator of the APC to which the selected code was assigned,
and we considered this claim as a major procedure claim.
If a multiple procedure minor claim contained multiple codes with
status indicator ``Q2'' (``T-packaged'') and status indicator ``Q1''
(``STV-packaged''), we selected the T-packaged status indicator ``Q2''
HCPCS code that had the highest relative payment weight for CY 2015 and
set the units to one on that HCPCS code to reflect our policy of paying
only one unit of a code with a status indicator of ``Q2.'' We then
packaged all costs for the following into a single cost for the
selected (``T-packaged'') HCPCS code to create a ``pseudo'' single
procedure claim for that code: Additional units of the status indicator
``Q2'' HCPCS code with the highest CY 2015 relative payment weight;
other codes with status indicator ``Q2''; codes with status indicator
``Q1'' (``STV-packaged''); and other packaged HCPCS codes and packaged
revenue code costs. We selected status indicator ``Q2'' HCPCS codes
instead of ``Q1'' HCPCS codes because ``Q2'' HCPCS codes have higher CY
2015 relative payment weights. If a status indicator ``Q1'' HCPCS code
had a higher CY 2015 relative payment weight, it became the primary
code for the simulated single bill process. We changed the status
indicator for the selected status indicator ``Q2'' (``T-packaged'')
code from a data status indicator of ``N'' to the status indicator of
the APC to which the selected code was assigned and we considered this
claim as a major procedure claim.
We then applied our revised process for creating ``pseudo'' single
procedure claims to the conditionally packaged codes that do not meet
the criteria for packaging, which enabled us to create single procedure
claims from them, if they met the criteria for single procedure claims.
Conditionally packaged codes are identified using status indicators
``Q1'' and ``Q2,'' and are described in section XI.A. of this final
rule with comment period.
Lastly, we excluded those claims that we were not able to convert
to single procedure claims even after applying all of the techniques
for creation of ``pseudo'' single procedure claims to multiple
procedure major claims and to multiple procedure minor claims. As has
been our practice in recent years, we also excluded claims that
contained codes that were viewed as independently or conditionally
bilateral and that contained the bilateral procedure modifier (Modifier
50) because the line-item cost for the code represented the cost of two
units of the procedure, notwithstanding that hospitals billed the code
with a unit of one.
We did not receive any public comments on our proposed methodology
for creating ``pseudo'' single procedure claims. Therefore, we are
finalizing our proposal to continue to apply the methodology described
above for the purpose of creating ``pseudo'' single procedure claims
for the CY 2016 OPPS. The final CY 2016 bypass codes and ``overlap
bypass codes'' are listed in Addendum N to this final rule with comment
period (which is available via the Internet on the CMS Web site).
c. Completion of Claim Records and Geometric Mean Cost Calculations
(1) General Process
We proposed to then package the costs of packaged HCPCS codes
(codes with status indicator ``N'' listed in Addendum B to the proposed
rule (which is available via the Internet on the CMS Web site) and the
costs of those lines for codes with status indicator ``Q1'' or ``Q2''
when they are not separately paid), and the costs of the
[[Page 70319]]
services reported under packaged revenue codes in Table 4 of the
proposed rule (Table 4 below in this final rule with comment period)
that appeared on the claim without a HCPCS code into the cost of the
single major procedure remaining on the claim. For a more complete
discussion of our CY 2016 OPPS packaging policy, we refer readers to
section II.A.3. of this final rule with comment period.
As noted in the CY 2008 OPPS/ASC final rule with comment period (72
FR 66606), for the CY 2008 OPPS, we adopted an APC Panel recommendation
that CMS should review the final list of packaged revenue codes for
consistency with OPPS policy and ensure that future versions of the I/
OCE edit accordingly. As we have in the past, we are continuing to
compare the final list of packaged revenue codes that we adopt for CY
2016 to the revenue codes that the I/OCE will package for CY 2016 to
ensure consistency.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68531), we replaced the NUBC standard abbreviations for the revenue
codes listed in Table 2 of the CY 2009 OPPS/ASC proposed rule with the
most current NUBC descriptions of the revenue code categories and
subcategories to better articulate the meanings of the revenue codes
without changing the list of revenue codes. In the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60362 through 60363), we
finalized changes to the packaged revenue code list based on our
examination of the updated NUBC codes and public comment on the CY 2010
proposed list of packaged revenue codes.
For CY 2016, as we did for CY 2015, we reviewed the changes to
revenue codes that were effective during CY 2014 for purposes of
determining the charges reported with revenue codes but without HCPCS
codes that we proposed to package for CY 2016. We stated in the
proposed rule that we believe that the charges reported under the
revenue codes listed in Table 4 of the proposed rule continue to
reflect ancillary and supportive services for which hospitals report
charges without HCPCS codes. Therefore, for CY 2016, we proposed to
continue to package the costs that we derive from the charges reported
without HCPCS codes under the revenue codes displayed in Table 4 of the
proposed rule for purposes of calculating the geometric mean costs on
which the CY 2016 OPPS/ASC payment rates are based.
Comment: One commenter suggested that CMS revisit its ratesetting
methodology to prevent items or services that are more costly than a
primary service from being packaged into the payment for the primary
service. The commenter also suggested that only items or services that
are clinically relevant to a primary service be packaged for payment
with a primary service.
Response: We thank the commenter for these suggestions. Since the
beginning of the OPPS and throughout its development, we have striven
to find ways to improve our methodologies for estimating the costs
associated with providing services, including our methodology for
packaging services. We will continue to look at ways to improve our
ratesetting process, including improving our packaging logic, in future
payment years. We only assign packaged status indicators to services
that we determine are ancillary, supportive, dependent, or adjunctive
to a primary service. We disagree with the commenter that only payment
for less costly services should be packaged into payment for a primary
service, as the cost of a packaged service relative to a primary
service is not necessarily determinative of packaged status.
For the reasons set forth in the proposed rule, we are finalizing
the proposed packaged revenue codes for CY 2016, without modification,
which are identified in Table 4 below.
Table 4--CY 2016 Packaged Revenue Codes
------------------------------------------------------------------------
Revenue code Description
------------------------------------------------------------------------
250.................................. Pharmacy; General Classification.
251.................................. Pharmacy; Generic Drugs.
252.................................. Pharmacy; Non-Generic Drugs.
254.................................. Pharmacy; Drugs Incident to Other
Diagnostic Services.
255.................................. Pharmacy; Drugs Incident to
Radiology.
257.................................. Pharmacy; Non-Prescription.
258.................................. Pharmacy; IV Solutions.
259.................................. Pharmacy; Other Pharmacy.
260.................................. IV Therapy; General
Classification.
261.................................. IV Therapy; Infusion Pump.
262.................................. IV Therapy; IV Therapy/Pharmacy
Svcs.
263.................................. IV Therapy; IV Therapy/Drug/
Supply Delivery.
264.................................. IV Therapy; IV Therapy/Supplies.
269.................................. IV Therapy; Other IV Therapy.
270.................................. Medical/Surgical Supplies and
Devices; General Classification.
271.................................. Medical/Surgical Supplies and
Devices; Non-sterile Supply.
272.................................. Medical/Surgical Supplies and
Devices; Sterile Supply.
275.................................. Medical/Surgical Supplies and
Devices; Pacemaker.
276.................................. Medical/Surgical Supplies and
Devices; Intraocular Lens.
278.................................. Medical/Surgical Supplies and
Devices; Other Implants.
279.................................. Medical/Surgical Supplies and
Devices; Other Supplies/Devices.
280.................................. Oncology; General Classification.
289.................................. Oncology; Other Oncology.
331.................................. Radiology--Therapeutic and/or
Chemotherapy Administration;
Chemotherapy Admin--Injected.
332.................................. Radiology--Therapeutic and/or
Chemotherapy Administration;
Chemotherapy Admin--Oral.
335.................................. Radiology--Therapeutic and/or
Chemotherapy Administration;
Chemotherapy Admin--IV.
343.................................. Nuclear Medicine; Diagnostic
Radiopharmaceuticals.
344.................................. Nuclear Medicine; Therapeutic
Radiopharmaceuticals.
360.................................. Operating Room Services; General
Classification.
361.................................. Operating Room Services; Minor
Surgery.
362.................................. Operating Room Services; Organ
Transplant--Other than Kidney.
369.................................. Operating Room Services; Other OR
Services.
[[Page 70320]]
370.................................. Anesthesia; General
Classification.
371.................................. Anesthesia; Anesthesia Incident
to Radiology.
372.................................. Anesthesia; Anesthesia Incident
to Other DX Services.
379.................................. Anesthesia; Other Anesthesia.
390.................................. Administration, Processing and
Storage for Blood and Blood
Components; General
Classification.
392.................................. Administration, Processing and
Storage for Blood and Blood
Components; Processing and
Storage.
399.................................. Administration, Processing and
Storage for Blood and Blood
Components; Other Blood
Handling.
410.................................. Respiratory Services; General
Classification.
412.................................. Respiratory Services; Inhalation
Services.
413.................................. Respiratory Services; Hyperbaric
Oxygen Therapy.
419.................................. Respiratory Services; Other
Respiratory Services.
621.................................. Medical Surgical Supplies--
Extension of 027X; Supplies
Incident to Radiology.
622.................................. Medical Surgical Supplies--
Extension of 027X; Supplies
Incident to Other DX Services.
623.................................. Medical Supplies--Extension of
027X, Surgical Dressings.
624.................................. Medical Surgical Supplies--
Extension of 027X; FDA
Investigational Devices.
630.................................. Pharmacy--Extension of 025X;
Reserved.
631.................................. Pharmacy--Extension of 025X;
Single Source Drug.
632.................................. Pharmacy--Extension of 025X;
Multiple Source Drug.
633.................................. Pharmacy--Extension of 025X;
Restrictive Prescription.
681.................................. Trauma Response; Level I Trauma.
682.................................. Trauma Response; Level II Trauma.
683.................................. Trauma Response; Level III
Trauma.
684.................................. Trauma Response; Level IV Trauma.
689.................................. Trauma Response; Other.
700.................................. Cast Room; General
Classification.
710.................................. Recovery Room; General
Classification.
720.................................. Labor Room/Delivery; General
Classification.
721.................................. Labor Room/Delivery; Labor.
722.................................. Labor Room/Delivery; Delivery
Room.
724.................................. Labor Room/Delivery; Birthing
Center.
729.................................. Labor Room/Delivery; Other Labor
Room/Delivery.
732.................................. EKG/ECG (Electrocardiogram);
Telemetry.
760.................................. Specialty Services; General
Classification.
761.................................. Specialty Services; Treatment
Room.
762.................................. Specialty services; Observation
Hours.
769.................................. Specialty Services; Other
Specialty Services.
770.................................. Preventive Care Services; General
Classification.
801.................................. Inpatient Renal Dialysis;
Inpatient Hemodialysis.
802.................................. Inpatient Renal Dialysis;
Inpatient Peritoneal Dialysis
(Non-CAPD).
803.................................. Inpatient Renal Dialysis;
Inpatient Continuous Ambulatory
Peritoneal Dialysis (CAPD).
804.................................. Inpatient Renal Dialysis;
Inpatient Continuous Cycling
Peritoneal Dialysis (CCPD).
809.................................. Inpatient Renal Dialysis; Other
Inpatient Dialysis.
810.................................. Acquisition of Body Components;
General Classification.
819.................................. Acquisition of Body Components;
Other Donor.
821.................................. Hemodialysis--Outpatient or Home;
Hemodialysis Composite or Other
Rate.
824.................................. Hemodialysis--Outpatient or Home;
Maintenance--100%.
825.................................. Hemodialysis--Outpatient or Home;
Support Services.
829.................................. Hemodialysis--Outpatient or Home;
Other OP Hemodialysis.
942.................................. Other Therapeutic Services (also
see 095X, an extension of 094x);
Education/Training.
943.................................. Other Therapeutic Services (also
see 095X, an extension of 094X),
Cardiac Rehabilitation.
948.................................. Other Therapeutic Services (also
see 095X, an extension of 094X),
Pulmonary Rehabilitation.
------------------------------------------------------------------------
In accordance with our longstanding policy, we proposed to continue
to exclude: (1) Claims that had zero costs after summing all costs on
the claim; and (2) claims containing packaging flag number 3. Effective
for services furnished after July 1, 2014, the I/OCE assigned packaging
flag number 3 to claims on which hospitals submitted token charges less
than $1.01 for a service with status indicator ``S'' or ``T'' (a major
separately payable service under the OPPS) for which the Medicare
Administrative Contractor (MAC) was required to allocate the sum of
charges for services with a status indicator equaling ``S'' or ``T''
based on the relative payment weight of the APC to which each code was
assigned. We do not believe that these charges, which were token
charges as submitted by the hospital, are valid reflections of hospital
resources. Therefore, we deleted these claims. We also deleted claims
for which the charges equaled the revenue center payment (that is, the
Medicare payment) on the assumption that, where the charge equaled the
payment, to apply a CCR to the charge would not yield a valid estimate
of relative provider cost. We are continuing these processes for the CY
2016 OPPS.
For the remaining claims, we then standardized 60 percent of the
costs of the claim (which we have previously determined to be the
labor-related portion) for geographic differences in labor input costs.
We made this adjustment by determining the wage index that applied to
the hospital that furnished the service and dividing the cost for the
separately paid HCPCS code furnished by the hospital by that wage
index. The claims accounting that we provide for the proposed rule and
final rule with comment period contains the formula we use to
standardize the total cost for the effects of the wage index. As
[[Page 70321]]
has been our policy since the inception of the OPPS, we used the pre-
reclassified wage indices for standardization because we believe that
they better reflect the true costs of items and services in the area in
which the hospital is located than the post-reclassification wage
indices and, therefore, would result in the most accurate unadjusted
geometric mean costs. We used these pre-reclassified wage indices for
standardization using the new OMB labor market area delineations
described in section II.C. of this final rule with comment period.
In accordance with our longstanding practice, we also excluded
single and ``pseudo'' single procedure claims for which the total cost
on the claim was outside 3 standard deviations from the geometric mean
of units for each HCPCS code on the bypass list (because, as discussed
above, we used claims that contain multiple units of the bypass codes).
After removing claims for hospitals with error CCRs, claims without
HCPCS codes, claims for immunizations not covered under the OPPS, and
claims for services not paid under the OPPS, approximately 122 million
claims remained. Using these approximately 122 million claims, we
created approximately 95 million single and ``pseudo'' single procedure
claims, of which we used approximately 92 million single claims (after
trimming out approximately 3 million claims as discussed in section
II.A.1.a. of this final rule with comment period) in the CY 2016
geometric mean cost development and ratesetting.
As discussed above, the OPPS has historically developed the
relative weights on which APC payments are based using APC median
costs. For the CYs 2013, 2014, and 2015 OPPS, we calculated the APC
relative payment weights using geometric mean costs, and we are
continuing this practice for CY 2016. Therefore, the following
discussion of the 2 times rule violation and the development of the
relative payment weight refers to geometric means. For more detail
about the CY 2016 OPPS/ASC policy to calculate relative payment weights
based on geometric means, we refer readers to section II.A.2.c. of this
final rule with comment period.
We used these claims to calculate the CY 2016 geometric mean costs
for each separately payable procedure described by the HCPCS code and
each APC. The comparison of HCPCS code-specific and APC geometric mean
costs determines the applicability of the 2 times rule. Section
1833(t)(2) of the Act provides that, subject to certain exceptions, the
items and services within an APC group shall not be treated as
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
within the group is more than 2 times greater than the lowest median
cost (or mean cost, if so elected) for an item or service within the
same group (the 2 times rule). While we have historically applied the 2
times rule based on median costs, in the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68270), as part of the CY 2013 policy to
develop the OPPS relative payment weights based on geometric mean
costs, we also applied the 2 times rule based on geometric mean costs.
For the CY 2016 OPPS, as we proposed, we are continuing to develop the
APC relative payment weights based on geometric mean costs.
We note that, for purposes of identifying significant HCPCS codes
for examination in the 2 times rule, we consider codes that have more
than 1,000 single major claims or codes that have both greater than 99
single major claims and contribute at least 2 percent of the single
major claims used to establish the APC geometric mean cost to be
significant. This longstanding definition of when a HCPCS code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 claims is negligible within the set of
approximately 92 million single procedure or single session claims we
use for establishing geometric mean costs. Similarly, a HCPCS code for
which there are fewer than 99 single claims and which comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC geometric mean. We note that this method
of identifying significant HCPCS codes within an APC for purposes of
the 2 times rule was used in prior years under the median-based cost
methodology. Under our CY 2016 policy to continue to base the relative
payment weights on geometric mean costs, we believe that this same
consideration for identifying significant HCPCS codes should apply
because the principles are consistent with their use in the median-
based cost methodology. Unlisted codes are not used in establishing the
percent of claims contributing to the APC, nor are their costs used in
the calculation of the APC geometric mean. Finally, we reviewed the
geometric mean costs for the services for which we will pay separately
under this final rule with comment period, and we reassigned HCPCS
codes to different APCs where it was necessary to ensure clinical and
resource homogeneity within the APCs. The APC geometric means were
recalculated after we reassigned the affected HCPCS codes. Both the
HCPCS code-specific geometric means and the APC geometric means were
weighted to account for the inclusion of multiple units of the bypass
codes in the creation of ``pseudo'' single procedure claims.
As we discuss in sections II.A.2.d., II.A.2.f., and VIII.B. of this
final rule with comment period, in some cases, APC geometric mean costs
were calculated using variations of the process outlined above.
Specifically, section II.A.2.d. of this final rule with comment period
addresses the calculation of single APC criteria-based geometric mean
costs. Section II.A.2.f. of this final rule with comment period
discusses the calculation of composite APC criteria-based geometric
mean costs. Section VIII.B. of this final rule with comment period
addresses the methodology for calculating the geometric mean costs for
partial hospitalization services.
We did not receive any public comments on our proposal for
completion of claims records and calculation of geometric means cost.
Therefore, we are adopting the geometric means calculation process that
we proposed as final. We are finalizing our proposed methodology for
calculating geometric means costs for purposes of creating relative
payment weights and subsequent APC payment rates for the CY 2016 OPPS.
(2) Recommendations of the Advisory Panel on Hospital Outpatient
Payment (the Panel) Regarding Data Development
At the August 24, 2015 meeting of the Panel, we discussed our
standard analysis of APCs, specifically those APCs for which geometric
mean costs in the proposed rule run of CY 2014 claims data varied
significantly from the CY 2013 claims data used for the CY 2015 OPPS/
ASC final rule with comment period. We also discussed the ``pseudo''
single development process for the CY 2015 OPPS/ASC final rule with
comment period.
At the August 24, 2015 Panel meeting, the Panel made two
recommendations related to the data process. The Panel's data-related
recommendations and our responses follow.
Recommendation: The Panel recommends that the work of the Data
Subcommittee continue.
CMS Response: We are accepting this recommendation.
Recommendation: The Panel recommends that CMS provide the Panel
with a list of APCs fluctuating
[[Page 70322]]
significantly in costs at the next Panel meeting.
CMS Response: We are accepting this recommendation.
Recommendation: The Panel recommends that Michael Schroyer serve as
Chair of the Data Subcommittee.
CMS Response: We are accepting this recommendation.
d. 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 2016 OPPS/ASC proposed rule (80 FR 39222), for CY 2016,
we proposed to continue to establish payment rates for blood and blood
products using our blood-specific CCR methodology, which utilizes
actual or simulated CCRs from the most recently available hospital cost
reports to convert hospital charges for blood and blood products to
costs. This methodology has been our standard ratesetting methodology
for blood and blood products since CY 2005. It was developed in
response to data analysis indicating that there was a significant
difference in CCRs for those hospitals with and without blood-specific
cost centers, and past public comments indicating that the former OPPS
policy of defaulting to the overall hospital CCR for hospitals not
reporting a blood-specific cost center often resulted in an
underestimation of the true hospital costs for blood and blood
products. Specifically, in order to address the differences in CCRs and
to better reflect hospitals' costs, we proposed to continue to simulate
blood CCRs for each hospital that does not report a blood cost center
by calculating the ratio of the blood-specific CCRs to hospitals'
overall CCRs for those hospitals that do report costs and charges for
blood cost centers. We also proposed to apply this mean ratio to the
overall CCRs of hospitals not reporting costs and charges for blood
cost centers on their cost reports in order to simulate blood-specific
CCRs for those hospitals. We proposed to calculate the costs upon which
the CY 2016 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 proposed rule that we continue to believe that the
hospital-specific simulated blood-specific CCR methodology better
responds to the absence of a blood-specific CCR for a hospital than
alternative methodologies, such as defaulting to the overall hospital
CCR or applying an average blood-specific CCR across hospitals. Because
this methodology takes into account the unique charging and cost
accounting structure of each hospital, we believe that it yields more
accurate estimated costs for these products. We continue to believe
that this methodology in CY 2016 will result in costs for blood and
blood products that appropriately reflect the relative estimated costs
of these products for hospitals without blood cost centers and,
therefore, for these blood products in general.
We invited public comments on this proposal to continue this
longstanding methodology.
Comment: Commenters supported the proposal to continue to
separately pay for blood and blood products using a blood-specific CCR
methodology.
Response: We appreciate the commenters' support.
Comment: Numerous commenters (various hospitals, blood centers,
associations, and other stakeholders) expressed concern regarding the
proposed CY 2016 payment rates for blood and blood products. The
commenters believed that the proposed payment rates do not accurately
reflect the cost of collecting, processing, and distributing blood
products to patients. The commenters noted that the payment rates did
not align with the costs statistics data provided with the proposed
rule, and therefore the commenters believed that the CY 2016 proposed
payment rates for blood and blood products were produced in error.
Response: We acknowledge that an error occurred in the calculation
of the proposed CY 2016 payment rates for blood and blood products
included in the proposed rule. The payment rates included in the
proposed rule erroneously were not calculated using the hospital-
specific simulated blood-specific CCR methodology described in the
proposed rule (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). As a result of correcting this
error, payment rates for blood and blood products increased
approximately 10 percent to 60 percent from the proposed CY 2016
payment rates. We have corrected this error in this final rule with
comment period and the final CY 2016 payment rates reflect this
correction.
After consideration of the public comments we received, we are
finalizing, without modification, our CY 2016 proposal to continue to
establish payment rates for blood and blood products using our blood-
specific CCR methodology. The final CY 2016 payment rates for blood and
blood products (which are identified with status indicator ``R'') are
reflective of the use of the hospital-specific simulated blood-specific
CCR methodology and can be found in Addendum B to this final rule with
comment period (which is available via the Internet on the CMS Web
site).
(b) New HCPCS Codes for Pathogen-Reduced Blood Products
For CY 2016, the HCPCS Workgroup established three new HCPCS P-
codes for new pathogen-reduced blood products, effective January 1,
2016, as follows:
P9070 (Plasma, pooled multiple donor, pathogen reduced,
frozen, each unit);
P9071 (Plasma (single donor), pathogen reduced, frozen,
each unit); and
P9072 (Platelets, pheresis, pathogen reduced, each unit).
The term ``pathogen reduction'' describes various techniques
(including treatment with Amotosalen and UVA light) used on blood
products to eliminate certain pathogens and reduce the risk of
transfusion-associated infections. As discussed above, we calculate
payment rates for blood and blood products using our blood-specific CCR
methodology, which utilizes actual or simulated CCRs from the most
recently available hospital cost reports to convert hospital charges
for blood and blood products to costs. Because these three HCPCS P-
codes are new for CY 2016, there are currently no claims data on the
charges and costs for these blood products upon which to apply our
blood-specific CCR methodology. Therefore, we are establishing interim
payment rates for these three HCPCS P-codes based on a crosswalk to
existing blood product HCPCS codes that we believe provide the best
proxy for the costs of the three new blood products described by the
above listed new HCPCS P-codes. Table 5 below list the new pathogen-
reduced blood products
[[Page 70323]]
HCPCS P-codes and their payment crosswalks.
Table 5--New Pathogen-Reduced Blood Products HCPCS P-Codes and Interim Payment Rates and Crosswalks for CY 2016
----------------------------------------------------------------------------------------------------------------
Final CY 2016
New CY 2016 HCPCS P-code New HCPCS P-code Crosswalked HCPCS Crosswalked HCPCS P- OPPS payment
long descriptor P[dash]code code long descriptor amount
----------------------------------------------------------------------------------------------------------------
P9070.................... Plasma, pooled P9059.................... Fresh frozen plasma $73.08
multiple donor, between 8-24 hours
pathogen reduced, of collection, each
frozen, each unit. unit.
P9071.................... Plasma (single P9017.................... Fresh frozen plasma 72.56
donor), pathogen (single donor),
reduced, frozen, frozen within 8
each unit. hours of
collection, each
unit.
P9072.................... Platelets, pheresis, P9037.................... Platelets, pheresis, 641.85
pathogen reduced, leukocytes reduced,
each unit. irradiated, each
unit.
----------------------------------------------------------------------------------------------------------------
These interim payment rates are open for public comment in this CY
2016 final rule with comment period. Specifically, the new HCPCS P-
codes are 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 2016 and are seeking public
comments on the APC and status indicator assignments. Once we have
claims data for these new HCPCS P-codes, we will calculate payment
rates using the claims data that should be available for these new
codes beginning in CY 2018, which is our practice for other blood
products for which claims data have been available for 2 years.
During the process of creating these new HCPCS P-codes for the
three pathogen-reduced blood products, we examined the current set of
HCPCS P-codes, which became effective many years ago. We believe that
the HCPCS P-codes for these products could benefit from a careful
examination and review with possible revision and updating to make the
HCPCS P-codes describing blood products reflect current product
descriptions and utilization while minimizing redundancy and
potentially outdated descriptors. Therefore, we intend in future
rulemaking to evaluate the set of HCPCS P-codes and propose revisions
that may be necessary to create a current and robust code set for blood
products.
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed to payment
based on hospitals' charges adjusted to cost, also would provide
hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796
through 66798) for further discussion of the history of OPPS payment
for brachytherapy sources.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39222), for CY 2016,
we proposed to use the costs derived from CY 2014 claims data to set
the proposed CY 2016 payment rates for brachytherapy sources, as we
proposed to use to set the proposed payment rates for most other items
and services that would be paid under the CY 2016 OPPS. We based the
proposed payment rates for brachytherapy sources on the geometric mean
unit costs for each source, consistent with the methodology proposed
for other items and services paid under the OPPS, as discussed in
section II.A.2. of the proposed rule and this final rule with comment
period. We also proposed to continue the other payment policies for
brachytherapy sources that we finalized and first implemented in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60537). We proposed
to pay for the stranded and nonstranded not otherwise specified (NOS)
codes, HCPCS codes C2698 and C2699, at a rate equal to the lowest
stranded or nonstranded prospective payment rate for such sources,
respectively, on a per source basis (as opposed to, for example, a per
mCi), which is based on the policy we established in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66785). For CY 2016 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). That
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 2016 payment rates for brachytherapy sources were
included in Addendum B to the proposed rule (which is available via the
Internet on the CMS Web site) and were identified with status indicator
``U.''
We invited public comments on this proposed policy. We also
requested recommendations for new HCPCS codes to describe new
brachytherapy sources consisting of a radioactive isotope, including a
detailed rationale to support recommended new sources.
Comment: One commenter expressed concern regarding the outpatient
[[Page 70324]]
hospital claims data that CMS used to set the prospective payment rates
for brachytherapy sources. The commenter stated that high dose rate
(HDR) brachytherapy devices are renewable because the devices have a
90-day use span and are used in the treatment of multiple patients
during this 90-day span. According to the commenter, the true cost of
treatment involving brachytherapy sources depends on the number of
patients treated by a hospital within a 90-day period, as well as the
number of treatments required and the intensity of the treatments. For
this reason, the commenter believed that it is difficult to establish
fair and adequate prospective payment rates for brachytherapy sources.
The commenter also noted that the brachytherapy source payment data
continue to show huge variation in per unit cost across hospitals.
In addition, the commenter believed that CMS' claims data contain
rank order anomalies, causing the usual cost relationship between the
high activity palladium-103 source (HCPCS code C2635, Brachytherapy
source, non-stranded, high activity, palladium-103, greater than 2.2
mci (NIST) per source) and the low activity palladium-103 sources
(HCPCS code C2640, Brachytherapy source, stranded, palladium-103, per
source and HCPCS code C2641, Brachytherapy source, non-stranded,
palladium-103, per source) to be reversed. The commenter noted that the
proposed geometric mean costs of the brachytherapy source HCPCS codes
are approximately $35, $72, and $72, respectively. The commenters
stated that, based on its experience, stranded palladium-103 sources
(HCPCS code C2640) always cost more than non-stranded palladium-103
sources (HCPCS code C2641), which is not reflected in the proposed rule
claims data that CMS used. The commenter expressed concern that payment
for brachytherapy sources are unstable and fluctuate significantly
since CMS implemented the prospective payment methodology based on
source-specific median cost in CY 2010 and geometric mean unit cost in
CY 2013.
Response: As stated above, we believe that geometric mean costs
based on hospital claims data for brachytherapy sources have produced
reasonably consistent per-source cost estimates over the past several
years, comparable to the patterns we have observed for many other OPPS
services whose payments are set based upon relative payment weights
from claims data. We believe that our per-source payment methodology
specific to each source's radioisotope, radioactive intensity, and
stranded or non-stranded configuration, supplemented by payment based
on the number of sources used in a specific clinical case, adequately
accounts for the major expected sources of variability across
treatments. (We refer readers to 72 FR 66782; 74 FR 60534; 75 FR 71979;
76 FR 74161; 77 FR 68241; 78 FR 74861; and 79 FR 66796.) We believe
that the CY 2014 brachytherapy source claims data used for CY 2016
ratesetting produce adequate payment rates for brachytherapy sources.
In addition, as we have explained previously, a prospective payment
system relies upon the concept of averaging, where the payment may be
more or less than the estimated cost of providing a service for a
particular patient. With the exception of outlier cases, the payment
for services is adequate to ensure access to appropriate care. In the
case of brachytherapy sources for which the law requires separate
payment groups, without packaging, the costs of these individual items
could be expected to show greater variation than some other APCs under
the OPPS because higher variability in costs for some component items
and services is not balanced with lower variability in costs for
others, and because relative payment weights are typically estimated
using a smaller set of claims. Nevertheless, we believe that
prospective payment rates for brachytherapy sources based on geometric
mean costs of the services reported on claims calculated according to
the standard OPPS methodology are appropriate and provide hospitals
with the greatest incentives for efficiency in furnishing brachytherapy
treatment.
Under the OPPS, it is the relativity of costs, not the absolute
costs, that is important, and we believe that brachytherapy sources are
appropriately paid according to the standard OPPS approach.
Furthermore, some sources may have geometric mean costs and payment
rates based on 50 or fewer providers because it is not uncommon for
OPPS rates to be based on claims from a relatively small number of
hospitals that furnished the service in the year of claims data
available for the OPPS update year. Fifty hospitals may report hundreds
of brachytherapy sources on claims for many cases and comprise the
universe of providers using particular low volume sources, for which we
are required to pay separately by statute. Further, our methodology for
estimating geometric mean costs for brachytherapy sources utilizes all
line-item charges for those sources, which allows us to use all
hospital reported charge and estimated cost information to set payment
rates for these items. Therefore, no brachytherapy source claims are
excluded from the calculation of geometric means costs. We have no
reason to believe that prospective payment rates based on claims data
from those providers furnishing a particular source do not
appropriately reflect the cost of that source to hospitals. As with
most other OPPS services, we note that the geometric mean costs for
brachytherapy sources are based upon the costs of those providers'
sources in CY 2014. Hospitals individually determine their charge for
an item or service, and one of Medicare's primary requirements for
setting a charge is that it be reasonably and consistently related to
the cost of the item or service for that facility. (We refer readers to
the Medicare Provider Reimbursement Manual, Part I, Section 2203, which
is available on the CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.html?DLPage=1&DLSort=0&DLSortDir=ascending.) We then estimate
a cost from that charge using the hospital's most recent Medicare
hospital cost report data in our standard OPPS ratesetting process.
We acknowledge that HDR brachytherapy sources such as HDR iridium-
192 have a fixed active life and must be replaced every 90 days. As a
result, a hospital's per treatment cost for the source would be
dependent on the number of treatments furnished per source. The cost of
the brachytherapy source must be amortized over the life of the source.
Therefore, when establishing charges for HDR iridium-192, we expect
hospitals to project the number of treatments that would be provided
over the life of the source and establish charges for the source
accordingly (72 FR 66783; 74 FR 60535; 75 FR 71980; 76 FR 74162; 77 FR
68242; and 78 FR 74861). For most payable services under the OPPS, our
practice is to establish prospective payment rates based on the
geometric mean costs determined from hospitals' claims data to provide
incentives for efficient and cost effective delivery of these services.
With regard to the commenter's stated concerns relating to the
differences in costs for high-activity and low-activity palladium-103
sources, our claims data consistently have shown higher average costs
for low-activity palladium-103 sources. For the high-activity
palladium-103 sources described by HCPCS code C2635, our claims data
showed that 9 hospitals submitted claims for this source in CY 2014,
compared to 91 and 145 hospitals that submitted claims for the low-
activity palladium-103 sources described by
[[Page 70325]]
HCPCS codes C2640 and C2641, respectively. It is clear from these
claims data that fewer hospitals furnished the high-activity palladium-
103 source than the low-activity palladium-103 sources, and we expect
that the hospital cost distribution for those hospitals could be
different than the cost distribution of the large numbers of hospitals
reporting the low-activity palladium-103 sources, as previously stated
(74 FR 60535; 75 FR 71979; 76 FR 74162; 77 FR 68242; and 78 FR 74861).
These varied cost distributions clearly contribute to the observed
relationship in geometric mean cost between the different types of
sources. However, we see no reason why our standard ratesetting
methodology for brachytherapy sources that relies on all claims data
from all hospitals furnishing brachytherapy sources would not yield
valid geometric mean costs for those hospitals furnishing the different
brachytherapy sources upon which CY 2016 prospective payments are
based.
Comment: A number of commenters noted that the proposed CY 2016
payment rate for brachytherapy sources described by HCPCS code C2616
(Brachytx, non-str, yttrium-90) would not adequately cover a hospital's
true cost for purchasing the device. The commenters expressed concern
that the claims data used to calculate the CY 2016 proposed payment
rate does not accurately represent charges for the Y-90 brachytherapy
devices and the CY 2015 purchase price incurred by hospitals. In
addition, the commenters believed that inconsistent or incorrect
reporting (or both) of revenue codes for the use of Y-90 brachytherapy
devices adversely affected the proposed CY 2016 payment rate for HCPCS
code C2616.
Response: As illustrated in Table 6 below, the CY 2016 geometric
mean cost of brachytherapy sources described by HCPCS code C2616 for
this final rule with comment period is approximately $16,760, compared
with approximately $16,160 for CY 2015, and $16,890 for CY 2014.
Furthermore, we note that the CY 2016 geometric mean cost is based on a
greater number of providers, days, and units in comparison to CY 2014
and CY 2015.
Table 6--Cost Statistics for Brachytheraopy Sources Described by HCPCS Code C2616 for CY 2014 Through CY 2016
----------------------------------------------------------------------------------------------------------------
Number of Geometric mean
Calendar year HCPCS code providers Days Units unit cost
----------------------------------------------------------------------------------------------------------------
2014.......................... C2616........... 246 2,237 2,237 $16,888.06
2015.......................... C2616........... 299 2,464 2,464 16,164.79
2016.......................... C2616........... 352 3,153 3,153 16,764.72
----------------------------------------------------------------------------------------------------------------
We believe that some variation in relative cost from year to year
is to be expected in a prospective payment system, particularly for
low-volume items.
For all APCs whose payment rates are based upon relative payment
weights, we note that the quality and accuracy of reported units and
charges significantly influence the final geometric mean costs that are
the basis for our payments. Beyond our standard OPPS trimming
methodology (described in section II.A.2. for this final rule with
comment period) that we apply to those claims that have passed various
types of claims processing edits, it is not our policy to critique the
accuracy of hospital coding and charging for the purpose of
ratesetting. Moreover, we do not believe it is necessary to incorporate
external cost data from manufacturers of Y-90 brachytherapy sources (or
any other brachytherapy sources) because, in a relative weight system
like the OPPS, it is the relativity of the costs of services to one
another, rather than absolute cost, that is important in setting
payment rates. External data lack relativity to the estimated costs
derived from the claims and cost report data and generally are not
appropriate for determining relative weights that result in payment
rates when costs derives from hospital claims and cost report data for
services are available.
After consideration of the public comments we received, we are
finalizing our proposal to continue to set the payment rates for
brachytherapy sources using our established prospective payment
methodology, which is based on geometric mean costs. The CY 2016 final
payment rates for brachytherapy sources are found in Addendum B to this
final rule with comment period (which is available via the Internet on
the CMS Web site).
As stated in the proposed rule, we continue to invite hospitals and
other parties to submit recommendations to us for new codes to describe
new brachytherapy sources. Such recommendations should be directed to
the Division of Outpatient Care, Mail Stop C4-03-27, 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.
e. Comprehensive APCs (C-APCs) for CY 2016
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014, but the effective
date was delayed until January 1, 2015, to allow additional time for
further analysis, opportunity for public comment, and systems
preparation. The comprehensive APC (C-APC) policy was implemented
effective January 1, 2015, with modifications and clarifications in
response to public comments received regarding specific provisions of
the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 through 66810).
Under this policy, we designated a HCPCS code assigned to a C-APC
as the primary service (identified by a new 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
[[Page 70326]]
comprehensive service (78 FR 74865 and 79 FR 66799). Payments for
adjunctive services are packaged into the payments for the primary
services. This results in a single prospective payment for each of the
primary, comprehensive services based on the costs of all reported
services at the claim level.
Services excluded from the C-APC policy include services that are
not covered OPD services, services that cannot by statute be paid for
under the OPPS, and services that are required by statute that must be
separately paid. This includes certain mammography and ambulance
services that are not ever covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through drugs and devices, which also
require separate payment under section 1833(t)(6) of the Act; self-
administered drugs (SADs) that are not otherwise packaged as supplies
because they are not covered under Medicare Part B under section
1861(s)(2)(B) of the Act, and certain preventive services (78 FR 74865
and 79 FR 66800 through 66801).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period for the C-APCs and modified and
implemented in CY 2015 is summarized as follows (78 FR 74887 and 79 FR
66800):
Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
with comment period, we define the C-APC payment policy as including
all covered OPD services on a hospital outpatient claim reporting a
primary service that is assigned to status indicator ``J1,'' excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS. Services and procedures described by HCPCS
codes assigned to status indicator ``J1'' are assigned to C-APCs based
on our usual APC assignment methodology by evaluating the geometric
mean costs of the primary service claims to establish resource
similarity and the clinical characteristics of each procedure to
establish clinical similarity within each APC.
Services included under the C-APC payment packaging policy, that
is, services that are typically adjunctive to the primary service,
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, except the excluded services
that are described below (78 FR 74865 and 79 FR 66800).
In addition, payment for outpatient department services that are
similar to therapy services and delivered either by therapists or
nontherapists is included as part of the payment for the packaged
complete comprehensive service. These services that are provided during
the perioperative period are adjunctive services and not therapy
services as described in section 1834(k) of the Act, regardless of
whether the services are delivered by therapists or other nontherapist
health care workers. We have previously noted that therapy services are
those provided by therapists under a plan of care in accordance with
section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid
for under section 1834(k) of the Act, subject to annual therapy caps as
applicable (78 FR 74867 and 79 FR 66800). However, certain other
services similar to therapy services are considered and paid for as
outpatient department services. Payment for these nontherapy outpatient
department services that are reported with therapy codes and provided
with a comprehensive service is included in the payment for the
packaged complete comprehensive service. We note that these services,
even though they are reported with therapy codes, are outpatient
department services and not therapy services. Therefore, the
requirement for functional reporting under the regulations at 42 CFR
410.59(a)(4) and 42 CFR 410.60(a)(4) does not apply.
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 those drugs that are usually self-
administered (SADs), unless they function as packaged supplies (78 FR
74868 through 74869 and 74909 and 79 FR 66800). We refer readers to
Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a
description of our policy on SADs treated as hospital outpatient
supplies, including lists of SADs that function as supplies and those
that do not function as supplies.
Items and services excluded from the C-APC payment policy include:
SADs that are not considered supplies because they are not covered
under Medicare Part B under section 1861(s)(2)(B) of the Act; services
excluded from the OPPS according to section 1833(t)(1)(B) of the Act,
including recurring therapy services, which we considered unrelated to
the comprehensive service (defined as therapy services reported on a
separate facility claim for recurring services), ambulance services,
diagnostic and screening mammography, the annual wellness visit
providing personalized prevention plan services, and pass-through drugs
and devices that are paid according to section 1833(t)(6) of the Act.
We also excluded preventive services. For a description of the
preventive services that are excluded from the C-APC payment policy, we
refer readers to the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66800 through 66801) and the list below in Table 7, which also
includes any new preventive services added for CY 2016.
Other exclusions include brachytherapy services and pass-through
drugs, biologicals, and devices that are required by statute to be
separately payable (78 FR 74868 and 74909 and 79 FR 66801). In
addition, we also excluded services assigned to OPPS status indicator
``F,'' which are services not paid under the OPPS and are instead paid
on a reasonable cost basis (that is, certain certified registered nurse
assistant (CRNA) services, Hepatitis B vaccines, and corneal tissue
acquisition, which is not part of a comprehensive service for CY 2015).
In Table 7 below, we list the services that are excluded from the C-APC
payment policy.
Table 7--Comprehensive APC Payment Policy Exclusions for CY 2016
------------------------------------------------------------------------
-------------------------------------------------------------------------
Ambulance services;
------------------------------------------------------------------------
Brachytherapy;
------------------------------------------------------------------------
[[Page 70327]]
Diagnostic and mammography screenings;
------------------------------------------------------------------------
Physical therapy, speech-language pathology and occupational therapy
services--Therapy services reported on a separate facility claim for
recurring services;
------------------------------------------------------------------------
Pass-through drugs, biologicals, and devices;
------------------------------------------------------------------------
Preventive services defined in 42 CFR 410.2:
Annual wellness visits providing personalized prevention
plan services
Initial preventive physical examinations
Pneumococcal, influenza, and hepatitis B vaccines and
administrations
Mammography Screenings
Pap smear screenings and pelvic examination screenings
Low Dose Computed Tomography
Prostate cancer screening tests
Colorectal cancer screening tests
Diabetes outpatient self-management training services
Bone mass measurements
Glaucoma screenings
Medical nutrition therapy services
Cardiovascular screening blood tests
Diabetes screening tests
Ultrasound screenings for abdominal aortic aneurysm
Additional preventive services (as defined in section
1861(ddd)(1) of the Act);
------------------------------------------------------------------------
Self-administered drugs (SADs)--Drugs that are usually self-administered
and do not function as supplies in the provision of the comprehensive
service;
------------------------------------------------------------------------
Services assigned to OPPS status indicator ``F'' (certain CRNA services,
Hepatitis B vaccines and corneal tissue acquisition);
------------------------------------------------------------------------
Services assigned to OPPS status indicator ``L'' (influenza and
pneumococcal pneumonia vaccines); and
------------------------------------------------------------------------
Certain Part B inpatient services--Ancillary Part B inpatient services
payable under Part B when the primary ``J1'' service for the claim is
not a payable Medicare Part B inpatient service (for example, exhausted
Medicare Part A benefits, beneficiaries with Part B only).
------------------------------------------------------------------------
We define each hospital outpatient claim reporting a single unit of
a single primary service assigned to status indicator ``J1'' as a
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). We
sum all line item charges for services included on the C-APC claim,
convert the charges to costs, and calculate the ``comprehensive''
geometric mean cost of one unit of each service assigned to status
indicator ``J1.'' (We note that we use the term ``comprehensive'' to
describe the geometric mean cost of a claim reporting ``J1'' service(s)
or the geometric mean cost of a C-APC, inclusive of all of the items
and services included in the C-APC service payment bundle.) Charges for
services that would otherwise be separately payable are added to the
charges for the primary service. This process differs from our
traditional cost accounting methodology only in that all such services
on the claim are packaged (except certain services as described above).
We apply our standard data trims, excluding claims with extremely high
primary units or extreme costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to their comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof
(approximately 20 percent of CY 2014 claims), we identify one ``J1''
service as the primary service for the claim based on our cost-based
ranking of primary services. We then assign these multiple ``J1''
procedure claims to the C-APC to which the service designated as the
primary service is assigned. If the reported ``J1'' services reported
on a claim map to different C-APCs, we designate the ``J1'' service
assigned to the C-APC with the highest comprehensive geometric mean
cost as the primary service for that claim. If the reported multiple
``J1'' services on a claim map to the same C-APC, we designate the most
costly service (at the HCPCS code level) as the primary service for
that claim. This process results in initial assignments of claims for
the primary services assigned to status indicator ``J1'' to the most
appropriate C-APCs based on both single and multiple procedure claims
reporting these services and clinical and resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying ``J1'' service code
combinations or code combinations of ``J1'' services and certain add-on
codes (as described further below) from the originating C-APC (the C-
APC to which the designated primary service is first assigned) to a
higher paying C-APC in the same clinical family of C-APCs, if
reassignment is clinically appropriate and the reassignment would not
create a violation of the 2 times rule in the receiving APC (the higher
paying C-APC in the same clinical family of C-APCs). We implement this
type of complexity adjustment when the code combination represents a
complex, costly form or version of the primary service according to the
following criteria:
Frequency of 25 or more claims reporting the code
combination (frequency threshold); and
Violation of the 2 times rule (cost threshold).
After designating a single primary service for a claim, we evaluate
that service in combination with each of the other procedure codes
reported on the claim assigned to status indicator ``J1'' (or certain
add-on codes) to determine if they meet the complexity adjustment
[[Page 70328]]
criteria. For new HCPCS codes, we determine initial C-APC assignments
and complexity adjustments using the best data available, crosswalking
the new HCPCS codes to predecessor codes wherever possible.
Once we have determined that a particular code combination of
``J1'' services (or combinations of ``J1'' services reported in
conjunction with certain add-on codes) represents a complex version of
the primary service because it is sufficiently costly, frequent, and a
subset of the primary comprehensive service overall according to the
criteria described above, we promote the complex version of the primary
service as described by the code combination to the next higher cost C-
APC within the clinical family, unless the APC reassignment is not
clinically appropriate, the reassignment would create a violation of
the 2 times rule in the receiving APC, or the primary service is
already assigned to the highest cost APC within the C-APC clinical
family or assigned to the only C-APC in a clinical family. We do not
create new APCs with a comprehensive geometric mean cost that is higher
than the highest geometric mean cost (or only) C-APC in a clinical
family just to accommodate potential complexity adjustments. Therefore,
the highest payment for any code combination for services assigned to a
C-APC would be the highest paying C-APC in the clinical family (79 FR
66802).
We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service-add-on combinations may qualify
for a complexity adjustment. First, the add-on code must be an eligible
add-on code. The list of add-on codes that are eligible for complexity
adjustment evaluation was included in Table 8 of the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66810), and also was identified
as Addendum J to the proposed rule (which is available via the Internet
on the CMS Web site). In the CY 2016 OPPS/ASC proposed rule (80 FR
39225), for CY 2016, we did not propose to add any add-on codes to the
list of add-on codes that are evaluated for a complexity adjustment
when performed in conjunction with a primary C-APC procedure.
To determine which combinations of primary service codes reported
in conjunction with an eligible add-on code may qualify for a
complexity adjustment for CY 2016, 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. If the frequency and cost
criteria thresholds for a complexity adjustment are met, and
reassignment to the next higher cost APC in the clinical family is
appropriate, we make a complexity adjustment for the code combination;
that is, we reassign the primary service code reported in conjunction
with the eligible add-on code combination to a higher cost C-APC within
the same clinical family of C-APCs. If any add-on code combination
reported in conjunction with the primary service code does not qualify
for a complexity adjustment, payment for these services is packaged
within the payment for the complete comprehensive service. We list the
complexity adjustments proposed for add-on code combinations for CY
2016, along with all of the other complexity adjustments, in Addendum J
to this final rule with comment period (which is available via the
Internet on the CMS Web site).
We are providing in Addendum J to this final rule with comment
period a breakdown of cost statistics for each code combination that
will 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 code
combinations that describe a complex code combination that will qualify
for a complexity adjustment and will be reassigned to the next higher
cost C-APC within the clinical family. The combined statistics for all
reassigned complex code combinations are represented by an alphanumeric
code with the last 4 digits of the designated primary service followed
by ``A'' (indicating ``adjustment''). For example, the geometric mean
cost listed in Addendum J for the code combination described by
complexity adjustment assignment 3208A, which is assigned to renumbered
C-APC 5223 (Level 3 Pacemaker and Similar Procedures) (previously APC
0089), includes all code combinations that are reassigned to renumbered
C-APC 5223 when CPT code 33208 is the primary code. Providing the
information contained in Addendum J in this final rule with comment
period allows stakeholders the opportunity to better assess the impact
associated with the reassignment of each of the code combinations
eligible for a complexity adjustment.
(2) C-APCs To Be Paid Under the C-APC Payment Policy for CY 2016
(a) CY 2016 C-APCs
In the CY 2016 OPPS/ASC proposed rule (80 FR 39225), for CY 2016,
we proposed to continue to apply the C-APC payment policy methodology
made effective in CY 2015, as described in detail below. We proposed to
continue to define the services assigned to C-APCs as primary services,
and to define a C-APC as a classification for the provision of a
primary service and all adjunctive services and supplies provided to
support the delivery of the primary service. We also proposed to follow
the C-APC payment policy methodology of including all covered OPD
services on a hospital outpatient claim reporting a primary service
that is assigned to status indicator ``J1,'' excluding services that
are not covered OPD services or that cannot by statute be paid under
the OPPS.
As indicated in the CY 2016 OPPS/ASC proposed rule (80 FR 39225),
after our annual review of the OPPS, we proposed to establish nine
additional C-APCs to be paid under the existing C-APC payment policy
beginning in CY 2016. All C-APCs, including those effective in CY 2016
and those being proposed for CY 2016, were displayed in Table 6 of the
proposed rule with the proposed new C-APCs denoted with an asterisk.
Addendum J to the proposed rule (which is available via the Internet on
the CMS Web site) contained all of the data related to the C-APC
payment policy methodology, including the list of proposed complexity
adjustments.
Comment: Several commenters generally supported the concept of
creating larger payment bundles under the OPPS. The commenters endorsed
the C-APC payment policy and the proposal to establish nine additional
C-APCs for CY 2016 to be paid under the existing policy.
Response: We appreciate the commenters' support.
Comment: Some commenters expressed concerns that the C-APC payment
rates do not accurately reflect all of the costs associated with the
primary service and all adjunctive services. Many of these commenters
opposed the expansion of the C-APC policy and requested a delay in the
implementation of the proposed CY 2016 C-APCs until the effect of the
existing C-APCs can be assessed. Other commenters stated that the C-APC
payment rates may not appropriately account for the cost of recurring
services such as radiation oncology and dialysis that are unrelated to
the primary service, but may be included in a C-
[[Page 70329]]
APC claim. Some commenters also requested CMS to provide for
transparency in the development of C-APC payment rates and data inputs.
Response: We do not believe that we should delay implementation of
the proposed CY 2016 C-APCs to allow time for assessment of the effect
of the existing C-APCs. It is unclear what specific analyses the
commenters are requesting we perform before establishing additional C-
APCs. In addition, we believe we have provided adequate information to
enable stakeholders sufficient time to perform independent analysis of
the proposed C-APC payment rates and their effects.
We believe that the additional nine C-APCs that we proposed for CY
2016 and the existing 25 C-APCs meet the established C-APC criteria. In
addition, the commenters did not present any data or evidence that
would suggest that the C-APC payment methodology used to calculate the
CY 2016 payment rates is inappropriate. We calculate payment rates for
C-APCs with the same basic methodology used to calculate payment rates
for other APCs. We calculated the final relative payment weights for C-
APCs by using relative costs derived from our standard process as
described earlier in section II.A. of this final rule with comment
period. Specifically, after converting charges to costs on the claims,
we identified all claims reporting a single procedure described by a
HCPCS code assigned to status indicator ``J1'' as constituting a
comprehensive service. These claims were, by definition, classified as
single major procedure claims. Any claims that contained more than one
of these procedures were identified but were included in calculating
the cost of the procedure that had the greatest cost when traditional
HCPCS level accounting was applied. All other costs were summed to
calculate the total cost of the comprehensive service, and statistics
for those services were calculated in the usual manner. Claims with
extreme costs were excluded in accordance with our usual process. We
used the final relative payment weights of these comprehensive services
to calculate final payments following our standard methodology. We
believe that the C-APC payment methodology is consistent with our goal
of making the OPPS more like a prospective payment system and less like
a fee schedule. As is our current practice, we intend to continue to
review and monitor all of our payment rates to ensure that they are
accurate and reflect the average resource costs of furnishing a service
or set of services. In the event that we discover inaccuracies in the
development of payment rates, CMS will take appropriate action and make
adjustments as necessary.
With respect to the public comments regarding the inclusion of
unrelated services on a C-APC claim, we note that we have responded to
similar comments in a prior rulemaking. We refer readers to the CY 2014
OPPS/ASC final rule with comment period (78 FR 74865) and CY 2015 OPPS/
ASC final rule with comment period (79 FR 66804 and 66806) for a
complete discussion of this issue. We believe that the central
attribute of the C-APC payment policy is the packaging of all the
services related to the primary service, with the exception of those
services described above that, according to the statute, cannot be
packaged or the list of preventive services that generally would not be
provided at the time of a major procedure assigned to a C-APC. We
believe that other services performed at the time of major procedures
included in C-APCs can reasonably be considered to be related to the
primary service or procedure. Therefore, we consider all services
reported on the claim to be related to the primary service and include
these services in establishing the payment rate for the C-APC. We do
not believe that a significant amount of unrelated services would be
billed on the claim for the primary service.
Further, we note that the comments received regarding this issue
were primarily concerned with unrelated services reported on claims
spanning 30 days. We have previously issued manual guidance in the
Internet Only Manual, Pub. 100-4, Chapter 1, Section 50.2.2, that
states that only recurring services should be billed monthly. We also
have specified that, in the event that a recurring service occurs on
the same day as an acute service that falls within the span of the
recurring service claim, hospitals should bill separately for recurring
services on a monthly claim (repetitive billing) and submit a separate
claim for the acute service (79 FR 66804). In addition, we have
instructed hospitals that laboratory tests ordered by unrelated
providers for unrelated medical conditions may be billed on a 14X bill-
type (78 FR 74926).
Lastly, we do not believe that it would be an undue hardship for
some hospitals to alter their processes in order to submit separate
claims for services that are unrelated both clinically and in regard to
time to the comprehensive service.
In response to comments requesting additional transparency of the
development of C-APCs and their proposed cost, we believe that the data
made available to the public as part of the proposed rule was
appropriate, clear, and sufficient. For further information on our data
process, we refer readers to section II.A.1.b. of this final rule with
comment period.
Comment: A few commenters requested that CMS provide more clarity
regarding the definition of adjunctive services.
Response: A description of services that are considered to be
adjunctive to the primary comprehensive service is provided in the CY
2014 OPPS/ASC final rule with comment period (78 FR 74865) as well as
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66800). As
previously stated, adjunctive services include services that are
integral, ancillary, supportive, or dependent that are provided during
the delivery of the comprehensive service. This includes the 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; outpatient department
services delivered by therapists as part of the comprehensive 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 are provided during the
comprehensive service, except for mammography services and ambulance
services, which are never payable as OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act.
Comment: One commenter expressed concerns regarding payment for
durable medical equipment that is included on the claim with a primary
service and packaged into the C-APC payment for the service. The
commenter stated that, with the implementation of the C-APC payment
policy, these items and services are no longer paid under separate fee
schedules and their costs are included in determining the relative
weights for the C-APCs. Further, the commenter stated that CMS did not
provide any evidence that funds were added to the OPPS for these
packaged groups and that not adding these funds could potentially add
costs to the payment system without increasing payment rates. In
addition, the commenter expressed concerns that the relative weights of
the new C-APCs will increase, in turn causing the relative weights of
other APCs to decrease, which would unfairly decrease payment rates for
those other separately paid procedures.
[[Page 70330]]
Response: The costs of durable medical equipment, prosthetics, and
orthotics have been accounted for in the OPPS. Funds were transferred
from the DMEPOS Fee Schedule to the OPPS to account for costs of
durable medical equipment. We refer readers to the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66823) for a discussion of the
redistribution from the DMEPOS Fee Schedule to the OPPS of
approximately $1 million.
Also, with regard to the effect of the increase in the relative
weights for the C-APCs, we disagree with the commenters that payment
rates for other separately paid procedures are unfairly reduced.
Because funds were transferred from the DMEPOS Fee Schedule to account
for the costs of durable medical equipment, the relativity of the OPPS
payment weights has not been distorted. This accounting for additional
DME costs would make the relative payment weights of OPPS services
(both comprehensive and noncomprehensive) reflective of their estimated
costs. Further, in a budget neutral system, changes to any OPPS
relative payment weights have redistributional effects throughout the
system and any policy changes or data updates have the potential to
cause these effects.
Comment: One commenter opposed CMS' proposal to assign the
procedure described by new CPT code 0392T (Laparoscopy, surgical,
esophageal sphincter augmentation procedure, placement of sphincter
augmentation device (i.e., magnetic band)) to C-APC 5362 (Level 2
Laparoscopy). Although the commenter did not suggest a specific APC or
C-APC to which the procedure should be assigned, the commenter stated
that the proposed C-APC assignment for the procedure described by CPT
code 0392T results in a significant payment reduction for the procedure
and creates a situation where the cost of the device represents
approximately 51 percent of the payment rate for C-APC 5362. Therefore,
the commenter requested that CMS consider an alternative APC assignment
for this procedure. Another commenter suggested that CMS create a third
level to the C-APC structure for the Laparoscopic Procedures clinical
family that includes laparoscopic procedures with a mean geometric cost
that is greater than $8,000.
Response: We disagree with the commenter's request. As a part of
our broader efforts to thoroughly review, revise, and consolidate APCs
to improve both resource and clinical homogeneity, we proposed a two-
level APC structure for laparoscopy procedures for CY 2016. This
proposal reduced the levels in the Laparoscopic Procedures clinical
family from four levels in CY 2015 to two levels proposed for CY 2016.
The procedure described by CPT code 0392T is similar in terms of
clinical characteristics to the other procedures assigned to C-APC 5362
(Level 2 Laparoscopy), which has the highest payment rate in this
clinical family. In addition, CPT code 0392T replaced HCPCS code C9737
(Laparoscopy, surgical, esophageal sphincter augmentation with device
(e.g., magnetic band)), beginning July 1, 2015. In CY 2015, the
procedure described by HCPCS code C9737 was assigned to APC 0174 (Level
4 Laparoscopy). Because CPT code 0392T describes the same procedure as
HCPCS code C9737, we proposed to assign the new CPT code to the same
APC and status indicator as its predecessor HCPCS C-code. In addition,
because CPT code 0392T is new for CY 2015 and we do not have claims
data for ratesetting purposes for this code, we used the geometric mean
cost of the predecessor HCPCS code (C9737) as a proxy for the APC
assignment. The geometric mean cost of the procedure described by HCPCS
code C9737 is approximately $9,779 and the geometric mean cost of C-APC
5362 is approximately $7,179, which comprises significant services
ranging in cost from approximately $6,139 to approximately $9,551.
Therefore, the assignment of CPT code 0392T to C-APC 5362 is based on
similar resource use and does not result in a violation of the 2 times
rule. In addition, CPT code 0392T is a laparoscopic procedure that is
similar in clinical characteristics to other procedures assigned to C-
APC 5362. Once we have available claims data for the procedure
described by CPT code 0392T, we intend to reevaluate this APC
assignment under the yearly review of APC assignments.
We believe that the procedures assigned to C-APC 5362 have similar
resource utilization and do not create a violation of the 2 times rule
within the C-APC. Therefore, we do not believe that creating another
level in the structure of this clinical family is warranted.
Comment: One commenter recommended that the Neurostimulators C-APC
clinical family be restructured to: (1) Assign all of the single and
multiple lead combination procedures to C-APC 5462 (Level 2
Neurostimulators); (2) assign all of the single generators (without
placement of a lead) and low cost combination full system implants (one
generator and one or more leads) to C-APC 5463 (Level 3
Neurostimulator); and (3) assign all of the multiple generators for
bilateral procedures and high cost full system implants (one generator
and one or more leads) to C-APC 5464 (Level 4 Neurostimulators). The
commenter noted that it appears that the procedures assigned to the
Neurostimulators C-APC clinical family were based on the comparable
cost of the procedures alone rather than also factoring in clinical
similarity. The commenter believed that the recommended restructuring
would improve the clinical coherence of the procedures assigned to the
neurostimulators C-APC family and increase the stability of the C-APC.
Response: We do not believe that we should restructure the
Neurostimulators C-APC clinical family as recommended by the commenter.
We note that APC groupings are based on two factors, clinical
similarity and resource similarity. The highest level in this APC
series includes various combinations of neurostimulator generator
implantation procedures with or without leads (and no other types of
procedures) within the specified cost range. The commenter suggested
that we define clinical similarity very narrowly with strict adherence
to the CPT code descriptors. If the OPPS were a fee schedule that did
not assign procedures to groups, this could be an acceptable approach.
However, the OPPS is a prospective payment system that uses APC
groupings of clinically similar services. We believe that the proposed
structure of this C-APC clinical family best meets the objective of
both clinical and resource homogeneity within the context of a
prospective payment system.
Comment: A few commenters requested that CMS make modifications to
the C-APC complexity adjustment policy. Some commenters requested that
CMS revise the criteria for a claim to qualify for a complexity
adjustment beyond the current frequency and cost thresholds to account
for the patient acuity experienced at institutions such as academic
medical centers, cancer hospitals, and trauma centers. Other commenters
requested that CMS consider the inclusion of three or more primary
``J1'' codes in the evaluation of complexity adjustments instead of the
current code pair comparison policy. The commenter believed that the
reliance on code combinations based on cost ranking of codes would lead
to instability in the complexity adjustments from year to year, and
would not take into consideration a large number of comprehensive
claims with multiple ``J1'' services.
Response: While we acknowledge the challenges involved with
treating
[[Page 70331]]
complex patients, as discussed in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66805), OPPS payments are not currently based on
patient severity or diagnosis like payments under the IPPS. Therefore,
we are unable to make adjustments based on these factors.
With regard to considering the inclusion of three or more primary
``J1'' services in evaluation of complexity adjustments, we reiterate
our statement in the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66806) in which we disagreed that assigning complexity
adjustments based on cost ranking of primary and secondary codes is
either insufficient or would result in instability of the complexity
adjustments in future years. Ranking ``J1'' services based on
comprehensive geometric mean costs to determine the primary ``J1''
service on a claim does not result in instability in the evaluation of
complexity adjustments because, by definition, the complexity
adjustment is for costly cases relative to the primary (most costly)
``J1'' service. We proposed complexity adjustments for certain code
pairs to provide a higher payment by promoting the claim for high cost
procedure pairs consisting of a primary comprehensive procedure and a
secondary comprehensive procedure that represent sufficiently frequent
and sufficiently costly comprehensive procedure pairs to the next
higher paying APC within a clinical family, such that these claims are
separated from and provided a higher payment than all of the services
that are accounted for in the APC assignment of the primary service. We
do not believe that providing a complexity adjustment to any claim that
has three or more ``J1'' services or to all claims reporting code pairs
of ``J1'' services that meet the cost and frequency criteria would
adequately serve the stated purpose of the policy. The intent of the
complexity adjustment policy is to identify a limited number of costly
procedure pairs that would qualify for a higher payment at the next
higher paying C-APC within the clinical family, not to unpackage and
separately pay for all of the high cost services that are associated
with the primary ``J1'' procedure.
Comment: One commenter requested that CMS allow any add-on codes
describing status indicator ``J1'' procedures to be eligible for
complexity adjustments when the codes appear on the claim in
combination with a primary ``J1''service. The commenter noted that the
current list of add-on codes eligible for complexity adjustments
includes only add-on codes formerly assigned to device-dependent APCs.
The commenter further reasoned that, because CMS has extended the
concept of C-APCs beyond the original policy of applying the
comprehensive APC methodology to device-dependent APCs, the list of
eligible add-on procedures should be expanded as well.
Response: We agree with the commenters. The current policy allows
add-on codes that were (prior to CY 2015) assigned to device-dependent
APCs to be evaluated for a complexity adjustment when provided in
combination with a primary ``J1'' service. This policy was adopted
because the original group of C-APCs was primarily the former device-
dependent APCs; therefore, the add-on codes that were evaluated for a
complexity adjustment were consistent with the codes assigned as
primary ``J1''services under the original C-APCs. As we expand the
number of C-APCs, we believe that we must also expand the number of
add-on codes that can be evaluated for a complexity adjustment beyond
only those add-on codes that were once assigned to device-dependent
APCs. Therefore, we are revising the list of add-on codes that are
evaluated for a complexity adjustment to include all add-on codes that
can be appropriately reported in combination with a base code that
describes a primary ``J1''service.
In order to qualify for a complexity adjustment, the primary
service add-on combination must meet the frequency (25 or more claims
reporting the code combination) and cost (no violation of the 2 times
rule) thresholds discussed above. Table 8 of the CY 2015 OPPS/ASC final
rule with comment period (79 FR 66810) (now also Table 8 in this final
rule with comment period) has been updated to include the additional
add-on codes that can be evaluated for a complexity adjustment.
Table 8--Final CY 2016 Packaged CPT Add-On Codes That Are Evaluated for
a Complexity Adjustment
------------------------------------------------------------------------
CY 2016 CPT/HCPCS add-on code CY 2016 short descriptor
------------------------------------------------------------------------
C9601................................. Perc drug-el cor stent bran.
C9603................................. Perc d-e cor stent ather br.
C9605................................. Perc d-e cor revasc t cabg b.
C9608................................. Perc d-e cor revasc chro add.
G0289................................. Arthro, loose body + chondro.
0172T................................. Lumbar spine process addl.
0205T................................. Inirs each vessel add-on.
0289T................................. Laser inc for pkp/lkp donor.
0290T................................. Laser inc for pkp/lkp recip.
0291T................................. Iv oct for proc init vessel.
0294T................................. Ins lt atrl mont pres lead.
0376T................................. Insert ant segment drain int.
0396T................................. Intraop kinetic balnce sensr.
0397T................................. Ercp w/optical endomicroscpy.
20930................................. Sp bone algrft morsel add-on.
20931................................. Sp bone algrft struct add-o.
20936................................. Sp bone agrft local add-on.
20937................................. Sp bone agrft morsel add-on.
20938................................. Sp bone agrft struct add-on.
22515................................. Perq vertebral augmentation.
22552................................. Addl neck spine fusion.
22585................................. Additional spinal fusion.
22614................................. Spine fusion extra segment.
22632................................. Spine fusion extra segment.
22840................................. Insert spine fixation device.
22841................................. Insert spine fixation device.
22842................................. Insert spine fixation device.
22843................................. Insert spine fixation device.
22844................................. Insert spine fixation device.
22845................................. Insert spine fixation device.
22846................................. Insert spine fixation device.
22847................................. Insert spine fixation device.
22848................................. Insert spine fixation device.
22851................................. Apply spine prosth device.
22858................................. Second level cer diskectomy.
27358................................. Remove femur lesion/fixation.
29826................................. Shoulder arthroscopy/surgery.
33225................................. L ventric pacing lead add-on.
37222................................. Iliac revasc add-on.
37223................................. Iliac revasc w/stent add-on.
37232................................. Tib/per revasc add-on.
37233................................. Tibper revasc w/ather add-on.
37234................................. Revsc opn/prq tib/pero stent.
37235................................. Tib/per revasc stnt & ather.
37237................................. Open/perq place stent ea add.
37239................................. Open/perq place stent ea add.
38900................................. Io map of sent lymph node.
43273................................. Endoscopic pancreatoscopy.
43283................................. Lap esoph lengthening.
43338................................. Esoph lengthening.
49326................................. Lap w/omentopexy add-on.
49327................................. Lap ins device for rt.
49435................................. Insert subq exten to ip cath.
[[Page 70332]]
57267................................. Insert mesh/pelvic flr addon.
60512................................. Autotransplant parathyroid.
63035................................. Spinal disk surgery add-on.
63043................................. Laminotomy addl cervical.
63044................................. Laminotomy addl lumbar.
63048................................. Remove spinal lamina add-on.
63057................................. Decompress spine cord add-on.
63066................................. Decompress spine cord add-on.
63076................................. Neck spine disk surgery.
65757................................. Prep corneal endo allograft.
66990................................. Ophthalmic endoscope add-on.
92921................................. Prq cardiac angio addl art.
92925................................. Prq card angio/athrect addl.
92929................................. Prq card stent w/angio addl.
92934................................. Prq card stent/ath/angio.
92938................................. Prq revasc byp graft addl.
92944................................. Prq card revasc chronic addl.
92973................................. Prq coronary mech thrombect.
92974................................. Cath place cardio brachytx.
92978................................. Intravasc us heart add-on.
92998................................. Pul art balloon repr precut.
93462................................. L hrt cath trnsptl puncture.
93463................................. Drug admin & hemodynmic meas.
93571................................. Heart flow reserve measure.
93609................................. Map tachycardia add-on.
93613................................. Electrophys map 3d add-on.
93621................................. Electrophysiology evaluation.
93622................................. Electrophysiology evaluation.
93623................................. Stimulation pacing heart.
93655................................. Ablate arrhythmia add on.
93657................................. Tx l/r atrial fib addl.
93662................................. Intracardiac ecg (ice).
------------------------------------------------------------------------
After consideration of the public comments we received, we are
finalizing our proposal with a slight modification to establish 10
additional C-APCs to be paid under the existing C-APC payment policy
beginning in CY 2016. Because an additional level 5 was added to the
musculoskeletal procedures APC series (we refer readers to section
III.D.9. of this final rule with comment period), the final number of
additional C-APCs for CY 2016 is 10. In addition, we are adopting a
final policy to include all add-on codes that are paired with a primary
service assigned status indicator ``J1'' to be evaluated to qualify for
a complexity adjustment as shown in Table 8 above. All C-APCs,
including those newly added for CY 2016, are displayed in Table 9 of
this final rule with comment period with the new C-APCs denoted with an
asterisk. Addendum J to this final rule with comment period (which is
available via the Internet on the CMS Web site) contains all of the
data related to the C-APC payment policy methodology, including the
list of complexity adjustments.
Table 9--Final CY 2016 C-APCs
----------------------------------------------------------------------------------------------------------------
CY 2016 C-APC \+\ CY 2016 APC Group title Clinical family New C-APC
----------------------------------------------------------------------------------------------------------------
5222.............................. Level 2 Pacemaker and AICDP............................ ...............
Similar Procedures.
5223.............................. Level 3 Pacemaker and AICDP............................ ...............
Similar Procedures.
5224.............................. Level 4 Pacemaker and AICDP............................ ...............
Similar Procedures.
5231.............................. Level 1 ICD and Similar AICDP............................ ...............
Procedures.
5232.............................. Level 2 ICD and Similar AICDP............................ ...............
Procedures.
5093.............................. Level 3 Breast/Lymphatic BREAS............................ ...............
Surgery and Related
Procedures.
5165.............................. Level 5 ENT Procedures.. ENTXX............................ *
5166.............................. Level 6 ENT Procedures.. ENTXX............................ ...............
5211.............................. Level 1 EPHYS............................ ...............
Electrophysiologic
Procedures.
5212.............................. Level 2 EPHYS............................ ...............
Electrophysiologic
Procedures.
5213.............................. Level 3 EPHYS............................ ...............
Electrophysiologic
Procedures.
5492.............................. Level 2 Intraocular EYEXX............................ *
Procedures.
5493.............................. Level 3 Intraocular EYEXX............................ ...............
Procedures.
5494.............................. Level 4 Intraocular EYEXX............................ ...............
Procedures.
5331.............................. Complex GI Procedures... GIXXX............................ ...............
5415.............................. Level 5 Gynecologic GYNXX............................ ...............
Procedures.
5416.............................. Level 6 Gynecologic GYNXX............................ *
Procedures.
5361.............................. Level 1 Laparoscopy..... LAPXX............................ *
5362.............................. Level 2 Laparoscopy..... LAPXX............................ *
5462.............................. Level 2 Neurostimulator NSTIM............................ ...............
and Related Procedures.
5463.............................. Level 3 Neurostimulator NSTIM............................ ...............
and Related Procedures.
5464.............................. Level 4 Neurostimulator NSTIM............................ ...............
and Related Procedures.
5123.............................. Level 3 Musculoskeletal ORTHO............................ *
Procedures.
5124.............................. Level 4 Musculoskeletal ORTHO............................ ...............
Procedures.
5125.............................. Level 5 Musculoskeletal ORTHO............................ *
Procedures.
5471.............................. Implantation of Drug PUMPS............................ ...............
Infusion Device.
5627.............................. Level 7 Radiation RADTX............................ ...............
Therapy.
5375.............................. Level 5 Urology and UROXX............................ *
Related Services.
5376.............................. Level 6 Urology and UROXX............................ ...............
Related Services.
5377.............................. Level 7 Urology and UROXX............................ ...............
Related Services.
5191.............................. Level 1 Endovascular VASCX............................ ...............
Procedures.
5192.............................. Level 2 Endovascular VASCX............................ ...............
Procedures.
5193.............................. Level 3 Endovascular VASCX............................ ...............
Procedures.
5881.............................. Ancillary Outpatient N/A.............................. *
Services When Patient
Expires.
8011.............................. Comprehensive N/A.............................. *
Observation Services.
----------------------------------------------------------------------------------------------------------------
\+\ We refer readers to section III.D. of this final rule with comment period for a discussion of the overall
restructuring and renumbering of APCs.
[[Page 70333]]
* New C-APC for CY 2016.
Clinical Family Descriptor Key:
AICDP = Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices.
BREAS = Breast Surgery.
ENTXX = ENT Procedures.
EPHYS = Cardiac Electrophysiology.
EYEXX = Ophthalmic Surgery.
GIXXX = Gastrointestinal Procedures.
GYNXX = Gynecologic Procedures.
LAPXX = Laparoscopic Procedures.
NSTIM = Neurostimulators.
ORTHO = Orthopedic Surgery.
PUMPS = Implantable Drug Delivery Systems.
RADTX = Radiation Oncology.
UROXX = Urologic Procedures.
VASCX = Vascular Procedures.
(b) Observation Comprehensive APC (C-APC 8011)
As part of our expansion of the C-APC payment policy methodology,
we have identified an instance where we believe that comprehensive
payments are appropriate, that is, when a claim contains a specific
combination of services performed in combination with each other, as
opposed to the presence of a single primary service identified by
status indicator ``J1.'' To recognize such instances, in the CY 2016
OPPS/ASC proposed rule (80 FR 39226), for CY 2016, we proposed to
create a new status indicator ``J2'' to designate specific combinations
of services that, when performed in combination with each other and
reported on a hospital Medicare Part B outpatient claim, would allow
for all other OPPS payable services and items reported on the claim
(excluding all preventive services and certain Medicare Part B
inpatient services) 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. Additional information about the
proposed new status indicator ``J2'' and its proposed C-APC assignment
is provided below.
It has been our longstanding policy to provide payment to hospitals
in certain circumstances when extended assessment and management of a
patient occur (79 FR 66811 through 66812). Currently, payment for all
qualifying extended assessment and management encounters is provided
through APC 8009 (Extended Assessment and Management (EAM) Composite)
(79 FR 66811 through 66812). Under this policy, we allow services
identified by the following to qualify for payment through EAM
composite APC 8009: A clinic visit (described by HCPCS code G0463); a
Level 4 or 5 Type A ED visit (described by CPT codes 99284 or 99285); a
Level 5 Type B ED visit (described by HCPCS code G0384); and a direct
referral for observation (described by HCPCS code G0379), or critical
care services (described by CPT code 99291) provided by a hospital in
conjunction with observation services of substantial duration (8 or
more hours) (provided the observation was not furnished on the same day
as surgery or postoperatively) (79 FR 66811 through 66812).
For CY 2016, we proposed to pay for all qualifying extended
assessment and management encounters through a newly created
``Comprehensive Observation Services'' C-APC (C-APC 8011) and to assign
the services within this APC to proposed new status indicator ``J2,''
as described earlier in this section. Specifically, we proposed to make
a C-APC payment through the proposed new C-APC 8011 for claims that
meet the following criteria:
The claims do not contain a procedure described by a HCPCS
code to which we have assigned status indicator ``T'' that is reported
with a date of service on the same day or 1 day earlier than the date
of service associated with services described by HCPCS code G0378;
The claims contain 8 or more units of services described
by HCPCS code G0378 (Observation services, per hour);
The claims contain services described by one of the
following codes: HCPCS code G0379 (Direct referral of patient for
hospital observation care) on the same date of service as services
described by HCPCS code G0378; 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 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) provided on
the same date of service or 1 day before the date of service for
services described by HCPCS code G0378; and
The claims do not contain services described by a HCPCS
code to which we have assigned status indicator ``J1.''
We proposed to utilize all of the claims that meet the above
criteria in ratesetting for the proposed new C-APC 8011, and to develop
the geometric mean costs of the comprehensive service based on the
costs of all reported OPPS payable services reported on the claim
(excluding all preventive services and certain Medicare Part B
inpatient services). The proposed CY 2016 geometric mean cost resulting
from this methodology was approximately $2,111, based on 1,191,120
claims used for ratesetting.
With the proposal to establish a new C-APC 8011 to capture
qualifying extended assessment and management encounters that currently
are paid using composite APC 8009, in the CY 2016 OPPS/ASC proposed
rule, we correspondingly proposed to delete APC 8009, as it would be
replaced with proposed new C-APC 8011.
As stated earlier, we proposed to assign certain combinations of
procedures within proposed new C-APC 8011 to the proposed new status
indicator ``J2,'' to distinguish the new C-APC 8011 from the other C-
APCs. Comprehensive payment would be made through the new C-APC 8011
when a claim contains a specific combination of services performed in
combination with each other, as opposed to the presence of a single
primary service identified by status indicator ``J1.'' We believe that
a distinction in the status indicator is necessary to distinguish
between the logic required to identify when a claim qualifies for
payment through a C-APC because of the presence of a status indicator
``J1'' procedure on the claim versus when a claim qualifies for payment
through a C-APC because of the presence of a specific combination of
services on the claim. Specifically, for proposed new C-APC 8011, we
believe the assignment of certain combinations
[[Page 70334]]
of services that qualify under proposed new C-APC 8011 to the new
proposed status indicator ``J2'' is necessary because claims containing
procedures assigned status indicator ``T'' that are performed on the
same day or day before observation care is provided would not be
payable through the proposed new C-APC 8011, and the initial ``J1''
logic would not exclude claims containing procedures assigned status
indicator ``T'' from qualifying for payment through another
appropriately assigned C-APC based on the primary ``J1'' procedure.
For claims reporting services assigned to status indicator ``J1''
that qualify for payment through a C-APC and services assigned to
status indicator ``J2'' that qualify for payment through a C-APC, we
proposed that payment for services would be made through the C-APC to
which the primary ``J1'' procedure is assigned or through the C-APC to
which the primary ``J2'' procedures is assigned, and all of the OPPS
payable services performed would be deemed adjunctive services to the
primary status indicator ``J1'' service, including the specific
combination of services performed in combination with each other that
would otherwise qualify for payment through a C-APC based on the
primary procedure being assigned to status indicator ``J2.'' We
proposed that the presence of the specific combination of services
performed in combination with each other that would otherwise qualify
the service for payment through a C-APC because it is assigned to
status indicator ``J2'' on a hospital outpatient claim would not result
in a complexity adjustment for the service qualifying for payment
through a C-APC because the primary procedure is assigned to status
indicator ``J1.''
Under the C-APC payment policy, we note that, instead of paying
copayments for a number of separate services that are generally,
individually subject to the copayment liability cap at section
1833(t)(8)(C)(i) of the Act, beneficiaries can expect to pay a single
copayment for the comprehensive service that would be subject to the
copayment liability cap. As a result, we expect that this policy likely
reduces the possibility that the overall beneficiary liability exceeds
the cap for most of these types of claims.
Comment: Many commenters, including MedPAC, supported the proposal
to create new C-APC 8011. The majority of those commenters who
supported the proposal requested that CMS not allow any claims
reporting a surgical procedure (assigned status indicator ``T'') to
qualify for payment through C-APC 8011, regardless of whether the
procedure assigned status indicator ``T'' was furnished before or after
observation services (described by HCPCS code G0378) were provided. A
few other commenters who supported the proposal requested that CMS make
separate payment for services assigned to the proposed new C-APC 8011
and the procedure assigned status indicator ``T,'' when a procedure
assigned status indicator ``T'' was furnished after observation
services were provided as part of an encounter that would otherwise
qualify for payment through the proposed new C-APC 8011. One commenter
requested that CMS package payment for all procedures assigned status
indicator ``T'' into the payment for the services through the proposed
new C-APC 8011, regardless of whether the procedure assigned status
indicator ``T'' was provided prior to or after the furnishing the
services described by HCPCS code G0378 when both services are present
on a claim that would otherwise qualify for payment through the
proposed new C-APC 8011. Other commenters recommended that CMS make
modifications to the proposal, including creating a cost threshold to
exclude relative high-cost but low frequency services from being
packaged into the payment for services assigned to C-APC 8011;
excluding the payment for specified covered outpatient drugs (SCODs)
from being packaged into the payment for proposed new C-APC 8011;
establishing multiple observation C-APCs; and creating a complexity
adjustment factor for services assigned to proposed new C-APC 8011
similar to the complexity adjustment used for services assigned status
indicator ``J1'' and paid through other C-APCs.
Response: We appreciate the commenters' support of our proposal to
create new C-APC 8011. In response to comments pertaining to packaging
the payment for procedures assigned status indicator ``T'' into the
payment for proposed new C-APC 8011, we are sensitive to commenters'
concerns regarding packaging payment for potentially high-cost surgical
procedures into the payment for an observation C-APC and agree that
claims reporting procedures assigned status indicator ``T'' should not
qualify for payment through C-APC 8011, regardless of whether the
procedure assigned status indicator ``T'' was furnished before or after
observation services (described by HCPCS code G0378) were provided. We
believe that excluding all claims reporting procedures assigned status
indicator ``T'' from qualifying for payment through the new C-APC 8011
will eliminate any need to create a cost threshold to exclude payment
for relative high-cost but low frequency services from being packaged
into the payment for C-APC 8011, as well as eliminate any need to
create a complexity adjustment factor for services assigned to C-APC
8011 or to create multiple observation C-APCs.
While we believe that payment for surgical procedures should not be
packaged into the payment for services assigned to C-APC 8011, we do
not believe that separate payment should be made for both C-APC 8011
and the procedure assigned status indicator ``T'' when the procedure
assigned status indicator ``T'' was provided as part of an encounter
that would otherwise qualify for payment through the proposed new C-APC
8011.
Accordingly, we are adopting a policy that payment for observation
services will always be packaged when furnished with a procedure
assigned status indicator ``T.'' For CY 2016, consistent with our
modified final policy discussed in this final rule with comment period,
payment for observation services will be packaged into the surgical
procedure when comprehensive observation services are furnished with a
procedure assigned status indicator ``T,'' while eligible separately
payable services will receive separate payment.
In addition, we do not believe that payment for SCODs should be
excluded from packaging into the payment made through C-APC 8011
because the services are considered supportive and ancillary when
furnished during an outpatient observation encounter and, therefore,
are appropriate for inclusion in the comprehensive payment through C-
APC 8011.
Comment: A number of commenters who supported the proposal
suggested that CMS include all emergency department (ED) visits as
eligible services paid through C-APC 8011, as opposed to limiting the
eligible services to only high-level ED visits.
Response: We agree with the commenters' suggestion that CMS assign
all ED visits to C-APC 8011, rather than only the high-level ED visits,
because we believe that all ED visits should be eligible to trigger C-
APC payment in the same fashion that all clinic visits are eligible to
trigger C-APC payment to C-APC 8011. We believe that including all ED
visits in C-APC 8011 is more consistent with our comprehensive payment
policy. Allowing all ED visits to be eligible to trigger C-APC payment
through C-APC 8011 means that we will make C-APC payment for the full
spectrum of ED and clinic visits when furnished in conjunction with 8
or more
[[Page 70335]]
hours of observation and without a surgical procedure.
Comment: One commenter requested that CMS withdraw its requirement
to ``carve out,'' or not include under the reported observation hours,
the number of hours associated with active monitoring.
Response: We disagree with the commenter. Consistent with Section
290.2.2 of Chapter 4 of the Medicare Claims Processing Manual,
observation services should not be billed concurrently with diagnostic
or therapeutic services for which active monitoring is a part of the
procedure.
Comment: Some commenters expressed concern that the proposed
payment rate for C-APC 8011 does not adequately cover the costs of the
services involved, and may result in a disincentive for hospitals to
establish policies that result in premature discharge of these
patients.
Response: The proposed geometric mean cost of C-APC 8011 upon which
the CY 2016 proposed payment rate is based, represents the geometric
mean cost of all services reported on claims that qualified for payment
through the former EAM composite APC. Based on the approximately 1.2
million claims used for ratesetting for C-APC 8011, we believe that the
CY 2016 geometric mean cost and associated CY 2016 payment rate
appropriately reflect the appropriate comprehensive payment for
encounters qualifying for payment through C-APC 8011. Accordingly, we
do not believe the proposed payment rate for C-APC 8011 would
incentivize hospitals to prematurely discharge patients.
Comment: A few commenters expressed concern that, because the
breadth of services that may be included in these observation stays
varies widely based on the specific diagnoses associated with the stay,
critical care hospitals and those hospitals in areas with low socio-
demographic status may be disproportionately penalized by receiving
payment for services through C-APC 8011. Another commenter expressed
concern that the proposed creation of C-APC 8011 would incentivize use
of the least expensive test for complex Medicare patients with serious
life-threatening symptoms, regardless of what may be the best test for
a patient at a given time based on the physician's clinical judgment.
Response: We do not agree with the commenters' assertion that the
creation of new C-APC 8011 would incentivize hospitals to furnish the
cheapest test to complex Medicare patients at the expense of what may
be the most appropriate course of treatment because we believe that
hospitals provide appropriate reasonable and necessary care that is in
the best interest of the patient, and if furnishing a more costly test
represents the most appropriate course of treatment, hospitals would
provide such a service. As noted earlier in this section, the payment
rate for C-APC 8011 was based on all services reported on claims that
previously qualified for the EAM composite APC. Therefore, we believe
the payment rate appropriately reflects the average resources expended
in furnishing comprehensive observation services. In addition, we have
no reason or evidence to support the commenters' assertion that
critical care hospitals and those in areas with low socio-demographic
status may be disproportionately penalized by receiving payment for
services through C-APC 8011, as the commenter did not explain the basis
for this assertion. We believe that hospitals will continue to provide
appropriate care that is reasonable and necessary. We note that, as
part of our annual rulemaking cycle, we will continue to examine the
claims data and monitor any changes in the provision of care associated
with furnishing observation services and payment through C-APC 8011.
Comment: A number of commenters requested that CMS provide
additional transparency on the development of C-APC 8011 and its
proposed cost, as well as assess the risk of care fragmentation and
analyze the impact of the C-APC payment methodology on a variety of
factors such as length of stay, patient diagnosis, and patient age. One
commenter asked CMS to remind providers of the critical importance of
reporting all services provided to patients, regardless of whether they
are separately paid or not.
Response: In response to comments requesting additional
transparency on the development of C-APC 8011 and its proposed cost, we
believe that the data made available to the public as part of the
addenda to the proposed rule was appropriate, clear, and sufficient.
For further information on our data process, we refer readers to
section II.A.1.b. of this final rule with comment period. Furthermore,
as indicated earlier in this section, as part of our annual rulemaking
cycle, we will continue to examine the claims data and monitor any
changes in the provision of care, including care fragmentation and
other factors such as length of stay associated with furnishing
observation services and payment through C-APC 8011. We also remind
providers to report all services provided to patients, regardless of
whether they are separately paid or not.
A number of comments presented specific issues pertaining to self-
administered drugs, long observation stays, outpatient observation
notice, and the 3-day inpatient stay requirement for Medicare paid
skilled nursing facility (SNF) coverage. We did not propose or discuss
policies in the proposed rule that implicated any of the specific
issues raised by the commenters. Therefore, we believe these comments
are outside the scope of the proposed rule, and we are not responding
to them in this final with comment period.
After consideration of the public comments we received, effective
beginning CY 2016, we are finalizing our proposals to delete APC 8009,
to establish new C-APC 8011, and to develop the geometric mean costs of
the C-APCs based on the costs of all reported OPPS payable services
reported on the claim (excluding all preventive services and certain
Medicare Part B inpatient services). We also are finalizing our
proposal to pay for all qualifying extended assessment and management
encounters through C-APC 8011 and to assign the services within this
APC to proposed new status indicator ``J2.'' In addition, we are
modifying our proposed criteria for services to qualify for
comprehensive payment through C-APC 8011 and how we identify all claims
used in ratesetting for the new C-APC 8011. Specifically, we are
adopting the following two modifications to our proposal: (1) The
criteria for services to qualify for payment through C-APC 8011 and the
claims identified for purposes of ratesetting for C-APC 8011 will
exclude all claims containing a status indicator ``T'' procedure from
qualification; and (2) any level ED visit is an eligible service that
could trigger qualification and payment through C-APC 8011, as opposed
to only high-level emergency department visits. The finalized criteria
for services to qualify for payment through C-APC 8011 are listed
below. All claims meeting these criteria will be utilized in
ratesetting purposes for C-APC 8011 for CY 2016.
The claims do not contain a procedure described by a HCPCS
code to which we have assigned status indicator ``T'';
The claims contain 8 or more units of services described
by HCPCS code G0378 (Observation services, per hour);
The claims contain services provided on the same date of
service or 1 day before the date of service for HCPCS code G0378 that
are described by one of the following codes: HCPCS code G0379 (Direct
referral of patient for hospital observation care) on the same date of
service as HCPCS code G0378;
[[Page 70336]]
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
The claims do not contain a service that is described by a
HCPCS code to which we have assigned status indicator ``J1.''
The final CY 2016 geometric mean cost for C-APC 8011 resulting from
this methodology is approximately $2,275, based on 1,338,889 claims
used for ratesetting.
(3) CY 2016 Policies for Specific C-APCs
(a) Stereotactic Radiosurgery (SRS)
With the advent of C-APCs, the OPPS consists of a wide array of
payment methodologies, ranging from separate payment for a single
service to a C-APC payment for an entire outpatient encounter with
multiple services. As described above, our C-APC payment policy
generally provides payment for a primary service and all adjunctive
services provided to support the delivery of the primary service, with
certain exceptions, reported on the same claim, regardless of the date
of service. Since implementation of the C-APC policy and subsequent
claims data analyses, we have observed circumstances in which necessary
services that are appropriately included in an entire outpatient
encounter payment are furnished prior to a primary ``J1'' service and
billed separately. That is, our analysis of billing patterns associated
with certain procedures assigned status indicator ``J1'' indicates that
providers are reporting planning services, imaging tests, and other
``planning and preparation'' services that are integrally associated
with the direct provision of the primary ``J1'' service on a separate
claim. The physician practice patterns associated with reporting the
provision of various stereotactic radiosurgery (SRS) treatments
presents an example of this issue.
Section 634 of the American Taxpayer Relief Act (ATRA) of 2012
(Pub. L. 112-240) amended section 1833(t)(16) of the Act by adding a
new subparagraph (D) to require that OPPS payments for Cobalt-60 based
SRS (also referred to as gamma knife) be reduced to equal that of
payments for robotic linear accelerator-based (LINAC) SRS, for covered
OPD services furnished on or after April 1, 2013. This payment
reduction does not apply to hospitals in rural areas, rural referral
centers, or SCHs. In the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66809), we created C-APC 0067 (which was proposed to be
renumbered to C-APC 5631 for CY 2016) for procedures involving single-
session cranial SRS services. Because section 1833(t)(16)(D) of the Act
requires equal payment for SRS delivered by Cobalt-60 based or LINAC
based technology, proposed renumbered C-APC 5631 includes two types of
services involving SRS delivery instruments, which are described by
HCPCS code 77371 (Radiation treatment delivery, stereotactic
radiosurgery [SRS], complete course of treatment cranial lesion(s)
consisting of 1 session; multi-source Cobalt 60-based) and HCPCS code
77372 (Linear accelerator based) (79 FR 66862).
As discussed in the CY 2016 OPPS/ASC proposed rule (80 FR 39228),
based on our analysis of CY 2014 claims data (the data used to develop
the proposed CY 2016 payment rates), we identified differences in the
billing patterns for SRS procedures delivered using Cobalt-60 based and
LINAC based technologies. In particular, our claims data analysis
results revealed that services involving SRS delivered by Cobalt-60
based technologies (as described by HCPCS code 77371) typically
included SRS treatment planning services (for example, imaging studies,
radiation treatment aids, and treatment planning) and the actual
deliveries of SRS treatment on the same date of service and reported on
the same claim. In contrast, claims data analysis results revealed that
services involving SRS delivered by LINAC-based technologies (as
described by HCPCS code 77372) frequently included services related to
SRS treatment (for example, imaging studies, radiation treatment aids,
and treatment planning) that were provided on different dates of
services and reported on claims separate from the actual delivery of
SRS treatment. Because services involving Cobalt-60 based and LINAC-
based technologies are proposed to be assigned to proposed renumbered
C-APC 5631, the costs of both technologies are reflected in the C-APC
payment rate.
The policy intent of C-APCs is to bundle payment for all services
related and adjunctive to the primary ``J1'' procedure. In light of
this, we believe that all essential planning and preparation services
also should be paid through the C-APC. For accuracy of payment, we make
a single payment through the C-APC that includes payment for these
essential planning and preparation services, and we do not pay
separately for C-APC services when they are furnished prior to delivery
of the primary ``J1'' procedure and reported on separate claims.
Procedures involving SRS services are just one example of where this
may be occurring under our C-APC payment policy.
As a result of our SRS claims data findings, in the CY 2016 OPPS/
ASC proposed rule (80 FR 39228), for CY 2016, we proposed to change
payment for SRS treatment under proposed renumbered C-APC 5631 by
identifying any services that are differentially reported using HCPCS
codes 77371 and 77372 on the same claim and on claims one month prior
to the delivery of SRS services in proposed renumbered C-APC 5631,
including planning and preparation services, and removing these claims
from our C-APC geometric mean cost calculations for CY 2016 and CY
2017, while we collect data using a modifier, which is discussed in
greater detail below. For any of the services that we remove from the
C-APC payment bundle, we proposed that those services would receive
separate payment even when appearing in combination with a primary
``J1'' procedure (described either by HCPCS code 77371 or 77372) on the
same claim for both CY 2016 and CY 2017. Specifically, we proposed to
apply this treatment for the following codes for planning and
preparation services:
CT localization (HCPCS codes 77011 and 77014);
MRI imaging (HCPCS codes 70551, 70552, and 70553);
Clinical treatment planning (HCPCS codes 77280, 77285,
77290, and 77295); and
Physics consultation (HCPCS code 77336).
We invited public comments on our proposal to remove claims
reporting planning and preparation service for SRS treatment from our
geometric mean
[[Page 70337]]
cost calculation for the CY 2016 and CY 2017 payment rate for proposed
renumbered C-APC 5631 and to allow for separate payment of these same
services during CY 2016 and CY 2017 using either modality. As discussed
in detail below, our long-term goal is to create a single prospective
payment for the entire outpatient encounter by packaging payment for
all C-APC services, including all planning and preparation services
that occur prior to the primary ``J1'' procedure.
Comment: Several commenters supported our policy proposal to remove
claims reporting planning and preparation services from the geometric
mean cost calculations for proposed renumbered C-APC 5631. The
commenters believed that because of the coding changes implemented over
the past few years to describe SRS delivery by LINAC-based and Cobalt-
60 based technologies, hospitals have incorrectly coded claims
reporting SRS services. To remedy perceived payment inaccuracies for C-
APC 5631, the commenters urged CMS to adopt the policy as proposed.
Response: We appreciate the commenters' support of our proposal.
Comment: In contrast, many commenters opposed the policy proposal
regarding payment for SRS services and recommended that CMS leave the
four identified categories of services within the C-APC payment
methodology for CY 2016 and work with stakeholders to improve the
coding guidance for SRS services.
Response: As we stated in the proposed rule, the policy intent of
the C-APCs is to bundle payment for all services related and adjunctive
to the primary ``J1'' procedure. In light of this, we believe that all
services that are adjunctive to the primary service should be paid
through the C-APC. However, our claims analysis has shown that the
services described by HCPCS codes that we proposed to exclude from the
C-APC payment were frequently reported on a separate claim than the
primary ``J1'' SRS service and, therefore, received separate payment in
addition to the full C-APC payment. Therefore, to collect claims data
on the adjunctive services for the SRS ``J1'' procedures and to ensure
appropriate ratesetting for the SRS C-APC in the future, we believe it
is necessary to unbundle payment for the adjunctive services for CY
2016 and CY 2017. Because the intent of a C-APC is to bundle payment
for all services related and adjunctive to the primary ``J1''
procedure, we agree that coding and billing guidance and instructions
for SRS services should reflect the inclusion of the comprehensive
services that were furnished in conjunction with the primary ``J1''
service and we proposed the use of a modifier to better identify when
related comprehensive services were being billed separately.
Comment: One commenter requested clarification on how CMS will pay
for planning and preparation services performed prior to the actual
delivery of the SRS service, such as basic dosimetry (CPT code 77300),
since CMS did not specifically propose to remove these costs from the
calculation of C-APC 5631.
Response: Only the above-identified 10 planning and preparation CPT
codes that we proposed to remove from the C-APC bundle payment for SRS
delivery services will be paid for separately in CY 2016 when furnished
to a beneficiary within one month of the SRS treatment. For CY 2016 and
CY 2017, these codes will not be included in the C-APC payment for SRS
even if they are furnished on the same date of service. The services
that we did not propose to remove from the geometric mean cost
calculations will continue to be paid through C-APC 5631 (for CY 2016,
this will be C-APC 5627). However, we remind hospitals that procedure
codes related to the primary SRS service should either be reported on
the same claim, or, if furnished on a different date than the primary
service, must include modifier ``CP'' that we are adopting in this
final rule with comment period (as discussed in detail below).
Comment: Commenters requested that CMS provide additional guidance
on the specific items and services, apart from the four identified
categories, that are to be reported with the proposed modifier as
integral, ancillary, supportive, dependent, and adjunctive to either
HCPCS code 77371 or 77372. Commenters also asked for clarification on
the time period in which CMS will consider the delivery of a service to
be adjunctive to the primary ``J1'' SRS treatment.
Response: As we stated in the proposed rule, any service that is
integral, ancillary, supportive, dependent and adjunctive to the
primary ``J1'' service identified by either HCPCS code 77371 or 77372
that is reported on a different claim than the primary ``J1'' service
must be billed with the HCPCS modifier. We believe that hospitals,
physicians, and other clinical staff that furnish comprehensive
services are in a position to identify these types of related services.
We do not believe that it is feasible or practicable for us to identify
all of the services that could potentially be related to a primary
``J1'' service given differences in medical practice. We expect
providers to identify any adjunctive services provided within 30 days
prior to SRS treatment.
After consideration of the public comments we received, for CY 2016
and CY 2017, we are finalizing our proposal to remove planning and
preparation services (identified by the following 10 specific HCPCS
codes: 70551, 70552, 70553, 77011, 77014, 77280, 77285, 77290, 77295,
and 77336) from the geometric mean cost calculations for proposed C-APC
5631 which, beginning in CY 2016, will be C-APC 5627 (Level 7 Radiation
Therapy). In addition, for CY 2016 and CY 2017, we will separately pay
for planning and preparation services adjunctive to the delivery of the
SRS treatment through either modality, regardless of whether they are
furnished on the same date of service as the primary ``J1'' SRS
service.
(b) Data Collection for Nonprimary Services in C-APCs
As mentioned above, provider practice patterns can create a need
for hospitals to perform services that are integral, ancillary,
supportive, dependent, and adjunctive, hereinafter collectively
referred to as ``adjunctive services'', to a comprehensive service
prior to the delivery of that service--for example, testing leads for a
pacemaker insertion or planning for radiation treatment. As the C-APC
policy continues to expand, we need a mechanism to identify these
adjunctive services that are furnished prior to the delivery of the
associated primary ``J1'' service so that payments under the encounter-
based C-APC will be more accurate.
To meet this objective, in the CY 2016 OPPS/ASC proposed rule (80
FR 39228), for CY 2016, we proposed to establish a HCPCS modifier to be
reported with every service code that describes an adjunctive service
to a comprehensive service, but is reported on a different claim. We
proposed that the modifier would be reported on UB-04 form (CMS Form
1450) for hospital outpatient services. Specifically, hospitals would
report this modifier for services that are adjunctive to a primary
procedure code assigned a status indicator ``J1'' and that are reported
on a different claim than the primary ``J1'' service. The collection of
this information would allow us to begin to assess the accuracy of the
claims data used to set payment rates for C-APC services. This
information would be useful in refining our C-APC ratesetting process.
Based on the collection of these data, we envision creating a single
encounter payment for primary ``J1'' services that reflects the costs
of all of the resources used during
[[Page 70338]]
the delivery of the primary services. We also would discontinue
separate payment for any of these packaged adjunctive services, even
when furnished prior to delivery of the primary ``J1''service. As noted
above, we proposed to use the modifier to identify planning and
preparation services for primary ``J1'' procedures involving SRS
services with this goal in mind.
We invited additional public comments on whether to adopt a
condition code as early as CY 2017, which would replace this modifier
to be used for CY 2016 data collection, for collecting this service-
level information.
Comment: Overall, few commenters supported CMS' proposed policy to
collect claims data on the costs of adjunctive services furnished prior
to a primary ``J1'' procedure and reported on a different claim. Those
commenters who supported the policy proposal encouraged CMS to
implement this proposal to begin an effort to include the costs of all
planning and preparation services in the payment bundles for C-APCs.
Response: We appreciate the commenters' support.
Comment: A significant number of commenters opposed the proposed
policy to require hospitals to report a modifier with every HCPCS code
that describes services that are adjunctive to a comprehensive service
(as described by a ``J1'' status indicator), but reported on a
different claim. The commonly cited concerns among the commenters who
opposed the proposed policy were as follows:
Definition of related and adjunctive services. Commenters
requested that CMS provide greater clarity on the definition of
adjunctive services. Specifically, the commenters recommended that CMS
identify and propose adjunctive services by HCPCS code for each primary
``J1'' service, similar to the SRS C-APC proposal, so that hospitals
will know which HCPCS codes describing adjunctive services to report
with the modifier. Without specific guidance from CMS on the scope of
these adjunctive services, some commenters expressed uncertainty about
their ability to accurately report services using the modifier.
Operational challenges and administrative burden.
Commenters asserted that operationalizing new reporting requirements
for modifiers is challenging because it requires a manual claims review
to determine appropriateness of a modifier. In addition, commenters
recommended that CMS delay implementation or withdraw the proposed
modifier for C-APC adjunctive services data collection so that
facilities can successfully implement ICD-10 and accurately use the PO
modifier and the new modifier 59 subset X (E,S,P, and U).
Response: We appreciate the thoughtful comments that were submitted
and, based on the above-mentioned issues, particularly the desire for
CMs to provide additional information pertaining to adjunctive services
for each C-APC raised by the commenters, are modifying our proposal to
only require that the modifier be used with respect to reporting
adjunctive services related to primary ``J1'' SRS services that are
reported separately on different claims. We believe that it is
appropriate to finalize our proposal to require the use of the modifier
for adjunctive SRS services based on our analysis of claims data and
information submitted by stakeholders who are familiar with the
distinct processes of care for each type of SRS technology. We are not
finalizing our proposal to require the use of the modifier for
reporting any other C-APC services at this time. We will take these
comments into consideration if we propose a modifier for the other C-
APCs in future rulemaking.
Comment: Several commenters raised technical questions about the
application of the proposed adjunctive services modifier. Specifically,
commenters posed the following questions:
Should facilities report adjunctive planning and
preparation services when furnished in a setting outside of the HOPD?
Are adjunctive services limited to preoperative testing
and planning services only?
Does the modifier apply to services performed by different
physicians within a health system?
Response: As noted above, we are finalizing our proposal to require
the use of the modifier for reporting adjunctive and related services
to a primary ``J1'' SRS procedure at this time. We intend to issue
further subregulatory guidance on use of the modifier with respect to
SRS services prior to January 1, 2016. The commenters' technical
questions will be addressed in that guidance.
Comment: One commenter supported the use of a modifier over a
condition code to report adjunctive services. The commenter stated that
because CMS proposed to require the use of the modifier for CY 2016, it
is less burdensome to continue its use in subsequent years than switch
to a condition code. In addition, several commenters asked CMS to delay
implementation of the requirement to use the adjunctive services
modifier until additional clarifying instruction is provided on how to
identify adjunctive services furnished prior to a primary ``J1''
service. Alternatively, commenters recommended that CMS follow a step-
wise roll out approach and propose select C-APCs through annual
rulemaking for which the use of the adjunctive services modifier will
be required.
Response: We appreciate the feedback from the commenter regarding
the preference for use of a modifier rather than a condition code. For
CY 2016, we are finalizing a policy to only require the use of the
HCPCS code modifier for adjunctive services related to primary ``J1''
SRS services (described by HCPCS codes 77371 and 77372) that are
reported on a separate claim than the primary ``J1'' service. In
response to comments on additional clarification on how to identify
adjunctive services, we have identified these services for SRS
treatments in this final rule with comment period. Because we are not
adopting a policy to require the use of this HCPCS modifier for other
C-APCs at this time, we are not providing additional information
relating to adjunctive services for other C-APCs in this final rule
with comment period.
After consideration of the public comments we received we are
finalizing our proposal, with modification. Specifically, for CY 2016
and CY 2017, we are adopting a policy to require the use of a HCPCS
code modifier for adjunctive SRS C-APC services that are reported
separate from the primary ``J1'' SRS service. Effective January 1,
2016, hospitals must use the HCPCS code modifier ``CP'' (Adjunctive
service related to a procedure assigned to a comprehensive ambulatory
payment classification (C-APC) procedure, but reported on a different
claim) to report adjunctive service(s) related to a primary ``J1'' SRS
services that is reported on a separate claim than the primary ``J1''
service. With respect to other C-APCs, we are not adopting a policy to
require the use of the HCPCS code modifier to identify adjunctive
services that are reported separately at this time, but may consider
doing so in the future.
(c) Payment for Claims Reporting Inpatient Only Services Performed on a
Patient Who Dies Before Admission
Currently, composite APC 0375 (Ancillary Outpatient Services When
Patient Dies) packages payment for all services provided on the same
date as an inpatient only procedure that is performed on an emergence
basis on an outpatient who dies before admission
[[Page 70339]]
when the modifier ``-CA'' appears on the claim. For CY 2016, we
proposed to provide payment through proposed renumbered C-APC 5881 for
all services reported on the same claim as an inpatient only procedure
with the modifier ``-CA.'' We stated in the proposed rule that this
proposal provides for all services reported on the same claim as an
inpatient only procedure with modifier ``-CA'' would be paid through a
single prospective payment for the comprehensive service. In the CY
2016 OPPS/ASC proposed rule (80 FR 39228), we proposed to renumber APC
0375 as APC 5881 (Ancillary Outpatient Services When Patient Dies) for
CY 2016.
We did not receive any public comments on this proposal. Therefore,
we are finalizing, without modification, our proposal to provide
payment through renumbered C-APC 5881 for all services provided on the
same date and reported on the same claim as an inpatient only procedure
with the modifier ``-CA.''
f. Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for extended assessment and management services, low
dose rate (LDR) prostate brachytherapy, mental health services, and
multiple imaging services. We refer readers to the CY 2008 OPPS/ASC
final rule with comment period for a full discussion of the development
of the composite APC methodology (72 FR 66611 through 66614 and 66650
through 66652) and the CY 2012 OPPS/ASC final rule with comment period
(76 FR 74163) for more recent background.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39228 through 39232),
for CY 2016, we proposed to continue our composite APC payment policies
for LDR prostate brachytherapy services, mental health services, and
multiple imaging services, as discussed below. For CY 2016, we proposed
to discontinue our composite APC payment policies for qualifying
extended assessment and management services (APC 8009) and to pay for
these services through proposed new C-APC 8011 (Comprehensive
Observation Services), as presented in a proposal included under
section II.A.2.e. of the proposed rule. As a result, we proposed to
delete APC 8009 for CY 2016.
We noted that we finalized a policy to discontinue our composite
APC payment policies for cardiac electrophysiologic evaluation and
ablation services (APC 8000), and to pay for these services through C-
APC 0086 (Level III Electrophysiologic Procedures), as presented in a
proposal included under section II.A.2.e. of the CY 2015 OPPS/ASC
proposed rule (79 FR 66800 through 66810). As a result, in the CY 2015
OPPS/ASC final rule with comment period, we deleted APC 8000 for CY
2015 (79 FR 66810). For CY 2016, we proposed to continue to pay for
cardiac electrophysiologic evaluation and ablation services through
existing C-APC 0086 (that was proposed to be renumbered C-APC 5213).
(1) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC
LDR prostate brachytherapy is a treatment for prostate cancer in
which hollow needles or catheters are inserted into the prostate,
followed by permanent implantation of radioactive sources into the
prostate through the needles/catheters. At least two CPT codes are used
to report the composite treatment service because there are separate
codes that describe placement of the needles/catheters and the
application of the brachytherapy sources: CPT code 55875 (Transperineal
placement of needles or catheters into prostate for interstitial
radioelement application, with or without cystoscopy) and CPT code
77778 (Interstitial radiation source application; complex), which are
generally present together on claims for the same date of service in
the same operative session. In order to base payment on claims for the
most common clinical scenario, and to further our goal of providing
payment under the OPPS for a larger bundle of component services
provided in a single hospital encounter, beginning in CY 2008, we began
providing a single payment for LDR prostate brachytherapy when the
composite service, reported as CPT codes 55875 and 77778, is furnished
in a single hospital encounter. We base the payment for composite APC
8001 (LDR Prostate Brachytherapy Composite) on the geometric mean cost
derived from claims for the same date of service that contain both CPT
codes 55875 and 77778 and that do not contain other separately paid
codes that are not on the bypass list. We refer readers to the CY 2008
OPPS/ASC final rule with comment period (72 FR 66652 through 66655) for
a full history of OPPS payment for LDR prostate brachytherapy services
and a detailed description of how we developed the LDR prostate
brachytherapy composite APC. (We note that, for CY 2016, we did not
propose to renumber composite APC 8001 as part of our overall APC
restructuring and renumbering discussed in section III.D. of the
proposed rule.)
In the CY 2016 OPPS/ASC proposed rule (80 FR 39229), for CY 2016,
we proposed to continue to pay for LDR prostate brachytherapy services
using the composite APC payment methodology proposed and implemented
for CY 2008 through CY 2015. That is, we proposed to use CY 2014 claims
reporting charges for both CPT codes 55875 and 77778 on the same date
of service with no other separately paid procedure codes (other than
those on the bypass list) to calculate the proposed payment rate for
composite APC 8001. Consistent with our CY 2008 through CY 2015
practice, in the proposed rule, we proposed to not use the claims that
meet these criteria in the calculation of the geometric mean costs of
procedures or services assigned to APC 0163 (Level IV Cystourethroscopy
and Other Genitourinary Procedures) (which was proposed to be
renumbered APC 5375 in the proposed rule) and APC 0651 (Complex
Interstitial Radiation Source Application) (which was proposed to be
renumbered APC 5641 in the proposed rule), the APCs to which CPT codes
55875 and 77778 are assigned, respectively. We proposed to continue to
calculate the proposed geometric mean costs of procedures or services
assigned to proposed renumbered APCs 5375 and 5641 using single and
``pseudo'' single procedure claims. We stated that we continue to
believe that composite APC 8001 contributes to our goal of creating
hospital incentives for efficiency and cost containment, while
providing hospitals with the most flexibility to manage their
resources. We
[[Page 70340]]
also stated that we continue to believe that data from claims reporting
both services required for LDR prostate brachytherapy provide the most
accurate geometric mean cost upon which to base the proposed composite
APC payment rate.
Using a partial year of CY 2014 claims data available for the CY
2016 proposed rule, we were able to use 226 claims that contained both
CPT codes 55875 and 77778 to calculate the proposed geometric mean cost
of approximately $3,807 for these procedures upon which the proposed CY
2016 payment rate for composite APC 8001 was based.
Comment: One commenter expressed concern that the proposed CY 2016
payment rate for APC 8001 is based only on 226 claims that reported
both CPT codes 55875 and 77778 on the same date of service, a
significant decrease in the number of claims used from the CY 2015
final rule ratesetting, which was based on 406 available claims.
Response: We were able to identify 240 claims in the CY 2014 claims
data available for this CY 2016 final rule, which we used to set the
final CY 2016 payment rate for APC 8001 (which has a geometric mean
cost of approximately $3,542), compared to the 226 claims that were
available and used for ratesetting for the CY 2016 proposed rule (which
had a geometric mean cost of approximately $3,807). With regard to the
commenters' concern regarding the decrease in the number of claims
available for CY 2016 ratesetting relative to the number of claims
available for CY 2015 ratesetting, we note that there is typically some
fluctuation in costs from year to year. We acknowledge that the number
of claims available and used for ratesetting for APC 8001 has
continuously decreased over recent years. However, the percentage of
single frequency claims compared to total claims that were available
and that we were able to use for ratesetting in this final rule with
comment period is comparable to prior years.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to continue to use the
payment rate for composite APC 8001 to pay for LDR prostate
brachytherapy services for CY 2016 and to set the payment rate for this
APC using our established methodology.
(2) Mental Health Services Composite APC
In the CY 2016 OPPS/ASC proposed rule (80 FR 39229 through 39230),
for CY 2016, we proposed to continue our longstanding policy of
limiting the aggregate payment for specified less resource-intensive
mental health services furnished on the same date to the payment for a
day of partial hospitalization services provided by a hospital, which
we consider to be the most resource-intensive of all outpatient mental
health services. We refer readers to the April 7, 2000 OPPS final rule
with comment period (65 FR 18452 through 18455) for the initial
discussion of this longstanding policy and the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74168) for more recent background.
Specifically, we proposed that when the aggregate payment for
specified mental health services provided by one hospital to a single
beneficiary on one date of service based on the payment rates
associated with the APCs for the individual services exceeds the
maximum per diem payment rate for partial hospitalization services
provided by a hospital, those specified mental health services would be
assigned to proposed renumbered composite APC 8010 (Mental Health
Services Composite) (existing APC 0034). We also proposed to continue
to set the payment rate for proposed renumbered composite APC 8010 at
the same payment rate that we proposed to establish for proposed
renumbered APC 5862 (Level 2 Partial Hospitalization (4 or more
services) for hospital-based PHPs) (existing APC 0176), which is the
maximum partial hospitalization per diem payment rate for a hospital,
and that the hospital continue to be paid the payment rate for proposed
renumbered composite APC 8010. Under this policy, the I/OCE would
continue to determine whether to pay for these specified mental health
services individually, or to make a single payment at the same payment
rate established for proposed renumbered APC 5862 (existing APC 0176)
for all of the specified mental health services furnished by the
hospital on that single date of service. We stated that we continue to
believe that the costs associated with administering a partial
hospitalization program at a hospital represent the most resource-
intensive of all outpatient mental health services. Therefore, we do
not believe that we should pay more for mental health services under
the OPPS than the highest partial hospitalization per diem payment rate
for hospitals.
We did not receive any public comments on this proposal. Therefore,
we are finalizing our CY 2016 proposal, without modification, that when
the aggregate payment for specified mental health services provided by
one hospital to a single beneficiary on one date of service, based on
the payment rates associated with the APCs for the individual services,
exceeds the maximum per diem payment rate for partial hospitalization
services provided by a hospital, those specified mental health services
will be assigned to renumbered composite APC 8010 (Mental Health
Services Composite) (existing APC 0034) for CY 2016. For CY 2016, we
also will continue to set the payment rate for renumbered composite APC
8010 (existing APC 0034) at the same payment rate that we established
for renumbered APC 5862 (Level 2 Partial Hospitalization (4 or more
services) for hospital-based PHPs) (existing APC 0176), which is the
maximum partial hospitalization per diem payment rate for a hospital,
and that the hospital will continue to be paid the payment rate for
renumbered composite APC 8010.
(3) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, in order to reflect and
promote the efficiencies hospitals can achieve when performing multiple
imaging procedures during a single session (73 FR 41448 through 41450).
We utilize three imaging families based on imaging modality for
purposes of this methodology: (1) Ultrasound; (2) computed tomography
(CT) and computed tomographic angiography (CTA); and (3) magnetic
resonance imaging (MRI) and magnetic resonance angiography (MRA). The
HCPCS codes subject to the multiple imaging composite policy and their
respective families are listed in Table 12 of the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74920 through 74924).
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement under section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast.
The five multiple imaging composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
[[Page 70341]]
APC 8008 (MRI and MRA with Contrast Composite).
(We note that we did not propose to renumber these composite APCs
as part of our overall restructuring and renumbering of APCs as
discussed in section III.D. of the proposed rule.)
We define the single imaging session for the ``with contrast''
composite APCs as having at least one or more imaging procedures from
the same family performed with contrast on the same date of service.
For example, if the hospital performs an MRI without contrast during
the same session as at least one other MRI with contrast, the hospital
will receive payment based on the payment rate for APC 8008, the ``with
contrast'' composite APC.
We make a single payment for those imaging procedures that qualify
for payment based on the composite APC payment rate, which includes any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging procedures performed across families.
For a full discussion of the development of the multiple imaging
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68559 through 68569).
In the CY 2016 OPPS/ASC proposed rule (80 FR 39230), for CY 2016,
we proposed to continue to pay for all multiple imaging procedures
within an imaging family performed on the same date of service using
the multiple imaging composite APC payment methodology. We stated that
we continue to believe that this policy will reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session.
The proposed CY 2016 payment rates for the five multiple imaging
composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on
proposed geometric mean costs calculated from a partial year of CY 2014
claims available for the proposed rule that qualified for composite
payment under the current policy (that is, those claims reporting more
than one procedure within the same family on a single date of service).
To calculate the proposed geometric mean costs, we used the same
methodology that we used to calculate the final CY 2014 and CY 2015
geometric mean costs for these composite APCs, as described in the CY
2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging
HCPCS codes referred to as ``overlap bypass codes'' that we removed
from the bypass list for purposes of calculating the proposed multiple
imaging composite APC geometric mean costs, in accordance with our
established methodology as stated in the CY 2014 OPPS/ASC final rule
with comment period (78 FR 74918), were identified by asterisks in
Addendum N to the proposed rule (which is available via the Internet on
the CMS Web site) and are discussed in more detail in section II.A.1.b.
of the proposed rule and this final rule with comment period.
For the CY 2016 OPPS/ASC proposed rule, we were able to identify
approximately 584,194 ``single session'' claims out of an estimated 1.5
million potential claims for payment through composite APCs from our
ratesetting claims data, which represents approximately 39 percent of
all eligible claims, to calculate the proposed CY 2016 geometric mean
costs for the multiple imaging composite APCs. Table 7 of the proposed
rule listed the proposed HCPCS codes that would be subject to the
multiple imaging composite APC policy and their respective families and
approximate composite APC proposed geometric mean costs for CY 2016.
Comment: One commenter supported CMS' decision to not propose any
new multiple imaging composite APCs and requested that CMS provide
stakeholders with the opportunity to meaningfully comment on any new
composite APCs that the agency may propose in the future.
Response: We appreciate the commenter's support.
After consideration of the public comment we received, we are
finalizing our proposal to continue the use of multiple imaging
composite APCs to pay for services providing more than one imaging
procedure from the same family on the same date, without modification.
For this CY 2016 final rule with comment period, we were able to
identify approximately 616,602 ``single session'' claims out of an
estimated 1.6 million potential claims for payment through composite
APCs from our ratesetting claims data, which represents approximately
38 percent of all eligible claims, to calculate the final CY 2016
geometric mean costs for the multiple imaging composite APCs. Table 10
below lists the HCPCS codes that are subject to the multiple imaging
composite APC policy and their respective families and approximate
composite APC geometric mean costs for CY 2016.
Table 10--OPPS Imaging Families and Multiple Imaging Procedure Composite
APCs
------------------------------------------------------------------------
------------------------------------------------------------------------
Family 1--Ultrasound
------------------------------------------------------------------------
CY 2016 APC 8004 (Ultrasound Composite) CY 2016 Approximate APC
Geometric Mean Cost = $296
------------------------------------------------------------------------
76604.................................. Us exam, chest.
76700.................................. Us exam, abdom, complete.
76705.................................. Echo exam of abdomen.
76770.................................. Us exam abdo back wall, comp.
76775.................................. Us exam abdo back wall, lim.
76776.................................. Us exam k transpl w/Doppler.
76831.................................. Echo exam, uterus.
76856.................................. Us exam, pelvic, complete.
76870.................................. Us exam, scrotum.
76857.................................. Us exam, pelvic, limited.
------------------------------------------------------------------------
Family 2--CT and CTA with and without Contrast
------------------------------------------------------------------------
CY 2016 APC 8005 (CT and CTA without CY 2016 Approximate APC
Contrast Composite) * Geometric Mean Cost = $325
------------------------------------------------------------------------
70450.................................. Ct head/brain w/o dye.
70480.................................. Ct orbit/ear/fossa w/o dye.
70486.................................. Ct maxillofacial w/o dye.
[[Page 70342]]
70490.................................. Ct soft tissue neck w/o dye.
71250.................................. Ct thorax w/o dye.
72125.................................. Ct neck spine w/o dye.
72128.................................. Ct chest spine w/o dye.
72131.................................. Ct lumbar spine w/o dye.
72192.................................. Ct pelvis w/o dye.
73200.................................. Ct upper extremity w/o dye.
73700.................................. Ct lower extremity w/o dye.
74150.................................. Ct abdomen w/o dye.
74261.................................. Ct colonography, w/o dye.
74176.................................. Ct angio abd & pelvis.
------------------------------------------------------------------------
CY 2016 APC 8006 (CT and CTA with CY 2016 Approximate APC
Contrast Composite) Geometric Mean Cost = $548
------------------------------------------------------------------------
70487.................................. Ct maxillofacial w/dye.
70460.................................. Ct head/brain w/dye.
70470.................................. Ct head/brain w/o & w/dye.
70481.................................. Ct orbit/ear/fossa w/dye.
70482.................................. Ct orbit/ear/fossa w/o & w/dye.
70488.................................. Ct maxillofacial w/o & w/dye.
70491.................................. Ct soft tissue neck w/dye.
70492.................................. Ct sft tsue nck w/o & w/dye.
70496.................................. Ct angiography, head.
70498.................................. Ct angiography, neck.
71260.................................. Ct thorax w/dye.
71270.................................. Ct thorax w/o & w/dye.
71275.................................. Ct angiography, chest.
72126.................................. Ct neck spine w/dye.
72127.................................. Ct neck spine w/o & w/dye.
72129.................................. Ct chest spine w/dye.
72130.................................. Ct chest spine w/o & w/dye.
72132.................................. Ct lumbar spine w/dye.
72133.................................. Ct lumbar spine w/o & w/dye.
72191.................................. Ct angiograph pelv w/o & w/dye.
72193.................................. Ct pelvis w/dye.
72194.................................. Ct pelvis w/o & w/dye.
73201.................................. Ct upper extremity w/dye.
73202.................................. Ct uppr extremity w/o & w/dye.
73206.................................. Ct angio upr extrm w/o & w/dye.
73701.................................. Ct lower extremity w/dye.
73702.................................. Ct lwr extremity w/o & w/dye.
73706.................................. Ct angio lwr extr w/o & w/dye.
74160.................................. Ct abdomen w/dye.
74170.................................. Ct abdomen w/o & w/dye.
74175.................................. Ct angio abdom w/o & w/dye.
74262.................................. Ct colonography, w/dye.
75635.................................. Ct angio abdominal arteries.
74177.................................. Ct angio abd & pelv w/contrast.
74178.................................. Ct angio abd & pelv 1+ regns.
------------------------------------------------------------------------
* If a ``without contrast'' CT or CTA procedure is performed during the
same session as a ``with contrast'' CT or CTA procedure, the I/OCE
assigns the procedure to APC 8006 rather than APC 8005..
------------------------------------------------------------------------
Family 3--MRI and MRA with and without Contrast
------------------------------------------------------------------------
CY 2016 APC 8007 (MRI and MRA without CY 2016 Approximate APC
Contrast Composite) * Geometric Mean Cost = $631
------------------------------------------------------------------------
70336.................................. Magnetic image, jaw joint.
70540.................................. Mri orbit/face/neck w/o dye.
70544.................................. Mr angiography head w/o dye.
70547.................................. Mr angiography neck w/o dye.
70551.................................. Mri brain w/o dye.
70554.................................. Fmri brain by tech.
71550.................................. Mri chest w/o dye.
72141.................................. Mri neck spine w/o dye.
72146.................................. Mri chest spine w/o dye.
72148.................................. Mri lumbar spine w/o dye.
72195.................................. Mri pelvis w/o dye.
73218.................................. Mri upper extremity w/o dye.
73221.................................. Mri joint upr extrem w/o dye.
73718.................................. Mri lower extremity w/o dye.
73721.................................. Mri jnt of lwr extre w/o dye.
74181.................................. Mri abdomen w/o dye.
75557.................................. Cardiac mri for morph.
[[Page 70343]]
75559.................................. Cardiac mri w/stress img.
C8901.................................. MRA w/o cont, abd.
C8904.................................. MRI w/o cont, breast, uni.
C8907.................................. MRI w/o cont, breast, bi.
C8910.................................. MRA w/o cont, chest.
C8913.................................. MRA w/o cont, lwr ext.
C8919.................................. MRA w/o cont, pelvis.
C8932.................................. MRA, w/o dye, spinal canal.
C8935.................................. MRA, w/o dye, upper extr.
------------------------------------------------------------------------
CY 2016 APC 8008 (MRI and MRA with CY 2016 Approximate APC
Contrast Composite) Geometric Mean Cost = $945
------------------------------------------------------------------------
70549.................................. Mr angiograph neck w/o & w/dye.
70542.................................. Mri orbit/face/neck w/dye.
70543.................................. Mri orbt/fac/nck w/o & w/dye.
70545.................................. Mr angiography head w/dye.
70546.................................. Mr angiograph head w/o & w/dye.
70547.................................. Mr angiography neck w/o dye.
70548.................................. Mr angiography neck w/dye.
70552.................................. Mri brain w/dye.
70553.................................. Mri brain w/o & w/dye.
71551.................................. Mri chest w/dye.
71552.................................. Mri chest w/o & w/dye.
72142.................................. Mri neck spine w/dye.
72147.................................. Mri chest spine w/dye.
72149.................................. Mri lumbar spine w/dye.
72156.................................. Mri neck spine w/o & w/dye.
72157.................................. Mri chest spine w/o & w/dye.
72158.................................. Mri lumbar spine w/o & w/dye.
72196.................................. Mri pelvis w/dye.
72197.................................. Mri pelvis w/o & w/dye.
73219.................................. Mri upper extremity w/dye.
73220.................................. Mri uppr extremity w/o & w/dye.
73222.................................. Mri joint upr extrem w/dye.
73223.................................. Mri joint upr extr w/o & w/dye.
73719.................................. Mri lower extremity w/dye.
73720.................................. Mri lwr extremity w/o & w/dye.
73722.................................. Mri joint of lwr extr w/dye.
73723.................................. Mri joint lwr extr w/o & w/dye.
74182.................................. Mri abdomen w/dye.
74183.................................. Mri abdomen w/o & w/dye.
75561.................................. Cardiac mri for morph w/dye.
75563.................................. Card mri w/stress img & dye.
C8900.................................. MRA w/cont, abd.
C8902.................................. MRA w/o fol w/cont, abd.
C8903.................................. MRI w/cont, breast, uni.
C8905.................................. MRI w/o fol w/cont, brst, un.
C8906.................................. MRI w/cont, breast, bi.
C8908.................................. MRI w/o fol w/cont, breast.
C8909.................................. MRA w/cont, chest.
C8911.................................. MRA w/o fol w/cont, chest.
C8912.................................. MRA w/cont, lwr ext.
C8914.................................. MRA w/o fol w/cont, lwr ext.
C8918.................................. MRA w/cont, pelvis.
C8920.................................. MRA w/o fol w/cont, pelvis.
C8931.................................. MRA, w/dye, spinal canal.
C8933.................................. MRA, w/o&w/dye, spinal canal.
C8934.................................. MRA, w/dye, upper extremity.
C8936.................................. MRA, w/o&w/dye, upper extr.
------------------------------------------------------------------------
* If a ``without contrast'' MRI or MRA procedure is performed during the
same session as a ``with contrast'' MRI or MRA procedure, the I/OCE
assigns the procedure to APC 8008 rather than APC 8007..
------------------------------------------------------------------------
3. Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the
concept of averaging to establish a payment rate for services. The
payment may be more or less than the estimated cost of providing a
specific service or a bundle of specific services for a particular
patient. The OPPS packages payment for multiple interrelated items and
services into a single payment to create incentives for hospitals to
furnish services most efficiently and to manage their resources with
maximum flexibility. Our packaging policies support our strategic goal
of using larger payment bundles in the OPPS to maximize hospitals'
incentives to provide care in the most efficient manner. For example,
where there are a
[[Page 70344]]
variety of devices, drugs, items, and supplies that could be used to
furnish a service, some of which are more costly than others, packaging
encourages hospitals to use the most cost-efficient item that meets the
patient's needs, rather than to routinely use a more expensive item,
which often results if separate payment is provided for the item.
Packaging also encourages hospitals to effectively negotiate with
manufacturers and suppliers to reduce the purchase price of items and
services or to explore alternative group purchasing arrangements,
thereby encouraging the most economical health care delivery.
Similarly, packaging encourages hospitals to establish protocols that
ensure that necessary services are furnished, while scrutinizing the
services ordered by practitioners to maximize the efficient use of
hospital resources. Packaging payments into larger payment bundles
promotes the predictability and accuracy of payment for services over
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated
with higher cost cases requiring many ancillary items and services and
lower cost cases requiring fewer ancillary items and services. Because
packaging encourages efficiency and is an essential component of a
prospective payment system, packaging payment for items and services
that are typically integral, ancillary, supportive, dependent, or
adjunctive to a primary service has been a fundamental part of the OPPS
since its implementation in August 2000. For an extensive discussion of
the history and background of the OPPS packaging policy, we refer
readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74925), and the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66817). Over the last 15 years,
as we have refined our understanding of the OPPS as a prospective
payment system, we have packaged numerous services that were originally
paid separately. As we continue to develop larger payment groups that
more broadly reflect services provided in an encounter or episode of
care, we have expanded the OPPS packaging policies. Most, but not
necessarily all, items and services currently packaged in the OPPS are
listed in 42 CFR 419.2(b). Our overarching goal is to make OPPS
payments for all services paid under the OPPS more consistent with
those of a prospective payment system and less like those of a per
service fee schedule, which pays separately for each coded item. As a
part of this effort, we have continued to examine the payment for items
and services provided under the OPPS to determine which OPPS services
can be packaged to further achieve the objective of advancing the OPPS
toward a more prospective payment system.
For CY 2016, we have examined the items and services currently
provided under the OPPS, reviewing categories of integral, ancillary,
supportive, dependent, or adjunctive items and services for which we
believe payment would be appropriately packaged into payment of the
primary service that they support. Specifically, we examined the HCPCS
code definitions (including CPT code descriptors) to determine whether
there were categories of codes for which packaging would be appropriate
according to existing OPPS packaging policies or a logical expansion of
those existing OPPS packaging policies. In general, in the CY 2016
OPPS/ASC proposed rule (80 FR 39233 through 39236), for CY 2016, we
proposed to package the costs of selected newly identified ancillary
services into payment with a primary service where we believe that the
proposed packaged item or service is integral, ancillary, supportive,
dependent, or adjunctive to the provision of care that was reported by
the primary service HCPCS code. Below we discuss the items and services
that we proposed to package beginning in CY 2016 and are finalizing in
this final rule with comment period.
b. Packaging Policies for CY 2016
(1) Ancillary Services
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66819
through 66822), we conditionally packaged payment for ancillary
services assigned to APCs with a geometric mean cost of less than or
equal to $100 (prior to application of the conditional packaging status
indicator). The ancillary services that we identified are primarily
minor diagnostic tests and procedures that are often performed with a
primary service, although there are instances where hospitals provide
such services alone and without another primary service during the same
encounter. Under this policy, we assigned the conditionally packaged
services to status indicator ``Q1,'' which indicates that the service
is separately payable when not billed on the same date of service as a
HCPCS code assigned status indicator ``S,'' ``T,'' or ``V.'' Exclusions
to this ancillary service packaging policy include preventive services,
certain psychiatric and counseling-related services, and certain low-
cost drug administration services. The policy adopted in CY 2015 was
proposed in response to public comments on the CY 2014 ancillary
packaging proposal, which expressed concern that certain low volume but
relatively costly ancillary services would have been packaged into high
volume but relatively inexpensive primary services (for example, a
visit) (74 FR 74945). We noted in the CY 2015 OPPS/ASC final rule with
comment period that the $100 geometric mean cost limit target was a
selection criterion for the initial set of services in conditionally
packaged ancillary service APCs under this packaging policy. The $100
geometric mean cost target was not intended to be a threshold above
which ancillary services will not be packaged, but was a basis for
selecting the initial set of APCs under the conditional packaging
policy for ancillary services, which would likely be updated and
expanded upon in the future. An increase in the geometric mean cost of
any of those packaged APCs to above $100 in future years does not
change the conditionally packaged status of services assigned to the
APCs selected in CY 2015 in a future year. When we finalized this
policy, we stated that we would continue to consider services in these
APCs to be conditionally packaged and would review the conditionally
packaged status of ancillary services annually. The ancillary services
packaging policy is codified in the regulations at 42 CFR 419.2(b)(7).
For CY 2016, as we did in CY 2015, we examined categories of
ancillary services that are integral, ancillary, supportive, dependent,
or adjunctive items and services for which we believe payment would be
appropriately packaged into payment of the primary services that they
support. As previously stated, the $100 geometric mean cost target we
adopted in CY 2015 was not intended to be a threshold above which
ancillary services will not be packaged, but was a basis for selecting
the initial set of APCs under the conditional packaging policy for
ancillary services, which would likely be updated and expanded upon in
the future. Accordingly, in the CY 2016 OPPS/ASC proposed rule (80 FR
39233), for CY 2016, we proposed to not limit our examination to
ancillary service APCs with a geometric mean cost of $100 or less. The
geometric mean cost limit of $100 only applied in 2015, and it is no
longer relevant. We stated in the
[[Page 70345]]
proposed rule that we believe there are some ancillary services that
are assigned to APCs with a geometric mean cost above $100, but for
which conditional packaging is appropriate, given the context in which
the service is performed. For CY 2016, we proposed to evaluate
categories of ancillary services by considering the clinical similarity
of such categories of services to the currently conditionally packaged
ancillary services that have already been determined to be integral,
ancillary, supportive, dependent, or adjunctive to a primary service.
Under this proposal, we identified services in certain APCs that meet
these criteria. Specifically, for CY 2016, we proposed to expand the
set of conditionally packaged ancillary services to include services in
the three APCs listed in Table 8 of the proposed rule (80 FR 39234)
(APC 5734 (Level 4 Minor Procedures); APC 5673 (Level 3 Pathology); and
APC 5674 (Level 4 Pathology)). Ancillary services in the APCs in Table
8 of the proposed rule are typically furnished with a higher paying,
separately payable primary procedure.
However, to avoid packaging a subset of high-cost pathology
services into lower cost and possibly nonprimary services (for example,
low-cost imaging services) frequently billed with some of the services
assigned to Level 3 and Level 4 pathology APCs, we proposed to package
Level 3 and 4 pathology services only when they are billed with a
surgical service. We believe that pathology services are routine tests
that are typically performed ancillary or adjunctive to another primary
service, most commonly surgery, to establish or confirm a diagnosis.
For the Level 3 and 4 pathology APCs, we proposed that the assigned
status indicator would be ``Q2'' (``T packaging''). The HCPCS codes
that we proposed to conditionally package as ancillary services for CY
2016 were displayed in Addendum B to the CY 2016 OPPS/ASC proposed rule
(which is available via the Internet on the CMS Web site). The
supporting documents for the proposed rule are available at the CMS Web
site at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Comment: Several commenters supported designating as conditionally
packaged the services assigned to APCs 5734, 5673, and 5674.
Response: We appreciate the commenters' support.
Comment: Several commenters objected to the conditional packaging
proposal. Some commenters objected because they believed that CMS has
finalized too many new packaging policies in recent years. Other
commenters objected to the proposed conditionally packaging of the
services in the Levels 3 and 4 Pathology APCs because they believed
that these more expensive pathology tests (as compared to the services
assigned to the Levels 1 and 2 Pathology APCs) could be packaged with
less costly surgical procedures.
Response: The number of other recent packaging proposals in the CY
2014 and CY 2015 OPPS/ASC final rules with comment periods has no
bearing on this CY 2016 packaging proposal. The CY 2016 packaging
proposal is based on the payment packaging principles specified
earlier. We believe that these three APCs consist of services that are
generally integral, ancillary, supportive, dependent, or adjunctive to
a primary service. In addition, because this proposal is for
conditional packaging, if the services are provided alone, the services
would be separately paid. We also have not stated that more costly
services cannot be packaged into less costly services.
After consideration of the public comments we received, we are
finalizing our proposal to conditionally packaged ancillary services
assigned to APCs 5734, 5673, and 5674 for CY 2016. The three APCs and
their CY 2016 final status indicators and payment rates are displayed
in Table 11 below.
Table 11--APCs for Conditionally Packaged Ancillary Services for CY 2016
----------------------------------------------------------------------------------------------------------------
CY 2016 OPPS
Renumbered CY 2016 APC CY 2016 APC title status CY 2016
indicator payment rate
----------------------------------------------------------------------------------------------------------------
5734....................................... Level 4 Minor Procedures.......... Q1 $119.58
5673....................................... Level 3 Pathology................. Q2 229.13
5674....................................... Level 4 Pathology................. Q2 459.96
----------------------------------------------------------------------------------------------------------------
The HCPCS codes that we are conditionally packaging as ancillary
services for CY 2016 are displayed in Addendum B to this CY 2016 OPPS/
ASC final rule with comment period (which is available via the Internet
on the CMS Web site). The supporting documents for the final rule with
comment period are available at the CMS Web site at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
In addition, in the CY 2016 OPPS/ASC proposed rule (80 FR 39234),
we proposed to continue to exclude certain services from this ancillary
services packaging policy. As established in CY 2015, preventive
services, certain psychiatric and counseling-related services, and
certain low-cost drug administration services are separately payable
under the OPPS (79 FR 66819). Preventable services that would continue
to be exempted from the ancillary service packaging policy for CY 2016
were listed in Table 9 of the proposed rule.
Comment: Several commenters supported this proposal.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our policy to continue to exempt preventive services from
the ancillary services packaging policy for CY 2016. Preventive
services that will continue to be exempted from the ancillary service
packaging policy for CY 2016 and subsequent years are listed in Table
12 below.
Table 12--Preventive Services Exempted From the Ancillary Services Packaging Policy
----------------------------------------------------------------------------------------------------------------
CY 2016 status
HCPCS code Short descriptor indicator CY 2016 APC
----------------------------------------------------------------------------------------------------------------
76977...................................... Us bone density measure........... S 5732
[[Page 70346]]
77078...................................... Ct bone density axial............. S 5521
77080...................................... Dxa bone density axial............ S 5522
77081...................................... Dxa bone density/peripheral....... S 5521
G0117...................................... Glaucoma scrn hgh risk direc...... S 5732
G0118...................................... Glaucoma scrn hgh risk direc...... S 5732
G0130...................................... Single energy x-ray study......... S 5521
G0389...................................... Ultrasound exam aaa screen........ S 5531
G0404...................................... Ekg tracing for initial prev...... S 5731
Q0091...................................... Obtaining screen pap smear........ S 5731
----------------------------------------------------------------------------------------------------------------
(2) Drugs and Biologicals That Function as Supplies When Used in a
Surgical Procedure
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74930
through 74939), we finalized a policy at 42 CFR 419.2(b)(16) to
unconditionally package all drugs and biologicals that function as
supplies when used in a surgical procedure. As noted in that final rule
with comment period, supplies are a large category of items that
typically are either for single patient use or have a shorter life span
in use than equipment. Supplies can be anything that is not equipment
and include not only minor, inexpensive, or commodity-type items but
also include a wide range of products used in the hospital outpatient
setting, including certain implantable medical devices, drugs,
biologicals, or radiopharmaceuticals (78 FR 74390). When evaluating
whether a particular drug may meet the criteria for packaging under
this policy, we do not consider low drug product utilization and/or
drug product cost (as compared to the primary service APC payment) to
be factors in our determination (79 FR 66875). We unconditionally
package all drugs and biologicals that function as supplies in a
surgical procedure (79 FR 74930).
For CY 2016, we conducted a comprehensive review of CY 2015
separately payable OPPS drugs; that is, drugs with either a status
indicator of ``G'' or ``K.'' For each separately payable drug, we
reviewed the FDA-approved label and conducted a clinical review to
determine whether a drug is indicated for use in a surgical procedure.
Based on our clinical review, in the CY 2016 OPPS/ASC proposed rule (80
FR 39235), for CY 2016, we proposed to package payment for the four
drugs that were listed in Table 10 of the proposed rule (80 FR 39235)
based on their primary function as a supply in a surgical procedure,
which typically means that the drug or biological is integral to or
dependent on or supportive of or adjunctive to a surgical procedure
(HCPCS code J0583 (Injection, bivalirudin, 1 mg); HCPCS code J7315
(Mitomycin, ophthalmic, 0.2 mg); HCPCS code C9447 (Injection,
phenylephrine and ketorolac, 4 ml vial); and HCPCS code J0130
(Injection abciximab, 10 mg)). We noted in the proposed rule that one
drug, described by HCPCS code C9447, whose payment would otherwise be
packaged in CY 2016, currently has pass-through payment status.
Therefore, we did not propose to package payment for the drug described
by HCPCS code C9447 for CY 2016. Instead, we proposed to package
payment for this drug for CY 2018, after its drug pass-through payment
status has expired.
Comment: A few commenters requested that CMS not package the drug
described by HCPCS code J7315 as a surgical supply. One commenter in
particular believed that, because the drug mitomycin is not necessarily
required in all trabeculectomies, the packaging regulation for drugs
and biologicals that function as supplies when used in a surgical
procedure specified at Sec. 419.2(b)(16) of the regulations should not
apply to HCPCS code J7315.
Response: We addressed a similar comment and explained this
packaging policy as it applies to HCPCS code J7315 in the CY 2014 OPPS/
ASC final rule with comment period (78 FR 74938). We are repeating some
of the points made in our response here. First, HCPCS code J7315
describes a drug. Second, indication for the drug described by HCPCS
code J7315 is ``for use as an adjunct to ab externo glaucoma surgery''
(emphasis added). The drugs that function as surgical supplies
packaging policy specified at Sec. 419.2(b)(16) applies to all drugs
and biologicals that are either integral or ancillary or supportive or
dependent or adjunctive to a surgical procedure (78 FR 74938). Because
the drug described by HCPCS code J7315 is an adjunct to surgery (the
drug's only indication), payment for the drug is packaged in CY 2016 in
accordance with Sec. 419.2(b)(16). For purposes of packaging payment,
it does not matter in what percentage of trabeculectomies the drug
described by HCPCS code J7315 is used. Packaging policies apply both to
products that are used as a necessary ingredient to a procedure
(meaning that the test or procedure cannot be performed without the
product) and to products that are optional and only occasionally used
with a procedure. The frequency of use relative to overall procedure
frequency is not a factor in determining whether a drug or biological
is packaged under Sec. 419.2(b)(16). With packaging of a drug or
biological payment into the procedure payment, surgeons, hospitals, and
ASCs can weigh the clinical utility of the product for a particular
case against the cost of the product (because payment is fixed for the
overall procedure and includes all supplies). If the clinical utility
of a product is high relative to the cost, hospitals and ASCs (on an
order by a physician) would be more likely to use the product. If the
opposite is true, they would be less likely to use a product. Packaging
policies support the medically necessary use of products and should
restrain use that may be more a matter of convenience than of medical
necessity. Therefore, we are finalizing our proposal to package the
drug described by HCPCS code J7315 (and assign it status indicator
``N'') for CY 2016 and subsequent years.
Comment: One commenter expressed concern that mitomycin is overused
in trabeculectomies. The commenter believed that target intraocular
pressures (IOPs) should be better tailored to the individual patient
rather than always aiming for very low IOPs that are achievable with
mitomycin. The commenter stated that the current CMS payment policy of
separate payment for mitomycin may encourage the use of mitomycin in
trabeculectomy.
[[Page 70347]]
Response: We appreciate this thoughtful comment. As stated above,
we believe that packaging payment for mitomycin will require facilities
to focus on the clinical utility of mitomycin in a particular case
because using the packaged drug will be a cost that must be covered by
the trabeculectomy procedure payment. On the contrary, separate payment
for drugs creates a financial incentive for hospitals and ASCs to use
drugs because they are paid an additional amount at ASP+6 percent. In
addition, if the facility acquires a drug whose payment is at less than
ASP, the profit for using the drug is even greater than 6 percent of
the drug's ASP.
Comment: One commenter requested that CMS not package the drug
described by HCPCS code C9447 (phenylephrine and ketorolac) as a
surgical supply beginning in CY 2018. While the commenter did not
disagree that the drug would be subject to the packaging regulation at
Sec. 419.2(b)(16), the commenter predicted that packaging of this drug
will result in the use of lower quality alternative drugs. In addition,
the commenter requested that, if CMS packages payment for the drug
described by HCPCS code C9447, CMS create a separate APC with higher
payment rates for procedures that use packaged drugs.
Response: Because the drug described by HCPCS code C9447 functions
as a surgical supply in cataract surgery, payment for the drug will be
packaged under Sec. 419.2(b)(16) after its pass-through status expires
beginning in CY 2018. Which particular drugs surgeons, hospitals, and
ASCs will employ to perform cataract surgery is a matter of choice by
the physician and the facility. Through packaging of the payment for
supplies into the payment for the procedure, CMS generally leaves
decision-making about which packaged services to use during a procedure
in the hands of physicians and providers. We believe that pass-through
payment status should facilitate the use of the drug described by HCPCS
code C9447. With the packaging of the payment for the drug described by
HCPCS code C9447 into the cataract surgery procedure payment, we
believe surgeons, hospitals, and ASCs can weigh the clinical utility of
the product for a particular case against the cost of the product
(because payment is fixed for the overall procedure and includes all
supplies). If the clinical utility of the drug is high relative to its
cost, hospitals and ASCs (on an order by a physician) would be more
likely to use the product. If the opposite is true, they would be less
likely to use the product. If successful cataract surgery depends upon
the use of the drug described by HCPCS code C9447, we expect that
hospitals and ASCs will bear the additional cost of the drug. As noted
above, packaging policies support the medically necessary use of
products and should restrain use that may be more a matter of
convenience than of medical necessity.
We are finalizing our proposal to package the drug described by
HCPCS code C9447 (and assign it status indicator ``N'') beginning in CY
2018 and subsequent years. We are not creating a separate APC with a
higher payment for cataract surgery that uses the drug described by
HCPCS code C9447, as the commenter requested. We believe that doing so
would be inconsistent with the packaging policy. The payment for
cataract surgery is a total payment that includes all necessary
equipment and supplies, including drugs and biologicals that are
employed before, during, and after a surgery.
Comment: One commenter requested that CMS not package payment for
the drug described by HCPCS code J0583. The commenter stated that,
because HCPCS code J0583 describes a specified covered outpatient drug
(SCOD), the drug cannot be packaged because of the specific statutory
payment methodology that applies to SCODs. The commenter also requested
that, if CMS finalizes the proposal to package payment for the drug
described by HCPCS code J0583 as a surgical supply, CMS should also
package payment for the drugs described by HCPCS codes J1327
(Eptifibatide) and J3246 (Tirofiban hydrochloride) to ensure that the
packaging policy is not implemented in an arbitrary and capricious
manner.
Response: We have previously explained why SCODs can be packaged in
the OPPS (72 FR 66766). The drug described by HCPCS code J0583 is
indicated for various types of patients undergoing percutaneous
coronary intervention (PCI), which we consider to be a surgical
procedure for purposes of this packaging policy. The drugs described by
HCPCS codes J1327 and J3246 mentioned by the commenter have other
indications besides facilitating PCI. The drugs described by HCPCS
codes J1327 and J3246 are indicated for the treatment of acute coronary
syndrome (ACS). These drugs were not among the drugs proposed to be
packaged as surgical supplies because they have nonsurgical
indications.
Comment: A few commenters requested that CMS revise its packaging
policy to unpackage payment for diagnostic radiopharmaceuticals, stress
agents, and Cysview. The commenters believed that packaging payment for
these products limits patient access.
Response: We disagree with the commenters that packaging limits
patient access to diagnostic radiopharmaceuticals, stress agents, and
Cysview. We believe that unconditionally packaging diagnostic
radiopharmaceuticals, stress agents, Cysview, and other drugs and
biologicals that function as surgical supplies establishes better
incentives to ensure clinically appropriate patient care.
As discussed in the CY 2014 OPPS/ASC final rule with comment period
(78 FR 74925 through 74926), like other prospective payment systems,
the OPPS relies on the concept of averaging, where the payment may be
more or less than the estimated cost of providing a specific service or
bundle of specific services for a particular patient. There are many
items and services in the OPPS in which use of the item or service may
increase the cost per case above that of the average or typical case,
and there are cases where no additional items or services are necessary
and the cost of a typical case is much less than the average. This is a
fundamental aspect of a prospective payment system. Overall, we believe
that OPPS payments reflect average estimated costs for both situations
and encourage the hospital to assess the appropriate use of those
additional items and services in diagnosing bladder cancer and other
diseases.
While we continuously examine our claims data to identify data
anomalies or inconsistencies in billing patterns, we also welcome and
appreciate public comments that support claims data on how our
packaging policy may adversely impacts patient access.
After consideration of the public comments we received, we are
finalizing our proposal to package payment for the four discussed
drugs. We are not modifying our drug packaging policy and will continue
to package drugs and biologicals that function as supplies when used in
a surgical procedure as codified at 42 CFR 419.2(b)(15) and (b)(16).
Table 13 below lists the drugs that we are finalizing as
unconditionally packaged surgical supplies beginning in the calendar
year indicated in the table.
[[Page 70348]]
Table 13--Drugs Packaged as Surgical Supplies
----------------------------------------------------------------------------------------------------------------
CY 2015 status Primary use in First calendar
HCPCS code Descriptor indicator surgical procedure year packaged
----------------------------------------------------------------------------------------------------------------
J0583........................ Injection, bivalirudin, K Percutaneous Coronary 2016
1 mg. Intervention[PCI]/PCTA
[percutaneous
transluminal coronary
angioplasty]
procedures.
J7315........................ Mitomycin, ophthalmic, G Glaucoma surgery....... 2016
0.2 mg.
C9447........................ Injection, G Cataract surgery....... 2018
phenylephrine and
ketorolac, 4 ml vial.
J0130........................ Injection abciximab, 10 K PCI procedure.......... 2016
mg.
----------------------------------------------------------------------------------------------------------------
(3) Clinical Diagnostic Laboratory Tests
(a) Background
In CY 2014, we finalized a policy to package payment for most
clinical diagnostic laboratory tests in the OPPS (78 FR 74939 through
74942 and 42 CFR 419.2(b)(17)). Under current policy, certain clinical
diagnostic laboratory tests that are listed on the Clinical Laboratory
Fee Schedule (CLFS) are packaged in the OPPS as integral, ancillary,
supportive, dependent, or adjunctive to the primary service or services
provided in the hospital outpatient setting on the same date of service
as the laboratory test. Specifically, we conditionally package
laboratory tests and only pay separately for a laboratory test when (1)
it is the only service provided to a beneficiary on a given date of
service; or (2) it is conducted on the same date of service as the
primary service, but is ordered for a different diagnosis than the
other hospital outpatient services and ordered by a practitioner
different than the practitioner who ordered the other hospital
outpatient services. Also excluded from this conditional packaging
policy are molecular pathology tests described by CPT codes in the
ranges of 81200 through 81383, 81400 through 81408, and 81479 (78 FR
74939 through 74942), which are assigned status indicator ``A'' in
Addendum B to this final rule with comment period (which is available
at the CMS Web site at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html). When laboratory
tests are not packaged under the OPPS and are listed on the CLFS, they
are paid at the CLFS payment rates outside the OPPS under Medicare Part
B.
To implement our packaging policy in CY 2014, we assigned status
indicator ``N,'' which describes unconditionally packaged items and
services, to all laboratory tests paid at the CLFS rates except
molecular pathology tests. We indicated in the CY 2014 OPPS/ASC final
rule with comment period (78 FR 74939) that hospitals should use the
14X bill type for laboratory tests to bill and receive separate payment
for laboratory tests that are the only services provided on a date of
service and laboratory tests provided on the same date of service as
another hospital outpatient service but ordered for a different
diagnosis than the primary service and ordered by a different
practitioner than the practitioner who ordered the other hospital
outpatient service. Therefore, under our final policy, we relied on
hospitals to identify when laboratory tests should be separately paid
and bill those laboratory tests on a 14X bill type.
Upon implementation of this final policy in January 2014, the
National Uniform Billing Committee (NUBC) expressed concern that the
14X bill type was not an appropriate choice of bill type for billing
for laboratory tests other than for laboratory tests on referred
specimens and requested that CMS find another mechanism for hospitals
to bill for separately payable laboratory tests. (We refer readers to
our Medicare Learning Network article on this issue on the CMS Web site
at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1412.pdf.) In Transmittal
2971, Change Request 8776, July 2014 Update of the Hospital Outpatient
Prospective Payment System (OPPS), which is available on the CMS Web
site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R2971CP.pdf, we implemented modifier ``L1''
(Separately payable laboratory test) to be used in lieu of the 14X bill
type. Specifically, we stated that hospitals should use the ``L1''
modifier to indicate when laboratory tests meet either of the two
exceptions for separate payment described above.
(b) CY 2016 Laboratory Test Packaging Proposals and Finalized Policies
In the CY 2016 OPPS/ASC proposed rule (80 FR 39235 through 39236),
for CY 2016 and subsequent years, we proposed a few revisions to the
laboratory packaging policy. First, with regard to the particular
molecular pathology tests in the code range expressly excluded from the
previous policy, we proposed to expand this exclusion to exclude all
molecular pathology tests from our packaging policy, including any new
codes that also describe molecular pathology tests. In our rationale
for excluding these laboratory tests from our final packaging policy in
the CY 2014 OPPS/ASC final rule with comment period (78 FR 74939), we
stated that we did not propose to package molecular pathology
laboratory tests because we believed that these relatively new tests
may have a different pattern of clinical use, which may make them
generally less tied to a primary service in the hospital outpatient
setting than the more common and routine laboratory tests that we
proposed to package. As stated in the CY 2016 OPPS/ASC proposed rule,
we believe that this rationale remains applicable and may be
appropriately extended to any new molecular pathology tests. Therefore,
for CY 2016, we proposed to assign all laboratory tests that describe
molecular pathology tests status indicator ``A'' in Addendum B to the
proposed rule (which is available via the Internet on the CMS Web
site), which means that they would be separately paid at the CLFS rates
outside of the OPPS.
Second, in the CY 2016 OPPS/ASC proposed rule (80 FR 39236), we
proposed for CY 2016 to make separate payment for preventive laboratory
tests and we assigned them status indicator ``A'' in Addendum B to the
proposed rule. Laboratory tests that are considered preventive are
listed in Section 1.2, Chapter 18 of the Medicare Claims Processing
Manual (Pub. 100-04). We currently make an exception to conditional
packaging of ancillary services for ancillary services that are also
preventive services (79 FR 66819). We stated in the proposed rule that,
for consistency, we believe that such an
[[Page 70349]]
exception should also apply to laboratory tests that are classified as
preventive services.
Finally, for CY 2016, we proposed in the CY 2016 OPPS/ASC proposed
rule (80 FR 39236) to modify our current conditional packaging policy
that laboratory tests are integral, ancillary, supportive, dependent,
or adjunctive to a primary service or services provided in the hospital
outpatient setting when those services are provided on the same date of
service as the primary service and when they are ordered for the same
diagnosis and by the same practitioner as the practitioner who ordered
the other hospital outpatient service. Specifically, we proposed to
consider laboratory tests provided during the same outpatient stay
(rather than specifically provided on a same date of service as the
primary service) as integral, ancillary, supportive, dependent, or
adjunctive to a primary service or services, except when a laboratory
test is ordered for a different diagnosis and by a different
practitioner than the practitioner who ordered the other hospital
outpatient services. In some cases, outpatient hospital stays span more
than a single date. For laboratory tests reported on a claim with a
primary service, we stated in the proposed rule that we do not believe
that a different date of service for the laboratory test affects
whether that test is integral, ancillary, supportive, dependent, or
adjunctive to the primary service or services provided in the HOPD.
Further, as we discussed in the proposed rule, in reviewing our CY 2014
claims data, we observed hospitals indicating separate payment by
reporting the ``L1'' modifier for only a few laboratory tests reported
on different days than another hospital outpatient service. We
concluded that hospitals generally do not view laboratory tests
occurring on a different day than a primary service during an
outpatient stay as a reason for separate payment. Therefore, we
proposed to package laboratory tests that are reported on the same
claim with a primary service, regardless of the date of service.
As stated in the proposed rule (80 FR 39236), this proposal does
not affect our existing policy to provide separate payment for
laboratory tests: (1) If they are the only services furnished to an
outpatient and are the only services on a claim and have a payment rate
on the CLFS; or (2) if they are ordered for a different diagnosis than
another hospital outpatient service by a practitioner different than
the practitioner who ordered the other hospital outpatient service (78
FR 74942). As indicated in the proposed rule, we also plan to continue
to have hospitals report the ``L1'' modifier to identify any clinically
``unrelated'' laboratory tests that are furnished on the same claim as
OPPS services, but are ordered by a different practitioner and for a
different diagnosis than the other hospital outpatient service.
However, for ease of administration, we also proposed to implement
claims processing edits through a new conditional packaging status
indicator ``Q4'' that would identify 13X bill type claims where there
are only laboratory HCPCS codes that appear on the CLFS; automatically
change their status indicator to ``A''; and pay them separately at the
CLFS payment rates. For such claims, the ``L1'' modifier would not be
used (80 FR 39236). Status indicator ``Q4'' is defined as ``packaged
APC payment if billed on the same claim as a HCPCS code assigned status
indicator ``J1,'' ``J2,'' ``S,'' ``T,'' ``V,'' ``Q1,'' ``Q2,'' or
``Q3,'' otherwise separately paid, and would apply to conditionally
packaged laboratory tests. In our CY 2014 claims data, we observed some
claims reporting laboratory services and no other OPPS services that
were not paid because the hospital did not appropriately report the
``L1'' modifier. We further believe that the status indicator ``N'' for
unconditional packaging does not accurately reflect the payment status
of these laboratory tests. These tests may be eligible to receive
separate payment at the CLFS payment rates in several circumstances as
discussed above. With the assignment of the proposed ``Q4'' modifier to
laboratory tests, we proposed that modifier ``L1'' would only be used
to identify ``unrelated'' laboratory tests that are ordered for a
different diagnosis and by a different practitioner than the other
hospital outpatient services on the claim.
We invited public comments on these proposals.
Comment: Many commenters agreed with expanding the molecular
pathology test exception to include new molecular pathology tests, and
not only the tests listed in the CY 2014 OPPS/ASC final rule with
comment period. In addition, many commenters agreed with the proposal
for separate payment for preventive laboratory tests.
Response: We appreciate the commenters' support for these
proposals.
Comment: A few commenters disagreed with the assignment of status
indicator ``E'' (Not paid by Medicare when submitted on outpatient
claims) for the following CPT codes that describe new multianalyte
assays with algorithmic analyses (MAAAs):
CPT code 81490 (Autoimmune (rheumatoid arthritis),
analysis of 12 biomarkers using immunoassays, utilizing serum,
prognostic algorithm reported as a disease activity score);
CPT code 81535 (Oncology (gynecologic), live tumor cell
culture and chemotherapeutic response by DAPI stain and morphology,
predictive algorithm reported as a drug response score; first single
drug or drug combination);
CPT code 81536 (Oncology (gynecologic), live tumor cell
culture and chemotherapeutic response by DAPI stain and morphology,
predictive algorithm reported as a drug response score; each additional
single drug or drug combination (List separately in addition to code
for primary procedure)); and
CPT code 81538 (Oncology (lung), mass spectrometric 8-
protein signature, including amyloid A, utilizing serum, prognostic and
predictive algorithm reported as good versus poor overall survival).
In addition, the commenters agreed with CMS' designation of certain
other MAAAs as separately paid molecular pathology tests, but requested
that CMS also assign status indicator ``A'' to the four MAAAs codes
listed above. The commenters believed that the rationale stated in the
proposed rule for not packaging payment for molecular pathology
laboratory tests (that is, that ``we believed that these relatively new
tests [molecular pathology laboratory tests] may have a different
pattern of clinical use, which may make them generally less tied to a
primary service in the hospital outpatient setting than the more common
and routine laboratory tests that we . . . package'' (80 FR 39236))
applies equally to the four new nonmolecular pathology MAAAs listed
above, and for this reason, payment for these MAAAs should also not be
packaged.
Response: We agree in part with the commenters. We agree that the
MAAAs codes in question should not be assigned status indicator ``E''
for CY 2016 because there is some local Medicare coverage for these
codes. However, the proposal was limited to molecular pathology
laboratory tests and not to any laboratory test that could possibly fit
into the molecular pathology test exception rationale. While we did not
propose to extend the packaging exception that applies to molecular
pathology laboratory tests to these nonmolecular pathology MAAAs
laboratory tests, we may consider whether additional exceptions to the
OPPS laboratory test packaging policy should apply to tests other than
[[Page 70350]]
molecular pathology tests in the future. For CY 2016, the four MAAAs
codes listed above are assigned status indicator ``Q4.''
Comment: Many commenters supported the proposed ``Q4'' status
indicator for conditionally packaged laboratory tests. The commenters
expressed their appreciation for the administrative convenience this
policy will afford hospitals in receiving separate payment without the
use of a modifier for laboratory tests provided without other hospital
services. However, some commenters objected to the associated logic of
applying laboratory test packaging at the claim level instead of at the
date of service level. These commenters believed that laboratory tests
performed during an outpatient hospital stay but on a different date of
service might not be ancillary to a primary service on a different date
of service. Some commenters also believed that payment for laboratory
tests should not be packaged into payment for other conditionally
packaged services that are assigned status indicator ``Q1'' or ``Q2,''
because they were concerned that the cost of some packaged laboratory
tests could exceed the cost of other conditionally packaged services
into which the laboratory tests are packaged.
Response: We appreciate the commenters' support for the proposed
``Q4'' status indicator. However, we believe that the ``Q4'' status
indicator should apply at the claim level. We believe that it is
appropriate to package payment for laboratory tests that are provided
on a different date of service than other hospital services. For
example, a patient could be seen in the emergency room and receive some
laboratory tests prior to midnight and receive the remainder of the
services after midnight on a different date of service. This order of
services should not affect whether the laboratory tests are packaged.
Therefore, we believe that the ``Q4'' status indicator should identify
packaging of laboratory tests into procedures on the same claim,
regardless of the date of service, unless an exception applies.
Regarding the commenters' concern about costly laboratory tests
possibly being packaged into less costly services that are assigned
status indicator ``Q1'' or ``Q2,'' it is possible that this could
happen but, given the low cost of most laboratory tests relative to
most other hospital outpatient services, we do not believe that this
would be a common occurrence. In addition, packaging in the OPPS is not
limited to only ancillary or subordinate services that are lower cost
than a primary service. In some cases, the packaged services can have a
higher cost than the primary service.
After consideration of the public comments we received, we are
finalizing the changes to the laboratory test packaging policy as
proposed, with one modification. We are assigning status indicator
``Q4'' (instead of ``E'') to CPT codes 81490, 81535, 81536, and 81538.
Status indicator assignments for laboratory tests are included in
Addendum B to this final rule with comment period (which is available
at the CMS Web site at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html). When laboratory
tests are not packaged under the OPPS and are listed on the CLFS, they
are paid at the CLFS payment rates outside the OPPS under Medicare Part
B.
4. Calculation of OPPS Scaled Payment Weights
In the CY 2016 OPPS/ASC proposed rule (80 FR 39236 through 39237),
we proposed to calculate the relative payment weights for each APC
shown in Addenda A and B to the proposed rule (which are available via
the Internet on the CMS Web site) using the APC costs discussed in
sections II.A.1. and II.A.2. of the proposed rule. Prior to CY 2007, we
standardized all of the relative payment weights to APC 0601 (Mid-Level
Clinic Visit) because mid-level clinic visits were among the most
frequently performed services in the hospital outpatient setting. We
assigned APC 0601 a relative payment weight of 1.00 and divided the
median cost for each APC by the median cost for APC 0601 to derive an
initial unscaled relative payment weight for each APC.
Beginning with the CY 2007 OPPS (71 FR 67990), we standardized all
of the relative payment weights to the median cost of APC 0606 (Level 3
Clinic Visits) because we deleted APC 0601 as part of the
reconfiguration of the clinic visit APCs. We selected APC 0606 as the
base APC because it was the mid-level clinic visit APC (that is, Level
3 of 5 levels). We established a policy in the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68283) of using geometric mean-based
APC costs rather than median-based APC costs to calculate relative
payment weights. In the CY 2016 OPPS/ASC proposed rule (80 FR 39236
through 39237), we proposed to continue this policy for CY 2016 and
subsequent years.
As noted earlier for CY 2012 and CY 2013, outpatient clinic visits
were assigned to one of five levels of clinic visit APCs, with APC 0606
representing a mid-level clinic visit. In the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75036 through 75043), we finalized a
new policy that created alphanumeric HCPCS code G0463 (Hospital
outpatient clinic visit for assessment and management of a patient),
representing any and all clinic visits under the OPPS. HCPCS code G0463
was assigned to APC 0634 (Hospital Clinic Visits). We also finalized a
policy to use CY 2012 claims data to develop the CY 2014 OPPS payment
rates for HCPCS code G0463 based on the total geometric mean cost of
the levels one through five CPT E/M codes for clinic visits previously
recognized under the OPPS (CPT codes 99201 through 99205 and 99211
through 99215). In addition, we finalized a policy to no longer
recognize a distinction between new and established patient clinic
visits.
For the CY 2014 and CY 2015 OPPS final rules with comment period,
we standardized all of the relative payment weights to the geometric
mean cost of APC 0634 as discussed in section VII. of the CY 2015 OPPS/
ASC final rule with comment period (79 FR 66823). As noted in section
VII. of the CY 2016 proposed rule, for CY 2016, we proposed to delete
APC 0634 and to move the outpatient clinic visit HCPCS code G0463 to
APC 0632 (Level 2 Examinations and Related Services) (80 FR 39237).
Accordingly, for CY 2016 and subsequent years, we proposed to
standardize all of the relative payment weights to APC 0632. As stated
in the proposed rule, we believe that standardizing relative payment
weights to the geometric mean of the APC to which HCPCS code G0463 is
assigned maintains consistency in calculating unscaled weights that
represent the cost of some of the most frequently provided OPPS
services. For CY 2016, we proposed to renumber APC 0632 as APC 5012
(Level 2 Examination and Related Services). For CY 2016, we proposed to
assign proposed renumbered APC 5012 a relative payment weight of 1.00
and to divide the geometric mean cost of each APC by the proposed
geometric mean cost for proposed renumbered APC 5012 to derive the
proposed unscaled relative payment weight for each APC. The choice of
the APC on which to standardize the proposed relative payment weights
does not affect payments made under the OPPS because we scale the
weights for budget neutrality.
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated
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aggregate weight under the OPPS for CY 2016 is neither greater than nor
less than the estimated aggregate weight that would have been made
without the changes. To comply with this requirement concerning the APC
changes, we proposed to compare the estimated aggregate weight using
the CY 2015 scaled relative payment weights to the estimated aggregate
weight using the proposed CY 2016 unscaled relative payment weights.
We did not receive any public comments on our proposal to use the
geometric mean cost of renumbered APC 5012 to standardize relative
payment weights. Therefore, we are finalizing the use of the relative
payment weight of 1.00 for APC 5012 to derive the unscaled relative
payment weight for each APC.
For CY 2015, we multiplied the CY 2015 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2014 claims to calculate the total relative
payment weight for each service. We then added together the total
relative payment weight for each of these services in order to
calculate an estimated aggregate weight for the year. For CY 2016, we
proposed to apply the same process using the estimated CY 2016 unscaled
relative payment weights rather than scaled relative payment weights.
We proposed to calculate the weight scaler by dividing the CY 2015
estimated aggregate weight by the unscaled CY 2016 estimated aggregate
weight (80 FR 39237).
For a detailed discussion of the weight scalar calculation, we
refer readers to the OPPS claims accounting document available on the
CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the CY 2016 OPPS
final rule link and open the claims accounting document link at the
bottom of the page.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39237), we proposed to
compare the estimated unscaled relative payment weights in CY 2016 to
the estimated total relative payment weights in CY 2015 using CY 2014
claims data, holding all other components of the payment system
constant to isolate changes in total weight. Based on this comparison,
we proposed to adjust the calculated CY 2016 unscaled relative payment
weights for purposes of budget neutrality. We proposed to adjust the
estimated CY 2016 unscaled relative payment weights by multiplying them
by a weight scaler of 1.3823 to ensure that the proposed CY 2016
relative payment weights are scaled to be budget neutral. The proposed
CY 2016 relative payment weights listed in Addenda A and B to the
proposed rule (which are available via the Internet on the CMS Web
site) were scaled and incorporated the recalibration adjustments
discussed in sections II.A.1. and II.A.2. of the proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for
certain SCODs. Section 1833(t)(14)(H) of the Act provides that
additional expenditures resulting from this paragraph shall not be
taken into account in establishing the conversion factor, weighting,
and other adjustment factors for 2004 and 2005 under paragraph (9), but
shall be taken into account for subsequent years. Therefore, the cost
of those SCODs (as discussed in section V.B.3. of this final rule with
comment period) is included in the budget neutrality calculations for
the CY 2016 OPPS.
We did not receive any public comments on the proposed weight
scaler calculation. Therefore, we are finalizing the calculation
process described in the proposed rule without modification. Using
updating final rule claims data, we are updating the estimated CY 2016
unscaled relative payment weights by multiplying them by a weight
scaler of 1.3852 to ensure that the final CY 2016 relative payment
weights are scaled to be budget neutral.
B. Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD fee schedule increase
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee
schedule increase factor is equal to the hospital inpatient market
basket percentage increase applicable to hospital discharges under
section 1886(b)(3)(B)(iii) of the Act. In the FY 2016 IPPS/LTCH PPS
final rule (80 FR 49508), consistent with current law, based on IHS
Global Insight, Inc.'s second quarter 2015 forecast of the FY 2016
market basket increase, the FY 2016 IPPS market basket update is 2.4
percent. However, sections 1833(t)(3)(F) and 1833(t)(3)(G)(iv) of the
Act, as added by section 3401(i) of the Patient Protection and
Affordable Care Act of 2010 (Pub. L. 111-148) and as amended by section
10319(g) of that law and further amended by section 1105(e) of the
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152),
provide adjustments to the OPD fee schedule increase factor for CY
2016.
Specifically, section 1833(t)(3)(F)(i) of the Act requires that,
for 2012 and subsequent years, the OPD fee schedule increase factor
under subparagraph (C)(iv) be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
equal to the 10-year moving average of changes in annual economy-wide,
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, year, cost reporting period, or other annual period) (the
``MFP adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR
51689 through 51692), we finalized our methodology for calculating and
applying the MFP adjustment. In the FY 2016 IPPS/LTCH PPS final rule
(80 FR 49509), we discussed the calculation of the final MFP adjustment
for FY 2016, which is a 0.5 percentage point reduction.
In the CY 2016 OPPS/ASC proposed rule, we proposed that if more
recent data became subsequently available after the publication of the
proposed rule (for example, a more recent estimate of the market basket
increase and the MFP adjustment), we would use such updated data, if
appropriate, to determine the CY 2016 market basket update and the MFP
adjustment, components in calculating the OPD fee schedule increase
factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act,
in the CY 2016 OPPS/ASC final rule with comment period. Consistent with
that proposal, and the FY 2016 IPPS/LTCH PPS final rule, we applied the
updated final FY 2016 market basket percentage increase and the MFP
adjustment to the OPD fee schedule increase factor for the CY 2016
OPPS.
In addition, section 1833(t)(3)(F)(ii) of the Act requires that,
for each of years 2010 through 2019, the OPD fee schedule increase
factor under section 1833(t)(3)(C)(iv) of the Act be reduced by the
adjustment described in section 1833(t)(3)(G) of the Act. For CY 2016,
section 1833(t)(3)(G)(iv) of the Act provides a -0.2 percentage point
reduction to the OPD fee schedule increase factor under section
1833(t)(3)(C)(iv) of the Act. Therefore, in accordance with sections
1833(t)(3)(F)(ii) and 1833(t)(3)(G)(iv) of the Act, in the CY 2016
OPPS/ASC proposed rule, we proposed to apply a 0.2 percentage point
reduction to the OPD fee schedule increase factor for CY 2016.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee
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schedule increase factor under section 1833(t)(3)(C)(iv) of the Act
being less than 0.0 percent for a year, and may result in OPPS payment
rates being less than rates for the preceding year. As described in
further detail below, we are applying an OPD fee schedule increase
factor of 1.7 percent for the CY 2016 OPPS (which is 2.4 percent, the
final estimate of the hospital inpatient market basket percentage
increase, less the final 0.5 percentage point MFP adjustment, and less
the 0.2 percentage point additional adjustment).
Hospitals that fail to meet the Hospital OQR Program reporting
requirements are subject to an additional reduction of 2.0 percentage
points from the OPD fee schedule increase factor adjustment to the
conversion factor that would be used to calculate the OPPS payment
rates for their services, as required by section 1833(t)(17) of the
Act. For further discussion of the Hospital OQR Program, we refer
readers to section XIII. of this final rule with comment period.
In the CY 2016 OPPS/ASC proposed rule, we proposed to amend 42 CFR
419.32(b)(1)(iv)(B) by adding new paragraph (7) to reflect the
requirement in section 1833(t)(3)(F)(i) of the Act that, for CY 2016,
we reduce the OPD fee schedule increase factor by the MFP adjustment as
determined by CMS, and to reflect the requirement in section
1833(t)(3)(G)(iv) of the Act, as required by section 1833(t)(3)(F)(ii)
of the Act, that we reduce the OPD fee schedule increase factor by an
additional 0.2 percentage point for CY 2016.
We did not receive any public comments on our proposed adjustments
to the OPD fee schedule increase factor or on the proposed changes to
the regulations at 42 CFR 419.32(b)(1)(iv)(B). For the reasons
discussed above, we are adjusting the OPD fee schedule increase factor
and finalizing the changes to the regulations as proposed.
To set the OPPS conversion factor for the CY 2016 proposed rule, we
increased the CY 2015 conversion factor of $74.173 by 1.9 percent. In
accordance with section 1833(t)(9)(B) of the Act, we further adjusted
the conversion factor for CY 2016 to ensure that any revisions made to
the wage index and rural adjustment were made on a budget neutral
basis. We calculated an overall budget neutrality factor of 0.9993 for
wage index changes by comparing total estimated payments from our
simulation model using the FY 2016 IPPS wage indexes to those payments
using the FY 2015 IPPS wage indexes, as adopted on a calendar year
basis for the OPPS.
For the CY 2016 proposed rule, we maintained the current rural
adjustment policy, as discussed in section II.E. of this final rule
with comment period. Therefore, we set the budget neutrality factor for
the rural adjustment is 1.0000.
For the CY 2016 proposed rule, we proposed to continue previously
established policies for implementing the cancer hospital payment
adjustment described in section 1833(t)(18) of the Act, as discussed in
section II.F. of this final rule with comment period. Consistent with
that policy, we calculated a CY 2016 budget neutrality adjustment
factor for the cancer hospital payment adjustment by comparing
estimated total CY 2016 payments under section 1833(t) of the Act,
including the CY 2016 cancer hospital payment adjustment, to estimated
CY 2016 total payments using the CY 2015 final cancer hospital payment
adjustment as required under section 1833(t)(18)(B) of the Act. The CY
2016 estimated payments applying the CY 2016 cancer hospital payment
adjustment are identical to estimated payments applying the CY 2015
final cancer hospital payment adjustment. Therefore, we applied a
budget neutrality adjustment factor of 1.0000 to the conversion factor
for the cancer hospital payment adjustment.
For the proposed rule, we estimated that pass-through spending for
drugs, biologicals, and devices for CY 2016 would equal approximately
$136.8 million, which represented 0.25 percent of total projected CY
2016 OPPS spending. Therefore, the conversion factor was adjusted by
the difference between the 0.13 percent estimate of pass-through
spending for CY 2015 and the 0.25 percent estimate of pass-through
spending for CY 2016, resulting in an adjustment for CY 2016 of -0.12
percent. Estimated payments for outliers remained at 1.0 percent of
total OPPS payments for CY 2016. We estimated for the proposed rule
that outlier payments would be 0.95 percent of total OPPS payments in
CY 2015; the 1.0 percent for outlier payments in CY 2016 would
constitute a 0.05 percent increase in payment in CY 2016 relative to CY
2015.
We did not receive any public comments on our proposed general
methodology for calculating the CY 2016 conversion factor. Therefore,
we are finalizing the methodology in this final rule with comment
period.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39238), we also
proposed to exercise our authority in section 1833(t)(3)(C)(iii) of the
Act to further adjust the conversion factor to eliminate the effect of
coding and classification changes that we believe resulted in a change
in aggregate payments that do not reflect real changes in service-mix
related to our final policy to package certain clinical diagnostic
laboratory tests in the CY 2014 OPPS/ASC final rule with comment period
(78 FR 74939 through 74942). Below we discuss our proposed and final
adjustment to the conversion factor to redress the inflation in the
OPPS payment rates for CY 2016 resulting from excess packaged payment
under the OPPS for laboratory tests that we now understand continue to
be paid separately outside the OPPS.
The current clinical diagnostic laboratory test packaging policy
packages payment for laboratory tests in the OPPS when they are
integral, ancillary, supportive, dependent, or adjunctive to a primary
service or services provided in the hospital outpatient setting. Under
current policy, payment for a laboratory test is not packaged when: (1)
A laboratory test is the only service provided to the beneficiary on
that date of service; or (2) a laboratory test is conducted on the same
date of service as the primary service but is ordered for a different
purpose than the primary service by a practitioner different than the
practitioner who ordered the primary service. The laboratory tests
falling under these two exceptions continue to be paid separately at
the CLFS payment rates outside the OPPS.
In addition, we exclude payment for molecular pathology tests
described by CPT codes in the ranges of 81200 through 81383, 81400
through 81404, and 81479 from packaging (78 FR 74939). In section
II.A.3.b.(3) of the proposed rule, we proposed to expand this exclusion
to exclude all molecular pathology tests from our packaging policy,
including any new codes that also describe molecular pathology tests.
Finally, we continue to pay separately for referred specimens billed on
a 14X bill type because these services will always consist only of
laboratory services. We also make separate (that is, not packaged)
payment for laboratory tests billed on a 12X (inpatient Part B) bill
type claim when billed for reasons other than rebilling for a denied
Part A claim, such as inpatient Part B coverage following exhausted
Part A benefits. We refer readers to section II.A.3.b.(3) of this final
rule with comment period for a detailed discussion of our laboratory
test packaging policy exceptions and to review our proposals, and final
policy, to modify our laboratory test packaging policy in light of
current experience with this policy.
In monitoring aggregate payments for CY 2014, we observed that OPPS
[[Page 70353]]
spending for hospital outpatient services experienced double digit
growth in 2014 compared to typical growth of 6 to 8 percent, due to our
CY 2014 final policy to package laboratory services, without a
comparable reduction in spending for laboratory services paid at the
CLFS payment rates outside the OPPS. As part of our CY 2014 final
policy to package certain clinical diagnostic laboratory tests, we both
revised the OPPS relative payment weights to reflect packaged
laboratory services, and we increased the OPPS relative weight scaler
to reflect the estimated total cost of packaged laboratory services. In
calculating the appropriate increase to the weight scaler for CY 2014,
we estimated that we spent approximately $2.4 billion on laboratory
services on 13X type bill claims, and we incorporated this aggregate
amount of weight into our estimate of the 2013 relative weight when
calculating the budget neutral weight scaler to scale all relative
weights for CY 2014, except those with a fixed payment amount such as
drugs paid at ASP+6 percent (78 FR 74948 through 74949). An adjustment
to the overall weight scaler has a comparable effect on final payment
as an adjustment to the conversion factor. We also assumed that
separate payment would continue for laboratory services billed on 14X
bill type claims for referred specimens and for select inpatient Part B
claims billed on a 12X bill type claim. Thus, we stated that we
expected to experience an increase in OPPS spending due to our final
packaging policy and a commensurate reduction in overall payment for
Medicare Part B laboratory tests paid at the CLFS rates outside the
OPPS.
However, as we discussed in the CY 2016 OPPS/ASC proposed rule (80
FR 39239), upon reviewing actual claims for CY 2014, we observed an
unexpectedly high volume of laboratory tests associated with $1 billion
in spending for exceptions to our packaging policy for laboratory tests
that continued to receive separate payment at the CLFS payment rates
outside the OPPS. We did not observe a significant change in the
overall volume of laboratory services being furnished. Specifically, we
observed a pronounced shift in volume from billing on the 13X bill type
claims to the 14X bill type claims beginning January 1, 2014,
consistent with our final rule policy and then shifting back to the 13X
bill type claims with an ``L1'' modifier when our instructions on
billing for laboratory tests that are excepted from our laboratory
packaging policy were implemented in July 2014. (We refer readers to
Transmittal 2971, Change Request 8776, July 2014 Update of the Hospital
Outpatient Prospective Payment System (OPPS), which is available on the
CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R2971CP.pdf.) Because we did not observe a
significant change in the number of laboratory services in our claims
data, we concluded that the changes in aggregate payments under the
OPPS were a result of changes in pricing alone and did not reflect real
changes in service-mix.
Therefore, we overestimated the adjustment necessary to account for
the new policy to package laboratory tests and underestimated the
amount of spending that would continue for laboratory tests paid at the
CLFS rates outside the OPPS by approximately $1 billion. This $1
billion effectively resulted in inflation in the OPPS payment rates
resulting from excess packaged payment under the OPPS for laboratory
tests for all OPPS services and duplicate payments for certain
laboratory tests because we are paying the laboratory tests through
packaged payment incorporated into the OPPS payment rates as well as
through separate payment at the CLFS payment rates outside the OPPS.
Section 1833(t)(3)(C)(iii) of the Act specifies that if the
Secretary determines the adjustments for service-mix for a previous
year (or estimates that such adjustments for a future year) did (or are
likely to) result in a change in aggregate payments during the year
that are a result of changes in the coding or classification of covered
OPD services that do not reflect real changes in service-mix, the
Secretary may adjust the conversion factor for subsequent years so as
to eliminate the effect of such coding or classification changes. Based
on this authority, we proposed a reduction of 2.0 percentage points to
the proposed CY 2016 conversion factor to redress inappropriate
inflation in the OPPS payment rates and prevent CY 2016 payment rates
from including $1 billion in excess packaged payment. We also used the
``L1'' modifier information on the CY 2014 claims data that we use to
model the OPPS to identify which laboratory services should be packaged
into the associated OPPS services when establishing the proposed CY
2016 relative weights. We proposed this reduction in order to eliminate
the effect of the coding and classification changes for payment for
laboratory tests that resulted in changes in aggregate payments, but
which did not result in real changes in service-mix under the OPPS. If
we had been able to accurately forecast the amount of continued
spending on separately payable laboratory tests that would continue in
CY 2014 at the CLFS rates outside the OPPS, we would have incorporated
a reduced amount of estimated spending into our CY 2014 OPPS budget
neutrality calculations in CY 2014 rulemaking.
We conducted several analyses to better understand the derivation
of the overestimated adjustment made in CY 2014. These efforts included
an attempt to determine how much spending at the CLFS payment rates
outside the OPPS should have been packaged in CY 2014 with full
knowledge of the actual volume for exceptions to our final laboratory
tests packaging policy now that CY 2014 claims data are available for
review. This assessment required some assumptions about what payment
would have been at the CY 2014 CLFS payment amounts using the CLFS
national limitation amount (NLA) price or the mode price among
jurisdictions where an NLA did not exist for all laboratory services in
12X, 13X, and 14X bill type claims less actual payments for those same
services and the $2.4 billion in packaged payments. We adjusted our
total estimates for incomplete claims data because the data that we use
to model the proposed rule are data from CY 2014 claims processed as of
December 31, 2014, estimated at 90 percent based on historical claims
data. As a result of this analysis, we estimated that we included a
gross estimate of roughly $1.1 billion in excess packaged payment in
the CY 2014 OPPS payment rates for laboratory tests that were paid
separately, as demonstrated by actual CY 2014 claims data. We also did
a more straightforward analysis assessing total payment for our
exceptions policy, in which we looked at the change in payment on 14X
bill type claims for the first part of CY 2014 along with any payment
for laboratory services billed with the ``L1'' modifier. This analysis
resulted in a similar estimate of roughly $1.003 billion. Because both
analyses resulted in an approximate $1 billion estimate of spending at
the CLFS rates outside the OPPS that was packaged into the OPPS, we
stated that we believe that a prospective adjustment to remove $1
billion from the CY 2016 OPPS payment rates would realign total
aggregate OPPS payments to reflect the resources associated with OPPS
services. When we calculated the $1 billion as a percent of actual
total spending for OPPS services in CY 2014 (approximately $50
billion), we determined an estimated 2.0 percent
[[Page 70354]]
reduction to total spending to be applied to the conversion factor in
CY 2016. Therefore, in the CY 2016 OPPS/ASC proposed rule, we proposed
to apply a 2.0 percent adjustment to the proposed CY 2016 conversion
factor to redress the inflation in the OPPS payment rates resulting
from excess packaged payment under the OPPS for laboratory tests we now
understand continue to be paid at the CLFS rates outside the OPPS for
CY 2016 and subsequent years.
We also stated in the proposed rule that, for the CY 2017 OPPS
rulemaking, we plan to review actual CY 2015 claims data and assess
whether our proposed adjustment for CY 2016 accurately adjusted for the
inflation in the OPPS payment rates under current policy.
We provided a summary file of our analysis of separate payment at
the CLFS rates outside the OPPS for laboratory services that are
exceptions to our packaging policy which is available in the
``Downloads'' section of the CMS Web site accompanying the proposed
rule (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We noted that the ``OPPS limited data set'' that we make
available to accompany each proposed and final rule is not a complete
set of institutional Part B claims, containing only the 12X, 13X, and
14X bill types that we use to model the OPPS rates and excluding claims
weeded or trimmed as discussed in our claims accounting document
(http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).
For the proposed rule, we also proposed that hospitals that fail to
meet the reporting requirements of the Hospital OQR Program would
continue to be subject to a further reduction of 2.0 percentage points
to the OPD fee schedule increase factor. For hospitals that fail to
meet the requirements of the Hospital OQR Program, we proposed to make
all other adjustments discussed above, but use a reduced OPD fee
schedule update factor of -0.1 percent (that is, the proposed OPD fee
schedule increase factor of 1.9 percent further reduced by 2.0
percentage points). This would result in a proposed reduced conversion
factor for CY 2016 of $72.478 for hospitals that fail to meet the
Hospital OQR requirements (a difference of -1.451 in the conversion
factor relative to hospitals that meet the requirements).
Comment: MedPAC and other commenters commended CMS for recognizing
that an adjustment to OPPS payment rates was warranted in light of the
effects of the laboratory services packaging policy. MedPAC noted that
the proposal to adjust payment rates to prevent continued excess
payment is consistent with adjustments CMS has made in IPPS, Medicare
Advantage, and the home health prospective payment system in the past.
Response: We appreciate the commenters' support.
Comment: Several commenters suggested that the purpose of the
proposed adjustment was to recoup overpayments in CY 2014 and CY 2015,
and that recouping overpayments made in prior years was inconsistent
with a prospective payment system.
Response: The proposed -2.0 percent adjustment to the conversion
factor would not recoup ``overpayments'' made for CYs 2014 and 2015.
When we classified laboratory tests as OPPS packaged services in 2014,
we increased the conversion factor to account for that change, which
resulted in excess payment being built into the rates. The proposal to
apply a -2.0 percent adjustment to the conversion factor is intended to
address the effects of the OPPS classification changes on OPPS payments
for CY 2016 that do not reflect real changes in service-mix. If we do
not adjust the conversion factor, the excess payment built into the
rates would carry through to the CY 2016 OPPS rates.
Comment: A few commenters suggested that the proposed adjustment to
the conversion factor was unfairly applied across the board to OPPS
services. The commenters suggested that the adjustment should only
apply to services that have packaged laboratory tests.
Response: The proposed adjustment to reduce the conversion factor
would apply to all OPPS services, but we also established relative
weights in a manner that would target payment effects on services whose
payment rates previously reflected excess packaged payment for
laboratory services. In modeling the CY 2016 OPPS, we did not include
costs for laboratory tests that were billed separately in CY 2014 for
purposes of calculating the relative weights of all services. This
means that services with excess payment due to packaged laboratory
tests in CYs 2014 and 2015 would have had the additional weight for
those laboratory services removed from their weight calculation for CY
2016. With that weight removed, all other services would have a higher
relative weight than they otherwise would if the costs for those
packaged laboratory services had been included in the model. As a
result, the proposed adjustment to the conversion factor in conjunction
with the relative weights primarily affects the payment for services
that previously included excess packaged payment for laboratory tests.
Section 1833(t)(3)(C)(iii) of the Act authorizes the agency to adjust
the conversion factor, and adjustments to payment rates such as this
are often applied across the board to all services.
Comment: One commenter questioned the legality of CMS using section
1833(t)(3)(C)(iii) of the Act as the authority to make the conversion
factor adjustment because the commenter viewed the 2.0 percent
reduction as a correction to an error CMS made in CY 2014, not an
adjustment for service-mix.
Response: The commenter misunderstands the basis for the proposed
adjustment. Section 1833(t)(3)(C)(iii) of the Act provides that, if the
Secretary determines that adjustments for service-mix for a previous
year resulted in (or are likely to result in) a change in aggregate
payments that are a result of changes in the coding or classification
of covered OPD services that do not reflect real changes in service-
mix, the Secretary may adjust the conversion factor for subsequent
years to eliminate the effect of such coding or classification changes.
This authority applies to the proposed adjustment.
The increase in aggregate OPPS payments for CY 2014 did not reflect
real changes in the service-mix for CY 2014, but, rather, was
attributable to classification changes relating to the packaging of
laboratory tests in the OPPS.
As we noted in the CY 2016 OPPS proposed rule (80 FR 39239), in our
claims data, we did not observe a significant change in the overall
volume of laboratory services being furnished in CY 2014. Because we
did not observe such a change, and because these services that we
packaged continued to be billed and paid separately, we concluded, and
confirmed based on several analyses, that the changes in aggregate
payments under the OPPS for CY 2014 were the result of classification
changes and not real changes in service-mix. In addition, as stated
above, the excess built into the rates for CY 2014 and CY 2015 would
carry through to the CY 2016 OPPS rates in the absence of an
adjustment. Accordingly, we determined that the classification changes
relating to packaged laboratory services would likely result in a
change in aggregate payments for CY 2016 that does not reflect real
changes in service-mix. In accordance with section
[[Page 70355]]
1833(t)(3)(C)(iii) of the Act, our proposal to adjust the conversion
factor was intended to eliminate the effect of the classification
changes for CY 2016.
The Secretary's adjustment is consistent with the statute, is
reasonable, and is not arbitrary or capricious. We note that section
1833(t)(12) of the Act precludes administrative and judicial review of
the Secretary's calculations under section 1833(t)(3) of the Act,
including adjustments under section 1833(t)(3)(C)(iii) of the Act.
Comment: Some commenters suggested that CMS implement a transition
period for the conversion factor adjustment so that the adjustment is
phased in over several years.
Response: We recognize that the adjustment to the conversion factor
is significant for CY 2016, but we do not believe a transition period
for the adjustment to the conversion factor is appropriate in this
situation because it would allow the excess packaged payments built
into the rates for CY 2014 and CY 2015 to continue into CY 2016. We
believe it is appropriate to adjust for this excess packaged payment as
soon as possible.
Comment: Several commenters suggested that CMS present its analysis
of the need for this adjustment to the Advisory Panel on Hospital
Outpatient Payment (HOP) in the spring of 2016 before implementing this
adjustment to allow the HOP Panel to opine on whether this adjustment
is warranted.
Response: As we indicated earlier, we believe it is appropriate to
make this adjustment for the CY 2016 payment rates because otherwise
the excess packaged payments built into the rates for CY 2014 and CY
2015 would continue into CY 2016. If we waited to present this issue to
the HOP Panel, we would not be able to implement this adjustment until
the CY 2017 payment year.
Comment: One commenter suggested that the increase in ``unrelated''
laboratory services paid under the CLFS in CY 2014 might be a
continuation of the broader trend of inpatient services transitioning
to outpatient services and might not be related to the laboratory
packaging policy implemented in CY 2014.
Response: Our actuaries' analyses included in conjunction with the
proposed rule (80 FR 39239 and the ``Summary Analysis Supporting
Adjustment for Excess Laboratory Packaging'' on the OPPS Web site at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1633-P.html) indicate that the total amount of laboratory
services performed in the outpatient setting did not increase and that
the number of laboratory services performed in the outpatient setting
that were deemed ``unrelated'' to OPPS services in CY 2014 were greater
than we had estimated they would be with the implementation of the
laboratory services packaging policy. As a result, we believe that the
higher than expected number of ``unrelated'' laboratory services is
reflective of the classification changes related to the laboratory
packaging policy and not due to services moving from the inpatient
setting to the outpatient setting.
Comment: Several commenters suggested that CMS not implement this
adjustment because CMS had not specified in the CY 2014 OPPS final rule
that $2.4 billion was being included in the CY 2014 OPPS payment rates
to account for newly packaged laboratory services. The commentators
indicated that CMS did not specify in the CY 2014 OPPS final rule or in
the CY 2016 OPPS proposed rule whether CMS was excluding from the $2.4
billion estimate ``unrelated'' laboratory services that under CMS' CY
2014 policy would be separately paid.
Response: The proposed adjustment to the conversion factor would
affect OPPS payments for CY 2016, not CY 2014. In the CY 2014 OPPS/ASC
final rule with comment period, we discussed the incorporation of the
payment weights for outpatient laboratory tests previously paid at the
CLFS payment rates (78 FR 74948 through 74949). The calculation of the
OPPS relative weights and payment rates for CY 2014 reflects estimates
attributable to packaged laboratory services. While we did not specify
the estimated dollar amount ($2.4 billion) attributable to packaged
laboratory services in the CY 2014 final rule with comment period, we
did specify in the CY 2016 OPPS/ASC proposed rule that an estimated
$2.4 billion was effectively added to the OPPS payment system to
account for packaged laboratory services in the CY 2014 OPPS/ASC final
rule with comment period. Insofar as hospitals may have received
significant windfalls for CY 2014 and CY 2015, presumably commenters do
not intend to challenge the payments for those years (at least with
respect to the incorporation of packaged laboratory services). With
respect to the OPPS ratesetting process for CY 2016, we referenced the
$2.4 billion estimate in the CY 2016 OPPS/ASC proposed rule (as
explained above) and thus commenters had notice of the estimate for
purposes of commenting on the proposed adjustment in the CY 2016 OPPS/
ASC proposed rule.
Comment: Several commenters suggested that CMS not implement this
adjustment because the ``Summary Analysis Supporting Adjustment for
Excess Laboratory Packaging,'' released with the CY 2016 OPPS/ASC
proposed rule, included data that were not publicly available. The
commenters indicated that this summary analysis included CY 2014 data
processed through May 31, 2015, while the OPPS limited data set
released with the proposed rule included data processed through
December 31, 2014. In addition, the commenters noted that the summary
analysis displayed monthly data that are not available in the OPPS
limited data set. The commenters also noted that CMS did not detail
every assumption made in calculating the proposed adjustment, and that
without these details it would be difficult for commenters to replicate
our actuaries' analysis.
Response: The ``Summary Analysis Supporting Adjustment for Excess
Laboratory Packaging'' was provided in conjunction with the proposed
rule to give stakeholders/commenters additional information about our
methodology for determining the amount of the proposed adjustment, even
though the data used for purposes of the summary analysis were not the
same exact data used for purposes of the proposed rule. For the
supplemental summary analysis, we used the most recent data available
to us, CY 2014 claims processed through May 31, 2015, which we
estimated to be approximately 98 percent complete. The limited data set
(LDS) used for the proposed rule was approximately 90 percent complete.
While having 90 percent of claims, as opposed to 98 percent, may have
made it difficult for stakeholders to exactly replicate our results, we
note that the 90 percent LDS yielded very similar results to the 98
percent dataset, and we believe it would have been sufficient to enable
stakeholders to meaningfully comment on the proposed adjustment.
Likewise, we provided the table in the supplemental analysis with the
data presented by month because we believed it would help stakeholders
better understand the proposed adjustment, even if these data are not
replicable using the LDS. Specifically, we believed that the monthly
breakdown of unrelated laboratory test billing would show that
unrelated laboratory test billing was fairly consistent across CY 2014
and that the mid-year change in billing methodology
[[Page 70356]]
did not affect billing of unrelated laboratory tests in CY 2014.
We performed multiple analyses to better understand the effect of
the classification changes relating to packaged laboratory services on
aggregate payments, in order to determine the amount of the proposed
adjustment described in the proposed rule (80 FR 39239 through 39240).
As mentioned earlier in this section and explained in the proposed
rule, in one analysis, we analyzed actual claims data for CY 2014
(using data available for the CY 2016 proposed rule) to determine an
estimate of the total dollar amount that ``should have been'' packaged
into the OPPS for laboratory services in CY 2014 if we had had perfect
information about billing patterns of unrelated services when making
our original proposal for CY 2014. We first estimated how much we would
have paid if all laboratory services were paid at CLFS NLA rates and
had not been packaged under the OPPS. To do this, we began with the CY
2014 claims data which we used for the CY 2016 proposed rule. We
identified the number of billed laboratory services for each laboratory
test and associated the CY 2014 CLFS NLA payment rate with that
utilization to determine a total payment amount in CY 2014 for
laboratory services at NLA payment rates. We would expect final CLFS
payment to be less than total payment at NLA amounts because the CLFS
pays the ``lesser of'' the fee schedule amount, the NLA, or changes
(section 1833(a)(1)(D) of the Act). The NLA establishes a ceiling on
possible payment. We estimated an overall adjustment factor of 0.88
from the difference in total estimated NLA payment in CY 2012 rates and
total final actual CLFS payment on the claims. We used that factor to
adjust estimated total payment amounts for laboratory services at NLA
payment rates in CY 2014 claims to better reflect what actual payment
would have been in CY 2014 under CLFS payment methodologies. In
addition, we adjusted the payment amounts to account for the difference
between CY 2014 claims data and CY 2012 claims data and to account for
the fact that the CY 2014 claims data was only 90 percent complete for
the CY 2016 proposed rule. Using our standard methodology, we adjusted
these data to account for what they would have shown had they been
complete at the time of our analysis. We then examined actual CY 2014
claims data to estimate how much was paid separately for laboratory
services in CY 2014. The difference between these estimates reflects a
reasonable approximation of the payment that would have been packaged
into OPPS for laboratory services in CY 2014 if we had had perfect
information about billing patterns of unrelated services when making
our original proposal for CY 2014. This analysis indicates that we
included a gross estimate of roughly $1 billion in packaged payment in
the CY 2014 OPPS payment rates for laboratory tests that ultimately
were paid separately in CY 2014 (that is, excess packaged payment for
laboratory services).
We also performed an analysis to assess the total payment for
laboratory services that were billed on an OPPS claim, but were paid
separately in CY 2014 because they were unrelated to the OPPS services.
Specifically, using CY 2014 data processed through May 31, 2015, we
observed that laboratory services billed on the 14X claim increased
immediately beginning in January 2014 (as displayed in the ``Summary
Analysis Supporting Adjustment for Excess Laboratory Packaging'' posted
with the CY 2016 OPPS/ASC proposed rule) corresponding with use of the
14X bill type to report ``unrelated'' laboratory services. Beginning in
July 2014, corresponding with the change in billing policy to bill
``unrelated'' laboratory services on a 13X bill type with the ``L1''
modifier, we observed most of the increase in 14X billing shifting to
the 13X bill type with the ``L1'' modifier (again, as displayed in the
``Summary Analysis Supporting Adjustment for Excess Laboratory
Packaging'' posted with the CY 2016 OPPS/ASC proposed rule). Summing
the total increase in 14X billing in CY 2014 (compared to CY 2013) and
the total amount billed on 13X claims with an ``L1'' modifier in CY
2014 resulted in a similar estimate of approximately $1 billion in
``unrelated'' laboratory services. Because both analyses resulted in an
approximate $1 billion estimate of spending at the CLFS rates outside
the OPPS that was packaged into the OPPS, we stated that we believe
that a prospective adjustment to remove this $1 billion from the OPPS
would realign total aggregate OPPS payments to reflect the resources
associated with OPPS services. We calculated the $1 billion as a
percent of $50 billion (the approximate actual total spending for OPPS
services in CY 2014), which is 2.0 percent. Therefore, based on our
analysis of the effects of the classification changes for CY 2014, we
proposed a 2.0 percent downward adjustment to the conversion factor for
CY 2016. In addition to the proposed rule itself, we provided a
significant amount of additional information in the ``Summary Analysis
Supporting Adjustment for Excess Laboratory Packaging,'' including a
description of our actuaries' details and methods for its analysis, the
adjustment input quantities, and outpatient monthly unrelated
laboratory test billing. We believe the detail included in the proposed
rule and in conjunction with the proposed rule was sufficient for
stakeholders to be able to understand CMS' methodology for determining
the amount of the proposed adjustment.
Comment: Several commenters suggested that CMS not implement this
adjustment because the CY 2014 data year was an inappropriate base year
for analysis of the laboratory packing proposal because of the changing
methodology for reporting ``unrelated'' laboratory services during CY
2014. Many of these commenters suggested that CMS should wait until CY
2015 data are available before making an adjustment.
Response: As noted in the proposed rule (80 FR 39239) and
illustrated in the ``Outpatient Unrelated Lab Billing Shift
Quantities'' chart in the ``Summary Analysis Supporting Adjustment for
Excess Laboratory Packaging'' files released in conjunction with the CY
2016 OPPS proposed rule, monthly total ``unrelated'' laboratory test
billing was very consistent throughout CY 2014, with most ``unrelated''
laboratory test billing shifting from the 14X claim to the 13X claim
with the ``L1'' modifier in July 2014. Because monthly total
``unrelated'' billing was consistent over the CY 2014 payment year, we
do not believe that the mid-year change in how providers were to bill
for ``unrelated'' laboratory services led to an increase in billing for
such services in CY 2014. We believe that the consistency in the CY
2014 ``unrelated'' billing patterns across different billing
instructions shows that the change in billing requirements for
reporting unrelated laboratory services in CY 2014 did not cause a
higher than expected amount of unrelated laboratory service payments in
CY 2014. We continue to believe that the CY 2014 data regarding
``unrelated'' billing are appropriate for purposes of determining
whether an adjustment to the conversion factor is warranted for CY 2016
and the amount of any adjustment. We will monitor ``unrelated''
laboratory test billing patterns in the CY 2015 OPPS claims data as we
establish ratesetting for the CY 2017 OPPS payments to confirm this
conclusion.
Comment: Several commenters suggested that CMS not implement this
adjustment because CMS did not specify
[[Page 70357]]
whether the proposed changes to laboratory test packaging policy in the
CY 2016 OPPS/ASC proposed rule were factored into the -2.0 percent
adjustment to the conversion factor to address excess packaged payment
for laboratory services.
Response: The proposed adjustment to the conversion factor for CY
2016 is based on the effects of the OPPS classification changes
implemented for CY 2014; the proposed adjustment is not based on the
proposed classification changes for CY 2016. We did not propose an
adjustment to the conversion factor based on classification changes for
CY 2016, but we will monitor the effects of those changes. At this
time, we do not believe that a separate adjustment to the conversion
factor based on CY 2016 classification changes is warranted. Our
analysis indicates that the estimated effect of the CY 2016
classification changes on shifts between aggregate payments for
laboratory tests paid separately using CLFS payment rates and those
packaged under the OPPS is small and that, if we did make an adjustment
to account for those changes, it would be a further reduction to OPPS
payments. We will examine CY 2015 claims data when we set CY 2017 OPPS
payment rates.
After consideration of the public comments we received, we are
finalizing our proposal to adjust the CY 2016 conversion factor by -2.0
percent to eliminate the effects of classification changes on aggregate
payments that do not reflect real changes in service-mix.
In summary, for CY 2016, we are finalizing our proposal to amend
Sec. 419.32(b)(1)(iv)(B) by adding a new paragraph (7) to reflect the
reductions to the OPD fee schedule increase factor that are required
for CY 2016 to satisfy the statutory requirements of sections
1833(t)(3)(F) and (t)(3)(G)(iv) of the Act. We are using a reduced
conversion factor of $72.251 in the calculation of payments for
hospitals that fail to meet the Hospital OQR Program requirements (a
difference of -$1.474 in the conversion factor relative to hospitals
that meet the requirements).
For CY 2016, we are continuing previously established policies for
implementing the cancer hospital payment adjustment described in
section 1833(t)(18) of the Act, as discussed in section II.F. of this
final rule with comment period.
As a result of these finalized policies, the OPD fee schedule
increase factor for the CY 2016 OPPS is 1.7 percent (which is 2.4
percent, the estimate of the hospital inpatient market basket
percentage increase, less the 0.5 percentage point MFP adjustment, and
less the 0.2 percentage point additional adjustment). For CY 2016, we
are using a conversion factor of $73.725 in the calculation of the
national unadjusted payment rates for those items and services for
which payment rates are calculated using geometric mean costs. That is,
the OPD fee schedule increase factor of 1.7 percent for CY 2016, the
required wage index budget neutrality adjustment of 0.9992, the cancer
hospital payment adjustment of 0.9994, the -2.0 percent adjustment to
the conversion factor to eliminate the effects of classification
changes that would otherwise result in an increase in aggregate OPPS
payments (due to excess packaged payment under the OPPS for laboratory
tests), and the adjustment of -0.13 percentage point of projected OPPS
spending for the difference in the pass-through spending result in a
conversion factor for CY 2016 of $73.725.
C. Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B. of this final rule with
comment period.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). Therefore, in the CY 2016 OPPS/ASC
proposed rule, we proposed to continue this policy for the CY 2016
OPPS. We refer readers to section II.H. of this final rule with comment
period for a description and an example of how the wage index for a
particular hospital is used to determine payment for the hospital.
As discussed in section II.A.2.c. of this final rule with comment
period, for estimating APC costs, we standardize 60 percent of
estimated claims costs for geographic area wage variation using the
same FY 2016 pre-reclassified wage index that the IPPS uses to
standardize costs. This standardization process removes the effects of
differences in area wage levels from the determination of a national
unadjusted OPPS payment rate and copayment amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the original
OPPS April 7, 2000 final rule with comment period (65 FR 18495 and
18545)), the OPPS adopted the final fiscal year IPPS post-reclassified
wage index as the calendar year wage index for adjusting the OPPS
standard payment amounts for labor market differences. Therefore, the
wage index that applies to a particular acute care short-stay hospital
under the IPPS also applies to that hospital under the OPPS. As
initially explained in the September 8, 1998 OPPS proposed rule (63 FR
47576), we believe that using the IPPS wage index as the source of an
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS
wage index is updated annually.
The Affordable Care Act contained several provisions affecting the
wage index. These provisions were discussed in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74191). Section 10324 of the
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act,
which defines a frontier State and amended section 1833(t) of the Act
to add new paragraph (19), which requires a frontier State wage index
floor of 1.00 in certain cases, and states that the frontier State
floor shall not be applied in a budget neutral manner. We codified
these requirements in Sec. 419.43(c)(2) and (c)(3) of our regulations.
For the CY 2016 OPPS, we proposed to implement this provision in the
same manner as we have since CY 2011. Under this policy, the frontier
State hospitals would receive a wage index of 1.00 if the otherwise
applicable wage index (including reclassification, rural and imputed
floor, and rural floor budget neutrality) is less than 1.00. Because
the HOPD receives a wage index based on the geographic location of the
specific inpatient hospital with which it is associated, the frontier
State wage index adjustment applicable for the inpatient hospital also
would apply for any associated HOPD. We refer readers to the following
sections in the FY 2011 through FY 2016 IPPS/LTCH PPS final rules for
discussions regarding this provision, including our methodology for
identifying which areas meet the definition of ``frontier States'' as
provided for in section 1886(d)(3)(E)(iii)(II) of the Act: for FY 2011,
75 FR 50160 through 50161; for
[[Page 70358]]
FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR 53369
through 53370; for FY 2014, 78 FR 50590 through 50591; for FY 2015, 79
FR 49971; and for FY 2016, 80 FR 49498.
In addition to the changes required by the Affordable Care Act, we
note that the FY 2016 IPPS wage indexes continue to reflect a number of
adjustments implemented over the past few years, including, but not
limited to, reclassification of hospitals to different geographic
areas, the rural and imputed floor provisions, an adjustment for
occupational mix, and an adjustment to the wage index based on
commuting patterns of employees (the out-migration adjustment). We
refer readers to the FY 2016 IPPS/LTCH PPS final rule (80 FR 49488
through 49508) for a detailed discussion of all changes to the FY 2016
IPPS wage indexes. In addition, we refer readers to the CY 2005 OPPS
final rule with comment period (69 FR 65842 through 65844) and
subsequent OPPS rules for a detailed discussion of the history of these
wage index adjustments as applied under the OPPS.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963) and the FY 2016 IPPS/LTCH PPS final rule (80 FR 49488
through 49513), the Office of Management and Budget (OMB) issued
revisions to the labor market area delineations on February 28, 2013
(based on 2010 Decennial Census data), that included a number of
significant changes such as new Core Based Statistical Areas (CBSAs),
urban counties that became rural, rural counties that became urban, and
existing CBSAs that were split apart (OMB Bulletin 13-01). This
bulletin can be found at: http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final
rule (79 FR 49950 through 49985), we adopted the use of the OMB labor
market area delineations that were based on the 2010 Decennial Census
data.
In the CY 2016 OPPS/ASC proposed rule, we proposed to use the FY
2016 hospital IPPS post-reclassified wage index for urban and rural
areas as the wage index for the OPPS to determine the wage adjustments
for both the OPPS payment rate and the copayment standardized amount
for CY 2016. Thus, any adjustments that were proposed for the FY 2016
IPPS post-reclassified wage index would be reflected in the proposed CY
2016 OPPS wage index. (We referred readers to the FY 2016 IPPS/LTCH PPS
proposed rule (80 FR 24463 through 24477) and the proposed FY 2016
hospital wage index files posted on the CMS Web site.)
Hospitals that are paid under the OPPS, but not under the IPPS, do
not have an assigned hospital wage index under the IPPS. Therefore, for
non-IPPS hospitals paid under the OPPS, it is our longstanding policy
to assign the wage index that would be applicable if the hospital were
paid under the IPPS, based on its geographic location and any
applicable wage index adjustments. We proposed to continue this policy
for CY 2016. The following is a brief summary of the major FY 2016 IPPS
wage index policies and adjustments that we proposed to apply to these
hospitals under the OPPS for CY 2016. We further refer readers to the
FY 2016 IPPS/LTCH PPS final rule (80 FR 49488 through 49508) for a
detailed discussion of the final changes to the FY 2016 IPPS wage
indexes.
It has been our longstanding policy to allow non-IPPS hospitals
paid under the OPPS to qualify for the out-migration adjustment if they
are located in a section 505 out-migration county (section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)). Applying this adjustment is consistent with our policy of
adopting IPPS wage index policies for hospitals paid under the OPPS. We
note that, because non-IPPS hospitals cannot reclassify, they would be
eligible for the out-migration wage adjustment if they are located in a
section 505 out-migration county. This is the same out-migration
adjustment policy that would apply if the hospital were paid under the
IPPS. For CY 2016, we proposed to continue our policy of allowing non-
IPPS hospitals paid under the OPPS to qualify for the out-migration
adjustment if they are located in a section 505 out-migration county
(section 505 of the MMA).
As stated earlier, in the FY 2015 IPPS/LTCH PPS final rule, we
adopted the OMB labor market area delineations issued by OMB in OMB
Bulletin No. 13-01 on February 28, 2013, based on standards published
on June 28, 2010 (75 FR 37246 through 37252) and the 2010 Census data
to delineate labor market areas for purposes of the IPPS wage index.
For IPPS wage index purposes, for hospitals that were located in urban
CBSAs in FY 2014 but were designated as rural under these revised OMB
labor market area delineations, we generally assigned them the urban
wage index value of the CBSA in which they were physically located for
FY 2014 for a period of 3 fiscal years (79 FR 49957 through 49960). To
be consistent, we applied the same policy to hospitals paid under the
OPPS but not under the IPPS so that such hospitals will maintain the
wage index of the CBSA in which they were physically located for FY
2014 for 3 calendar years (until December 31, 2017). Thus, for the CY
2016 OPPS, consistent with the FY 2016 IPPS/LTCH PPS final rule (80 FR
49494 through 49496), this 3-year transition will continue for the
second year in CY 2016. For CY 2015, we also finalized a 1-year blended
wage index for all hospitals that experienced any decrease in their
actual payment wage index exclusively due to the implementation of the
new OMB delineations. In the CY 2015 OPPS/ASC final rule with comment
period, for purposes of the OPPS, we finalized a policy to apply this
1-year, 50-percent transition blend to hospitals paid under the OPPS
but not under the IPPS. Therefore, this one-year transition blend does
not apply for the CY 2016 OPPS wage index because it expires at the end
of CY 2015.
In addition, for the FY 2016 IPPS, we extended the imputed floor
policy (both the original methodology and alternative methodology) for
another year, through September 30, 2016 (80 FR 49497 through 49498).
For purposes of the CY 2016 OPPS, we also proposed to apply the imputed
floor policy to hospitals paid under the OPPS but not under the IPPS so
long as the IPPS continues an imputed floor policy.
For CMHCs, for CY 2016, we proposed to continue to calculate the
wage index by using the post-reclassification IPPS wage index based on
the CBSA where the CMHC is located. As with OPPS hospitals and for the
same reasons, in CY 2015, we applied a 1-year, 50/50 blended wage index
to CMHCs that would receive a lower wage index due to the new OMB labor
market area delineations. However, this blended wage index does not
apply in CY 2016 because it expires at the end of CY 2015. In addition,
as with OPPS hospitals and for the same reasons, for CMHCs previously
located in urban CBSAs that were designated as rural under the new OMB
labor market area delineations, we finalized a policy to maintain the
urban wage index value of the CBSA in which they were physically
located for CY 2014 for 3 calendar years (until December 31, 2017).
Consistent with our current policy, the wage index that applies to
CMHCs includes both the imputed floor adjustment and the rural floor
adjustment, but does not include the out-migration adjustment because
that adjustment only applies to hospitals.
Comment: One commenter noted that the IPPS wage index does not
account for the difficulty of recruiting health professionals to rural
areas. The
[[Page 70359]]
commenter suggested that a higher wage index for rural areas would help
these hospitals recruit professionals from other areas to underserved
rural areas.
Response: Section 1833(t)(2)(D) of the Act requires the Secretary
to determine a wage adjustment factor to adjust the portion of payment
and coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner. We continue to believe that using the IPPS
wage index as the source of the OPPS wage index is reasonable and
logical, given the inseparable, subordinate status of the HOPD within
the hospital. As we discussed in the FY 2015 IPPS/LTCH PPS final rule
(79 FR 49951), we believe that the IPPS wage index reflects the reality
of population shifts and labor market conditions, and provides an
accurate representation of geographic variation in wage levels.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to continue to use an
OPPS labor-related share of 60 percent of the national OPPS payment for
the CY 2016 OPPS. We also are finalizing the use of the final FY 2016
IPPS post-reclassified wage index for urban and rural areas in its
entirety, including the frontier State wage index floor, the rural
floor, geographic reclassifications, and all other applicable wage
index adjustments, as the final CY 2016 wage index for OPPS hospitals
and CMHCs based on where the facility is located for both the OPPS
payment rate and the copayment standardized amount, as discussed above
and as set forth in the CY 2016 OPPS/ASC proposed rule (80 FR 39240
through 39242). We refer readers to the FY 2016 IPPS/LTCH PPS final
rule (80 FR 49488 through 49508) and the final FY 2016 hospital wage
index files posted on the CMS Web site. For non-IPPS hospitals under
the OPPS, we are finalizing our proposal to continue to assign the wage
index that would be applicable if the hospital were paid under the
IPPS, based on its geographic location and any applicable wage index
adjustments. We also are finalizing our proposal to apply the imputed
floor policy to hospitals paid under the OPPS but not under the IPPS so
long as the IPPS continues an imputed floor policy, which CMS has
extended for an additional year under the IPPS in the FY 2016 IPPS/LTCH
PPS final rule. In addition, we are finalizing our proposal to continue
our policy of allowing non-IPPS hospitals paid under the OPPS to
qualify for the out-migration adjustment if they are located in a
section 505 out-migration county (section 505 of the MMA). The new
Table 2 from the FY 2016 IPPS/LTCH PPS final rule (available via the
Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) identifies
counties eligible for the out-migration adjustment and IPPS hospitals
that will receive the adjustment for FY 2016. (We note that the new FY
2016 IPPS Table 2 consolidates information on counties eligible for the
out-migration adjustment that was previously issued as Table 4J.) We
are including the out-migration adjustment information from the new
consolidated Table 2 from the FY 2016 IPPS/LTCH PPS final rule as
Addendum L to this final rule with comment period with the addition of
non-IPPS hospitals that will receive the section 505 out-migration
adjustment under the CY 2016 OPPS. Addendum L is available via the
Internet on the CMS Web site. With the exception of the out-migration
wage adjustment table (Addendum L to this final rule with comment
period, which is available via the Internet on the CMS Web site), which
includes non-IPPS hospitals paid under the OPPS, we are not reprinting
the final FY 2016 IPPS wage indexes referenced in this discussion of
the wage index. We refer readers to the CMS Web site for the OPPS at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. At this link, readers will find a
link to the final FY 2016 IPPS wage index tables and Addendum L.
D. Statewide Average Default CCRs
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, CMS uses overall hospital-specific CCRs calculated
from the hospital's most recent cost report to determine outlier
payments, payments for pass-through devices, and monthly interim
transitional corridor payments under the OPPS during the PPS year. MACs
cannot calculate a CCR for some hospitals because there is no cost
report available. For these hospitals, CMS uses the statewide average
default CCRs to determine the payments mentioned above until a
hospital's MAC is able to calculate the hospital's actual CCR from its
most recently submitted Medicare cost report. These hospitals include,
but are not limited to, hospitals that are new, hospitals that have not
accepted assignment of an existing hospital's provider agreement, and
hospitals that have not yet submitted a cost report. CMS also uses the
statewide average default CCRs to determine payments for hospitals that
appear to have a biased CCR (that is, the CCR falls outside the
predetermined ceiling threshold for a valid CCR) or for hospitals in
which the most recent cost report reflects an all-inclusive rate status
(Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section
10.11). In this final rule with comment period, as we proposed, we are
updating the default ratios for CY 2016 using the most recent cost
report data. We discuss our policy for using default CCRs, including
setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68594 through 68599) in the
context of our adoption of an outlier reconciliation policy for cost
reports beginning on or after January 1, 2009.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39242), for CY 2016,
we proposed to continue to use our standard methodology of calculating
the statewide average default CCRs using the same hospital overall CCRs
that we use to adjust charges to costs on claims data for setting the
proposed CY 2016 OPPS relative payment weights. Table 11 published in
the proposed rule (80 FR 39243) listed the proposed CY 2016 default
urban and rural CCRs by State and compared them to the CY 2015 default
CCRs. These proposed CCRs represented the ratio of total costs to total
charges for those cost centers relevant to outpatient services from
each hospital's most recently submitted cost report, weighted by
Medicare Part B charges. We also proposed to adjust ratios from
submitted cost reports to reflect the final settled status by applying
the differential between settled to submitted overall CCRs for the cost
centers relevant to outpatient services from the most recent pair of
final settled and submitted cost reports. We then proposed to weight
each hospital's CCR by the volume of separately paid line-items on
hospital claims corresponding to the year of the majority of cost
reports used to calculate the overall CCRs. We refer readers to the CY
2008 OPPS/ASC final rule with comment period (72 FR 66680 through
66682) and prior OPPS rules for a more detailed discussion of our
established methodology for calculating the statewide average default
CCRs, including the hospitals used in our calculations and our trimming
criteria.
For Maryland, we used an overall weighted average CCR for all
hospitals in the Nation as a substitute for Maryland CCRs. Few
hospitals in Maryland are eligible to receive payment under the OPPS,
which limits the data available to calculate an accurate and
representative CCR. The weighted CCR is used for Maryland because it
takes into account each
[[Page 70360]]
hospital's volume, rather than treating each hospital equally. We refer
readers to the CY 2005 OPPS final rule with comment period (69 FR
65822) for further discussion and the rationale for our longstanding
policy of using the national average CCR for Maryland. In general,
observed changes in the statewide average default CCRs between CY 2015
and CY 2016 are modest and the few significant changes are associated
with areas that have a small number of hospitals.
We did not receive any public comments on our CY 2016 proposal.
Therefore, we are finalizing our proposal, without modification, to
apply our standard methodology of calculating the statewide average
default CCRs using the same hospital overall CCRs that we used to
adjust charges to costs on claims data for setting the final CY 2016
OPPS relative payment weights.
Table 14 below lists the statewide average default CCRs for OPPS
services furnished on or after January 1, 2016.
TABLE 14--CY 2016 Statewide Average CCRs
----------------------------------------------------------------------------------------------------------------
Previous default
State Urban/rural CY 2016 CCR (CY 2015 OPPS
default CCR final rule)
----------------------------------------------------------------------------------------------------------------
ALASKA...................................... RURAL......................... 0.588 0.439
ALASKA...................................... URBAN......................... 0.269 0.294
ALABAMA..................................... RURAL......................... 0.224 0.235
ALABAMA..................................... URBAN......................... 0.168 0.186
ARKANSAS.................................... RURAL......................... 0.223 0.262
ARKANSAS.................................... URBAN......................... 0.218 0.239
ARIZONA..................................... RURAL......................... 0.246 0.228
ARIZONA..................................... URBAN......................... 0.170 0.181
CALIFORNIA.................................. RURAL......................... 0.179 0.178
CALIFORNIA.................................. URBAN......................... 0.190 0.196
COLORADO.................................... RURAL......................... 0.366 0.410
COLORADO.................................... URBAN......................... 0.208 0.219
CONNECTICUT................................. RURAL......................... 0.366 0.339
CONNECTICUT................................. URBAN......................... 0.257 0.273
DISTRICT OF COLUMBIA........................ URBAN......................... 0.298 0.299
DELAWARE.................................... URBAN......................... 0.308 0.314
FLORIDA..................................... RURAL......................... 0.170 0.180
FLORIDA..................................... URBAN......................... 0.150 0.156
GEORGIA..................................... RURAL......................... 0.251 0.256
GEORGIA..................................... URBAN......................... 0.199 0.211
HAWAII...................................... RURAL......................... 0.339 0.337
HAWAII...................................... URBAN......................... 0.313 0.307
IOWA........................................ RURAL......................... 0.305 0.321
IOWA........................................ URBAN......................... 0.256 0.269
IDAHO....................................... RURAL......................... 0.337 0.353
IDAHO....................................... URBAN......................... 0.459 0.463
ILLINOIS.................................... RURAL......................... 0.234 0.252
ILLINOIS.................................... URBAN......................... 0.208 0.217
INDIANA..................................... RURAL......................... 0.314 0.334
INDIANA..................................... URBAN......................... 0.237 0.262
KANSAS...................................... RURAL......................... 0.287 0.300
KANSAS...................................... URBAN......................... 0.209 0.231
KENTUCKY.................................... RURAL......................... 0.202 0.231
KENTUCKY.................................... URBAN......................... 0.203 0.212
LOUISIANA................................... RURAL......................... 0.256 0.272
LOUISIANA................................... URBAN......................... 0.202 0.209
MASSACHUSETTS............................... RURAL......................... 0.324 0.326
MASSACHUSETTS............................... URBAN......................... 0.330 0.333
MAINE....................................... RURAL......................... 0.470 0.430
MAINE....................................... URBAN......................... 0.395 0.432
MARYLAND.................................... RURAL......................... 0.277 0.296
MARYLAND.................................... URBAN......................... 0.234 0.244
MICHIGAN.................................... RURAL......................... 0.317 0.371
MICHIGAN.................................... URBAN......................... 0.319 0.320
MINNESOTA................................... RURAL......................... 0.449 0.485
MINNESOTA................................... URBAN......................... 0.377 0.347
MISSOURI.................................... RURAL......................... 0.238 0.267
MISSOURI.................................... URBAN......................... 0.253 0.274
MISSISSIPPI................................. RURAL......................... 0.235 0.247
MISSISSIPPI................................. URBAN......................... 0.169 0.181
MONTANA..................................... RURAL......................... 0.480 0.501
MONTANA..................................... URBAN......................... 0.403 0.386
NORTH CAROLINA.............................. RURAL......................... 0.229 0.280
NORTH CAROLINA.............................. URBAN......................... 0.235 0.246
NORTH DAKOTA................................ RURAL......................... 0.443 0.660
NORTH DAKOTA................................ URBAN......................... 0.355 0.395
NEBRASKA.................................... RURAL......................... 0.283 0.290
NEBRASKA.................................... URBAN......................... 0.238 0.255
NEW HAMPSHIRE............................... RURAL......................... 0.306 0.362
NEW HAMPSHIRE............................... URBAN......................... 0.306 0.280
[[Page 70361]]
NEW JERSEY.................................. URBAN......................... 0.194 0.202
NEW MEXICO.................................. RURAL......................... 0.280 0.296
NEW MEXICO.................................. URBAN......................... 0.290 0.294
NEVADA...................................... RURAL......................... 0.219 0.241
NEVADA...................................... URBAN......................... 0.146 0.149
NEW YORK.................................... RURAL......................... 0.311 0.333
NEW YORK.................................... URBAN......................... 0.298 0.340
OHIO........................................ RURAL......................... 0.295 0.317
OHIO........................................ URBAN......................... 0.212 0.222
OKLAHOMA.................................... RURAL......................... 0.255 0.282
OKLAHOMA.................................... URBAN......................... 0.192 0.203
OREGON...................................... RURAL......................... 0.265 0.287
OREGON...................................... URBAN......................... 0.341 0.352
PENNSYLVANIA................................ RURAL......................... 0.277 0.283
PENNSYLVANIA................................ URBAN......................... 0.195 0.197
PUERTO RICO................................. URBAN......................... 0.590 0.577
RHODE ISLAND................................ URBAN......................... 0.290 0.297
SOUTH CAROLINA.............................. RURAL......................... 0.188 0.191
SOUTH CAROLINA.............................. URBAN......................... 0.197 0.207
SOUTH DAKOTA................................ RURAL......................... 0.367 0.286
SOUTH DAKOTA................................ URBAN......................... 0.224 0.214
TENNESSEE................................... RURAL......................... 0.198 0.203
TENNESSEE................................... URBAN......................... 0.177 0.188
TEXAS....................................... RURAL......................... 0.238 0.251
TEXAS....................................... URBAN......................... 0.179 0.203
UTAH........................................ RURAL......................... 0.493 0.481
UTAH........................................ URBAN......................... 0.325 0.335
VIRGINIA.................................... RURAL......................... 0.195 0.219
VIRGINIA.................................... URBAN......................... 0.233 0.241
VERMONT..................................... RURAL......................... 0.434 0.439
VERMONT..................................... URBAN......................... 0.336 0.353
WASHINGTON.................................. RURAL......................... 0.349 0.300
WASHINGTON.................................. URBAN......................... 0.308 0.330
WISCONSIN................................... RURAL......................... 0.317 0.328
WISCONSIN................................... URBAN......................... 0.296 0.294
WEST VIRGINIA............................... RURAL......................... 0.276 0.312
WEST VIRGINIA............................... URBAN......................... 0.294 0.300
WYOMING..................................... RURAL......................... 0.433 0.429
WYOMING..................................... URBAN......................... 0.311 0.262
----------------------------------------------------------------------------------------------------------------
E. Adjustment for Rural SCHs and EACHs Under Section 1833(t)(13)(B) of
the Act
In the CY 2006 OPPS final rule with comment period (70 FR 68556),
we finalized a payment increase for rural SCHs of 7.1 percent for all
services and procedures paid under the OPPS, excluding drugs,
biologicals, brachytherapy sources, and devices paid under the pass-
through payment policy in accordance with section 1833(t)(13)(B) of the
Act, as added by section 411 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173).
Section 1833(t)(13) of the Act provided the Secretary the authority to
make an adjustment to OPPS payments for rural hospitals, effective
January 1, 2006, if justified by a study of the difference in costs by
APC between hospitals in rural areas and hospitals in urban areas. Our
analysis showed a difference in costs for rural SCHs. Therefore, for
the CY 2006 OPPS, we finalized a payment adjustment for rural SCHs of
7.1 percent for all services and procedures paid under the OPPS,
excluding separately payable drugs and biologicals, brachytherapy
sources, and devices paid under the pass-through payment policy, in
accordance with section 1833(t)(13)(B) of the Act.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
and 68227), for purposes of receiving this rural adjustment, we revised
Sec. 419.43(g) of the regulations to clarify that EACHs also are
eligible to receive the rural SCH adjustment, assuming these entities
otherwise meet the rural adjustment criteria. Currently, two hospitals
are classified as EACHs, and as of CY 1998, under section 4201(c) of
Pub. L. 105-33, a hospital can no longer become newly classified as an
EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outlier payments and copayments. We stated in the CY 2006
OPPS final rule with comment period (70 FR 68560) that we would not
reestablish the adjustment amount on an annual basis, but we may review
the adjustment in the future and, if appropriate, would revise the
adjustment. We provided the same 7.1 percent adjustment to rural SCHs,
including EACHs, again in CYs 2008 through 2015. Further, in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated
the regulations at Sec. 419.43(g)(4) to specify, in general terms,
that items paid at charges adjusted to costs by application of a
hospital-specific CCR are excluded from the 7.1 percent payment
adjustment.
For the CY 2016 OPPS, we proposed to continue our policy of a 7.1
percent payment adjustment that is done in a budget neutral manner for
rural SCHs, including EACHs, for all services and procedures paid under
the OPPS,
[[Page 70362]]
excluding separately payable drugs and biologicals, devices paid under
the pass-through payment policy, and items paid at charges reduced to
costs (80 FR 39244).
Comment: Several commenters supported the proposed policy of a 7.1
percent payment adjustment.
Response: We appreciate the commenters' support.
Comment: A few commenters suggested that CMS perform a new analysis
to determine if a different rural adjustment amount is warranted. The
commenters noted that they performed their own analysis which suggested
that a higher adjustment was warranted for SCHs and that an adjustment
was warranted for small rural hospitals that were not SCHs. One
commenter suggested that CMS revisit its original analysis because an
adjustment for rural SCHs may no longer be warranted.
Response: We plan to review whether a revised analysis is warranted
for future rulemaking.
After consideration of the public comments we received, we are
finalizing our proposal for CY 2016 to continue our policy of a 7.1
percent payment adjustment that is done in a budget neutral manner for
rural SCHs, including EACHs, for all services and procedures paid under
the OPPS, excluding separately payable drugs and biologicals, devices
paid under the pass-through payment policy, and items paid at charges
reduced to costs.
F. OPPS Payment to Certain Cancer Hospitals Described by Section
1886(d)(1)(B)(v) of the Act
1. Background
Since the inception of the OPPS, which was authorized by the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
the 11 hospitals that meet the criteria for cancer hospitals identified
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
outpatient hospital services. These cancer hospitals are exempted from
payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced
Budget Refinement Act of 1999 (Pub. L. 106-113), Congress established
section 1833(t)(7) of the Act, ``Transitional Adjustment to Limit
Decline in Payment,'' to determine OPPS payments to cancer and
children's hospitals based on their pre-BBA payment amount (often
referred to as ``held harmless'').
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the difference between payments
for covered outpatient services under the OPPS and a ``pre-BBA
amount.'' That is, cancer hospitals are permanently held harmless to
their ``pre-BBA amount,'' and they receive transitional outpatient
payments (TOPs) or hold harmless payments to ensure that they do not
receive a payment that is lower in amount under the OPPS than the
payment amount they would have received before implementation of the
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
amount'' is the product of the hospital's reasonable costs for covered
outpatient services occurring in the current year and the base payment-
to-cost ratio (PCR) for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
determination of the base PCR are defined at 42 CFR 419.70(f). TOPs are
calculated on Worksheet E, Part B, of the Hospital Cost Report or the
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10, respectively) as applicable each year. Section 1833(t)(7)(I)
of the Act exempts TOPs from budget neutrality calculations.
Section 3138 of the Affordable Care Act amended section 1833(t) of
the Act by adding a new paragraph (18), which instructs the Secretary
to conduct a study to determine if, under the OPPS, outpatient costs
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
the Act with respect to APC groups exceed outpatient costs incurred by
other hospitals furnishing services under section 1833(t) of the Act,
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
the Act requires the Secretary to take into consideration the cost of
drugs and biologicals incurred by cancer hospitals and other hospitals.
Section 1833(t)(18)(B) of the Act provides that, if the Secretary
determines that cancer hospitals' costs are greater than other
hospitals' costs, the Secretary shall provide an appropriate adjustment
under section 1833(t)(2)(E) of the Act to reflect these higher costs.
In 2011, after conducting the study required by section 1833(t)(18)(A)
of the Act, we determined that outpatient costs incurred by the 11
specified cancer hospitals were greater than the costs incurred by
other OPPS hospitals. For a complete discussion regarding the cancer
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs as discussed in the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the calendar year and is
calculated using the most recent submitted or settled cost report data
that are available at the time of final rulemaking for the calendar
year. The amount of the payment adjustment is made on an aggregate
basis at cost report settlement. We note that the changes made by
section 1833(t)(18) of the Act do not affect the existing statutory
provisions that provide for TOPs for cancer hospitals. The TOPs are
assessed as usual after all payments, including the cancer hospital
payment adjustment, have been made for a cost reporting period. For CYs
2012 and 2013, the target PCR for purposes of the cancer hospital
payment adjustment was 0.91. For CY 2014, the target PCR for purposes
of the cancer hospital payment adjustment was 0.89. For CY 2015, the
target PCR was 0.90, as discussed in the CY 2015 OPPS/ASC final rule
with comment period correction notice (80 FR 9629).
2. Payment Adjustment for Certain Cancer Hospitals for CY 2016
For CY 2016, we proposed to continue our policy to provide
additional payments to the 11 specified cancer hospitals so that each
cancer hospital's final PCR is equal to the weighted average PCR (or
``target PCR'') for the other OPPS hospitals using the most recent
submitted or settled cost report data that were available at the time
of the development of the CY 2016 OPPS/ASC proposed rule (80 FR 39245).
To calculate the proposed CY 2016 target PCR, we used the same extract
of cost report data from HCRIS, as discussed in section II.A. of the
proposed rule, used to estimate costs for the CY 2016 OPPS. Using these
cost report data, we included data from Worksheet E, Part B, for each
hospital, using data from each hospital's most recent cost report,
whether as submitted or settled.
We then limited the dataset to the hospitals with CY 2014 claims
data that we used to model the impact of the proposed CY 2016 APC
relative payment weights (3,794 hospitals) because it is appropriate to
use the same set of hospitals that we are using to calibrate the
modeled CY 2016 OPPS. The cost report data for the hospitals in this
dataset were from cost report periods with fiscal year ends ranging
[[Page 70363]]
from 2013 to 2014. We then removed the cost report data of the 47
hospitals located in Puerto Rico from our dataset because we do not
believe that their cost structure reflects the costs of most hospitals
paid under the OPPS and, therefore, their inclusion may bias the
calculation of hospital-weighted statistics. We also removed the cost
report data of 18 hospitals because these hospitals had cost report
data that were not complete (missing aggregate OPPS payments, missing
aggregate cost data, or missing both), so that all cost reports in the
study would have both the payment and cost data necessary to calculate
a PCR for each hospital, leading to a proposed analytic file of 3,729
hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated that,
on average, the OPPS payments to other hospitals furnishing services
under the OPPS are approximately 90 percent of reasonable cost
(weighted average PCR of 0.90). Therefore, we proposed that the payment
amount associated with the cancer hospital payment adjustment to be
determined at cost report settlement would be the additional payment
needed to result in a PCR equal to 0.90 for each cancer hospital. Table
12 published in the proposed rule indicated the proposed estimated
percentage increase in OPPS payments to each cancer hospital for CY
2016 due to the cancer hospital payment adjustment policy.
We indicated that the actual amount of the CY 2016 cancer hospital
payment adjustment for each cancer hospital will be determined at cost
report settlement and will depend on each hospital's CY 2016 payments
and costs. We noted that the requirements contained in section
1833(t)(18) of the Act do not affect the existing statutory provisions
that provide for TOPs for cancer hospitals. The TOPs will be assessed
as usual after all payments, including the cancer hospital payment
adjustment, have been made for a cost reporting period.
Comment: Several commenters supported the proposed cancer hospital
payment adjustment for CY 2016.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing the proposed methodology for calculating the cancer hospital
payment adjustment for CY 2016. For this final rule with comment
period, we are using the most recent cost report data through September
30, 2015 to update the adjustment. This update yields a target PCR of
0.92. We limited the dataset to the hospitals with CY 2014 claims data
that we used to model the impact of the CY 2016 APC relative payment
weights (3,781 hospitals) because it is appropriate to use the same set
of hospitals that we are using to calibrate the modeled CY 2016 OPPS.
The cost report data for the hospitals in this dataset were from cost
report periods with fiscal year ends ranging from 2012 to 2015. We then
removed the cost report data of the 49 hospitals located in Puerto Rico
from our dataset because we do not believe that their cost structure
reflects the costs of most hospitals paid under the OPPS and,
therefore, their inclusion may bias the calculation of hospital-
weighted statistics. We also removed the cost report data of 11
hospitals because these hospitals had cost report data that were not
complete (missing aggregate OPPS payments, missing aggregate cost data,
or missing both), so that all cost reports in the study would have both
the payment and cost data necessary to calculate a PCR for each
hospital, leading to a proposed analytic file of 3,721 hospitals with
cost report data.
Using this smaller dataset of cost report data, we estimated that,
on average, the OPPS payments to other hospitals furnishing services
under the OPPS are approximately 92 percent of reasonable cost
(weighted average PCR of 0.92). Therefore, we are finalizing that the
payment amount associated with the cancer hospital payment adjustment
to be determined at cost report settlement would be the additional
payment needed to result in a PCR equal to 0.92 for each cancer
hospital.
Table 15 below indicates estimates in percentage terms of the CY
2016 payment adjustment for each cancer hospital. The actual amount of
the CY 2016 cancer hospital payment adjustment for each cancer hospital
will be determined at cost report settlement and will depend on each
hospital's CY 2016 payments and costs.
TABLE 15--Estimated CY 2016 Hospital-Specific Payment Adjustment for
Cancer Hospitals to be Provided at Cost Report Settlement
------------------------------------------------------------------------
Estimated percentage
Provider No. Hospital name increase in OPPS
payments for CY 2016
------------------------------------------------------------------------
050146..................... City of Hope 21.6
Comprehensive
Cancer Center.
050660..................... USC Norris Cancer 21.9
Hospital.
100079..................... Sylvester 25.1
Comprehensive
Cancer Center.
100271..................... H. Lee Moffitt 27.3
Cancer Center &
Research
Institute.
220162..................... Dana-Farber Cancer 51.1
Institute.
330154..................... Memorial Sloan- 46.9
Kettering Cancer
Center.
330354..................... Roswell Park 31.4
Cancer Institute.
360242..................... James Cancer 35.4
Hospital & Solove
Research
Institute.
390196..................... Fox Chase Cancer 23.7
Center.
450076..................... M.D. Anderson 50.9
Cancer Center.
500138..................... Seattle Cancer 57.3
Care Alliance.
------------------------------------------------------------------------
G. Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain amount of dollars). In CY 2015, the outlier
threshold was met when the hospital's
[[Page 70364]]
cost of furnishing a service exceeded 1.75 times (the multiplier
threshold) the APC payment amount and exceeded the APC payment amount
plus $2,775 (the fixed-dollar amount threshold) (79 FR 66834). If the
cost of a service exceeds both the multiplier threshold and the fixed-
dollar threshold, the outlier payment is calculated as 50 percent of
the amount by which the cost of furnishing the service exceeds 1.75
times the APC payment amount. Beginning with CY 2009 payments, outlier
payments are subject to a reconciliation process similar to the IPPS
outlier reconciliation process for cost reports, as discussed in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68594 through
68599).
It has been our policy to report the actual amount of outlier
payments as a percent of total spending in the claims being used to
model the proposed OPPS. Our estimate of total outlier payments as a
percent of total CY 2014 OPPS payment, using CY 2014 claims available
for this final rule with comment period and the revised OPPS
expenditure estimate for the FY 2016 President's Budget Mid-Session
Review, is approximately 0.9 percent of the total aggregated OPPS
payments. Therefore, for CY 2014, we estimate that we paid 0.1
percentage points below the CY 2014 outlier target of 1.0 percent of
total aggregated OPPS payments.
Using CY 2014 claims data and CY 2015 payment rates, we currently
estimate that the aggregate outlier payments for CY 2015 will be
approximately 0.9 percent of the total CY 2015 OPPS payments. The
difference between 0.9 percent and the 1.0 percent target is reflected
in the regulatory impact analysis in section XXI. of this final rule
with comment period. We provide estimated CY 2016 outlier payments for
hospitals and CMHCs with claims included in the claims data that we
used to model impacts in the Hospital-Specific Impacts--Provider-
Specific Data file on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Outlier Calculation
In the CY 2016 OPPS/ASC proposed rule (80 FR 39246), we proposed to
continue our policy of estimating outlier payments to be 1.0 percent of
the estimated aggregate total payments under the OPPS. We proposed that
a portion of that 1.0 percent, an amount equal to 0.49 percent of
outlier payments (or 0.0049 percent of total OPPS payments) would be
allocated to CMHCs for PHP outlier payments. This is the amount of
estimated outlier payments that would result from the proposed CMHC
outlier threshold as a proportion of total estimated OPPS outlier
payments. As discussed in section VIII.D. of the proposed rule and this
final rule with comment period, we proposed to continue our
longstanding policy that if a CMHC's cost for partial hospitalization
services, paid under either proposed renumbered APC 5851 (Level 1
Partial Hospitalization (3 services) for CMHCs) (existing APC 0172) or
proposed renumbered APC 5852 (Level 2 Partial Hospitalization (4 or
more services) for CMHCs) (existing APC 0173), exceeds 3.40 times the
payment rate for proposed renumbered APC 5852, the outlier payment
would be calculated as 50 percent of the amount by which the cost
exceeds 3.40 times the proposed renumbered APC 5852 payment rate. For
further discussion of CMHC outlier payments, we refer readers to
section VIII.D. of the proposed rule and this final rule with comment
period.
To ensure that the estimated CY 2016 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we proposed that the hospital outlier threshold be set so that
outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus $3,650.
We calculated the proposed fixed-dollar threshold of $3,650 using
the standard methodology most recently used for CY 2015 (79 FR 66833
through 66834). For purposes of estimating outlier payments for the
proposed rule, we used the hospital-specific overall ancillary CCRs
available in the April 2015 update to the Outpatient Provider-Specific
File (OPSF). The OPSF contains provider-specific data, such as the most
current CCRs, which are maintained by the MACs and used by the OPPS
Pricer to pay claims. The claims that we use to model each OPPS update
lag by 2 years.
In order to estimate the CY 2016 hospital outlier payments for the
proposed rule, we inflated the charges on the CY 2014 claims using the
same inflation factor of 1.0985 that we used to estimate the IPPS
fixed-dollar outlier threshold for the FY 2016 IPPS/LTCH PPS proposed
rule (80 FR 24632 through 24633). We used an inflation factor of 1.0481
to estimate CY 2015 charges from the CY 2014 charges reported on CY
2014 claims. The methodology for determining this charge inflation
factor is discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR
24632). As we stated in the CY 2005 OPPS final rule with comment period
(69 FR 65845), we believe that the use of these charge inflation
factors are appropriate for the OPPS because, with the exception of the
inpatient routine service cost centers, hospitals use the same
ancillary and outpatient cost centers to capture costs and charges for
inpatient and outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71
FR 68011), we are concerned that we could systematically overestimate
the OPPS hospital outlier threshold if we did not apply a CCR inflation
adjustment factor. Therefore, we proposed to apply the same CCR
inflation adjustment factor that we proposed to apply for the FY 2016
IPPS outlier calculation to the CCRs used to simulate the proposed CY
2016 OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2016, we proposed to apply an adjustment factor of
0.9795 to the CCRs that were in the April 2015 OPSF to trend them
forward from CY 2015 to CY 2016. The methodology for calculating this
proposed adjustment is discussed in the FY 2016 IPPS/LTCH PPS proposed
rule (80 FR 24633) and finalized in the FY 2016 IPPS/LTCH PPS final
rule (80 FR 49784).
To model hospital outlier payments for the proposed rule, we
applied the overall CCRs from the April 2015 OPSF after adjustment
(using the proposed CCR inflation adjustment factor of 0.9795 to
approximate CY 2016 CCRs) to charges on CY 2014 claims that were
adjusted (using the proposed charge inflation factor of 1.0985 to
approximate CY 2016 charges). We simulated aggregated CY 2016 hospital
outlier payments using these costs for several different fixed-dollar
thresholds, holding the 1.75 multiple threshold constant and assuming
that outlier payments would continue to be made at 50 percent of the
amount by which the cost of furnishing the service would exceed 1.75
times the APC payment amount, until the total outlier payments equaled
1.0 percent of aggregated estimated total CY 2016 OPPS payments. We
estimated that a proposed fixed-dollar threshold of $3,650, combined
with the proposed multiple threshold of 1.75 times the APC payment
rate, would allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, we proposed that, if a CMHC's cost for
partial hospitalization services, paid under either proposed renumbered
APC 5851 (existing APC 0172) or proposed renumbered APC 5852 (existing
APC 0173), exceeds 3.40 times the payment rate for proposed
[[Page 70365]]
renumbered 5852, the outlier payment would be calculated as 50 percent
of the amount by which the cost exceeds 3.40 times the proposed
renumbered APC 5852 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that will apply to certain outpatient items and services
furnished by hospitals that are required to report outpatient quality
data and that fail to meet the Hospital OQR Program requirements. For
hospitals that fail to meet the Hospital OQR Program requirements, we
proposed to continue the policy that we implemented in CY 2010 that the
hospitals' costs will be compared to the reduced payments for purposes
of outlier eligibility and payment calculation. For more information on
the Hospital OQR Program, we refer readers to section XIII. of this
final rule with comment period.
Comment: A few commenters suggested that the proposed outlier fixed
dollar threshold of $3,650 was too high for CMS to pay the target
aggregate outlier payment amount of 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year. The
commenters noted that 2014 and 2015 estimated outlier payments were
below 1.0 percent, despite a lower fixed-dollar threshold.
Response: As indicated earlier, we introduced a fixed-dollar
threshold in order to better target outlier payments to those high-cost
and complex procedures where a very costly service could present a
hospital with significant financial loss. We maintain the target
outlier percentage of 1.0 percent of estimated aggregate total payment
under the OPPS and have a fixed-dollar threshold so that OPPS outlier
payments are made only when the hospital would experience a significant
loss for supplying a particular service. While the commenters expressed
concern based on the assumption that OPPS outlier payments would
decrease under an increased fixed-dollar threshold, we note that the
threshold may increase or decrease from year to year, to maintain the
1.0 percent outlier spending target. The methodology we use to
calculate the fixed-dollar threshold for the prospective payment year
factors is based on several data inputs that may change from prior
payment years. For instance, updated hospital CCR data and changes to
the OPPS payment methodology influence projected outlier payments in
the prospective year. For this final rule with comment period, we used
the same methodology for calculating the outlier fixed-dollar threshold
that we used for the proposed rule but used updated data. However,
these updated data inputs for this final rule with comment period do
yield a lower threshold than for the proposed rule.
3. Final Outlier Calculation
Consistent with historical practice, we used updated data for this
final rule with comment period for outlier calculations. For CY 2016,
we are applying the overall CCRs from the July 2015 OPSF file after
adjustment (using the CCR inflation adjustment factor of 0.9701 to
approximate CY 2016 CCRs) to charges on CY 2014 claims that were
adjusted (using the charge inflation factor of 1.0766 to approximate CY
2016 charges). These are the same CCR adjustment and charge inflation
factors that were used to set the IPPS fixed-dollar thresholds for the
FY 2016 IPPS/LTCH PPS final rule (80 FR 49784). We simulated aggregated
CY 2016 hospital outlier payments using these costs for several
different fixed-dollar thresholds, holding the 1.75 multiple threshold
constant and assuming that outlier payments will continue to be made at
50 percent of the amount by which the cost of furnishing the service
would exceed 1.75 times the APC payment amount, until the total outlier
payments equaled 1.0 percent of aggregated estimated total CY 2016 OPPS
payments. We estimated that a fixed-dollar threshold of $3,250,
combined with the multiple threshold of 1.75 times the APC payment
rate, will allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, if a CMHC's cost for partial
hospitalization services, paid under either renumbered APC 5851
(existing APC 0172) or renumbered APC 5852 (existing APC 0173), exceeds
3.40 times the payment rate for renumbered APC 5852, the outlier
payment will be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times the renumbered APC 5852 payment rate.
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
The basic methodology for determining prospective payment rates for
HOPD services under the OPPS is set forth in existing regulations at 42
CFR part 419, subparts C and D. For this CY 2016 OPPS/ASC final rule
with comment period, the payment rate for most services and procedures
for which payment is made under the OPPS is the product of the
conversion factor calculated in accordance with section II.B. of this
final rule with comment period and the relative payment weight
determined under section II.A. of this final rule with comment period.
Therefore, the national unadjusted payment rate for most APCs contained
in Addendum A to this final rule with comment period (which is
available via the Internet on the CMS Web site) and for most HCPCS
codes to which separate payment under the OPPS has been assigned in
Addendum B to this final rule with comment period (which is available
via the Internet on the CMS Web site) was calculated by multiplying the
CY 2016 scaled weight for the APC by the CY 2016 conversion factor.
We note that section 1833(t)(17) of the Act, which applies to
hospitals as defined under section 1886(d)(1)(B) of the Act, requires
that hospitals that fail to submit data required to be submitted on
quality measures selected by the Secretary, in the form and manner and
at a time specified by the Secretary, incur a reduction of 2.0
percentage points to their OPD fee schedule increase factor, that is,
the annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that apply to certain outpatient items and services provided by
hospitals that are required to report outpatient quality data and that
fail to meet the Hospital OQR Program (formerly referred to as the
Hospital Outpatient Quality Data Reporting Program (HOP QDRP))
requirements. For further discussion of the payment reduction for
hospitals that fail to meet the requirements of the Hospital OQR
Program, we refer readers to section XIII. of this final rule with
comment period.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39247 through 39249),
we demonstrated the steps on how to determine the APC payments that
will be made in a calendar year under the OPPS to a hospital that
fulfills the Hospital OQR Program requirements and to a hospital that
fails to meet the Hospital OQR Program requirements for a service that
has any of the following status indicator assignments: ``J1,'' ``J2,''
``P,'' ``Q1,'' ``Q2,'' ``Q3,'' ``Q4,'' ``R,'' ``S,'' ``T,'' ``U,'' or
``V'' (as defined in Addendum D1 to the proposed rule, which is
available via the Internet on the CMS Web site), in a circumstance in
[[Page 70366]]
which the multiple procedure discount does not apply, the procedure is
not bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that, although
blood and blood products with status indicator ``R'' and brachytherapy
sources with status indicator ``U'' are not subject to wage adjustment,
they are subject to reduced payments when a hospital fails to meet the
Hospital OQR Program requirements. We note that, in the CY 2015 OPPS/
ASC final rule with comment period (79 FR 66799), we created new status
indicator ``J1'' to reflect the comprehensive APCs discussed in section
II.A.2.e. of this final rule with comment period. We also note that we
deleted status indicator ``X'' as part of the CY 2015 packaging policy
for ancillary services, discussed in section II.A.3. of this final rule
with comment period. In the CY 2016 OPPS/ASC proposed rule, we proposed
to create new status indicator ``J2'' to reflect the new C-APC 8011
(Comprehensive Observation Services) and new status indicator ``Q4'' to
reflect conditionally packaged laboratory tests. In this CY 2016 OPPS/
ASC final rule with comment period, we are finalizing the new status
indicators ``J2'' and ``Q4'' as proposed, as discussed in sections
II.A.2.e.(2) and II.A.3.b.(3) of this final rule with comment period,
respectively.
We did not receive any public comments on these steps under the
methodology that we included in the proposed rule to determine the APC
payments for CY 2016. Therefore, we are using the steps in the
methodology specified below, as we proposed, to demonstrate the
calculation of the final CY 2016 OPPS payments using the same
parameters.
Individual providers interested in calculating the payment amount
that they will receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this final
rule with comment period (which are available via the Internet on the
CMS Web site) should follow the formulas presented in the following
steps. For purposes of the payment calculations below, we refer to the
national unadjusted payment rate for hospitals that meet the
requirements of the Hospital OQR Program as the ``full'' national
unadjusted payment rate. We refer to the national unadjusted payment
rate for hospitals that fail to meet the requirements of the Hospital
OQR Program as the ``reduced'' national unadjusted payment rate. The
reduced national unadjusted payment rate is calculated by multiplying
the reporting ratio of 0.980 times the ``full'' national unadjusted
payment rate. The national unadjusted payment rate used in the
calculations below is either the full national unadjusted payment rate
or the reduced national unadjusted payment rate, depending on whether
the hospital met its Hospital OQR Program requirements in order to
receive the full CY 2016 OPPS fee schedule increase factor.
Step 1. Calculate 60 percent (the labor-related portion) of the
national unadjusted payment rate. Since the initial implementation of
the OPPS, we have used 60 percent to represent our estimate of that
portion of costs attributable, on average, to labor. We refer readers
to the April 7, 2000 OPPS final rule with comment period (65 FR 18496
through 18497) for a detailed discussion of how we derived this
percentage. During our regression analysis for the payment adjustment
for rural hospitals in the CY 2006 OPPS final rule with comment period
(70 FR 68553), we confirmed that this labor-related share for hospital
outpatient services is appropriate.
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment rate.
X = .60 * (national unadjusted payment rate).
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. We note that under the CY 2016 OPPS policy for continuing to
use the OMB labor market area delineations based on the 2010 Decennial
Census data for the wage indexes used under the IPPS, a hold harmless
policy for the wage index may apply, as discussed in section II.C. of
this final rule with comment period. The wage index values assigned to
each area reflect the geographic statistical areas (which are based
upon OMB standards) to which hospitals are assigned for FY 2016 under
the IPPS, reclassifications through the MGCRB, section 1886(d)(8)(B)
``Lugar'' hospitals, reclassifications under section 1886(d)(8)(E) of
the Act, as defined in Sec. 412.103 of the regulations, and hospitals
designated as urban under section 601(g) of Pub. L. 98-21. (For further
discussion of the changes to the FY 2016 IPPS wage indexes, as applied
to the CY 2016 OPPS, we refer readers to section II.C. of this final
rule with comment period.) As we proposed, we are continuing to apply a
wage index floor of 1.00 to frontier States, in accordance with section
10324 of the Affordable Care Act of 2010.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Pub. L.
108-173. Addendum L to this final rule with comment period (which is
available via the Internet on the CMS Web site) contains the qualifying
counties and the associated wage index increase developed for the FY
2016 IPPS, which are listed in Table 2 in the FY 2016 IPPS/LTCH PPS
final rule (80 FR 49326) and available via the Internet on the CMS Web
site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. This step is to be followed only if the
hospital is not reclassified or redesignated under section 1886(d)(8)
or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national unadjusted payment
rate for the specific service by the wage index.
Xa is the labor-related portion of the national unadjusted
payment rate (wage adjusted).
Xa = .60 * (national unadjusted payment rate) *
applicable wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
[[Page 70367]]
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
We are providing examples below of the calculation of both the full
and reduced national unadjusted payment rates that will apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the Hospital OQR Program requirements, using the
steps outlined above. For purposes of this example, we used a provider
that is located in Brooklyn, New York that is assigned to CBSA 35614.
This provider bills one service that is assigned to renumbered APC 5072
(Level 2 Excision/Biopsy/Incision and Drainage) (previously APC 0019).
The CY 2016 full national unadjusted payment rate for APC 5072 is
approximately $480.64. The reduced national unadjusted payment rate for
renumbered APC 5072 for a hospital that fails to meet the Hospital OQR
Program requirements is approximately $471.03. This reduced rate is
calculated by multiplying the reporting ratio of 0.980 by the full
unadjusted payment rate for renumbered APC 5072.
The FY 2016 wage index for a provider located in CBSA 35614 in New
York is 1.2991. The labor-related portion of the full national
unadjusted payment is approximately $374.64 (.60 * $480.64 * 1.2991).
The labor-related portion of the reduced national unadjusted payment is
approximately $367.15 (.60 * $471.03 * 1.2991). The nonlabor-related
portion of the full national unadjusted payment is approximately
$192.26 (.40 * $480.64). The nonlabor-related portion of the reduced
national unadjusted payment is approximately $188.41 (.40 * $471.03).
The sum of the labor-related and nonlabor-related portions of the full
national adjusted payment is approximately $566.90 ($374.64 + $192.26).
The sum of the portions of the reduced national adjusted payment is
approximately $555.56 ($367.15 + $188.41).
I. Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in calendar years thereafter, shall not exceed 40 percent of
the APC payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
Act limits the amount of beneficiary copayment that may be collected
for a procedure performed in a year to the amount of the inpatient
hospital deductible for that year.
Section 4104 of the Affordable Care Act eliminated the Part B
coinsurance for preventive services furnished on and after January 1,
2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. Our discussion of the changes made by the Affordable
Care Act with regard to copayments for preventive services furnished on
and after January 1, 2011, may be found in section XII.B. of the CY
2011 OPPS/ASC final rule with comment period (75 FR 72013).
2. OPPS Copayment Policy
In the CY 2016 OPPS/ASC proposed rule (80 FR 39249), for CY 2016,
we proposed to determine copayment amounts for new and revised APCs
using the same methodology that we implemented beginning in CY 2004.
(We refer readers to the November 7, 2003 OPPS final rule with comment
period (68 FR 63458).) In addition, we proposed to use the same
standard rounding principles that we have historically used in
instances where the application of our standard copayment methodology
would result in a copayment amount that is less than 20 percent and
cannot be rounded, under standard rounding principles, to 20 percent.
(We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66687) in which we discuss our rationale for applying
these rounding principles.) The proposed national unadjusted copayment
amounts for services payable under the OPPS that would be effective
January 1, 2016, were shown in Addenda A and B to the proposed rule
(which are available via the Internet on the CMS Web site). As
discussed in section XIII.E. of the proposed rule and this final rule
with comment period, for CY 2016, the Medicare beneficiary's minimum
unadjusted copayment and national unadjusted copayment for a service to
which a reduced national unadjusted payment rate applies will equal the
product of the reporting ratio and the national unadjusted copayment,
or the product of the reporting ratio and the minimum unadjusted
copayment, respectively, for the service.
We note that OPPS copayments may increase or decrease each year
based on changes in the calculated APC payment rates due to updated
cost report and claims data, and any changes to the OPPS cost modeling
process. However, as described in the CY 2004 OPPS final rule with
comment period, the development of the copayment methodology generally
moves beneficiary copayments closer to 20 percent of OPPS APC payments
(68 FR 63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459),
we adopted a new methodology to calculate unadjusted copayment amounts
in situations including reorganizing APCs, and we finalized the
following rules to determine copayment amounts in CY 2004 and
subsequent years.
When an APC group consists solely of HCPCS codes that were
not paid under the OPPS the prior year because they were packaged or
excluded or are new codes, the unadjusted copayment amount would be 20
percent of the APC payment rate.
If a new APC that did not exist during the prior year is
created and consists of HCPCS codes previously assigned to other APCs,
the copayment amount is calculated as the product of the APC payment
rate and the lowest coinsurance percentage of the codes comprising the
new APC.
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
equal to or greater than the prior year's rate, the copayment amount
remains constant (unless the resulting coinsurance percentage is less
than 20 percent).
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
less than the prior year's rate, the copayment amount is calculated as
the product of the new payment rate and the prior year's coinsurance
percentage.
If HCPCS codes are added to or deleted from an APC, and,
after
[[Page 70368]]
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in a decrease in the coinsurance
percentage for the reconfigured APC, the copayment amount would not
change (unless retaining the copayment amount would result in a
coinsurance rate less than 20 percent).
If HCPCS codes are added to an APC, and, after
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in an increase in the coinsurance
percentage for the reconfigured APC, the copayment amount would be
calculated as the product of the payment rate of the reconfigured APC
and the lowest coinsurance percentage of the codes being added to the
reconfigured APC.
We noted in that CY 2004 OPPS final rule with comment period that
we would seek to lower the copayment percentage for a service in an APC
from the prior year if the copayment percentage was greater than 20
percent. We noted that this principle was consistent with section
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
national unadjusted coinsurance rate so that beneficiary liability will
eventually equal 20 percent of the OPPS payment rate for all OPPS
services to which a copayment applies, and with section 1833(t)(3)(B)
of the Act, which is consistent with the Congressional goal of
achieving a 20-percent copayment percentage when fully phased in and
gives the Secretary the authority to set rules for determining
copayment amounts for new services. We further noted that the use of
this methodology would, in general, reduce the beneficiary coinsurance
rate and copayment amount for APCs for which the payment rate changes
as the result of the reconfiguration of APCs and/or recalibration of
relative payment weights (68 FR 63459). We believe the proposed
reorganization of APCs discussed in section III.D. of the proposed rule
and finalized under section III.D. of this final rule with comment
period hastens this movement toward copayments equal to 20 percent of
an APC for reorganized APCs that previously had copayment percentages
greater than 20 percent.
We did not receive any comments on the copayment percentage. For
the reasons set forth in this final rule with comment period, we are
finalizing our proposed CY 2016 copayment methodology without
modification.
3. Calculation of an Adjusted Copayment Amount for an APC Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using renumbered APC 5072 (previously APC 0019), $96.13 is
approximately 20 percent of the full national unadjusted payment rate
of $480.64. For APCs with only a minimum unadjusted copayment in
Addenda A and B to this final rule with comment period (which are
available via the Internet on the CMS Web site), the beneficiary
payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted
payment rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H. of this final rule with comment period. Calculate
the rural adjustment for eligible providers as indicated in Step 6
under section II.H. of this final rule with comment period.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC. The formula below is a mathematical representation
of Step 3 and applies the beneficiary payment percentage to the
adjusted payment rate for a service calculated under section II.H. of
this final rule with comment period, with and without the rural
adjustment, to calculate the adjusted beneficiary copayment for a given
service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.980.
The unadjusted copayments for services payable under the OPPS that
are effective January 1, 2016, are shown in Addenda A and B to this
final rule with comment period (which are available via the Internet on
the CMS Web site). We note that the national unadjusted payment rates
and copayment rates shown in Addenda A and B to this final rule with
comment period reflect the full CY 2016 OPD fee schedule increase
factor discussed in section II.B. of this final rule with comment
period.
In addition, as noted above, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New CPT and Level II HCPCS Codes
CPT and Level II HCPCS codes are used to report procedures,
services, items, and supplies under the hospital OPPS. Specifically,
CMS recognizes the following codes on OPPS claims:
Category I CPT codes, which describe surgical procedures
and medical services;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
Level II HCPCS codes, which are used primarily to identify
products, supplies, temporary procedures, and services not described by
CPT codes.
CPT codes are established by the American Medical Association (AMA)
and the Level II HCPCS codes are established by the CMS HCPCS
Workgroup. These codes are updated and changed throughout the year. CPT
and HCPCS code changes that affect the OPPS are published both through
the annual rulemaking cycle and through the OPPS quarterly update
Change Requests (CRs). CMS releases new Level II HCPCS codes to the
public or recognizes the release of new CPT codes by the AMA and makes
these codes effective (that is, the codes can be reported on Medicare
claims) outside of the formal rulemaking process via OPPS quarterly
update CRs. Based on our review, we assign the new CPT and Level II
HCPCS codes to interim status indicators (SIs) and APCs. These interim
assignments are finalized in the OPPS/ASC final rules. This quarterly
process offers hospitals access to codes that may more accurately
describe items or services furnished and provides payment or more
accurate payment for these items or services in a timelier manner than
if we waited for the annual rulemaking process. We solicit public
[[Page 70369]]
comments on these new codes and finalize our proposals related to these
codes through our annual rulemaking process.
We note that, under the OPPS, the APC assignment determines the
payment rate for an item, procedure, or service. For those items,
procedures, or services not paid separately under the hospital OPPS,
they are assigned to appropriate status indicators. Section XI. of this
final rule with comment period provides a discussion of the various
status indicators used under the OPPS. Certain payment indicators
provide separate payment while others do not.
In Table 16 below, we summarize our comment process for updating
codes through our OPPS quarterly update CRs, seeking public comments,
and finalizing the treatment of these new codes under the OPPS.
Table 16--Comment Timeframe for New or Revised HCPCS Codes
----------------------------------------------------------------------------------------------------------------
OPPS quarterly update CR Type of code Effective date Comments sought When finalized
----------------------------------------------------------------------------------------------------------------
April 1, 2015................... Level II HCPCS April 1, 2015..... CY 2016 OPPS/ASC CY 2016 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
July 1, 2015.................... Level II HCPCS July 1, 2015...... CY 2016 OPPS/ASC CY 2016 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
Category I July 1, 2015...... CY 2016 OPPS/ASC CY 2016 OPPS/ASC
(certain vaccine proposed rule. final rule with
codes) and III comment period.
CPT codes.
October 1, 2015................. Level II HCPCS October 1, 2015... CY 2016 OPPS/ASC CY 2017 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
January 1, 2016................. Level II HCPCS January 1, 2016... CY 2016 OPPS/ASC CY 2017 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
Category I and III January 1, 2016... CY 2016 OPPS/ASC CY 2016 OPPS/ASC
CPT Codes. proposed rule. final rule with
comment period.
----------------------------------------------------------------------------------------------------------------
This process is discussed in detail below. We have separated our
discussion into two sections based on whether we solicited public
comments in the CY 2016 OPPS/ASC proposed rule or whether we are
soliciting public comments in this CY 2016 OPPS/ASC final rule with
comment period. We note that we sought public comments in the CY 2015
OPPS/ASC final rule with comment period on the interim APC and status
indicator assignments for new CPT and Level II HCPCS codes that were
effective January 1, 2015. We also sought public comments in the CY
2015 OPPS/ASC final rule with comment period on the interim APC and
status assignments for new Level II HCPCS codes that became effective
October 1, 2014. These new and revised codes, with an effective date of
October 1, 2014, or January 1, 2015, were flagged with comment
indicator ``NI'' (New code, interim APC assignment; comments will be
accepted on the interim APC assignment for the new code) in Addendum B
to the CY 2015 OPPS/ASC final rule with comment period to indicate that
we were assigning them an interim payment status and an APC and payment
rate, if applicable, and were subject to public comment following
publication of the CY 2015 OPPS/ASC final rule with comment period. We
are responding to public comments and finalizing our interim OPPS
treatment of these codes in this CY 20165 OPPS/ASC final rule with
comment period.
Further, we received public comments on some new codes that were
assigned to comment indicator ``NI'' in Addendum B of the CY 2015 OPPS/
ASC final rule with comment period. We also received public comments on
new CPT codes that will be effective January 1, 2016, that were
assigned to comment indicator ``NP'' in Addendum B of the CY 2016 OPPS/
ASC proposed rule. We respond to those comments in section III.C. of
this CY 2016 OPPS/ASC final rule with comment period.
1. Treatment of New CY 2015 Level II HCPCS and CPT Codes Effective
April 1, 2015 and July 1, 2015 for Which We Solicited Public Comments
in the CY 2016 OPPS/ASC Proposed Rule
Through the April 2015 OPPS quarterly update CR (Transmittal 3217,
Change Request 9097, dated March 13, 2015), and the July 2015 OPPS
quarterly update CR (Transmittal 3280, Change Request 9205, dated June
5, 2015), we recognized several new HCPCS codes for separate payment
under the OPPS.
Effective April 1, 2015, we made effective eight new Level II HCPCS
codes and also assigned them to appropriate interim OPPS status
indicators and APCs. Through the April 2015 OPPS quarterly update CR,
we allowed separate payment for eight new Level II HCPCS codes.
Specifically, as displayed in Table 14 of the CY 2016 proposed rule (80
FR 39251), we provided separate payment for HCPCS codes C2623, C9445,
C9448, C9449, C9450, C9451, C9452, and Q9975. We note that HCPCS code
C9448 was deleted on June 30, 2015, and replaced with HCPCS code Q9978,
effective July 1, 2015.
In the CY 2016 OPPS/ASC proposed rule, we solicited public comments
on the proposed APC and status indicator assignments for the Level II
HCPCS codes implemented on April 1, 2015 and listed in Table 14 of the
proposed rule (80 FR 39251). Specifically, we solicited public comments
on HCPCS codes C2623, C9445, C9448, C9449, C9450, C9451, C9452, and
Q9975. We note that HCPCS code C9448 was deleted on June 30, 2015, and
replaced with HCPCS code Q9978, effective July 1, 2015. We indicated
that the proposed payment rates for these codes, where applicable,
could be found in Addendum B to the proposed rule (which is available
via the Internet on the CMS Web site).
For the CY 2016 update, the HCPCS Workgroup replaced the temporary
drug HCPCS C-codes and Q-codes that were listed in Table 14 of the
proposed rule with permanent HCPCS J-codes effective January 1, 2016.
Because the replacement HCPCS J-codes describe the
[[Page 70370]]
same drugs with the same dosage descriptors as their predecessor HCPCS
C-codes and Q-codes, they will continue to receive pass-through payment
status in CY 2016. Therefore, we are assigning the replacement HCPCS J-
codes to the same APCs and status indicators as their predecessor HCPCS
codes, as shown in Table 17 below.
We did not receive any public comments on the proposed APC and
status indicator assignments for the new Level II HCPCS codes
implemented in April 2015. Therefore, we are finalizing the proposed
APC assignments and status indicators for the new Level II HCPCS codes
implemented in April 2015, as indicated in Table 17 below. The final
payment rates for these codes, where applicable, can be found in
Addendum B to this final rule with comment period (which is available
via the Internet on the CMS Web site).
Table 17--Final CY 2016 Status Indicators and APC Assignments for the New Level II HCPCS Codes That Were
Implemented in April 2015
----------------------------------------------------------------------------------------------------------------
Final CY 2016
CY 2015 CPT/HCPCS code CY 2016 CPT/HCPCS code CY 2016 long descriptor status Final CY 2016
indicator APC
----------------------------------------------------------------------------------------------------------------
C2623................... C2623................... Catheter, transluminal H 2623
angioplasty, drug-coated,
non-laser.
C9445................... J0596................... Injection, c1 esterase G 9445
inhibitor (recombinant),
Ruconest, 10 units.
C9448 *................. J8655................... Netupitant 300 mg and G 9448
palonosetron 0.5 mg.
C9449................... J9039................... Injection, blinatumomab, 1 G 9449
microgram.
C9450................... J7313................... Injection, fluocinolone G 9450
acetonide intravitreal
implant, 0.01 mg.
C9451................... J2547................... Injection, peramivir, 1 mg. G 9451
C9452................... J0695................... Injection, ceftolozane 50 G 9452
mg and tazobactam 25 mg.
Q9975 **................ J7205................... Injection, factor viii fc G 1656
fusion (recombinant), per
iu.
----------------------------------------------------------------------------------------------------------------
* HCPCS code C9448 was deleted on June 30, 2015, and replaced with HCPCS code Q9978, effective July 1, 2015.
** HCPCS code C9136 (Injection, factor viii, fc fusion protein (recombinant), per i.u.) was deleted on March 31,
2015 and replaced with HCPCS code Q9975.
Effective July 1, 2015, we made effective several new CPT and Level
II HCPCS codes and also assigned them to appropriate interim OPPS
status indicators and APCs. Through the July 2015 OPPS quarterly update
CR (Transmittal 3280, Change Request 9205, dated June 5, 2015), we
assigned interim OPPS status indicators and APCs for two new Category
III CPT codes and eight Level II HCPCS codes that were made effective
July 1, 2015. Specifically, as displayed in Table 15 of the CY 2016
proposed rule (80 FR 39252), we made interim OPPS status indicators and
APC assignments for Category III CPT codes 0392T and 0393T, and Level
II HCPCS codes C2613, C9453, C9454, C9455, Q5101, Q9976, Q9977, and
Q9978. We note that CPT code 0392T replaced HCPCS code C9737
(Laparoscopy, surgical, esophageal sphincter augmentation with device
(e.g., magnetic band)), beginning July 1, 2015. Because CPT code 0392T
describes the same procedure as HCPCS code C9737, we proposed to assign
the CPT code to the same APC and status indicator as its predecessor
HCPCS C-code, as shown in Table 15 of the proposed rule.
Table 15 of the proposed rule (89 FR 39252) listed the CPT and
Level II HCPCS codes that were implemented on July 1, 2015, along with
the proposed status indicators, proposed APC assignments, and proposed
payment rates, where applicable, for CY 2016. We solicited public
comments on the proposed APC and status indicator assignments.
One commenter addressed CPT code 0392T which relates to
gastrointestinal procedures and services and which replaced HCPCS code
C9737. We have responded to this comment in section II.A.2.e. of this
final rule with comment period. We did not receive any public comments
on the proposed APC and status indicator assignments for Category III
CPT code 0393T and Level II HCPCS codes C2613, C9453, C9454, C9455,
Q9976, Q9977, and Q9978 for CY 2016.
In this final rule with comment period, we are adopting as final,
without modification, the proposed APC and status indicator assignments
for CPT code 0393T and for Level II HCPCS codes C2613, C9453, C9454,
C9455, Q9976, Q9977, Q9978. However, we are finalizing the APC and
status indicator assignments for HCPCS code Q5101 (Zarxio) with
modification. Specifically, we are assigning HCPCS code Q5101 to APC
1822 and status indicator ``G'' (pass-through drugs and biologicals).
We noted in the CY 2016 OPPS/ASC proposed rule (80 FR 39252) that
Zarxio (the drug described by HCPCS code Q5101) was currently not being
marketed. However, once pricing information was made available, the
drug would be paid separately under the OPPS. Zarxio was marketed on
September 3, 2015, and therefore, we began making separate payments
under the OPPS beginning on this date. From September 3, 2015, through
December 31, 2015, HCPCS code Q5101 is assigned status indicator ``K''
(Nonpass-through drugs and nonimplantable biologicals, including
therapeutic radiopharmaceuticals). Because Zarxio has been approved for
pass-through status beginning January 1, 2016, we are changing its OPPS
status indicator from ``K'' to ``G'' beginning January 1, 2016.
For the CY 2016 update, the HCPCS Workgroup replaced temporary
HCPCS codes C9453, C9454, C9455, and Q9978 with permanent HCPCS J codes
effective January 1, 2016. Because the replacement HCPCS J- codes
describe the same drugs with the same dosage descriptors as their
predecessor HCPCS C codes and Q codes, they will continue to receive
pass-through payment status in CY 2016. Therefore, we are assigning the
replacement HCPCS J-codes to the same APCs and status indicators as
their predecessor HCPCS codes, as shown in Table 18 below. Table 18
lists the final APCs and status indicator assignments for the new
category III CPT and Level II HCPCS codes that were implemented on July
1, 2015. The final payment rates for these codes, where applicable, can
be found in Addendum B to this final rule with comment period (which is
available via the Internet on the CMS Web site).
[[Page 70371]]
Table 18--Final CY 2016 Status Indicators and APC Assignments for the New Category III CPT and Level II HCPCS
Codes Implemented in July 2015
----------------------------------------------------------------------------------------------------------------
Final CY 2016
CY 2015 CPT/HCPCS code CY 2016 CPT/HCPCS code CY 2016 long descriptor status Final CY 2016
indicator APC
----------------------------------------------------------------------------------------------------------------
C2613................... C2613................... Lung biopsy plug with H 2613
delivery system.
C9453................... J9299................... Injection, nivolumab, 1 mg. G 9453
C9454................... J2502................... Injection, pasireotide long G 9454
acting, 1 mg.
C9455................... J2860................... Injection, siltuximab, 10 G 9455
mg.
Q5101 *................. Q5101*.................. Injection, Filgrastim (G- G 1822
CSF), Biosimilar, 1
microgram.
Q9976................... J1443................... Injection, ferric E N/A
pyrophosphate citrate
solution, 0.1 mg of iron.
Q9977................... Q9977 **................ Compounded Drug, Not D N/A
Otherwise Classified.
Q9978................... J8655................... Netupitant 300 mg and G 9448
palonosetron 0.5 mg.
0392T................... 0392T................... Laparoscopy, surgical, J1 5362
esophageal sphincter
augmentation procedure,
placement of sphincter
augmentation device (ie,
magnetic band).
0393T................... 0393T................... Removal of esophageal Q2 5361
sphincter augmentation
device.
----------------------------------------------------------------------------------------------------------------
* HCPCS code Q5101, which described the drug Zarxio, was approved by the FDA on March 6, 2015. Separate payment
for Zarxio was effective September 3, 2015, the date the drug was marketed.
** HCPCS code Q9977 will be deleted December 31, 2015, and a replacement code will not be established.
2. Process for New Level II HCPCS Codes That Became Effective October
1, 2015 and New Level II HCPCS Codes That Will Be Effective January 1,
2016 for Which We Are Soliciting Public Comments in This CY 2016 OPPS/
ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
Level II HCPCS codes that are effective October 1 and January 1 in the
final rule with comment period thereby updating the OPPS for the
following calendar year. These codes are released to the public through
the October and January OPPS quarterly update CRs and via the CMS HCPCS
Web site (for Level II HCPCS codes). For CY 2016, these codes are
flagged with comment indicator ``NI'' in Addendum B to this OPPS/ASC
final rule with comment period to indicate that we are assigning them
an interim payment status which is subject to public comment.
Specifically, the status indicators and the APC assignments for codes
flagged with comment indicator ``NI'' are open to public comment in
this final rule with comment period, and we will respond to these
public comments in the OPPS/ASC final rule with comment period for the
next year's OPPS/ASC update. In the CY 2016 OPPS/ASC proposed rule (80
FR 39252 through 39253), we proposed to continue this process for CY
2016. Specifically, for CY 2016, we proposed to include in Addendum B
to the CY 2016 OPPS/ASC final rule with comment period the following
new HCPCS codes:
New Level II HCPCS codes effective October 1, 2015, that
would be incorporated in the October 2015 OPPS quarterly update CR;
New Level II HCPCS codes effective January 1, 2016, that
would be incorporated in the January 2016 OPPS quarterly update CR.
As stated above, the October 1, 2015 and January 1, 2016 codes are
flagged with comment indicator ``NI'' in Addendum B to this CY 2016
OPPS/ASC final rule with comment period to indicate that we have
assigned the codes an interim OPPS payment status for CY 2016. We are
inviting public comments on the interim status indicator and APC
assignments and payment rates for these codes, if applicable, that will
be finalized in the CY 2017 OPPS/ASC final rule with comment period.
3. Treatment of New and Revised CY 2016 Category I and III CPT Codes
That Will Be Effective January 1, 2016, for Which We Solicited Public
Comments in the CY 2016 OPPS/ASC Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We
noted that even if we find that we need to create HCPCS G-codes in
place of certain CPT codes for the MPFS proposed rule, we do not
anticipate that these HCPCS G codes will always be necessary for OPPS
purposes. We will make every effort to include proposed APC and status
indicator assignments for all new and revised CPT codes that the AMA
makes publicly available in time for us to include them in the proposed
rule, and to avoid establishing HCPCS G codes and the resulting delay
in utilization of the most current CPT codes. In addition, we finalized
our proposal to make interim APC and status indicator assignments for
CPT codes that are not available in time for the proposed rule and that
describe wholly new services (such as new technologies or new surgical
procedures), solicit public comments, and finalize the specific APC and
status indicator assignments for those codes in the following year's
final rule.
For the CY 2016 OPPS update, we received the CY 2016 CPT codes from
AMA in time for inclusion in the CY 2016 OPPS/ASC proposed rule. In the
proposed rule (80 FR 39253), we indicated that the new and revised CY
2016 Category I and III CPT codes can be found in OPPS Addendum B to
the proposed rule and were assigned to new comment indicator ``NP'' to
indicate that the code is new for the next calendar year or the code is
an existing code with substantial revision to its code descriptor in
the next calendar year as compared to current calendar year with a
proposed APC assignment and that comments will be accepted on the
proposed APC assignment and
[[Page 70372]]
status indicator. We refer readers to section XI.B. of the CY 2016
OPPS/ASC proposed rule for further discussion on the proposed new
comment indicator ``NP.''
Further, in the proposed rule, we reminded readers that the CPT
code descriptors that appear in Addendum B are short descriptors and do
not accurately describe the complete procedure, service, or item
described by the CPT code. Therefore, we included the long descriptors
for the new and revised CY 2016 CPT codes in Addendum O to the proposed
rule (which is available via the Internet on the CMS Web site) so that
the public could adequately comment on our proposed APCs and status
indicator assignments. Because CPT procedure codes are 5 alpha-numeric
characters and CMS systems only utilize 5-character HCPCS codes, we
stated that we developed alternative 5-character placeholder codes for
the proposed rule. We indicated that the placeholder codes can be found
in Addendum O, specifically under the column labeled ``CY 2016 OPPS/ASC
Proposed Rule 5-Digit CMS Placeholder Code,'' to the proposed rule. We
also indicated that the final CPT code numbers would be included in
this CY 2016 OPPS/ASC final rule with comment period. We note that not
every code listed in Addendum O of the proposed rule was subject to
comment. For the new/revised Category I and III CPT codes, we requested
public comments on only those codes that were assigned to comment
indicator ``NP.'' We indicated that public comments would not be
accepted for new Category I CPT laboratory codes that were not assigned
to ``NP'' comment indicator in Addendum O to the proposed rule. We
stated that comments to these codes must be submitted at the Clinical
Laboratory Fee Schedule (CLFS) Public Meeting, which was scheduled for
July 16, 2015.
In summary, we solicited public comments on the proposed CY 2016
status indicators and APC assignments for the new and revised Category
I and III CPT codes that will be effective January 1, 2016. The CPT
codes are listed in Addendum B to the proposed rule with short
descriptors only. We listed them again in Addendum O to the proposed
rule with long descriptors. We also proposed to finalize the status
indicator and APC assignments for these codes (with their final CPT
code numbers) in the CY 2016 OPPS/ASC final rule with comment period.
Commenters addressed several of the new CPT codes that were
assigned to comment indicator ``NP'' in Addendum B of the CY 2016 OPPS/
ASC proposed rule. We respond to those comments in section III.D. of
this CY 2016 OPPS/ASC final rule with comment period.
The final status indicators, APC assignments, and payment rates for
the new CPT codes that will be effective January 1, 2016 can be found
in Addendum B to this final rule with comment period (which is
available via the Internet on the CMS Web site).
B. OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
(OPD) services. Section 1833(t)(2)(B) of the Act provides that the
Secretary may establish groups of covered OPD services within this
classification system, so that services classified within each group
are comparable clinically and with respect to the use of resources. In
accordance with these provisions, we developed a grouping
classification system, referred to as Ambulatory Payment
Classifications (APCs), as set forth in Sec. 419.31 of the
regulations. We use Level I and Level II HCPCS codes to identify and
group the services within each APC. The APCs are organized such that
each group is homogeneous both clinically and in terms of resource use.
Using this classification system, we have established distinct groups
of similar services. We also have developed separate APC groups for
certain medical devices, drugs, biologicals, therapeutic
radiopharmaceuticals, and brachytherapy devices that are not packaged
into the payment for the procedure.
We have packaged into the payment for each procedure or service
within an APC group the costs associated with those items and services
that are typically integral, ancillary, supportive, dependent, or
adjunctive to a primary service. Therefore, we do not make separate
payment for these packaged items or services. In general, packaged
items and services include, but are not limited to the items and
services listed in Sec. 419.2(b) of the regulations. A further
discussion of packaged services is included in section II.A.3. of this
final rule with comment period.
Under the OPPS, we generally pay for hospital outpatient services
on a rate-per-service basis, where the service may be reported with one
or more HCPCS codes. Payment varies according to the APC group to which
the independent service or combination of services is assigned. In the
CY 2016 OPPS/ASC proposed rule (80 FR 39254), for CY 2016, we proposed
that each APC relative payment weight represents the hospital cost of
the services included in that APC, relative to the hospital cost of the
services included in proposed renumbered APC 5012 (Level 2 Examinations
and Related Services) (existing APC 0632). The APC relative payment
weights were scaled to proposed renumbered APC 5012 because it is the
hospital clinic visit APC and clinic visits are among the most
frequently furnished services in the hospital outpatient setting. We
noted that, historically, we have proposed APC relative payment weights
relative to the hospital costs of services included in existing APC
0634. In the proposed rule, we proposed to reassign HCPCS code G0463
(Hospital outpatient clinic visit for assessment and management of a
patient) from existing APC 0634 to proposed renumbered APC 5012 (for CY
2015, this is existing APC 0632). Proposed new APC 5012 includes other
services that are clinically similar with similar resource costs to the
service described by HCPCS code G0463, such as HCPCS code G0402
(Initial preventive physical examination). Accordingly, for the CY 2016
OPPS update, we proposed to delete existing APC 0634 and replace it
with proposed renumbered APC 5012.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39254), for CY 2016,
we proposed that each APC relative payment weight represents the
hospital cost of the services included in that APC, relative to the
hospital cost of the services included in proposed renumbered APC 5012
(existing APC 0632).
We did not receive any public comments on the proposed reassignment
for HCPCS code G0463 from APC 0634 to proposed renumbered APC 5012.
However, some commenters expressed concern about CMS' use of a single
clinic visit code (HCPCS G0463) and a single APC payment for all clinic
Evaluation and Management (E/M) visits. We refer readers to section
VII. of this CY 2016 OPPS/ASC final rule with comment period for a
discussion of public comments and our responses and our finalized
policies on payments for hospital outpatient visits for CY 2016.
In this final rule with comment period, we are finalizing our
proposal, without modification, to assign HCPCS code G0463 to APC 5012
and to delete existing APC 0634 because it will be replaced with APC
5012, effective January 1, 2016.
[[Page 70373]]
2. Application of the 2 Times Rule
In accordance with section 1833(t)(2) of the Act and Sec. 419.31
of the regulations, we annually review the items and services within an
APC group to determine, with respect to comparability of the use of
resources, if the highest cost for an item or service in the APC group
is more than 2 times greater than the lowest cost for an item or
service within the same APC group (referred to as the ``2 times
rule''). The statute authorizes the Secretary to make exceptions to the
2 times rule in unusual cases, such as low-volume items and services
(but the Secretary may not make such an exception in the case of a drug
or biological that has been designated as an orphan drug under section
526 of the Federal Food, Drug, and Cosmetic Act). In determining the
APCs with a 2 times rule violation, we consider only those HCPCS codes
that are significant based on the number of claims. We note that, for
purposes of identifying significant procedure codes for examination
under the 2 times rule, we consider procedure codes that have more than
1,000 single major claims or procedure codes that have both greater
than 99 single major claims and contribute at least 2 percent of the
single major claims used to establish the APC cost to be significant
(75 FR 71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 claims (or less than 1,000 claims) is
negligible within the set of approximately 100 million single procedure
or single session claims we use for establishing costs. Similarly, a
procedure code for which there are fewer than 99 single claims and
which comprises less than 2 percent of the single major claims within
an APC will have a negligible impact on the APC cost. In the CY 2016
OPPS/ASC proposed rule (80 FR 39254), for CY 2016, we proposed to make
exceptions to this limit on the variation of costs within each APC
group in unusual cases, such as low-volume items and services.
For the CY 2016 OPPS, we identified the APCs with violations of the
2 times rule. Therefore, we proposed changes to the procedure codes
assigned to these APCs in Addendum B to the proposed rule. We noted
that Addendum B does not appear in the printed version of the Federal
Register as part of the CY 2016 OPPS/ASC proposed rule. Rather, it is
published and made available via the Internet on the CMS Web site at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
In these cases, to eliminate a violation of the 2 times rule or to
improve clinical and resource homogeneity, we proposed to reassign
these procedure codes to new APCs that contain services that are
similar with regard to both their clinical and resource
characteristics. In many cases, the proposed procedure code
reassignments and associated APC reconfigurations for CY 2016 included
in the proposed rule are related to changes in costs of services that
were observed in the CY 2014 claims data newly available for CY 2016
ratesetting. We also proposed changes to the status indicators for some
procedure codes that were not specifically and separately discussed in
the proposed rule. In these cases, we proposed to change the status
indicators for these procedure codes because we believe that another
status indicator would more accurately describe their payment status
from an OPPS perspective based on the policies that we are proposing
for CY 2016. In addition, we proposed to rename existing APCs or create
new clinical APCs to complement the proposed procedure code
reassignments. Addendum B to the CY 2016 OPPS/ASC proposed rule
identified with a comment indicator ``CH'' those procedure codes for
which we proposed a change to the APC assignment or status indicator,
or both, that were initially assigned in the July 1, 2015 OPPS Addendum
B Update (available via the Internet on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). In contrast, Addendum B to this final rule with comment
period (available via the Internet on the CMS Web site) identifies with
the ``CH'' comment indicator the final CY 2016 changes compared to the
HCPCS codes' status as reflected in the October 2015 Addendum B update.
3. APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we proposed for CY 2016,
we reviewed all of the APCs to determine which APCs would not meet the
requirements of the 2 times rule. We used the following criteria to
evaluate whether to propose exceptions to the 2 times rule for affected
APCs:
Resource homogeneity;
Clinical homogeneity;
Hospital outpatient setting utilization;
Frequency of service (volume); and
Opportunity for upcoding and code fragments.
Based on the CY 2014 claims data that were available for the CY
2016 proposed rule, we identified three APCs with violations of the 2
times rule. We applied the criteria as described above to identify the
APCs that we proposed to make exceptions for under the 2 times rule for
CY 2016. We did not include in that determination those APCs where a 2
times rule violation was not a relevant concept, such as existing APC
0375 (proposed for CY 2016 to be renumbered APC 5881 (Ancillary
Outpatient Services When Patient Dies)), which had a proposed APC
payment rate for a single service of $5,653.37. (We note that, in
section II.A.2.e. of this final rule with comment period, we are
converting renumbered APC 5881 to a comprehensive APC for CY 2016.
However, the APC cost is still not relevant to determine whether there
is a violation of the 2 times rule in that comprehensive APC.) We only
identified those APCs, including those with criteria-based costs, with
violations of the 2 times rule. For a detailed discussion of these
criteria, we refer readers to the April 7, 2000 OPPS final rule with
comment period (65 FR 18457 and 18458).
We note that, for cases in which a recommendation by the Panel
appears to result in or allow a violation of the 2 times rule, we may
accept the Panel's recommendation because those recommendations are
based on explicit consideration (that is, a review of the latest OPPS
claims data and group discussion of the issue) of resource use,
clinical homogeneity, site of service, and the quality of the claims
data used to determine the APC payment rates.
Table 16 of the proposed rule (80 FR 39255) listed the three APCs
that we proposed to make exceptions for under the 2 times rule for CY
2016 based on the criteria cited above and claims data submitted
between January 1, 2014, and December 31, 2014, and processed on or
before December 31, 2014. We stated in the proposed rule that, for the
final rule with comment period, we intended to use claims data for
dates of service between January 1, 2014, and December 31, 2014, that
were processed on or before June 30, 2015, and updated CCRs, if
available. For this final rule with comment period, after we reassigned
some codes, a violation of the 2 times rule no longer exists in APCs
5221 and 5673.
We applied the criteria described earlier to determine whether to
make exceptions to the 2 times rule for three APCs: APC 5165 (Level 5
ENT Procedures); APC 5731 (Level 1 Minor
[[Page 70374]]
Procedures) and APC 5841 (Psychotherapy). Based on our analysis of the
updated CY 2014 claims data available for this final rule with comment
period (and consideration of any related finalized changes to APC
assignments), we determined that APCs 5165, 5731 and 5841 meet the
exceptions criteria because these APC groupings optimize resource and
clinical homogeneity. Therefore, we are making these three APCs
exceptions to the 2 times rule.
Furthermore, although APC 5165 does not appear with a 2 times rule
indicator in the 2 times rule document that is posted with the CY 2016
OPPS/ASC final rule data files, an exception to the 2 times rule is
required so that a complexity adjustment is not made for CPT 60252 from
APC 5165 to APC 5166.
After consideration of the public comments we received and our
review of the CY 2014 costs from hospital claims and cost report data
available for this final rule with comment period, we are finalizing
three exceptions to the 2 times rule: APCs 5165, 5731 and 5841. We are
not finalizing our proposal to make exceptions for APC 5221 and APC
5673. Table 19 below lists the three APCs that we are excepting from
the 2 times rule for CY 2016 based on the criteria above and a review
of updated claims data. The geometric mean costs for hospital
outpatient services for these and all other APCs that were used in the
development of this final rule with comment period can be found on the
CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
Table 19--Final APC Exceptions to the 2 Times Rule for CY 2016
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5165.............................. Level 5 ENT Procedures.
5731.............................. Level 1 Minor Procedures.
5841.............................. Psychotherapy.
------------------------------------------------------------------------
The final costs for hospital outpatient services for these and all
other APCs that were used in the development of this final rule with
comment period can be found on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
C. New Technology APCs
1. Background
In the November 30, 2001 final rule (66 FR 59903), we finalized
changes to the time period a service was eligible for payment under a
New Technology APC. Beginning in CY 2002, we retain services within New
Technology APC groups until we gather sufficient claims data to enable
us to assign the service to an appropriate clinical APC. This policy
allows us to move a service from a New Technology APC in less than 2
years if sufficient data are available. It also allows us to retain a
service in a New Technology APC for more than 2 years if sufficient
data upon which to base a decision for reassignment have not been
collected.
Currently, there are 37 New Technology APC levels, ranging from the
lowest cost band assigned to APC 1491 (New Technology--Level 1A ($0--
$10)) through the highest cost band assigned to APC 1574 (New
Technology--Level XXXVII ($9,500--$10,000)). In the CY 2004 OPPS final
rule with comment period (68 FR 63416), we restructured the New
Technology APCs to make the cost intervals more consistent across
payment levels and refined the cost bands for these APCs to retain two
parallel sets of New Technology APCs, one set with a status indicator
of ``S'' (Significant Procedures, Not Discounted when Multiple. Paid
under OPPS; separate APC payment) and the other set with a status
indicator of ``T'' (Significant Procedure, Multiple Reduction Applies.
Paid under OPPS; separate APC payment). These current New Technology
APC configurations allow us to price new technology services more
appropriately and consistently. We note that we did not propose to
renumber the New Technology APCs in the CY 2016 OPPS/ASC proposed rule.
We note that the cost bands for the New Technology APCs,
specifically, APCs 1491 through 1574, vary with increments ranging from
$10 to $500. These cost bands identify the APCs to which new technology
procedures and services with estimated service costs that fall within
those cost bands are assigned under the OPPS. Payment for each APC is
made at the mid-point of the APC's assigned cost band. For example,
payment for New Technology APC 1507 (New Technology--Level VII ($500--
$600)) is made at $550.
Every year we receive several requests for higher payment amounts
under the New Technology APCs for specific procedures paid under the
OPPS because they require the use of expensive equipment. We are taking
this opportunity to reiterate our response in general to the issue of
hospitals' capital expenditures as they relate to the OPPS and
Medicare.
Under the OPPS, one of our goals is to make payments that are
appropriate for the services that are necessary for the treatment of
Medicare beneficiaries. The OPPS, like other Medicare payment systems,
is budget neutral and increases are limited to the annual hospital
inpatient market basket increase. We believe that our payment rates
generally reflect the costs that are associated with providing care to
Medicare beneficiaries, and we believe that our payment rates are
adequate to ensure access to services.
For many emerging technologies, there is a transitional period
during which utilization may be low, often because providers are first
learning about the techniques and their clinical utility. Quite often,
parties request that Medicare make higher payment amounts under the New
Technology APCs for new procedures in that transitional phase. These
requests, and their accompanying estimates for expected total patient
utilization, often reflect very low rates of patient use of expensive
equipment, resulting in high per use costs for which requesters believe
Medicare should make full payment. However, we believe that it is most
appropriate to set payment rates based on costs that are associated
with providing care to Medicare beneficiaries. As claims data for new
services become available, we use these data to establish payment rates
for new technology.
2. Additional New Technology APC Groups
Currently, there are 37 levels of New Technology APC groups with
two parallel status indicators; one set with a status indicator of
``S'' and the other set with a status indicator of ``T.'' To improve
our ability to pay appropriately for new technology services and
procedures, in the CY 2016 OPPS/ASC proposed rule (80 FR 39256), we
proposed to expand the New Technology APC groups by adding 9 more
levels, specifically, adding New Technology Levels 38 through 46. We
proposed this expansion to accommodate the assignment of the retinal
prosthesis implantation procedure to a New Technology APC, which is
discussed further below. Therefore, for the CY 2016 OPPS update, we
proposed to establish a new set of New Technology APCs 1575 through
1583 (for Levels 38 through 46) with OPPS status indicator ``S'' and a
[[Page 70375]]
new set of New Technology APCs 1585 through 1593 (for Levels 38 through
46) with OPPS status indicator ``T.'' These two new sets of APCs have
the same payment levels with one set subject to the multiple procedure
payment reduction (status indicator ``T'') and the other set not
subject to the multiple procedure payment reduction (status indicator
``S''). Each proposed set of new technology APC groups has identical
group titles, payment rates, and minimum unadjusted copayments, but a
different status indicator. Table 17 of the proposed rule included the
complete list of the proposed additional 18 New Technology APCs for CY
2016.
Comment: One commenter noted that the inconsistency in the
increment increases in the new levels for the New Technology APCs,
specifically that Level 38 through Level 41 increased in increments of
$5,000, while Level 42 through Level 46 increased in increments of
$10,000. The commenter suggested that increments of $5,000 is more
appropriate and provides more accurate payment for providers as well as
consistency among payment levels beginning at Level 38.
Response: As stated above, for CY 2015, there are 37 levels of New
Technology APC groups with two parallel status indicators; one set with
a status indicator of ``S'' and the other set with a status indicator
of ``T.'' The cost bands for these New Technology APCs range from $0 to
$50 in increments of $10, from $50 to $100 in increments of $50, from
$100 to $2,000 in increments of $100, and from $2,000 to $10,000 in
increments of $500. These cost bands identify the APCs to which new
technology procedures and services with estimated service costs that
fall within those cost bands are assigned under the OPPS. Payment for
each APC is made at the mid-point of the APC's assigned cost band. For
example, payment for New Technology APC 1530 (New Technology--Level 30
($6,000-$6,500)) is made at $6,250. We believe that the increments for
New Technology APC Levels 38 through 46 are appropriate because they
maintain a similar proportionality to the total payment as the original
New Technology APCs, and they allow us to price new technology
procedures and services on a temporary basis with sufficient accuracy
without an excessive and cumbersome number of cost bands. We will
monitor these APCs during our annual review and establish New
Technology APC cost bands in the future as warranted.
Comment: Several commenters supported expanding the New Technology
APCs by adding New Technology Levels 38 through 46. They believed that
the addition of these new cost bands provides flexibility for CMS to
properly assign qualifying services and technologies to the most
appropriate payment level, as well as an opportunity for the collection
of more accurate claims data to ensure appropriate payments when the
procedures and services transition out of the New Technology APC cost
bands to clinical APCs. The commenters also recommended revising the
payment level descriptions for the New Technology APCs by adding one
dollar to the lower end of the payment range (for example, Level 1502
at $51-$100) for the various levels to avoid pricing overlap. In
addition, the commenters suggested that CMS remain open to the idea of
creating new payment band levels in the future, as needed, to
accommodate the growing number of new procedures, services, and
technologies that can be safely performed and delivered in the hospital
outpatient setting.
Response: We appreciate the commenters' support for our proposal to
add New Technology Levels 38 through 46 for CY 2016. However, because
the payment rate for each New Technology APC is at the midpoint of the
specified range, we do not believe that revising the limits of these
ranges for the New Technology APCs is necessary to eliminate what
commenters believe is a pricing overlap. In addition, when we lack
claims data (as we do for new services that have not be reported on
hospital outpatient claims), our cost estimates typically suggest a
range as represented by a New Technology APC cost band. These estimates
are not so precise that they result in an exact dollar amount that
would correspond to a dollar amount limit of a New Technology APC
range. We typically estimate an approximate range that we believe
corresponds to the approximate cost of the new service and match that
range to the closest New Technology APC. Therefore, the overlap of the
limits of the ranges of adjacent New Technology APCs makes no
difference.
We agree with the commenters that adding New Technology APC cost
bands on an as needed basis is appropriate. In addition to the
additional New Technology APCs that we proposed, we are establishing
two additional New Technology APC levels (4 new APCs in total, for
which two APCs are assigned status indicator ``S'' and two APCs are
status indicator ``T''). These APCs are depicted in Table 20.
Table 20--Additional New Technology APCs for CY 2016
----------------------------------------------------------------------------------------------------------------
Status
APC No. APC title indicator
----------------------------------------------------------------------------------------------------------------
1584....................................................... New Technology--Level 47 ($80,000- S
$90,000).
1585....................................................... New Technology--Level 48 ($90,000- S
$100,000).
1598....................................................... New Technology--Level 47 ($80,000- T
$90,000).
1599....................................................... New Technology--Level 48 ($90,000- T
$100,000).
----------------------------------------------------------------------------------------------------------------
The explanation as to why we are creating these additional New
Technology APCs is contained below in the discussion of the New
Technology APC for the retinal prosthesis implant procedure.
After consideration of the public comments we received, we are
finalizing our proposal, with a modification, to add New Technology
Levels 38 through 46 for CY 2016. We also are adding two additional
levels, New Technology Levels 47 and 48. Table 21 below includes the
final complete list of the additional 22 New Technology APC groups for
CY 2016.
[[Page 70376]]
Table 21--Additional New Technology APC Groups for CY 2016
----------------------------------------------------------------------------------------------------------------
Final CY 2016
New CY 2016 APC CY 2016 APC group title status
indicator
----------------------------------------------------------------------------------------------------------------
1575....................................................... New Technology--Level 38 ($10,000- S
$15,000).
1576....................................................... New Technology--Level 39 ($15,000- S
$20,000).
1577....................................................... New Technology--Level 40 ($20,000- S
$25,000).
1578....................................................... New Technology--Level 41 ($25,000- S
$30,000).
1579....................................................... New Technology--Level 42 ($30,000- S
$40,000).
1580....................................................... New Technology--Level 43 ($40,000- S
$50,000).
1581....................................................... New Technology--Level 44 ($50,000- S
$60,000).
1582....................................................... New Technology--Level 45 ($60,000- S
$70,000).
1583....................................................... New Technology--Level 46 ($70,000- S
$80,000).
1584....................................................... New Technology--Level 47 ($80,000- S
$90,000).
1585....................................................... New Technology--Level 48 ($90,000- S
$100,000).
1589....................................................... New Technology--Level 38 ($10,000- T
$15,000).
1590....................................................... New Technology--Level 39 ($15,000- T
$20,000).
1591....................................................... New Technology--Level 40 ($20,000- T
$25,000).
1592....................................................... New Technology--Level 41 ($25,000- T
$30,000).
1593....................................................... New Technology--Level 42 ($30,000- T
$40,000).
1594....................................................... New Technology--Level 43 ($40,000- T
$50,000).
1595....................................................... New Technology--Level 44 ($50,000- T
$60,000).
1596....................................................... New Technology--Level 45 ($60,000- T
$70,000).
1597....................................................... New Technology--Level 46 ($70,000- T
$80,000).
1598....................................................... New Technology--Level 47 ($80,000- T
$90,000).
1599....................................................... New Technology--Level 48 ($90,000- T
$100,000).
----------------------------------------------------------------------------------------------------------------
The final payment rates for New Technology APC groups 1575 through
1598 (with status indicator ``S'') and APC groups 1585 through 1599
(with status indicator ``T'') can be found in Addendum A to this final
rule with comment period (which is available via the Internet on the
CMS Web site).
3. Procedures Assigned to New Technology APC Groups for CY 2016
As we explained in the CY 2002 OPPS final rule with comment period
(66 FR 59902), we generally retain a procedure in the New Technology
APC to which it is initially assigned until we have obtained sufficient
claims data to justify reassignment of the procedure to a clinically
appropriate APC. However, in cases where we find that our initial New
Technology APC assignment was based on inaccurate or inadequate
information (although it was the best information available at the
time), or where the New Technology APCs are restructured, we may, based
on more recent resource utilization information (including claims data)
or the availability of refined New Technology APC cost bands, reassign
the procedure or service to a different New Technology APC that more
appropriately reflects its cost (66 FR 59903).
Consistent with our current policy, in the CY 2016 OPPS/ASC
proposed rule (80 FR 39256), for CY 2016, we proposed to retain
services within New Technology APC groups until we obtain sufficient
claims data to justify reassignment of the service to a clinically
appropriate APC. The flexibility associated with this policy allows us
to reassign a service from a New Technology APC in less than 2 years if
sufficient claims data are available. It also allows us to retain a
service in a New Technology APC for more than 2 years if sufficient
claims data upon which to base a decision for reassignment have not
been obtained (66 FR 59902).
We did not receive any public comments related to this proposal.
Therefore, we are finalizing our CY 2016 proposal, without
modification, to retain services within New Technology APCs until we
gather sufficient claims data to assign the services to a clinically
appropriate APC. Thus, a service can be assigned to a New Technology
APC for more than 2 years if we have insufficient claims data to
reassign the service to a clinical APC, or it could be reassigned to a
clinical APC in less than 2 years if we have adequate claims data.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39256), we proposed to
assign two surgical procedures to New Technology APCs. Specifically, we
proposed to continue to assign HCPCS code C9740 (Cystourethroscopy,
with insertion of transprostatic implant; 4 or more implants) to New
Technology APC 1564 (New Technology--Level 27 ($4,500-$5,000)) and to
reassign CPT code 0100T (Placement of a subconjunctival retinal
prosthesis receiver and pulse generator, and implantation of intra-
ocular retinal electrode array, with vitrectomy) from APC 0673 (Level 2
Intraocular Procedures) to proposed newly established New Technology
APC 1593 (New Technology--Level 46 ($70,000-$80,000) to pay
appropriately for the procedures.
a. Transprostatic Urethral Implant Procedure
Currently, in CY 2015, there is one procedure that is receiving
payment through a New Technology APC. Specifically, the surgical
procedure described by HCPCS code C9740 is assigned to New Technology
APC 1564 (New Technology--Level 27 ($4,500-$5,000)), with a payment
rate of $4,750. This procedure was assigned to New Technology APC 1564
on April 1, 2014, when the HCPCS C-code was established.
For the CY 2016 OPPS update, based on our review of the claims data
for HCPCS code C9740 from April through December 2014, we found 100
single claims (out of 128 total claims) with a geometric mean cost of
approximately $5,648. Because there is not a full year of claims data
and only 100 single claims are in our database for HCPCS code C9740, in
the CY 2016 OPPS/ASC proposed rule, we proposed to maintain the
assignment of HCPCS code C9740 to New Technology APC 1564 for CY 2016.
As described in section IV.B. of the proposed rule, we note that, based
on the costs of the device relative to the procedure in this APC, the
procedures assigned to APC 1564 would be device-intensive for CY 2016.
The proposed CY 2016 payment rate for HCPCS code C9740 was included in
Addendum B to
[[Page 70377]]
the proposed rule (which is available via the Internet on the CMS Web
site).
Comment: Several commenters supported CMS' proposal to retain HCPCS
code C9740 in New Technology APC 1564 for CY 2016. The commenters
stated that retaining this surgical procedure in a new technology APC
for another year will allow CMS to continue collecting the claims data
necessary to identify an appropriate APC assignment for the procedure.
The commenters also supported the proposed designation of APC 1564 as a
device-intensive APC so that the procedure assigned to the APC can be
performed and paid adequately in the ASC setting. However, one
commenter disagreed with the APC assignment for HCPCS code C9740. The
commenter believed that, based on the cost data, HCPCS code C9740
should be assigned to New Technology APC 1567 (New Technology--Level 30
($6,000-$6,500)), with a payment rate of approximately $6,250.
Response: Based on the latest claims data used for this final rule
with comment period, which is based on claims submitted between January
1, 2014, and December 31, 2014, and processed on or before June 30,
2015, we are reassigning HCPCS code C9740 from New Technology APC 1564
to New Technology APC 1565 (New Technology--Level 28 ($5,000-$5,500)).
Specifically, we found a geometric mean cost of approximately $5,627
based on 130 single claims (out of 161 total claims) for HCPCS code
C9740, which is comparable to the payment rate of $5,250 for New
Technology APC 1565. We note that HCPCS code C9740 is the only code
assigned to New Technology APC 1565. We do not believe HCPCS code C9740
should be assigned to either New Technology APC 1566 (New Technology--
Level 29 ($5500-$6000)), with a payment rate of approximately $5,750 or
New Technology APC 1567 (New Technology--Level 30 ($6000-$6500)), with
a payment rate of approximately $6,250) because the payment rates for
these APCs are significantly higher than the geometric mean cost of
approximately $5,627 for HCPCS code C9740. Therefore, in this final
rule with comment period, we are revising the APC assignment for HCPCS
code C9740 to New Technology APC 1565 for CY 2016. We note that HCPCS
code C9740 is the only procedure assigned to New Technology APC 1565,
which is a device-intensive APC for CY 2016. We anticipate that the CY
2015 claims data (which will be used for CY 2017 ratesetting) for HCPCS
code C9740 will be sufficient for the assignment of the code to a
clinical APC in CY 2017.
Comment: One commenter suggested that CMS reassign HCPCS code C9739
(Cystourethroscopy, with insertion of transprostatic implant; 1 to 3
implants), from clinical APC 5374 (Level 4 Urology and Related
Services) to C-APC 5375 (Level 5 Urology and Related Services). The
commenter believed that, similar to HCPCS code C9740, HCPCS code C9739
should be assigned to a device-intensive APC. In addition, the
commenter believed that because both procedures describe an Urolift
implant procedure and the only difference is that HCPCS code C9739
involves 1 to 3 transprostatic implants while HCPCS code C9740 involves
4 or more implants, both procedure codes should be assigned to device-
intensive APCs.
Response: We agree with the commenter's suggestion to assign HCPS
code C9739 to APC 5375. Analysis of the latest claims data used for
this final rule revealed a geometric mean cost of approximately $4,263
based on 53 single claims (out of 54 total claims) for HCPCS code
C9739. We believe that the geometric mean cost for HCPCS code C9739 is
similar to other procedures assigned to APC 5375, which has a geometric
mean cost of approximately $3,551. Therefore, for CY 2016, we are
reassigning HCPCS code C9739 to APC 5375.
Comment: One commenter suggested that a device HCPCS C-code or
HCPCS code L8699 (Prosthetic implant, not otherwise specified) should
be required on all claims that report HCPCS code C9739 or C9740. The
commenter reported that, based on the review of the CY 2016 OPPS/ASC
proposed rule claims data, approximately 50 percent of the claims did
not have a device code reported, thus making it impossible to determine
the number of implants used. The commenter requested the establishment
of device edits to ensure that implant costs are included in the claims
to facilitate ratesetting.
Response: We do not believe that we should establish device edits
for every procedure code, including HCPCS code C9739 or C9740. We rely
on hospitals to report procedures, services, and items accurately. As
we have stated in previous final rules, it is extremely important that
hospitals use all of the required HCPCS codes to report the performance
of all services they furnish, consistent with the code descriptors, CPT
and/or CMS instructions, and correct coding principles, whether payment
for the services is made separately or packaged. The accuracy of the
OPPS payment rates depends on the quality and completeness of the
claims data that hospitals submit for the services they furnish to
Medicare beneficiaries.
However, in the CY 2016 OPPS/ASC proposed rule, we proposed to
establish claims processing edits such that a device HCPCS code must be
reported on the same claim form for any procedure code assigned to a
device-intensive APC (80 FR 39268). We further stated that claims
submitted with a procedure code requiring a device that is assigned to
a device-intensive APC but without any device HCPCS code on the claim
would be returned to the provider. We are finalizing this proposal for
CY 2016. Specifically, only the procedures that require the
implantation of a device that are assigned to a device-intensive APC
will require a device code on the claim and claims processing edits
will apply only to those APCs that are listed in Table 42 of this final
rule with comment period. Further discussion of this final policy can
be found in section IV.B. of this final rule with comment period.
Because HCPCS code C9740 is assigned to a device-intensive APC for CY
2016, we expect hospitals to report the appropriate device code with
the implant procedure. In this case, we also would expect hospitals to
report HCPCS code L8699 when reporting HCPCS code C9740. This will
ensure that device costs are always reported on the claim and are
appropriately captured in claims that CMS uses for ratesetting.
In summary, after consideration of the public comments we received,
we are finalizing our proposals, with modification. Specifically, we
are reassigning HCPCS code C9740 from New Technology APC 1564 to New
Technology APC 1565, and reassigning HCPCS code C9739 from clinical APC
5374 to APC 5375 for CY 2016. We note that the APC to which HCPCS code
C9740 is assigned is designated as a device-intensive APC, which will
require reporting the appropriate device code (in this case, HCPCS code
L8699) when the surgical procedure describing HCPCS C9740 is reported
on the claim. The final CY 2016 payment rates for HCPCS codes C9739 and
C9740 are included in Addendum B to this final rule with comment period
(which is available via the Internet on the CMS Web site).
b. Retinal Prosthesis Implant Procedure
CPT code 0100T describes the implantation of a retinal prosthesis.
This surgical procedure is currently assigned to APC 0673, which has a
CY 2015 payment rate of approximately $3,123. The retinal prosthesis
device that is used in the procedure described by CPT code 0100T is
described by HCPCS code C1841 (Retinal prosthesis,
[[Page 70378]]
includes all internal and external components). The first retinal
prosthesis (Argus[supreg] II Retinal Prosthesis System) was approved by
the FDA in 2013 for adult patients with advanced retinitis pigmentosa.
Pass-through status was granted for HCPCS code C1841 beginning October
1, 2013, and is proposed to expire on December 31, 2015. We refer
readers to section IV.A.1.b. of this final rule with comment period for
the discussion of the expiration of pass-through for HCPCS code C1841.
After pass-through status expires for a medical device, the payment
for the device is packaged into the payment for the associated surgical
procedure. The surgical procedure in which the Argus device (HCPCS code
C1841) is implanted is described by CPT code 0100T. Review of the CY
2014 OPPS claims data used for the CY 2016 OPPS/ASC proposed rule
showed only one single claim for CPT code 0100T with HCPCS code C1841
on the claim. Due to the newness of this surgical procedure and its
associated implantable device and the extremely low number of CY 2014
HOPD claims for this procedure, in the CY 2016 OPPS/ASC proposed rule
(80 FR 39257), we proposed to reassign CPT code 0100T from existing APC
0673 (Level III Intraocular Procedures) to proposed newly established
New Technology APC 1593 (New Technology--Level 46 ($70,000-$80,000)),
with a payment of approximately $75,000 for CY 2016. We refer readers
to section III.C.2. of the proposed rule and this final rule with
comment period for a discussion of the proposed expansion of the New
Technology APC levels. We stated in the proposed rule (80 FR 39257)
that ``[w]e are proposing a CY 2016 OPPS payment of approximately
$75,000 for proposed new APC 1593, which would be the payment for CPT
code 0100T (not including the retinal prosthesis), plus the proposed
maximum FY 2016 IPPS new technology add-on payment for a case involving
the Argus[supreg] II Retinal Prosthesis System of $72,028.75 (80 FR
24425).'' In the proposed rule (80 FR 39257), we also stated that we
believe that, given the newness of this procedure and the severe
paucity of OPPS claims data, this approach provides a reasonable
payment amount that is similar to the payment for the same procedure
provided in the hospital inpatient setting. Once we have more claims
data, we indicated that we will reassess the APC placement of the
retinal prosthesis implantation procedure in light of our standard rate
setting methodology. We invited public comments on this proposal.
Comment: Several commenters expressed concern over the proposed
payment rate of $75,000 for CPT code 0100T. The commenters reported
that the cost of the Argus II device is approximately $144,000 while
the cost of the surgical procedure to implant the device is between
approximately $5,000 and $10,000. The commenters urged CMS to establish
a payment rate of approximately $150,000 to accurately pay hospitals
for the full cost of providing the procedure and furnishing the device.
Other commenters reported confusion about the proposed policy. Based on
their reading of the proposal, the commenters believed that CMS is
proposing to pay (1) $75,000 for New Technology APC 1593 plus (2) the
IPPS New Technology payment amount of approximately $72,029, which
would result in a total procedure payment of approximately $147,029.
The commenters requested clarification on the proposed total procedure
payment. Another commenter indicated that a total payment of $75,000
for the device and surgical procedure is inappropriate and further
disagreed with CMS' use of the IPPS new technology add-on payment as a
proxy for the Argus II procedure cost because this add-on payment is
set at 50 percent of costs of the new technology.
Response: We appreciate the commenters' request for clarification.
In the CY 2016 OPPS/ASC proposed rule, we proposed to pay for the
surgical implant procedure including the retinal prosthesis device
under newly proposed New Technology APC 1593. The following sentence in
the proposed rule (80 FR 39257) may be the source of some commenters'
confusion: ``[w]e are proposing a CY 2016 OPPS payment of approximately
$75,000 for proposed new APC 1593, which would be the payment for CPT
code 0100T (not including the retinal prosthesis), plus the proposed
maximum FY 2016 IPPS new technology add-on payment for a case involving
the Argus[supreg] II Retinal Prosthesis System of $72,028.75.'' What we
meant by that sentence is the payment amount of $75,000 for APC 1593
would be comprised of the approximate sum of: (1) The payment amount
for the procedure ($3,123, which is the CY 2015 payment rate for the
procedure described by CPT code 0100T); and (2) the payment amount for
the device ($72,028.75--the proposed IPPS payment amount for the
device). That is, the approximate $75,000 payment for APC 1593 is the
total payment amount, which includes payment for both the procedure and
the device.
The final rule claims data contain additional claims data for CPT
code 0100T. There are 5 total claims (2 single claims) with a geometric
mean cost of approximately $95,866. Although this remains a very low
volume of claims, we prefer to base the cost estimate for this
procedure (which include the cost of the device) on the hospital
outpatient claims data rather than using the IPPS new technology add-on
payment as a proxy for the procedure cost. However, we do not believe
that there are a sufficient number of claims upon which to base a
clinical APC for the retinal prosthesis procedure. Therefore, we are
creating a New Technology APC (Level 48) for CPT code 0100T with the
cost band range of $90,000 to $100,000 and a payment amount of $95,000.
In addition, because the proposed additional New Technology APCs ended
with Level 46 ($70,000-$80,000), we also are creating a New Technology
Level 47 with the cost band range of $80,000 to $90,000 and a payment
amount of $85,000 to fill in the gap between New Technology APC Level
46 and Level 48.
Comment: One commenter recommended the establishment of a HCPCS G-
code for the Argus implant procedure and the assignment of this G-code
to a new technology APC with a payment rate of $150,000.
Response: We disagree with establishing a HCPCS G-code and
assigning it to a new technology APC with a payment rate of $150,000
because CPT code 0100T accurately describes the procedure associated
with implanting the Argus II device.
Comment: One commenter recommended, as an alternative to the New
Technology APC payment, that CMS continue to pay separately for CPT
code 0100T and HCPCS code C1841. Specifically, the commenter requested
that CMS pay separately for surgical procedure CPT code 0100T and also
extend the pass-through status for the device HCPCS code C1841 through
December 31, 2016 because of very limited claims data.
Response: We stated in the CY 2016 OPPS/ASC proposed rule that
pass-through payment status for device HCPCS code C1841 would expire on
December 31, 2015 because it was approved for pass-through status
effective October 1, 2013 (80 FR 39264). We also proposed to package
and assign device HCPCS code C1841 to OPPS status indicator ``N'' to
indicate that the payment for this code would be included in the
surgical procedure CPT code 0100T. We do not agree that
[[Page 70379]]
extending the pass-through status would be appropriate because we
believe it would be inconsistent with the statutory pass-through
provision. Section 1833(t)(6)(B)(iii) requires that, under the OPPS, a
category of devices be eligible for transitional pass-through payments
for at least 2 years, but not more than 3 years.
After consideration of the public comments we received, we are
assigning CPT code 0100T to New Technology APC 1599, which has a final
payment of $95,000 for CY 2016. This payment rate includes the payment
for the retinal prosthesis system as well as all other items and
supplies used in the surgical procedure to implant the device. Because
payment for retinal prosthesis is included in CPT code 100T, we are
finalizing our proposal to assign HCPCS code C1841 to OPPS status
indicator ``N'' to indicate that this code is packaged under the
hospital OPPS. We also are designating APC 1599 as a device-intensive
APC because almost all of the cost of the implantation procedure is
attributable to the cost of the device. Because CPT code 0100T is
assigned to a device-intensive APC, a device HCPCS C-code will be
required on claims with CPT code 0100T according to the device edit
policy described in section IV. of this final rule with comment period.
D. OPPS Ambulatory Payment Classification (APC) Group Policies
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and to revise the groups, 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. Therefore, every year we review and revise the APC
assignments for many procedure codes and diagnosis codes based on our
evaluation of these factors using the latest OPPS claims data. Although
we do not discuss every APC change in the proposed and final rules,
these changes are listed in the OPPS Addendum B of the proposed and
final rules. Specifically, procedure and diagnosis codes with revised
APC and/or status indicator assignments are identified by comment
indicator ``CH'' (Active HCPCS code in current year and next calendar
year, status indicator and/or APC assignment has changed) in the OPPS
Addendum B payment file.
In our efforts to improve clinical and resource homogeneity among
the APC groupings and update the hospital OPPS, we conducted a
comprehensive review of the current structure of the APCs and codes
assignments for CY 2015. Consequently, as part of our broader efforts
to thoroughly review, revise, and consolidate APCs to improve both
resource and clinical homogeneity, we proposed in the CY 2015 OPPS/ASC
proposed rule (79 FR 40981 through 40983) to restructure the first set
of clinical families, specifically the ophthalmology and gynecology
APCs. We proposed to restructure the APCs for these clinical families
based on the following principles:
Improved clinical homogeneity;
Improved resource homogeneity;
Reduced resource overlap in APCs within a clinical family;
and
Greater simplicity and improved understanding of the
structure of the APCs.
Based on our review, for CY 2015, we finalized the APC
restructuring for the ophthalmology and gynecology APCs. For the
complete discussion on the APC restructuring for the ophthalmology
APCs, we refer readers to the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66857 through 66859). Similarly, for the complete
discussion on the APC restructuring for the gynecology APCs, we refer
readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR
66849 through 66851).
For the CY 2016 update, as a part of our continued review of the
structure of the APCs, in the CY 2016 OPPS/ASC proposed rule (80 FR
39257), we proposed to restructure nine APC clinical families based on
the same principles used for restructuring the ophthalmology and
gynecology APCs for CY 2015. We discuss below our proposed
restructuring for the nine APC clinical families. We note that, in
conjunction with the proposed restructuring, we proposed to renumber
several families of APCs to provide consecutive APC numbers for
consecutive APC levels within a clinical family for improved
identification of APCs and ease of understanding the APC groupings. For
example, the seven APC levels for urology procedures were proposed to
be renumbered as APC 5371 (Level 1 Urology and Related Services), APC
5372 (Level 2 Urology and Related Services), APC 5373 (Level 3 Urology
and Related Services), APC 5374 (Level 4 Urology and Related Services),
APC 5375 (Level 5 Urology and Related Services), APC 5376 (Level 6
Urology and Related Services), and APC 5377 (Level 7 Urology and
Related Services). We stated in the proposed rule that we believe that
consecutive numbering of the APCs will enhance the public understanding
of the APC groups and will make it easier for them to communicate to
the agency about issues concerning APCs. We note that, under this
initiative, we did not propose to change the numbering of the composite
APCs or the New Technology APCs for CY 2016.
Comment: Several commenters expressed concern about the lack of
detail in the proposed rule on the proposed consolidation and
restructuring of the nine APC groups. The commenters stated that CMS
provided few details in the proposed rule to enable commenters to
adequately assess the full impact of the proposed APC reconfiguration,
and requested a delay in the implementation of the proposal until more
information is available. They also stated that CMS did not provide
impact tables to show the projected impact that the proposed APC
consolidation would have on Medicare payments by departments or
specialties, or provide the rationale behind the decisions for each
combination of APC groups, which they believed further complicated
analysis of each proposed APC group. Some commenters indicated that
they had difficulty analyzing the impact and interrelationship of the
different proposed policies to adequately determine Medicare payments
to hospitals. Several commenters requested that CMS not finalize the
proposal and stated that the proposed APC groupings do not reflect
clinical or resource homogeneity. Some commenters believed that CMS
should develop and establish criteria before finalizing the
reconfiguration of the nine APC groups.
However, many other commenters supported the consolidation and
restructuring of the nine clinical family APCs but requested
modification to the APC groupings. In particular, the commenters
requested the reassignment of several procedures and services to
certain APCs for the final rule. In addition, several commenters
requested further information in the final rule, and urged CMS to
include a separate impact analysis for each restructured APC clinical
family showing the distributional impact of the restructuring across
CMS' usual categories (such as urban/rural location, bed size, type of
ownership and teaching status).
Response: Based on our experience with the existing APCs under the
OPPS, we believe that establishing more inclusive categories of
procedures and services is more appropriate for future ratesetting
under the OPPS. Therefore, we believe that the proposed restructured
APCs have a more clinically appropriate granularity, while improving
resource similarity. We also
[[Page 70380]]
believe the proposed restructure and consolidation of APCs more
appropriately categorizes all of the procedures and services within
each of the nine APC groups such that the procedures and services
within each proposed newly configured APC are more comparable with
respect to clinical characteristics and resource use.
In addition, we disagree that we should delay or not finalize the
proposed consolidation and restructuring of the nine APC groups pending
provision of the extensive data that the commenters requested. We make
available a considerable amount of data for public analysis each year
for both the proposed rule and the final rule. While we are not
developing and providing the extensively detailed information that the
commenters requested, we are providing the public use files of claims
and a detailed narrative description of our data process that the
public can use to perform any desired analyses (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
We note that we included the impact of the CY 2016 OPPS proposals
on payment to different classes of hospitals in Table 65 of the
proposed rule (80 FR 39362 through 39363). We believe our estimate of
the impact of these proposed changes provided valuable information to
hospitals. We believe that it would be impractical and nonproductive to
develop impact tables for each of the primary clinical families that
were proposed to be reorganized. Hospitals generally do not perform a
limited set of services confined to one clinical family. Therefore, we
believe that impacts reflecting the interaction and collective effect
of the proposed APC restructuring best depict how most hospitals will
fare under the proposed reorganization. Many commenters submitted
comments relating to particular services and were able to provide
detailed analysis in their comments based on the data and other
information provided with the proposed rule.
Further, we do not agree that we should develop and establish
additional criteria before finalizing the proposed consolidation and
restructuring of the nine APC groups. The OPPS statute provides that
procedures grouped in APCs must be similar clinically and in terms of
resource use. In various sections of this final rule with comment
period, we have applied those criteria and responded to many of the
public comments we received, which included evaluations of the
recommended changes to the APC assignments, based on those criteria.
Each year, under the OPPS, we revise and make changes to the APC
groupings based on the latest hospital outpatient claims data to
appropriately place procedures and services in APCs based on clinical
characteristics and resource similarity.
Therefore, after consideration of the public comments we received,
we are finalizing, with some modifications that are discussed below in
the sections specific to each clinical family, the proposed
consolidation and restructuring of the nine clinical families of APCs
for CY 2016. Each of the nine clinical families, the public comments we
received, and our responses on those families are discussed below. The
final payment rates for the nine individual clinical family APCs are
included in Addendum A to this final rule with comment period.
1. Airway Endoscopy Procedures
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs that
contain airway endoscopy procedures. In the CY 2016 OPPS/ASC proposed
rule (80 FR 39257), for CY 2016, we proposed to restructure the OPPS
APC groupings for airway endoscopy procedures to more appropriately
reflect the costs and clinical characteristics of the procedures within
each APC grouping in the context of the OPPS. The current APCs for
airway endoscopy procedures are divided into upper airway and lower
airway endoscopy APC series. After reviewing these APCs, we believe
that consolidating the current upper airway and lower airway APC series
into a single APC grouping for airway endoscopy procedures would result
in improved resource homogeneity for the various airway endoscopy
procedures, while maintaining clinical homogeneity. Therefore, for CY
2016, we proposed to restructure and consolidate the APCs that include
airway endoscopy procedures into a single APC grouping. Table 18 of the
proposed rule listed the current CY 2015 APCs that contain the airway
endoscopy procedures, and Table 19 of the proposed rule listed the
proposed CY 2016 APCs that would result from our consolidation and
restructuring of the current airway endoscopy procedure APCs into a
single APC grouping. The proposed restructured/renumbered CY 2016
airway endoscopy APCs were: Proposed APC 5151 (Level 1Airway
Endoscopy); proposed APC 5152 (Level 2 Airway Endoscopy); proposed APC
5153 (Level 3 Airway Endoscopy); proposed APC 5154 (Level 4 Airway
Endoscopy); and proposed APC 5155 (Level 5 Airway Endoscopy.
We invited public comments on this proposal.
Comment: Several commenters supported the proposed restructuring of
the airway endoscopy APCs. However, the commenters submitted a list of
procedure codes (indicated in Table 22 below) that they requested CMS
to reassign to higher-level APCs in the airway endoscopy grouping based
on greater resource similarity of the procedures described by the codes
listed by the commenters compared to the procedures described by the
proposed codes assigned to the proposed APCs. In addition, the HOP
Panel recommended that CMS reassign the procedures described by CPT
codes 31652 and 31653 from proposed APC 5153 to proposed APC 5154
because the Panel agreed with the presenter that the procedures
described by these new codes are most similar to the procedures
assigned to CPT code 31629, which is assigned to APC 5154. One
commenter requested that CMS assign the procedure described by CPT code
31652 to APC 5154 and the procedure described by CPT code 31653 to APC
5155. Another commenter requested that CMS reassign the procedure
described by CPT code 31515 from proposed APC 5152 to proposed APC 5154
because the commenter believed that this procedure is more clinically
similar to other procedures (described by CPT codes 31629 and 31645)
assigned to proposed APC 5154. One commenter requested that CMS create
a Level 6 Airway Endoscopy APC and assign the procedures described by
CPT codes 31636, 31634, and 31647 to this newly APC because the costs
of these procedures are not similar to the costs of other procedures
assigned to APC 5155.
Response: We agree in part with the commenters' requested code
reassignments and with the Panel's recommendation. However, we do not
believe that the procedure described by CPT code 31515 should be
reassigned to proposed APC 5154, that the procedure described by CPT
code 31653 should be assigned to proposed APC 5153 instead of proposed
APC 5155, or that we should create a Level 6 Airway Endoscopy APC. We
are reassigning seven of the eight recommended procedure codes (as
listed in Table 22 below) to the next higher level airway endoscopy APC
to improve the resource homogeneity of all the procedures assigned to
the airway endoscopy APCs. We do not agree with the commenter
[[Page 70381]]
that the procedure described by CPT code 31515 should be assigned to
the higher level APC 5154 instead of APC 5152. The geometric mean cost
of the procedure described by CPT code 31515 is approximately $444, and
the geometric mean cost of APC 5152 is approximately $393. The
geometric mean cost of APC 5154 is approximately $2,084. We believe
that, given the significant difference in resource use and similarity
between the procedure described by CPT code 31515 and the procedures
assigned to APC 5154, assigning the procedure described by CPT code
31515 to APC 5154 would be an inappropriate APC assignment. We also
believe that, based on the clinical characteristics of the new airway
endoscopy procedure grouping described by CPT code 31653, the procedure
is most appropriately assigned to APC 5154, which is one level higher
than what was proposed. In addition, we do not believe it is necessary
to create a sixth level to the Airway Endoscopy APC grouping to
appropriately pay for the procedures described by CPT codes 31636,
31634, and 31647. The procedures described by these CPT codes are low
volume procedures, and even if the procedures represented a significant
volume in the CY 2014 claims data, assigning these procedures to APC
5155 would not result in a violation of the 2 times rule for the APC.
Table 22 below shows the airway endoscopy procedure codes with the
commenters' specific APC recommendations and the final CMS decisions,
final APC assignment, and final status indicator assignment for CY
2016.
Table 22--Airway Endoscopy Procedure Codes With Commenters' Specific APC Recommendations and Final CMS Decisions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Proposed CY Commenter Final CY Final CY
CPT/HCPCS code Short descriptor 2016 SI 2016 APC requested APC CMS Decision 2016 SI 2016 APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
31295..................... Sinus endo w/balloon dil. T 5154 5155 Agree...................... T 5155
31296..................... Sinus endo w/balloon dil. T 5154 5155 Agree...................... T 5155
31297..................... Sinus endo w/balloon dil. T 5154 5155 Agree...................... T 5155
31515..................... Laryngoscopy for T 5152 5154 Disagree................... T 5152
aspiration.
31626..................... Bronchoscopy w/markers... T 5154 5155 Agree...................... T 5155
31628..................... Bronchoscopy/lung bx each T 5153 5154 Agree...................... T 5154
31652 *................... Bronch ebus samplng 1/2 T 5153 5154 Agree...................... T 5154
node.
31653 **.................. Bronch ebus samplng 3/> T 5153 5154 Agree...................... T 5154
node.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT code 31652 will be effective January 1, 2016. This code was listed as code 3160A (the 5-digit CMS placeholder code) in Addendum B, O, and Q2 of
the CY 2016 OPPS/ASC proposed rule.
** CPT code 31653 will be effective January 1, 2016. This code was listed as code 3160B (the 5-digit CMS placeholder code) in Addendum B, O, and Q2 of
the CY 2016 OPPS/ASC proposed rule.
Comment: One commenter requested that CMS assign status indicator
``T'' (instead of status indicator ``N'') to new CY 2016 CPT codes
0406T (Nasal endoscopy, surgical, ethmoid sinus, placement of drug
eluting implant) and 0407T (Nasal endoscopy, surgical, ethmoid sinus,
placement of drug eluting implant; with biopsy, polypectomy or
debridement). (We note that CPT codes 0406T and 0407T were listed as
040XF and 040XG, respectively, in Addendum B, O, and Q2 of the CY 2016
OPPS/ASC proposed rule.) The commenter suggested, as an alternative,
that these codes be assigned status indicator ``Q2'' (T-packaged). In
addition, the commenter recommended that CMS assign CPT code 0406T to
APC 5153 and CPT code 0407T to APC 5154. The commenter believed that
these procedures should be paid separately under the OPPS because they
are performed as standalone surgical procedures according to the code
descriptors.
Response: We disagree with the commenter that the procedures
described by CPT codes 0406T and 0407T are performed as standalone
procedures. We believe that procedures describing the placement of a
drug-eluting sinus implant under the OPPS are performed as part of
several more comprehensive and extensive endoscopic sinus surgical
procedures. Therefore, we are finalizing our proposal to package
payment for the procedures described by CPT codes 0406T and 0407T, and
to assign these procedures to status indicator ``N'' for CY 2016.
After consideration of the public comments we received, we are
finalizing the proposed structure of the airway endoscopy APCs with the
code reassignments shown in Table 22 above. Table 23 below lists the
final CY 2016 APCs that result from our consolidation and restructuring
of the current airway endoscopy procedure APCs into a single APC
grouping. The procedures assigned to each APC are listed in Addendum B
to this final rule with comment period, which is available via the
Internet on the CMS Web site.
Table 23--Final CY 2016 Airway Endoscopy APCs
------------------------------------------------------------------------
Final CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5151.............................. Level 1 Airway Endoscopy.
5152.............................. Level 2 Airway Endoscopy.
5153.............................. Level 3 Airway Endoscopy.
5154.............................. Level 4 Airway Endoscopy.
5155.............................. Level 5 Airway Endoscopy.
------------------------------------------------------------------------
2. Cardiovascular Procedures and Services
a. Cardiac Contractility Modulation (CCM) Therapy
In Addendum B to the CY 2016 OPPS/ASC proposed rule, we proposed to
assign 11 new CY 2016 cardiac contractility modulation (CCM) therapy
system CPT codes to various APCs, which are listed in Table 24 below.
We also assigned these codes to comment indicator ``NP'' in Addendum B
to the proposed rule to indicate that the codes are new for CY 2016
with a proposed APC assignment and that public comments would be
accepted on their proposed APC assignments. We note these codes will be
effective January 1, 2016. However, in the proposed rule, the codes
were listed as 04XX1 through 04XX (the 5-digit CMS placeholder code) in
Addendum B, O, and Q2 of the CY 2016 OPPS/ASC proposed rule.
[[Page 70382]]
Table 24--Proposed CY 2016 OPPS APCs and Status Indicators for the Cardiac Contractility Modulation CPT
Procedure Codes
----------------------------------------------------------------------------------------------------------------
Proposed CY
CY 2016 OPPS/ASC proposed 2016 OPPS Proposed CY
rule 5-digit CMS CY 2016 CPT code Short descriptor status 2016 OPPS APC
placeholder code indicator
----------------------------------------------------------------------------------------------------------------
04XX1...................... 0408T...................... Insj/rplc cardiac J1 5223
modulj sys.
04XX2...................... 0409T...................... Insj/rplc cardiac J1 5223
modulj pls gn.
04XX3...................... 0410T...................... Insj/rplc car modulj J1 5222
atr elt.
04XX4...................... 0411T...................... Insj/rplc car modulj J1 5222
vnt elt.
04XX5...................... 0412T...................... Rmvl cardiac modulj J1 5222
pls gen.
04XX6...................... 0413T...................... Rmvl car modulj Q2 5221
tranvns elt.
04XX7...................... 0414T...................... Rmvl & rpl car modulj J1 5224
pls gn.
04XX8...................... 0415T...................... Repos car modulj T 5181
tranvns elt.
04XX9...................... 0416T...................... Reloc skin pocket pls T 5054
gen.
04X10...................... 0417T...................... Prgrmg eval cardiac Q1 5741
modulj.
04X11...................... 0418T...................... Interro eval cardiac Q1 5741
modulj.
----------------------------------------------------------------------------------------------------------------
Comment: One commenter disagreed with CMS' proposed APC assignments
for certain cardiac contractility modulation (CCM) Category III CPT
codes that are new in CY 2016 and therefore do not have associated
claims data available. Specifically, the commenter requested four CPT
codes be reassigned to the following APCs:
CPT code 408T (Insertion or replacement of permanent
cardiac contractility modulation system, including contractility
evaluation when performed, and programming of sensing and therapeutic
parameters; pulse generator with transvenous electrodes) to APC 5232
(Level 2 ICD and Similar Procedures);
CPT code 0409T (Insertion or replacement of permanent
cardiac contractility modulation system, including contractility
evaluation when performed, and programming of sensing and therapeutic
parameters; pulse generator only) to APC 5231 (Level 1 ICD and Similar
Procedures);
CPT code 0412T (Removal of permanent cardiac contractility
modulation system; pulse generator only) to APC 5221 (Level 1 Pacemaker
and Similar Procedures); and
CPT code 0414T (Removal and replacement of permanent
cardiac contractility modulation system pulse generator only) to APC
5231 (Level 1 ICD and Similar Procedures).
The commenter believed that the three codes for inserting or
replacing the system or pulse generator are more similar clinically and
in device complexity and resource use to implantable cardioverter-
defibrillators (ICD) procedures. In addition, the commenter stated that
the procedure time and device costs for CCM procedures exceed those for
pacemaker procedures. The commenter believed the recommended APC
assignment for removal of the CCM pulse generator codes better aligns
with other similar removal procedure codes.
Response: We agree with the commenter that there would be greater
homogeneity, both clinically and in terms of resource use, by
reassigning CCM procedures for insertion and/or replacement of the CCM
device (described by CPT code 0409T) from the pacemaker APCs to the ICD
APCs. We also agree with the commenter that procedures for removal of
the CCM device (described by CPT codes 0412T and 0414T) are more
homogenous clinically and in terms of resource use with pacemaker
procedures. Therefore, we are accepting the commenter's recommendation
to reassign the procedures described by CPT codes 0409T and 0414T to
APC 5231 and to reassign the procedures described by CPT code 0412T to
APC 5221. However, we disagree with the commenter's recommendation to
reassign the procedure described by CPT 0408T to APC 5232. Based on the
latest available hospital claims data used for this final rule with
comment period, we believe that the procedure described by CPT code
0408T should be assigned to APC 5231 because of its clinical and
resource homogeneity with other procedures assigned to APC 5231. Table
24 below summarizes the commenter's requested APC assignment for each
of the codes along with our decision and the final APC and status
indicator assignments.
Table 24--Cardiac Contractility Modulation Procedure Codes With Commenter's Recommended Specific APC Assigment, Final CMS Decision, and Final APC and
Status Indicator Assignment
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Proposed Commenter Final CY
CPT/HCPCS code Short descriptor 2016 status CY 2016 requested CMS decision 2016 status Final CY
indicator APC APC indicator 2016 APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
0408T....................... Insj/rplc cardiac modulj J1 5223 5232 Disagree.................... J1 5231
sys.
0409T....................... Insj/rplc cardiac modulj J1 5223 5231 Agree....................... J1 5231
pls gn.
0412T....................... Rmvl cardiac modulj pls gen J1 5222 5221 Agree....................... Q2 5221
0414T....................... Rmvl & rpl car modulj pls J1 5224 5231 Agree....................... J1 5231
gn.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The final status indicator, APC assignment, and payment rate for
these codes, where applicable, can be found in Addendum B to this final
rule with comment period (which is available via the Internet on the
CMS Web site).
b. Cardiac Rehabilitation
Currently, there are four established CPT/HCPCS codes that describe
cardiac rehabilitation services:
[[Page 70383]]
CPT code 93797 (Physician or other qualified health care
professional services for outpatient cardiac rehabilitation; without
continuous ECG monitoring (per session));
CPT code 93798 (Physician or other qualified health care
professional services for outpatient cardiac rehabilitation; with
continuous ECG monitoring (per session));
HCPCS code G0422 (Intensive cardiac rehabilitation; with
or without continuous ECG monitoring with exercise, per session); and
HCPCS code G0423 (Intensive cardiac rehabilitation; with
or without continuous ECG monitoring without exercise, per session).
In CY 2015, we assigned all four of these codes to APC 0095
(Cardiac Rehabilitation), which has a geometric mean cost of
approximately $107. In the CY OPPS/ASC 2016 proposed rule, we discussed
that the costs for the two intensive cardiac rehabilitation codes had
increased, such that the geometric mean costs for the four cardiac
rehabilitation codes that we calculated based on the CY 2014 hospital
claims data available for the proposed rule were as follows: For CPT
code 93797, the geometric mean cost was approximately $102. For CPT
code 93798, the geometric mean cost was approximately $111. For HCPCS
code G0422, the geometric mean cost was approximately $262). For HCPCS
code G0423, the geometric mean cost was approximately $493. In the
proposed rule, we stated that if we grouped all four of these codes
into a single APC, a 2 times rule violation would result. Therefore, we
proposed two levels of cardiac rehabilitation for CY 2016: APC 5771
(Level 1 Cardiac Rehabilitation), which contained the two standard
cardiac rehabilitation codes (CPT codes 93797 and 93798); and APC 5772
(Level 2 Cardiac Rehabilitation), which contained the two intensive
cardiac rehabilitation codes (HCPCS codes G0422 and G0423).
Our analysis of the latest CY 2014 hospital claims data available
for this final rule with comment period revealed that the geometric
mean costs of the intensive cardiac rehabilitation codes have decreased
to levels that are more consistent with the prior year's geometric mean
costs for these codes. The geometric mean costs for the four codes,
using the latest available final rule claims data, are as follows: For
CPT code 93797, the geometric mean cost is approximately $100. For CPT
code 93798, the geometric mean cost is approximately $109. For HCPCS
code G0422, the geometric mean cost is approximately $149. For HCPCS
code G0423, the geometric mean cost is approximately $158. Therefore,
because the geometric mean costs for all four codes based on the latest
available final rule data are relatively similar, we believe that the
current CY 2015 single APC configuration for cardiac rehabilitation is
more appropriate than the two levels we proposed for CY 2016 and
ensures that the procedures assigned to the APC do not cause a
violation of the 2 times rule. Analysis using the latest available
final rule claims data showed that the 2 time rule violation that
existed with the data for the proposed rule no longer exists.
Therefore, for CY 2016, we are assigning all four of the cardiac
rehabilitation codes (CPT codes 93797 and 93798 and HCPCS code G0422
and G0423) to new APC 5771 (Cardiac Rehabilitation), with a geometric
mean cost of approximately $109.
c. Cardiac Telemetry
For CY 2016, we proposed to reassign the procedure described by CPT
code 93229 (External mobile cardiovascular telemetry with
electrocardiographic recording, concurrent computerized real time data
analysis and greater than 24 hours of accessible ECG data storage
(retrievable with query) with ECG triggered and patient selected events
transmitted to a remote attended surveillance center for up to 30 days;
technical support for connection and patient instructions for use,
attended surveillance, analysis and transmission of daily and emergent
data reports as prescribed by a physician or other qualified health
care professional) from APC 0213 (Level 1 Extended EEG, sleep, and
Cardiovascular Studies) to proposed APC 5722 (Level 2 Diagnostic Tests
and Related Services), with a proposed payment rate of approximately
$220.
Comment: One commenter disagreed with the proposed APC assignment
for the procedure described by CPT code 93229 to proposed APC 5722. The
commenter stated that the proposed payment rate for APC 5722 does not
accurately reflect the full cost of providing the service described by
CPT code 93229. The commenter also stated that hospitals are miscoding
the service, and as a result, the proposed payment for this service is
significantly understated. The commenter noted that, based on its
internal analysis, several hospitals reported costs under $100 for
services described by CPT code 93229. The commenter stated that when
this service is provided under the MPFS, the payment is valued at
$680.05. The commenter believed that the true cost of providing this
service is closer to $795, and recommended that CMS reassign the
services described by CPT code 93229 to proposed APC 5724 (Level 4
Diagnostic Tests and Related Services), with a proposed payment rate of
approximately $880.
Response: As we stated in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66847), CPT code 93229 became effective January
1, 2009. We believe that 5 years is sufficient time for hospital coders
to understand the procedure described by CPT code 93229 and how to
appropriately report this service on hospital claims. Based on our
analysis of the CY 2014 hospital outpatient claims data used for this
final rule with comment period, we are unable to determine whether
hospitals are miscoding the service described by CPT code 93229. It is
generally not our policy to judge the accuracy of hospital coding and
charging for purposes of ratesetting (75 FR 71838). We rely on
hospitals to accurately report the use of HCPCS codes in accordance
with their code descriptors and CPT and CMS instructions, as
applicable, and to report services on claims and charges and costs for
the services on their Medicare hospital cost report appropriately.
However, we do not specify the methodologies that hospitals use to set
charges for this or any other service.
We acknowledge that payment under the MPFS is made separately for
the procedure described by CPT code 93229. However, the MPFS and the
OPPS are different payment systems with entirely different ratesetting
methodologies. Each is established under a different set of regulatory
and statutory principles and the policies established under the
physician fee schedule do not have bearing on the payment policies
under the OPPS. For example, the OPPS uses actual annual hospital
claims data to calculate payment rates, while the MPFS relies on
estimates of relative value units (RVUs) from the American Medical
Association/Specialty Society Relative Value Update Committee (RUC).
Furthermore, as has been our practice since the implementation of
the OPPS in 2000, we review, on an annual basis, the APC assignments
for the procedures and services paid under the OPPS. Based on the
latest hospital outpatient claims data used for this final rule with
comment period, our analysis does not support the assignment of the
procedure described by CPT code 93229 to APC 5724. We examined the
latest hospital outpatient claims data for CPT code 93229 for dates of
service between January 1, 2014, and December 31, 2014, that were
processed on or before June 30, 2014. Our analysis of the claims data
[[Page 70384]]
shows a geometric mean cost of approximately $170 for CPT code 93229
based on 2,153 single claims (out of 3,554 total claims). We do not
believe that it is appropriate to assign CPT code 93229 to APC 5724
because its geometric mean cost is approximately $896, which is
significantly higher than the geometric mean cost of approximately $170
for CPT code 93229, and assigning CPT code 93229 to APC 5724 would
result in an overpayment for the procedure. We believe that APC 5722 is
the most appropriate APC assignment for the procedure described by CPT
code 93229 based on its clinical and resource homogeneity to the other
diagnostic tests and procedures assigned to this APC.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to reassign the
procedure described by CPT code 93229 to APC 5722 for CY 2016. The
final payment rate for CPT code 93229 can be found in Addendum B to
this final rule with comment period, which is available via the
Internet on the CMS Web site.
3. Diagnostic Tests and Related Services
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs that
contain diagnostic tests and related services. For CY 2016, we proposed
to restructure the OPPS APC groupings for diagnostic tests and related
services to more appropriately reflect the costs and clinical
characteristics of the services within each APC grouping in the context
of the OPPS. The current APCs for diagnostic tests and related services
are divided according to organ system or physiologic test type. After
reviewing these APCs, we believe that the current APC structure is
based on clinical categories that do not necessarily reflect the
significant differences in the delivery of these services in the HOPD.
The current level of granularity for these APCs results in groupings
that are unnecessarily narrow for the purposes of a prospective payment
system. Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR 39258),
for CY 2016, we proposed to restructure and consolidate the APCs that
include diagnostic tests and related services. We believe that this
proposed restructuring and consolidation of APCs into larger APC
groupings would more appropriately reflect a prospective payment system
that is based on payment groupings and not code-specific payment rates,
while maintaining clinical and resource homogeneity. Table 20 of the
proposed rule listed the current CY 2015 APCs that contain nonimaging
diagnostic tests, and Table 21 of the proposed rule listed the CY 2016
APCs that would result from our proposed consolidation and
restructuring of the current diagnostic test and related services APCs.
We invited public comments on this proposal.
Comment: A few commenters requested that CMS unpackage the payment
for cochlear implant procedures described by CPT codes 92601 through
92604, and the procedures for programming an auditory brainstem implant
described by CPT code 92640, and to assign these procedure codes to
status indicator ``S'' instead of status indicator ``Q1.'' The
commenters stated that these services are independent evaluations that
are generally not related to other diagnostic tests or therapeutic
services. Instead, according to these commenters, these procedures are
very specific services used in the treatment for a limited population
of patients with cochlear implants. One commenter provided a summary of
an analysis of the claims data that it believed supports the position
that payment for these services are often packaged with other unrelated
OPPS services. One commenter requested that CMS unpackage the payment
for procedures described by CPT code 92557 (Comprehensive audiometry
threshold evaluation and speech recognition (92553 and 92556)) because
payments for these procedures are packaged with payment for other
unrelated services a majority of the time.
Response: We agree with the commenters regarding the cochlear
implant procedures described by CPT codes 92601 through 92604 and CPT
code 92640. After further review of the clinical context in which these
services are performed in the HOPD, we believe that separate payment
(identified by status indicator ``S'') for these services is more
appropriate than a conditional packaged payment triggered by status
indicator ``Q1.'' Therefore, we are changing the status indicator
assignments for these five procedure codes from ``Q1'' to ``S'' for CY
2016.
With regard to the procedure described by CPT code 92557, we
disagree with the commenter. We believe that audiometry is an ancillary
diagnostic test that is appropriately conditionally packaged similar to
many other diagnostic tests. Hearing loss has multiple potential
etiologies and an evaluation of the auditory system is an important
part of various diagnostic tests. It is not relevant that this service
is performed by an audiologist because several different kinds of
services are performed in the HOPD by various health care
professionals, depending upon their area of expertise. In addition, the
professional that performs the service is not a prerequisite for
payment packaging determinations. We note that, under the hospital
OPPS, when a conditionally packaged service is performed on a different
date of service and separate from other services, it is paid
separately.
Comment: One commenter supported the proposed restructuring of the
diagnostic test APCs. However, the commenter suggested that, because
the procedures assigned to APC 5761 (Level 1 Audiometry) and APC 5762
(Level 2 Audiometry) are diagnostic tests, these procedures should be
assigned to either the newly reorganized diagnostic test APCs or to one
of the minor procedure APCs to which similar procedure are assigned.
Response: We agree, in principle, with the commenter that it would
be consistent with the new diagnostic test APCs structure, which
includes all forms of diagnostic tests except audiometry, to also
assign the audiometry procedure codes in the two audiometry APCs to one
of the diagnostic test APCs or, in some cases, to one of the minor
procedure APCs. Therefore, for CY 2016, we are reassigning all of the
procedures in APCs 5761 and 5762 as shown in Table 25 below. In
addition, we are deleting APCs 5761 and 5762. In Table 25 below, we
summarize the commenter's requested APC assignment for each of the
procedure codes along with our decision and the final APC assignment.
Table 25--Reassignment of Codes Currently Assigned to Level 1 and 2 Audiometry
----------------------------------------------------------------------------------------------------------------
Proposed CY Final CY 2016
CPT/HCPCS code 2016 APC Commenter/requested APC CMS decision APC
----------------------------------------------------------------------------------------------------------------
0208T..................... 5761 No Recommendation........ N/A...................... 5732
0209T..................... 5761 No Recommendation........ N/A...................... 5732
[[Page 70385]]
0210T..................... 5761 No Recommendation........ N/A...................... 5732
0211T..................... 5761 No Recommendation........ N/A...................... 5732
0212T..................... 5762 No Recommendation........ N/A...................... 5721
92550..................... 5762 5721..................... Agree.................... 5721
92552..................... 5762 5721..................... Disagree................. 5734
92553..................... 5762 No Recommendation........ N/A...................... 5721
92555..................... 5761 5732..................... Agree.................... 5732
92556..................... 5761 5732..................... Agree.................... 5732
92557..................... 5762 5721 or 5722............. Agree.................... 5721
92561..................... 5762 5734..................... Agree.................... 5734
92562..................... 5762 5721..................... Agree.................... 5721
92563..................... 5761 No Recommendation........ N/A...................... 5732
92564..................... 5761 No Recommendation........ N/A...................... 5732
92565..................... 5761 5732..................... Agree.................... 5732
92567..................... 5761 5732..................... Agree.................... 5732
92570..................... 5762 5721..................... Agree.................... 5721
92571..................... 5761 No Recommendation........ N/A...................... 5732
92572..................... 5762 No Recommendation........ N/A...................... 5721
92575..................... 5761 No Recommendation........ N/A...................... 5732
92576..................... 5761 5732..................... Agree.................... 5732
92577..................... 5762 5721..................... Disagree................. 5723
92579..................... 5762 5721..................... Agree.................... 5721
92582..................... 5762 5721..................... Agree.................... 5721
92583..................... 5761 5732..................... Agree.................... 5732
92596..................... 5761 5732..................... Agree.................... 5732
92601..................... 5762 5721 or 5722............. Agree.................... 5721
92602..................... 5762 5721 or 5722............. Agree.................... 5721
92603..................... 5762 5721 or 5722............. Agree.................... 5721
92604..................... 5762 5721 or 5722............. Agree.................... 5721
92620..................... 5762 5721..................... Agree.................... 5721
92625..................... 5762 5721..................... Agree.................... 5721
92626..................... 5762 5721..................... Agree.................... 5721
92640..................... 5762 5721or 5722.............. Agree.................... 5721
92700..................... 5761 5732..................... Disagree................. 5731
----------------------------------------------------------------------------------------------------------------
We note that, for each of the procedure codes with which we
disagree with the commenter's requested APC assignment, we believe that
the final APC assignment is more appropriate based on the greater
similarity of resource use.
Comment: One commenter requested that CMS reassign the procedures
described CPT codes 95909 (Nerve conduction studies; 5-6 studies) and
95910 (Nerve conduction studies; 7-8 studies) from APC 5722 to APC 5723
based on the procedures' similar resource use when compared to the
resource use for the procedure described by CPT code 95961 (Functional
cortical and subcortical mapping by stimulation and/or recording of
electrodes on brain surface, or of depth electrodes, to provoke
seizures or identify vital brain structures; initial hour of attendance
by a physician or other qualified health care professional).
Response: We disagree with the commenter. The procedure described
by CPT code 95909 has a geometric mean cost of approximately $221 and
the procedure described by CPT code 95910 has a geometric mean cost of
approximately $275. The procedure described by CPT code 95961 has a
geometric mean cost of approximately $2,143 based on 4 single claims.
Based on the latest hospital outpatient claims data used for this final
rule with comment period, the geometric mean costs of the procedures
described by CPT codes 95909 and 95910 are not comparably similar to
the geometric mean cost of the procedure described by CPT code 95961.
Therefore, we are not reassigning the procedures described by CPT codes
95909 and 95910 to APC 5723, as the commenter suggested.
Comment: One commenter requested that the procedures described by
CPT codes 95965 (Magnetoencephalography (MEG), recording and analysis;
for spontaneous brain magnetic activity (e.g., epileptic cerebral
cortex localization)) and 95966 (Magnetoencephalography (MEG),
recording and analysis; for evoked magnetic fields, single modality
(e.g., sensory, motor, language, or visual cortex localization)) be
reassigned to an APC other than the proposed APC 5724. Although the
commenter believed that MEG procedures are not clinically similar to
the other procedures assigned to APC 5724, the commenter did not
specify to which APC it believed these procedures should be assigned.
Response: We disagree with the commenter. MEG procedures are
neurological diagnostic tests and are assigned to an APC with other
neurological diagnostic tests with comparably similar geometric mean
costs. In addition, these procedures are currently assigned to the
highest level APC, specifically APC 5724 (Level 4 Diagnostic Tests and
Related Services), in the diagnostic tests APC series. We do not
believe that there is a more appropriate APC assignment for MEG
procedures. Therefore, we are finalizing our proposal to assign the MEG
CPT codes 95965 and 95966 to APC 5724 for CY 2016.
Comment: One commenter requested that CMS assign the procedures
described by CPT codes 95800 (Sleep study, unattended, simultaneous
recording; heart rate, oxygen saturation, respiratory analysis (e.g.,
by airflow or peripheral arterial tone), and sleep time) and 95806
(Sleep study, unattended, simultaneous recording of, heart rate, oxygen
saturation, respiratory airflow, and respiratory effort (e.g.,
thoracoabdominal movement) to APC
[[Page 70386]]
5722 (Level 2 Diagnostic Tests & Related Services), based on
similarities in clinical characteristics and resource use to other
procedures assigned to APC 5722. The commenter also requested that CMS
assign CPT code 95801 (Sleep study, unattended, simultaneous recording;
minimum of heart rate, oxygen saturation, and respiratory analysis
(e.g., by airflow or peripheral arterial tone)) to APC 5721 (Level 1
Diagnostic Tests & Related Services), based on similarity in clinical
characteristics and resource use to other procedures assigned to APC
5721. Other commenters requested that CMS assign the procedures
described by CPT codes 95805 (Multiple sleep latency or maintenance of
wakefulness testing, recording, analysis and interpretation of
physiological measurements of sleep during multiple trials to assess
sleepiness) and 95782 (Polysomnography; younger than 6 years, sleep
staging with 4 or more additional parameters of sleep, attended by a
technologist) to APC 5724 (Level 4 Diagnostic Tests & Related
Services), based on similarities in clinical characteristics and
resource use to the other procedures assigned to APC 5724.
Response: We agree with the commenters' recommendation on the APC
assignment of the procedures described by CPT codes 95805 and 95782. We
believe that APC 5724 is a more appropriate APC group assignment for
these codes based on similarities in clinical characteristics and
resource use to the other procedures assigned to APC 5724 (as opposed
to the proposed assignment to APC 5723). However, we disagree with the
commenters' recommendation for the APC assignment for CPT codes 95800,
95801, and 95806; we believe that the proposed APC assignments are most
appropriate based on similarities in clinical characteristics and
resource use.
After consideration of the public comments we received, we are
finalizing for CY 2016 the proposed APC structure for the diagnostic
tests APCs, which is displayed in Table 26 below. The procedures
assigned to each APC are listed in Addendum B to this final rule with
comment period, which is available via the Internet on the CMS Web
site.
Table 26--CY 2016 Diagnostic Tests and Related Services APCs
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5721.............................. Level 1 Diagnostic Tests and Related
Services.
5722.............................. Level 2 Diagnostic Tests and Related
Services.
5723.............................. Level 3 Diagnostic Tests and Related
Services.
5724.............................. Level 4 Diagnostic Tests and Related
Services.
------------------------------------------------------------------------
4. Excision/Biopsy and Incision and Drainage Procedures
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs for
incision and drainage procedures as well as excision/biopsy procedures.
The current APC structure for these procedures is organized into two
series: Incision and drainage procedures; and excision/biopsy
procedures.
Based on our evaluation of the current APC structure and the latest
hospital outpatient claims data available for the CY 2016 OPPS/ASC
proposed rule, in the proposed rule (80 FR 39259), we proposed to
reconfigure the structure of these APCs by combining the incision and
drainage procedures with the excision/biopsy procedures to more
accurately reflect the resource costs and clinical characteristics of
the procedures within each APC. Many of the procedures assigned to
these two series are clinically similar. Therefore, we believe that a
single series encompassing incision and drainage procedures and
excision/biopsy procedures groups clinically similar procedures without
unnecessary granularity. We stated in the proposed rule that we believe
that the proposed consolidation and restructuring of these APCs would
more appropriately reflect a prospective payment system that is based
on payment for APC groupings with clinically similar procedures while
maintaining resource homogeneity. Moreover, we believe that the
proposed APC groupings would more accurately accommodate and align new
services paid under the hospital OPPS within clinical APCs that contain
services with similar clinical attributes and resource costs.
Therefore, for CY 2016, we proposed to consolidate and restructure the
APCs that describe incision and drainage procedures as well as the
excision/biopsy procedures by combining these procedures into a single
APC series. Table 22 of the proposed rule listed the current CY 2015
APCs that contain the incision and drainage procedures and the
excision/biopsy procedures, and Table 23 of the proposed rule listed
the CY 2016 APCs that would result from the consolidating and
restructuring of the APCs into a single APC series. We invited public
comments on this proposal.
Comment: Commenters generally supported the proposed APC
reconfiguration and consolidation for the incision and drainage and
excision/biopsy APCs. However, some commenters expressed concerns
regarding the APC assignment for the procedures described by the
following 19 CPT codes included in the proposed reconfiguration:
CPT code 10080 (Incision and drainage of pilonidal cyst;
simple);
CPT code 10081 (Drainage of pilonidal cyst; complicated);
CPT code 11603 (Excision, malignant lesion including
margins, trunk, arms, or legs; excised diameter 2.1 to 3.0 cm);
CPT code 11641 (Excision, malignant lesion including
margins, face, ears, eyelids, nose, lips; excised diameter 0.6 to 1.0
cm);
CPT code 11642 (Excision, malignant lesion including
margins, face, ears, eyelids, nose, lips; excised diameter 1.1 to 2.0
cm);
CPT code 11750 (Excision of nail and nail matrix, partial
or complete (e.g., ingrown or deformed nail), for permanent removal);
CPT code 15782 (Dermabrasion; regional, other than face;
CPT code 15999 (Unlisted procedure, excision pressure
ulcer);
CPT code 21725 (Division of sternocleidomastoid for
torticollis, open operation; with cast application);
CPT code 21930 (Excision, tumor, soft tissue of back or
flank, subcutaneous; less than 3 cm);
CPT code 23931 (Incision and drainage, upper arm or elbow
area; bursa);
CPT code 35206 (Repair blood vessel lesion);
CPT code 35226 (Repair blood vessel, direct; lower
extremity);
CPT code 38300 (Drainage of lymph node abscess or
lymphadenitis, simple);
CPT code 47399 (Unlisted procedure, liver);
CPT code 48999 (Unlisted procedure, pancreas);
CPT code 57022 (Incision and drainage of vaginal hematoma;
obstetrical/postpartum);
CPT code 62269 (Biopsy of spinal cord, percutaneous
needle);and
CPT code 69005 (Drain external ear, abscess or hematoma;
complicated).
The commenters recommended that CMS reassign these 19 procedure
codes to a higher level APC based on similarity in clinical
characteristics.
[[Page 70387]]
Response: Based on our analysis of the latest hospital outpatient
claims data used for this final rule with comment period, we agree with
the commenters' recommendations for APC assignment for the procedures
described by the following CPT codes: 11603; 21930; 23931; 57022; and
62269. However, we do not agree with the commenters' recommendations to
reassign the procedures described by the following CPT codes because
our final rule claims data show that the resource costs of these
procedures are not comparable to the resource costs of other procedures
in the APCs recommended: 10080; 11641; 11642; 11750; 15999; 21725;
35226; 47399; and 48999.
As indicated above, several of the CPT codes recommended by the
commenters describe unlisted procedures. We remind readers that, as a
matter of established OPPS policy described in the CY 2005 OPPS final
rule with comment period (69 FR 65724 through 65725), we assign all
unlisted CPT/HCPCS codes, such as CPT codes 15999, 47399, and 48999, to
the lowest level APC within the appropriate clinical category. By
definition, ``unlisted,'' ``unclassified,'' ``not otherwise
specified,'' or ``not otherwise classified'' codes do not describe the
services being performed, and the services coded using ``unlisted''
codes vary over time as new CPT and HCPCS codes are developed.
Therefore, it is impossible for any level of analysis of past hospital
claims data to support appropriate assignment of the service for the
upcoming year to an APC in which there is clinical and resource
integrity of the groupings and relative weights. We continue to believe
that the appropriate default APC assignment, in the absence of a code
that describes the service being furnished, is the lowest level APC
within the clinical category to which the unlisted code is assigned.
The assignment of the unlisted codes to the lowest level APC in the
clinical category provides a reasonable means for payment for the
service until there is a code that specifically describes the procedure
or service. In addition, we believe that this policy encourages the
creation of codes where appropriate and ensures that overpayment for
services that are not clearly identified on the claim does not occur.
Our assignment of CPT codes 15999, 47399, and 48999 to APC 5071 (Level
1 Excision/Biopsy/Incision and Drainage) is consistent with this
policy. The hospital cost data for unlisted CPT/HCPCS codes are not
used for ratesetting and, furthermore, the costs of unlisted CPT/HCPCS
codes are not subject to the 2 times rule. For further information on
the 2 times rule, we refer readers to sections III.B.2 and 3. of this
final rule with comment period.
Comment: One commenter specifically recommended that CMS assign the
following CPT codes from APC 5071 to APC 5073 (Level 3 Excision/Biopsy/
Incision and Drainage): 15782 (Dermabrasion; regional, other than
face); 38300 (Drainage of lymph node abscess or lymphadenitis; simple);
and 69005 (Drainage external ear, abscess or hematoma; complicated).
Response: As listed in the OPPS Addendum B of the proposed rule, we
proposed to reassign the procedure described by CPT code 15782 to APC
5072 (Level 2 Excision/Biopsy/Incision and Drainage), not to APC 5071
as the commenter stated. In addition, as listed in the OPPS Addendum B
of the proposed rule, we proposed to assign the procedures described by
CPT codes 38300 and 69005 to APC 5071.
Based on our analysis of the latest hospital outpatient claims data
used for this final rule with comment period, we disagree with the
commenter's suggested APC assignment. Our analysis of the latest
hospital outpatient claims data used for this final rule reveal that
these three procedures would be more appropriately reassigned to APC
5074 (Level 4 Excision/Biopsy/Incision and Drainage), rather than APC
5071, based on their clinical and resource homogeneity to the other
procedures assigned to APC 5074. We note that APC 5074 is the highest
level APC within this group. Consequently, we are finalizing our
proposal, with modification, to reassign the procedures described by
CPT codes 15782, 38300, and 69005 to APC 5074 for CY 2016.
Comment: Some commenters specifically agreed with the proposed APC
assignment for the excision/biopsy and incision and drainage procedures
described by CPT codes10081 (Incision and drainage of pilonidal cyst;
complicated) and 35206 (Repair blood vessel, direct; upper extremity),
and requested that CMS finalize them for CY 2016.
Response: We appreciate the commenters' support and are finalizing
our proposed APC assignments for CPT codes 10081 and 35206 for CY 2016
in this final rule with comment period.
After consideration of the public comments we received, we are
finalizing our proposed APC reconfiguration for the excision/biopsy and
incision and drainage APCs. In addition, we are finalizing the proposed
APC assignments for the procedures within the excision/biopsy and
incision and drainage APCs, with modifications to the APC assignment
for CPT codes 11603, 15782, 21930, 23931, 38300, 57022, 62269, and
69005. Table 27 below lists the 19 CPT codes, the commenters' requested
APC assignments, CMS' final decision, the final status indicators, and
the final APC assignments for CY 2016.
Table 27--Excision/Biopsy and Incision and Drainage Procedure Codes With Commenters' Specific APC Recommendations, Final CMS Decisions, Final Status
Indicators, and Final APC Assignment for CY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Proposed CY Commenters' Final CY Final CY
CPT/HCPCS code Short descriptor 2016 SI 2016 APC requested APC CMS decision 2016 SI 2016 APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
10080..................... Drainage of pilonidal T 5071 5072 Disagree................... T 5071
cyst.
10081..................... Drainage of pilonidal T 5072 5072 Agree...................... T 5072
cyst.
11603..................... Exc tr-ext mal+marg 2.1-3 T 5072 5073 Agree...................... T 5073
cm.
11641..................... Exc f/e/e/n/l mal+mrg 0.6- T 5072 5073 Disagree................... T 5072
1.
11642..................... Exc f/e/e/n/l mal+mrg 1.1- T 5072 5073 Disagree................... T 5072
2.
11750..................... Removal of nail bed...... T 5071 5072 Disagree................... T 5071
15782..................... Dermabrasion other than T 5072 5073 Disagree................... T 5074
face.
15999..................... Removal of pressure sore. T 5071 5074 Disagree................... T 5071
21725..................... Revision of neck muscle.. T 5071 5121 Disagree................... T 5071
21930..................... Exc back les sc <3 cm.... T 5073 5074 Agree...................... T 5074
23931..................... Drainage of arm bursa.... T 5071 5074 Agree...................... T 5074
35206..................... Repair blood vessel T 5182 5182 Agree...................... T 5182
lesion.
35226..................... Repair blood vessel T 5072 5182 Disagree................... T 5072
lesion.
38300..................... Drainage lymph node T 5071 5073 Disagree................... T 5074
lesion.
[[Page 70388]]
47399..................... Liver surgery procedure.. T 5071 5074 Disagree................... T 5071
48999..................... Pancreas surgery T 5071 5074 Disagree................... T 5071
procedure.
57022..................... I & d vaginal hematoma pp T 5071 5074 Agree...................... T 5074
62269..................... Needle biopsy spinal cord T 5071 5073 Agree...................... T 5073
69005..................... Drain external ear lesion T 5071 5073 Disagree................... T 5074
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 28 below lists the CY 2016 APCs that result from the
consolidating and restructuring of the APCs into a single APC series.
The final payment rates for the specific CPT codes for incision and
drainage procedures and excision/biopsy procedures are included in
Addendum B to this final rule with comment period. The final payment
rates for the specific APCs to which these procedures are assigned are
included in Addendum A to this final rule with comment period. Both
OPPS Addenda A and B are available via the Internet on the CMS Web
site.
Table 28--Final CY 2016 APCs for Excision/Biopsy/Incision and Drainage
Procedures
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5071.............................. Level 1 Excision/Biopsy/Incision and
Drainage.
5072.............................. Level 2 Excision/Biopsy/Incision and
Drainage.
5073.............................. Level 3 Excision/Biopsy/Incision and
Drainage.
5074.............................. Level 4 Excision/Biopsy/Incision and
Drainage.
------------------------------------------------------------------------
5. Eye Surgery and Other Eye-Related Procedures
a. Implantable Miniature Telescope (CPT Code 0308T)
CPT code 0308T (Insertion of ocular telescope prosthesis including
removal of crystalline lens or intraocular lens prosthesis) is a
relatively new procedure. This code became effective in CY 2013. The
procedure is a cataract (or IOL) extraction with the implantation of a
special kind of IOL, the Implantable Miniature Telescope (IMT), which
has the appearance of an IOL with a thick central optic. The payment
rate for this procedure in CY 2014 was approximately $15,551, and in CY
2015, the payment rate for this procedure is approximately $23,084. The
proposed CY 2016 payment rate is approximately $11,680. CPT code 0308T
is the only code assigned to APC 5494 (Level 4 Intraocular Procedures),
which is a C-APC. In the latest final rule CY 2014 claims data, there
are 40 total claims and 39 single claims. This is a low volume
procedure, in part because most of the cases (like most cataract
surgery) are performed in an ASC.
Comment: One commenter believed that the significant payment rate
decrease from CY 2015 to the proposed 2016 rate is due to some
hospitals submitting miscoded claims that have relatively low
associated costs. The commenter asserted that some hospitals are
reporting CPT code 0308T for procedures other than IMT implantation,
and that these miscoded claims have costs that are much lower than the
cost of the procedure described by CPT code 0308T. The commenters
stated that the evidence to support its assertion is the presence of
non-macular degeneration diagnosis codes on these purportedly miscoded
claims (geographic atrophy from end-stage macular degeneration is the
indication for the IMT). The commenter also believed that the hospitals
that submitted the miscoded claims do not perform any IMT surgery. The
commenter requested that CMS exclude these miscoded claims from the
claims data in calculating the CY 2016 payment rate for the procedure
described by CPT code 0308T. Alternatively, the commenter requested
that CMS invoke the equitable adjustment authority under section
1833(t)(2)(E) of the Act and base the payment rate for the procedure
described by CPT code 0308T on the median cost for all of the claims
instead of the geometric mean cost. The commenter believed that,
because the median cost is less sensitive to extreme observations (such
as claims with very low cost or very high cost), the median cost should
be used to calculate the payment rate for the procedure described by
CPT code 0308T, which has a low total claims volume. The commenter
stated that using the median cost instead of the geometric mean cost
would dampen the negative effect of the claims with very low cost and
mitigate the payment reduction from CY 2015 for the procedure described
by CPT code 0308T.
Response: We understand that when there are a very low volume of
claims in the dataset, each claim has a greater effect on the geometric
mean cost, as compared to a medium or large volume of claims in the
dataset. Regarding the request that we exclude certain claims that the
commenter argued are miscoded and contain inaccurate cost information,
we reiterate our position on this matter in an earlier rule: ``Beyond
our standard OPPS trimming methodology . . . that we apply to those
claims that have passed various types of claims processing edits, it is
not our general policy to judge the accuracy of hospital coding and
charging for purposes of ratesetting'' (75 FR 71838). We generally do
not remove claims from the claims accounting when stakeholders believe
that hospitals included incorrect information on some claims.
Therefore, we are not excluding claims from the ratesetting calculation
for the procedure described by CPT code 0308T for CY 2016.
However, we agree with the commenter that, given the very low
volume of claims for this relatively high-cost device intensive
surgical procedure (that is the only procedure assigned to APC 5494),
the median cost would be a more appropriate measure of the central
tendency for purposes of calculating the cost and the payment rate for
the procedure described by CPT code 0308T. The median cost is impacted
to a lesser degree than the geometric mean cost by more extreme
observations. Therefore, for CY 2016, we are using our equitable
adjustment authority under section 1833(t)(2)(E) of the Act to use the
median cost to calculate the payment rate for the procedure described
by CPT code 0308T, which is the only code assigned to APC 5494. The
median cost of the procedure described by CPT code 0308Tis $18,365, and
the geometric mean cost is $13,833. Unlike the retinal prosthesis
procedure, the procedure
[[Page 70389]]
described by CPT code 0308T has a low volume of claims data upon which
to base a payment rate. This procedure also differs from other
procedures for which we have not taken further measures when
stakeholders believe that incorrect hospital coding negatively affected
payment rates, because it is not grouped to an APC with procedures that
have robust claims data upon which an APC geometric mean cost can be
calculated. In future rulemaking, we will consider proposing a general
policy for the payment rate calculation for very low-volume device-
intensive APCs similar to APC 5494.
b. Other Ocular Procedures
Comment: A few commenters were concerned that the current structure
of APC 5492 (Level 2 Intraocular Procedures) results in inadequate
payment for certain procedures assigned to APC 5492. In particular,
these commenters were primarily concerned about the procedure described
by CPT code 66180, which, beginning in CY 2015, represented an overall
procedure that was formerly represented by two separate codes, one code
for the shunt placement and one code for the graft placement. The
commenters requested that CMS reexamine the intraocular procedures
series of APCs and the code assignments and consider alternatives that
would provide a payment that was more reflective of the costs of the
higher cost procedures currently assigned to APC 5492. Two commenters
requested that CMS create a new APC with a mean cost between that of
APC 5492 and APC 5493, and assign the procedure described by CPT code
66180 to this new APC.
Response: We reexamined the procedure code assignments and latest
claims data for the intraocular procedures series of four APCs. We do
not agree that an additional APC level within this series is warranted.
However, we do believe that reassigning some of the codes that were
proposed to be assigned to APC 5492 into APC 5491 results in a more
balanced APC 5491 (Level 1 Intraocular Procedures) and (Level 2
Intraocular Procedures). Therefore, we are reassigning all procedures
that were proposed to be assigned to Level 2 with a mean cost of less
than $3,000 to Level 1. This reassignment of procedure codes results in
a higher mean cost range for APC 5492 ($3,538 versus $3,438 in the
proposed rule).
Comment: One commenter requested that CMS reassign CPT code 0207T
(Evacuation of meibomian glands, automated, using heat and intermittent
pressure, unilateral) from APC 5732 (Level 2 Minor Procedures) to APC
5502 (Level 2 Extraocular, Repair, and Plastic Eye Procedures). The
commenter stated that the procedure described by CPT code 0207T is used
for patients with meibomian gland dysfunction. The commenter pointed
out that, for CY 2016, CPT code 0207T has nine single claims (29 total
claims) with a mean cost of $82.20; APC 5732 has a mean cost of $31.93;
and APC 5502 has a mean cost of $728.78. The commenter asserted that
most of the small number of claims filed for the procedure described by
CPT code 0207T was filed in error by a hospital that performed a
different procedure with significantly lower costs than the procedure
described by CPT code 0207T. The commenter requested that CMS exclude
these claims in our ratesetting calculation because it believed that
these claims were miscoded. The commenter believed that if CMS excluded
these incorrectly coded claims, the mean cost of the procedure
described by CPT code 0207T would be similar to the mean cost of the
procedures assigned to APC 5502. The commenter also stated that the
procedure described by CPT code 0207T is more appropriately assigned to
APC 5502 because APC 5502 contains procedures that focus on the eyelids
and ocular adnexa (as does the procedure described by CPT code like
0207T), while APC 5732 contains a variety of minor procedures, many of
which are not eye-related.
Response: We agree in part with the commenter. We agree that APC
5732 is not the most appropriate APC for the assignment of the
procedure described by CPT code 0207T. However, we believe that, based
on the mean cost of the claims for the procedure described by CPT code
0207T, APC 5734 (Level 4 Minor Procedures) is more appropriate from a
resource perspective than APC 5502 (with a mean cost of $728.78), which
is what the commenter requested. APC 5734 has a mean cost of $95.47,
which is close to the $82.20 mean cost of the procedure described by
CPT code 0207T. Clinically, although APC 5502 does contain primarily
eyelid procedures, these are surgical procedures assigned to the APC.
The procedure described by CPT code 0207T is not a surgical procedure.
The Minor Procedure series of four APCs (5731 through 5734) is not
limited to a particular anatomical region of the body. This series
contains some eye-related procedures as well as many other types of
procedures. All of the procedures assigned to one of the Minor
Procedure APCs are minor in nature and are relatively low cost.
Regarding the request by the commenter that we not use a subset of
claims in the claims ratesetting calculation for the procedure
described by CPT code 0207T, we again reiterate our position: ``Beyond
our standard OPPS trimming methodology . . . that we apply to those
claims that have passed various types of claims processing edits, it is
not our general policy to judge the accuracy of hospital coding and
charging for purposes of ratesetting'' (75 FR 71838). Therefore, we are
not excluding claims from the ratesetting calculation the procedure
described by CPT code 0207T. For CY 2016, the procedure described by
CPT code 0207T is assigned to APC 5734 (Level 4 Minor Procedures).
6. Gastrointestinal (GI) Procedures
As a part of our comprehensive review of the structure of the APCs
and procedure code assignments for CY 2016, we examined the APCs that
contain gastrointestinal (GI) procedures. As explained below, as a
result of our findings from this review, for CY 2016, in the CY OPPS/
ASC proposed rule, we proposed to restructure the APC groupings for GI
procedures to more appropriately reflect the costs and the clinical
characteristics of the procedures within each APC grouping in the
context of the OPPS.
The current APCs for GI procedures are partially organized
according to location in the GI tract and type of surgery performed
(endoscopy versus incisional surgery). After reviewing these APCs for
GI procedures, we believe that the current APC construction is based on
clinical categories that do not appropriately represent a consistent
set of clinical categories throughout the entire spectrum of GI-related
procedures. The current level of granularity for some of the GI APCs
results in groupings that are unnecessarily narrow for the purposes of
a prospective payment system. Therefore, in the CY 2016 OPPS/ASC
proposed rule (80 FR 39259 through 39260), for CY 2016, we proposed to
restructure and consolidate the APCs that contain GI procedures. In the
proposed rule, we stated that we believe that consolidating these
procedures under broader APC groupings primarily based on separating
upper and lower GI procedures into two series with additional APCs
containing abdominal and peritoneal procedures would more appropriately
reflect a prospective payment system that is based on payment for
clinically consistent APC groupings rather than code-specific
[[Page 70390]]
payment rates while maintaining resource homogeneity. Furthermore, we
believe that the proposed APC groupings would more accurately
accommodate and align new services within clinical APCs with similar
resource costs. Table 24 of the proposed rule listed the current CY
2015 APCs that contain GI procedures, and Table 25 of the proposed rule
listed the CY 2016 APCs that would result from the proposed
consolidation and restructuring of the current GI procedure APCs into a
single APC series. We invited public comments on this proposal.
Comment: Several commenters requested that CMS review the proposed
APC assignment for new CPT code 43210 (Esophagogastroduodenoscopy,
flexible, transoral; with esophagogastric fundoplasty, partial or
complete, includes duodenoscopy when performed) (whose predecessor code
was HCPCS code C9724). The commenters believed that the proposed
assignment of CPT code 43210 to APC 5302 (Level 2 Upper GI Procedures)
does not reflect the resources used to perform the procedure and that
the proposed payment rate is not adequate to cover the cost of the
equipment, ancillary supplies and other facility overhead to perform
the procedure. The commenters requested that CMS assign CPT code 43210
to one of the following APCs: (1) C-APC 5362 (Level 2 Laparoscopy),
because of the clinical similarity of the procedure to the procedure
described by HCPCS code 43280 (Laparoscopy, surgical, esophagogastric
fundoplasty (e.g., Nissen, Toupet procedures); (2) a New technology
APC; or (3) a new APC for transoral surgical procedures because of the
uniqueness of the procedure described by CPT code 43210.
Response: We agree in part with the commenters. We agree that APC
5302 is not the most appropriate APC assignment for the procedure
described by new CPT code 43210 or its predecessor code, HCPCS code
C9724. However, we do not agree with the commenters' request to
reassign CPT code 43210 to proposed C-APC 5362 (Level 2 Laparoscopy)
based on its similar clinical purpose to the procedure described by
HCPCS code 43280. While both of these procedures are surgical
procedures used in the treatment of gastroesophageal reflux disease,
unlike the procedures assigned to C-APC 5362, the procedure described
by CPT code 43210 is not a laparoscopy procedure, and C-APC 5362 is
limited to laparoscopy procedures. Therefore, the procedure described
by CPT code 43210 is not sufficiently clinically similar to the other
procedures assigned to C-APC 5362 to warrant reassignment to C-APC
5362. We also disagree with the commenters' requests for reassignment
to a new technology APC or the creation of a new APC for transoral
surgical procedures. The procedure described by CPT code 43210 (and its
predecessor HCPCS code C9724) is not new because HCPCS C9724 became
effective in CY 2005. In addition, as we discuss below, we believe that
there is an appropriate clinical APC to which CPT code 43210 can be
assigned. Therefore, it is not appropriate to assign the code to a New
Technology APC. Regarding the request for a new, dedicated APC for CPT
code 43210, the volume of available claims for the predecessor code
(HCPCS code C9724) is too low to warrant a separate, new APC for this
procedure. Because CPT code 43210 is new for CY 2016, there are no CY
2014 claims, and there is only one CY 2014 claim for HCPCS code C9724.
We believe that HCPCS code 43210 is sufficiently similar to the
procedures assigned to C-APC 5331 (Complex GI Procedures) in terms of
resource utilization and clinical complexity. Therefore, we are
assigning CPT code 43210 and its predecessor code, HCPCS code C9724, to
C-APC 5331 for CY 2016. Because C-APC 5331 is a comprehensive APC, we
are assigning CPT code 43210 to status indicator ``J1.''
Comment: Some of the commenters who supported the restructuring of
the gastrointestinal procedure APCs requested APC reassignments of
several codes, which are listed in Table 29 below.
Response: We agreed with some of the requests for reassignments of
the codes to different APCs and disagreed with other requests. Our
determinations for each code reassignment request are noted in Table 29
below.
Table 29--Gastrointestinal Procedure Codes With Specific Commenter APC Recommendations, Final CMS Decisions, and Final APC Assignments and Status
Indicators for CY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Final CY
CPT/HCPCS code Short descriptor 2016 status Proposed CY Commenter CMS decision 2016 status Final CY
indicator 2016 APC requested APC indicator 2016 APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
43240..................... Egd w/transmural drain T 5303 5331 Disagree................... T 5303
cyst.
44403..................... Colonoscopy w/resection.. T 5312 5313 Disagree................... T 5312
45349..................... Sigmoidoscopy w/resection T 5312 5313 Disagree................... T 5312
45390..................... Colonoscopy w/resection.. T 5312 5313 Disagree................... T 5312
46608..................... Anoscopy remove for body. T 5312 5313 Disagree................... T 5312
45303..................... Proctosigmoidoscopy T 5312 5313 Disagree................... T 5312
dilate.
45332..................... Sigmoidoscopy w/fb T 5312 5313 Disagree................... T 5312
removal.
45337..................... Sigmoidoscopy & T 5312 5313 Disagree................... T 5312
decompress.
45338..................... Sigmoidoscopy w/tumr T 5312 5313 Disagree................... T 5312
remove.
45346..................... Sigmoidoscopy w/ablation. T 5312 5313 Disagree................... T 5312
44390..................... Colonoscopy for foreign T 5312 5313 Disagree................... T 5312
body.
44394..................... Colonoscopy w/snare...... T 5312 5313 Disagree................... T 5312
44405..................... Colonoscopy w/dilation... T 5312 5313 Disagree................... T 5312
44408..................... Colonoscopy w/ T 5312 5313 Disagree................... T 5312
decompression.
45379..................... Colonoscopy w/fb removal. T 5312 5313 Disagree................... T 5312
45386..................... Colonoscopy w/balloon T 5312 5313 Disagree................... T 5312
dilat.
45388..................... Colonoscopy w/ablation... T 5312 5313 Disagree................... T 5312
45393..................... Colonoscopy w/ T 5312 5313 Disagree................... T 5312
decompression.
91110..................... GI tract capsule T 5301 5211/New APC Disagree................... T 5301
endoscopy.
91111..................... Esophageal capsule T 5301 5211/New APC Disagree................... T 5301
endoscopy.
[[Page 70391]]
91112..................... GI wireless capsule T 5301 5211/New APC Disagree................... T 5301
measure.
91022..................... Duodenal motility study.. S 5722 5723 Agree...................... S 5724
91037..................... Esoph imped function test S 5722 5723 Disagree................... S 5722
91038..................... Esoph imped funct test S 5722 5723 Agree...................... T 5723
>1hr.
43753..................... Tx gastro intub w/asp.... Q1 5734 5722 Agree...................... S 5722
43754..................... Dx gastr intub w/asp spec Q1 5734 5722 Agree...................... S 5722
43755..................... Dx gastr intub w/asp S 5721 5722 Disagree................... S 5721
specs.
43756..................... Dx duod intub w/asp spec. Q1 5522 5722 Disagree................... S 5522
C9724..................... Eps stomach plic......... D 5303 New APC/New Disagree................... D 5331
Tech
43210..................... Egd esophagogastrc T 5302 New APC/New Disagree................... J1 5331
fndoplsty. Tech
0336T..................... Lap ablat uterine J1 5362 5352 Disagree................... J1 5362
fibroids.
47370..................... Laparo ablate liver tumor J1 5362 5352 Disagree................... J1 5362
rf.
47371..................... Laparo ablate liver J1 5362 5352 Disagree................... J1 5362
cryosurg.
50542..................... Laparo ablate renal mass. J1 5362 5352 Disagree................... J1 5362
--------------------------------------------------------------------------------------------------------------------------------------------------------
We disagree with the commenters who requested that CPT code 43240
(Esophagogastroduodenoscopy, flexible, transoral; with transmural
drainage of pseudocyst (includes placement of transmural drainage
catheter[s]/stent[s], when performed, and endoscopic ultrasound, when
performed) be reassigned from proposed APC 5303 (Level 3 Upper GI
Procedures) to C-APC 5331 (Complex GI Procedures). The geometric mean
cost of the procedure described by CPT code 43240 is approximately
$1,818, and the geometric mean cost of APC 5303 is approximately
$2,072. The geometric mean cost of APC 5331 is approximately $3,781. We
believe that, given the geometric mean costs of APCs 5303 and 5331, APC
5303 is the more appropriate APC assignment for the procedure described
by CPT code 43240.
We also disagree with the commenters who requested that lower GI
endoscopic mucosal resection CPT codes (CPT codes 44403, 45349, and
45390) be reassigned from APC 5312 (Level 2 Lower GI Procedures) to APC
5313 (Level 3 Lower GI Procedures) based on resource and clinical
homogeneity. These three CPT codes became effective in CY 2015. We
believe that the current APC assignment for these codes is appropriate
based on similarity of clinical characteristics. Once we have claims
data for these CPT codes. we will reevaluate their APC assignment in
accordance with the yearly review of APC assignments and determine if a
reassignment is appropriate based on the claims data.
We also disagree with the commenters who requested reassignment of
the CPT codes listed in Table 29 above that represent foreign body
removal, ablation, and decompression of volvulus, colonoscopy through
stoma and flexible sigmoidoscopy, specifically CPT codes 44608, 45332,
45337, 45338, 45346, 44390, 44394, 44405, 44408, 45379, 45386, 45388,
and 45393 from APC 5312 (Level 2 Lower GI Procedures) to APC 5313
(Level 3 Lower GI Procedures). The commenters stated that the resource
utilization for these codes is similar to resource utilization for
procedures that employ similar techniques with proctoscopy that are
assigned to APC 5313. A majority of the procedures that were requested
to be reassigned to APC 5313 have geometric mean costs of approximately
$880 or lower, which is significantly lower than the geometric mean
cost of $1,739 for APC 5313. Therefore, we do not believe that
reassignment of these codes would be appropriate.
We do not agree with the commenters' request to reassign CPT codes
91110, 91111, and 91112 from APC 5301 (Level 1 Upper GI Procedures) to
APC 5211 (Level 1 Electrophysiologic Procedures) due to resource use
and clinical dissimilarities with procedures assigned to APC 5301,
which is limited to cardiac electrophysiology procedures. We also do
not agree that these procedures are clinically dissimilar enough from
other procedures in APC 5301 to require creation of a new APC dedicated
to these procedures.
We disagree with the commenters who requested that the procedure
described by CPT code 91037 be reassigned to APC 5723 (Level 3
Diagnostic Tests and Related Services) based on clinical and resource
similarity. The geometric mean cost of the procedure described by CPT
code 91037 is approximately $199, which is more similar to the
geometric mean cost of APC 5722 (approximately $231) than the geometric
mean cost of APC 5723 (approximately$415). In addition, assignment of
the procedure described by CPT code 91037 to APC 5723 would result in a
violation of the 2 times rule in APC 5723. However, we agree with the
commenters that CPT code 91022 is more appropriately assigned to APC
5724 (Level 4 Diagnostic Tests and Related Services) based on resource
similarity to other services assigned to APC 5724.
We disagree with the commenters who requested that CPT code 43755
be reassigned from APC 5721 (Level 1Diagnostic Tests and Related
Services) to APC 5722 (Level 2 Diagnostic Tests and Related Services).
The geometric mean cost of the services described by CPT code 43755 is
approximately $141, and the geometric mean cost of APC 5721 is
approximately $136. The geometric mean cost of APC 5722 is
approximately $231. We believe that, given the geometric mean cost of
APCs 5721 and 5722, APC 5721 is the more appropriate APC assignment for
the services described by CPT code 43755.
We disagree with the commenters who requested that CPT codes 0336T,
47370, 47371, and 50542 from C-APC 5362 (Level 2 Laparoscopy) be
reassigned to APC 5352 (Level 2 Percutaneous Abdominal/Biliary
Procedures and Related Procedures). These are laparoscopy procedures
and are assigned to an APC to which other
[[Page 70392]]
clinically similar procedures are assigned.
After consideration of the public comments we received, we are
finalizing the proposed structure of the gastrointestinal procedures
with the code reassignments shown in Table 29 above. Table 30 below
lists the CY 2016 APCs that result from the consolidation and
restructuring of the current GI procedure APCs into a single APC
series. The procedures assigned to each APC are listed in Addendum B to
this final rule with comment period, which is available via the
Internet on the CMS Web site.
Table 30--CY 2016 APCs for Gastrointestinal Procedures
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5301.............................. Level 1 Upper GI Procedures.
5302.............................. Level 2 Upper GI Procedures.
5303.............................. Level 3 Upper GI Procedures.
5311.............................. Level 1 Lower GI Procedures.
5312.............................. Level 2 Lower GI Procedures.
5313.............................. Level 3 Lower GI Procedures.
5314.............................. Level 4 Lower GI Procedures.
5331.............................. Complex GI Procedures.
5341.............................. Peritoneal and Abdominal Procedures.
5351.............................. Level 1 Percutaneous Abdominal/
Biliary Procedures and Related
Procedures.
5352.............................. Level 2 Percutaneous Abdominal/
Biliary Procedures and Related
Procedures.
5391.............................. Level 1 Tube/Catheter Changes/
Thoracentesis/Lavage.
5392.............................. Level 2 Tube/Catheter Changes/
Thoracentesis/Lavage.
------------------------------------------------------------------------
In the CY 2016 OPPS/ASC proposed rule (80 FR 39260), we proposed to
accept the Panel's recommendation with regard to the APC assignment for
four lower endoscopy stent procedures described by HCPCS codes that
were established in CY 2015. The Panel recommended that the four CPT
codes listed in Table 26 of the proposed rule be moved from their
currently assigned APC to C-APC 0384 (GI Procedures with Stents) (CPT
codes 44384 (Ileoscopy, through stoma; with placement of endoscopic
stent (includes pre- and post-dilation and guide wire passage, when
performed), 44402 (Colonoscopy through stoma; with endoscopic stent
placement (including pre- and post-dilation and guide wire passage,
when performed), 45347 (Sigmoidoscopy, flexible; with placement of
endoscopic stent (includes pre- and post-dilation and guide wire
passage, when performed), and 45389 (Colonoscopy, flexible; with
endoscopic stent placement (includes pre- and post-dilation and guide
wire passage, when performed). The Panel's recommendation was based on
an analysis of the similarities in clinical characteristics and
resource utilization between the procedures described by these four CPT
codes and the procedures described by other CPT codes within existing
(CY 2015) APCs 0142, 0143 and 0147. (We note that, in section II.A.2.e.
of the preamble of the proposed rule, we proposed to renumber and
retitle C-APC 0384 as ``C-APC 5331 (Complex GI Procedures)'' for CY
2016.)
Comment: Commenters supported the proposal to assign CPT codes
44384, 44402, 45347, and 45389 to C-APC 5331 (Complex GI Procedures).
Response: We appreciate the commenters' support.
We are finalizing our proposal to reassign CPT codes 44384, 44402,
45347, and 45389 to C-APC 5331 (Complex GI Procedures).
7. Gynecologic Procedures and Services
As listed in Addendum A to the CY 2016 OPPS/ASC proposed rule, we
proposed to add another level to the existing gynecologic APCs,
specifically, a Level 6 Gynecologic Procedures APC, and designated it
as APC 5416.
Comment: One commenter applauded CMS for revisiting the gynecologic
procedure APCs and adding APC 5416 (Level 6 Gynecologic Procedures) for
CY 2016. The commenter believed that expanding the number of APCs for
the gynecologic procedures is a positive change and further suggested
that CMS be open to reassignment of CPT codes within and across APCs as
part of rulemaking in CY 2016 and in future years.
Response: We appreciate the commenter's support. We believe that
the addition of this new APC groups gynecologic procedures more
appropriately based on their resource costs and clinical
characteristics.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to add the Level 6 APC
5416 to the existing gynecologic APC groups. The final CY 2016 payment
rate for APC 5416 can be found in Addendum A to this final rule with
comment period (which is available via the Internet on the CMS Web
site).
The AMA Editorial Committee established new CPT code 0404T
(Transcervical uterine fibroid(s) ablation with ultrasound guidance,
radiofrequency), to be effective on January 1, 2016. In the CY 2016
OPPS/ASC proposed rule, we proposed to assign this new code (which we
listed as code 04XXD (the 5-digit CMS placeholder code) in Addendum B,
O, and Q2 to the proposed rule) to APC 5415 (Level 5 Gynecologic
Procedures), with a proposed payment rate of approximately $3,713. We
also proposed to assign CPT code 0404T to comment indicator ``NP'' in
Addendum B to the proposed rule to indicate that the code is new for CY
2016 with a proposed APC assignment and that public comments would be
accepted on the proposed APC assignment.
Comment: One commenter disagreed with the proposed APC assignment
for new CPT code 0404T for CY 2016, and requested that the procedure be
reassigned to one of the following APCs: 5362 (Level 2 Laparoscopy);
5192 (Level 2 Endovascular Procedures); or 5416 (Level 6 Gynecologic
Procedures). The commenter believed that the procedure described by CPT
code 0404T is similar, based on clinical characteristics and resource
costs, to other procedures that are assigned to APCs 5362, 5192, and
5416. In addition, the commenter stated that the facility cost to
perform this procedure is approximately $4,850, which includes the
$3,965 single-use kit.
Response: Under the OPPS, we generally assign a payment rate to a
new Category III CPT code based on input from a variety of sources,
including, but not limited to, review of resource costs and clinical
homogeneity of the service to existing procedures, input from our
medical advisors, and other information available to us. Based on our
understanding of the procedure, we agree with the commenter that CPT
code 0404T would be more appropriately assigned to APC 5416 because its
resource costs and clinical homogeneity is similar to the other
procedures in APC 5416. Therefore, we are not adopting our proposal to
assign CPT code 0404T to APC 5415 for CY 2016. Rather, we are assigning
CPT code 0404T to APC 5416. The final CY 2016 payment rate for CPT code
0404T can be found in Addendum B to this final rule with comment period
(which is available via the Internet on the CMS Web site).
8. Imaging Services
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs that
contain imaging services. For CY 2016, we proposed to restructure the
OPPS APC groupings for imaging services to more appropriately reflect
the costs and clinical characteristics of the procedures within each
APC grouping in the context of the OPPS. The current APCs for imaging
services
[[Page 70393]]
are divided at the highest level between diagnostic radiology (for
example, x-ray, CT, MRI, and ultrasound) and nuclear medicine imaging.
After reviewing these APCs, we believe that the current APC structure
is based on clinical categories that do not necessarily reflect
significant differences in the delivery of these services in the HOPD.
The current level of granularity for these APCs results in groupings
that are unnecessarily narrow for the purposes of a prospective payment
system. This excessive granularity is especially apparent with the APCs
for x-ray based imaging services and nuclear medicine imaging services.
Many of these APCs are currently structured according to organ or
physiologic system that does not necessarily reflect either significant
differences in resources or how these services are delivered in the
HOPD.
Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR 39261), for
CY 2016, we proposed to restructure and consolidate the APCs that
include radiology and nuclear medicine services. We stated that we
believe that this proposed restructuring and consolidation would result
in APC groupings that would more appropriately reflect a prospective
payment system that is based on payment for clinically consistent APC
groupings and not code-specific payment rates, while maintaining
clinical and resource homogeneity. Furthermore, the proposed APC
groupings would more accurately accommodate and align new services into
clinical APCs with similar resource costs. Table 27 of the proposed
rule listed the current CY 2015 APCs that contain radiology and nuclear
medicine services, and Table 28 of the proposed rule listed the
proposed CY 2016 APCs that would result from the proposed consolidation
and restructuring of the current radiology and nuclear medicine
services APCs. We invited public comments on this proposal.
Comment: Many commenters generally supported the proposed
restructuring of the imaging-related APCs. However, several commenters
generally disagreed with the proposed restructuring of the nuclear
medicine and positron emission tomography (PET) APCs. The commenters
acknowledged that CMS has recognized the clinical differences between
the imaging modalities and maintained separate APCs for them since the
implementation of the OPPS. However, the commenters opposed collapsing
the current 17 nuclear medicine and PET APCs into three levels (Level 1
through Level 3 Nuclear Medicine and Related Services) for CY 2016, and
recommended that CMS maintain a distinct APC for all PET procedures.
Several other commenters, including nonhospital imaging centers and the
HOP Panel, recommended that CMS separate PET procedures from the non-
PET nuclear imaging tests in proposed APC 5593 (Level 3 Nuclear
Medicine and Related Services). Commenters believed that grouping PET
procedures with non-PET procedures (also referred to as SEPCT) would
reduce the payment for PET procedures below the cost of PET tests
because of the more significant capital equipment costs for PET.
Further, commenters stated that the proposed APC grouping of PET
procedures with non-PET procedures would result in underpayments, and
imaging centers that provide PET-only services will not be able to
offset the payment reduction by providing non-PET services, some of
which CMS proposed to increase the payment rate in CY 2016.
Response: We agree with the HOP Panel's and the commenters'
recommendation to separate PET tests into a separate APC because PET
imaging services involve higher resource costs and are of a clinically
distinct imaging modality from non-PET or SPECT imaging services.
Therefore, we are adding a fourth level to the nuclear medicine and
related services APC group (APC 5594 (Level 4 Nuclear Medicine and
Related Services), and are reassigning the PET procedures that were
proposed to be assigned to APC 5593 (Level 3 Nuclear Medicine and
Related Services) to APC 5594. While APC 5594 contains all of the PET
scan procedures, it is not necessarily limited only to PET scan
services. It is established as the fourth and highest level in the
nuclear medicine APC grouping, and non-PET scan nuclear medicine tests
may be assigned to this APC as appropriate.
Comment: Some commenters urged CMS to maintain the existing,
separately payable status indicators (that is, ``S'' or ``T'') for
several codes within the proposed nine reconfigured APC groupings
instead of assigning them to a conditional packaging status indicator
(that is, ``Q1'' or ``Q2''). One commenter provided a list of 70 codes,
and requested that CMS assign them to separately payable status
indicators. Among the 70 codes are 34 imaging services codes that, as a
result of the proposed APC restructuring, were proposed for CY 2016 to
be assigned to one of the following APCs, which are all three
conditionally packaged APCs: APC 5521 (Level 1 X-Ray and Related
Services); APC 5522 (Level 2 X-Ray and Related Services); or APC 5531
(Level 1 Ultrasound and Related Services).
Response: Prior to developing our proposal, we reviewed all of the
services associated with the proposed nine APC families. We believe
that the procedures and services that we proposed to assign to a
conditional packaging status indicator are ancillary and dependent in
relation to the other procedures within the same family groupings with
which they are most commonly furnished. Therefore, based on our review
and input from CMS clinical staff, we believe that the codes that we
proposed to conditionally package are appropriate. In addition, the
APCs to which the 34 codes listed by the commenter are proposed to be
assigned for CY 2016 are designated as conditionally packaged APCs. For
example, APC 5521 (Level 1 X-Ray and Related Services) is the successor
APC to CY 2015 APC 0260 (Level 1 X-Ray & Related Services), which was
designated in CY 2015 as a conditionally packaged APC; APC 5522 (Level
2 X-Ray and Related Services) is the successor APC to CY 2015 APC 0261
(Level 2 X-Ray & Related Services), which was designated in CY 2015 as
a conditionally packaged APC; and APC 5531 (Level 1 Ultrasound and
Related Services) is the successor APC to CY 2015 APC 0265 (Level 1
Ultrasound & Related Services), which was designated in CY 2015 as a
conditionally packaged APC. Therefore, we believe that these 34 imaging
services that are assigned to proposed new APCs 5521, 5522, and 5531
are appropriately assigned a conditionally packaged status indicator.
Further, based on the clinical nature of the services and our
understanding of the procedures, we believe that assigning these
services to a conditional packaging status indicator will create
incentives for hospitals and their physician partners to work together
to establish appropriate protocols that will eliminate unnecessary
services where they exist and institutionalize approaches to providing
necessary services more efficiently. Therefore, we are finalizing our
proposal to assign the 34 imaging services procedure codes identified
by the commenter status indicator ``Q1'' for CY 2016.
Comment: A few commenters who supported the restructuring of the
imaging-related procedure APCs requested APC reassignments of many
specific codes, which are listed in Table 31 below.
Response: We agree with some of the commenters' request for APC
reassignments and/or status indicator reassignments of procedure codes
describing imaging-related procedures.
[[Page 70394]]
Our decisions to accept or reject the recommended code assignments to
APCs also are indicated in Table 31 below.
Table 31--Imaging-Related Procedure Codes With Specific Commenters' Recommendations, Final CMS Decisions, Final APC Assignments, and Final APC Status
Indicators
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Final CY
CPT/HCPCS code Short descriptor 2016 status Proposed CY Commenter CMS decision 2016 status Final CY
indicator 2016 APC requested APC indicator 2016 APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
70370..................... Throat x-ray & Q1 5521 5522 Disagree................... Q1 5521
fluoroscopy.
71030..................... Chest x-ray 4/> views.... Q1 5521 5522 Disagree................... Q1 5521
72200..................... X-ray exam si joints..... Q1 5521 5522 Agree...................... Q1 5522
76496..................... Fluoroscopic procedure... Q1 5521 5522 Disagree................... Q1 5521
72050..................... X-ray exam neck spine 4/5 Q1 5522 5523 Disagree................... Q1 5522
vws.
72110..................... X-ray exam l-2 spine 4/> Q1 5522 5523 Disagree................... Q1 5522
vws.
72074..................... X-ray exam thorac spine 4/ Q1 5522 5523 Disagree................... Q1 5522
> vw.
77074..................... X-rays bone survey Q1 5522 5523 Disagree................... Q1 5522
limited.
74240..................... X-ray upper gi delay w/o Q1 5522 5523 Disagree................... Q1 5522
kub.
76010..................... X-ray nose to rectum..... Q1 5522 5523 Agree...................... Q1 5523
72052..................... X-ray exam neck spine 6/> Q1 5522 5523 Disagree................... Q1 5522
vws.
74246..................... Contrst x-ray uppr gi Q1 5522 5523 Disagree................... Q1 5522
tract.
76120..................... Cine/video x-rays........ Q1 5522 5523 Disagree................... Q1 5522
74270..................... Contrast x-ray exam of Q1 5522 5523 Disagree................... Q1 5522
colon.
74241..................... X-rayupper gi delay w/kub Q1 5522 5523 Disagree................... Q1 5522
70371..................... Speech evaluation complex Q1 5522 5523 Disagree................... Q1 5522
77075..................... X-rays bone survey Q1 5522 5523 Disagree................... Q1 5522
complete.
74247..................... Contrst x-ray uppr gi Q1 5522 5523 Disagree................... Q1 5522
tract.
49465..................... Fluoro exam of g/colon Q1 5522 5523 Disagree................... Q1 5522
tube.
73092..................... X-ray exam of arm infant. Q1 5522 5523 Disagree................... Q1 5522
70320..................... Full mouth x-ray of teeth Q1 5522 5523 Agree...................... Q1 5523
74260..................... X-ray exam of small bowel Q1 5522 5523 Agree...................... Q1 5523
70310..................... X-ray exam of teeth...... Q1 5522 5523 Agree...................... Q1 5523
74290..................... Contrast x-ray Q1 5522 5523 Agree...................... Q1 5523
gallbladder.
74430..................... Contrast x-ray bladder... Q2 5523 5524 Disagree................... Q2 5523
74450..................... X-ray urethra/bladder.... Q2 5523 5524 Disagree................... Q2 5523
74455..................... X-ray urethra/bladder.... Q2 5523 5524 Agree...................... Q2 5524
74740..................... X-ray female genital Q2 5523 5524 Agree...................... Q2 5524
tract.
C9733..................... Non-ophthalmic fva....... Q2 5523 5524 Agree...................... Q2 5524
G0120..................... Colon ca scrn; barium S 5524 5525 Disagree................... S 5524
enema.
74445..................... X-ray exam of penis...... Q2 5524 5525 Disagree................... Q2 5524
78457..................... Venous thrombosis imaging S 5524 5525 Disagree................... S 5592
78456..................... Acute venous thrombus S 5525 5526 Disagree................... S 5525
image.
75807..................... Lymph vessel x-ray trunk. Q2 5525 5526 Agree...................... Q2 5526
70190..................... X-ray exam of eye sockets Q1 5522 5521 Agree...................... Q1 5521
74210..................... Contrst x-ray exam of Q1 5522 5521 Disagree................... Q1 5522
throat.
72040..................... X-ray exam neck spine 2-3 Q1 5522 5521 Disagree................... Q1 5522
vw.
76101..................... Complex body section x- S 5523 5522 Agree...................... Q1 5522
ray.
78458..................... Ven thrombosis images S 5524 5523 Disagree................... S 5591
bilat.
74470..................... X-ray exam of kidney Q2 5525 5524 Agree...................... Q2 5524
lesion.
75898..................... Follow-up angiography.... Q2 5526 5525 Agree...................... Q2 5525
75827..................... Vein x-ray chest......... Q2 5526 5525 Agree...................... Q2 5525
75872..................... Vein x-ray skull epidural Q2 5526 5525 Disagree................... Q2 5526
70470..................... Ct head/brain w/o & w/dye Q3 5571 5572 Disagree................... Q3 5571
70482..................... Ct orbit/ear/fossa w/o & Q3 5571 5572 Disagree................... Q3 5571
w/dye.
70488..................... Ct maxillofacial w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
70492..................... Ct sft tsue nck w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
70496..................... Ct angiography head...... Q3 5571 5572 Disagree................... Q3 5571
70498..................... Ct angiography neck...... Q3 5571 5572 Disagree................... Q3 5571
71275..................... Ct angiography chest..... Q3 5571 5572 Disagree................... Q3 5571
72127..................... Ct neck spine w/o & w/dye Q3 5571 5572 Disagree................... Q3 5571
72130..................... Ct chest spine w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
72133..................... Ct lumbar spine w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
72191..................... Ct angiograph pelv w/o & Q3 5571 5572 Disagree................... Q3 5571
w/dye.
72194..................... Ct pelvis w/o & w/dye.... Q3 5571 5572 Disagree................... Q3 5571
73202..................... Ct uppr extremity w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
73206..................... Ct angio upr extrm w/o & Q3 5571 5572 Disagree................... Q3 5571
w/dye.
73702..................... Ct lwr extremity w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
73706..................... Ct angio lwr extr w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
74170..................... Ct abdomen w/o & w/dye... Q3 5571 5572 Disagree................... Q3 5571
74175..................... Ct angio abdom w/o & w/ Q3 5571 5572 Disagree................... Q3 5571
dye.
75574..................... Ct angio hrt w/3d image.. S 5571 5572 Disagree................... S 5571
75635..................... Ct angio abdominal Q2 5571 5572 Disagree................... Q2 5571
arteries.
72126..................... Ct neck spine w/dye...... Q3 5572 5571 Disagree................... Q3 5572
73201..................... Ct upper extremity w/dye. Q3 5572 5571 Disagree................... Q3 5572
[[Page 70395]]
74177..................... Ct abd & pelv w/contrast. Q3 5572 5571 Disagree................... Q3 5572
70544..................... Mr angiography head w/o Q3 5581 5583 Disagree................... Q3 5581
dye.
70547..................... Mr angiography neck w/o Q3 5581 5583 Disagree................... Q3 5581
dye.
70545..................... Mr angiography head w/dye Q3 5582 5583 Disagree................... Q3 5582
70546..................... Mr angiograph head w/o & Q3 5582 5583 Disagree................... Q3 5582
w/dye.
70548..................... Mr angiography neck w/dye Q3 5582 5583 Disagree................... Q3 5582
70549..................... Mr angiograph neck w/o & Q3 5582 5583 Disagree................... Q3 5582
w/dye.
C8902..................... Mra w/o fol w/cont, abd.. Q3 5582 5583 Disagree................... Q3 5582
C8911..................... Mra w/o fol w/cont, chest Q3 5582 5583 Disagree................... Q3 5582
C8914..................... Mra w/o fol w/cont, lwr Q3 5582 5583 Disagree................... Q3 5582
ext.
C8920..................... Mra w/o fol w/cont, Q3 5582 5583 Disagree................... Q3 5582
pelvis.
C8933..................... Mra, w/o & w/dye, spinal Q3 5582 5583 Disagree................... Q3 5582
canal.
C8936..................... Mra, w/o & w/dye, upper Q3 5582 5583 Disagree................... Q3 5582
extr.
93979..................... Vascular study........... Q1 5531 5532 Agree...................... Q1 5532
76513..................... Echo exam of eye water Q1 5531 5532 Agree...................... Q1 5532
bath.
76536..................... Us exam of head and neck. Q1 5531 5532 Agree...................... Q1 5532
76815..................... Ob us limited fetus(s)... Q1 5531 5532 Agree...................... Q1 5532
76775..................... Us exam abdo back wall Q1 5531 5532 Agree...................... Q1 5532
lim.
76870..................... Us exam scrotum.......... Q1 5531 5532 Agree...................... Q1 5532
76817..................... Transvaginal us obstetric Q1 5531 5532 Agree...................... Q1 5532
93890..................... Tcd vasoreactivity study. Q1 5531 5532 Agree...................... Q1 5532
76705..................... Echo exam of abdomen..... Q3 5532 5531 Disagree................... Q3 5532
76801..................... Ob us <14 wks single S 5532 5531 Disagree................... S 5532
fetus.
76830..................... Transvaginal us non-ob... S 5532 5531 Disagree................... S 5532
76872..................... Us transrectal........... S 5532 5531 Disagree................... S 5532
76881..................... Us xtr non-vasc complete. S 5532 5531 Disagree................... S 5532
93888..................... Intracranial limited S 5532 5531 Disagree................... S 5532
study.
93931..................... Upper extremity study.... S 5532 5531 Disagree................... S 5532
70559..................... Mri brain w/o & w/dye.... S 5582 5526 Agree...................... S 5526
74261..................... Ct colonography dx....... Q3 5521 5570 Agree...................... Q3 5570
75572..................... Ct hrt w/3d image........ S 5523 5571 Agree...................... S 5571
75559..................... Cardiac mri w/stress img. Q3 5581 5592 Agree...................... Q3 5592
75557..................... Cardiac mri for morph.... Q3 5581 5593 Disagree................... Q3 5581
50430..................... Njx px nfrosgrm &/urtrgrm Q2 5524 5373 Disagree................... Q2 5372
50431..................... Njx px nfrosgrm &/urtrgrm Q2 5524 5372 Agree...................... Q2 5372
50434..................... Convert nephrostomy T 5392 5372 Agree...................... T 5372
catheter.
50435..................... Exchange nephrostomy cath T 5392 5372 Agree...................... T 5372
73503..................... X-ray exam hip uni 4/> Q1 5521 5522 Agree...................... Q1 5522
views.
73522..................... X-ray exam hips bi 3-4 Q1 5522 5523 Disagree................... Q1 5522
views.
73523..................... X-ray exam hips bi 5/> S 5522 5523 Agree...................... S 5523
views.
72083..................... X-ray exam entire spi 4/5 S 5522 5523 Agree...................... S 5523
vw.
72084..................... X-ray exam entire spi 6/> S 5522 5524 Disagree................... S 5523
vw.
78266..................... Gastric emptying imag S 5591 5592 Agree...................... S 5592
study.
47532..................... Injection for Q2 5525 5351 Agree...................... Q2 5351
cholangiogram.
47535..................... Conversion ext bil drg T 5392 5351 Agree...................... T 5351
cath.
47536..................... Exchange biliary drg cath T 5392 5351 Agree...................... T 5351
47537..................... Removal biliary drg cath. Q2 5391 5351 Disagree................... Q2 5391
75563..................... Card mri w/stress img & S 5592 5593 Agree...................... S 5593
dye.
75571..................... Ct hrt w/o dye w/ca test. Q1 5731 5570 Disagree................... Q1 5731
--------------------------------------------------------------------------------------------------------------------------------------------------------
We disagree with the commenters who requested that the procedures
described by CPT codes 70370 (Radiologic examination; pharynx or
larynx, including fluoroscopy and/or magnification technique), 71030
(Radiologic examination, chest, complete, minimum of 4 views), and
76496 be elevated from proposed APC 5521 to APC 5522 based on resource
and clinical homogeneity. The procedure described by CPT code 70370 has
a geometric mean unit cost of approximately $81 and the geometric mean
cost of APC 5521 is approximately $64. Because the procedure described
by CPT code 70370 is a low-volume procedure (49 single claims out of 66
total claims) in APC 5521, it is unnecessary to reassign the procedure
describing CPT code 70370 to APC 5522, which has a geometric mean unit
cost of approximately $105. The procedure described by CPT code 71030
is appropriately assigned to APC 5521 because of the similarity of
clinical characteristics and resource use with other chest x-ray
procedures assigned to APC 5521. CPT code 76496 is an unlisted
fluoroscopic procedure code, and under our established policy, unlisted
codes are assigned to the lowest level APC within a clinical family.
We disagree with the commenters who requested that CPT codes 72050,
72110, 72074, 77074, 74240, 72052, 74246, 76120, 74270, 74241, 70371,
77075, 74247, 49465, and 73092 that were proposed to be assigned to
proposed APC 5522 (Level 2 X-Ray and Related Services) be reassigned to
APC
[[Page 70396]]
5523 (Level 3 X-Ray and Related Services) to improve resource
homogeneity. The geometric mean cost of these codes range from
approximately $129 to approximately $176, and the geometric mean cost
of APC 5522 is approximately $105. The geometric mean cost of APC 5523
is approximately $201. We believe that, given the geometric mean cost
of APC 5522 and the clinical similarity of the procedures described by
these codes compared to other procedures assigned to APC 5522, these
codes are appropriately assigned to APC 5522.
We disagree with the commenters who requested that CPT codes 74430
(Cystography, minimum of 3 views, radiological supervision and
interpretation) and 74450 (Urethrocystography, retrograde, radiological
supervision and interpretation) that were proposed to be assigned to
proposed APC 5523 (Level 3 X-Ray and Related Services) be reassigned to
APC 5524 (Level 4 X-Ray and related Services). The geometric mean cost
of CPT code 74430 is approximately $265. The geometric mean cost of CPT
code 74450 is approximately $277. The geometric mean cost of APC 5523
is approximately $201. The geometric mean cost of APC 5524 is
approximately $368. We believe that, given the geometric mean costs of
APC 5523 and APC 5524, APC 5523 is a more appropriate APC assignment
for the procedures described by CPT codes 74430 and 74450.
We disagree with the commenter who requested that the procedures
described by CPT codes G0120 (Colorectal cancer screening) and 74445
(X-Ray exam of penis) that were proposed to be assigned to proposed APC
5524 (Level 4 X-Ray and Related Services) be reassigned to APC 5525
(Level 5 X-Ray and Related Services). The geometric mean cost of the
procedure described by CPT code G0120 is approximately $330. The
geometric mean cost of the procedure described by CPT code 74445 is
approximately $532. The geometric mean cost of APC 5524 is
approximately $368. The geometric mean cost of APC 5525 is
approximately $700. We believe that, given the geometric mean costs of
APC 5524 and APC 5525, APC 5524 is the more appropriate APC assignment
for the procedures described by CPT codes G0120 and 74445.
We disagree with the commenter who requested that the procedure
described by CPT code 78456 (Acute venous thrombosis imaging, peptide)
that was proposed to be assigned to proposed APC 5525 (Level 5 X-Ray
and Related Services) be reassigned to APC 5526 (Level 6 X-Ray and
Related Services). Because the procedure described by CPT code 78456 is
a nuclear medicine test, we are assigning it to APC 5593. We also
disagree with the commenter who requested that CPT code 74210 and CPT
code 72040 that were proposed to be assigned to APC 5522 (Level 2 X-Ray
and Related Services) be reassigned to APC 5521 (Level 1 X-Ray and
Related Services). The geometric mean cost of each of the CPT codes is
approximately $90. The geometric mean cost of APC 5522 is approximately
$105. The geometric mean cost of APC 5521 is approximately $64. We
believe that, given the geometric mean cost of APCs 5521 and 5522, APC
5522 is the more appropriate assignment for the procedures described by
CPT codes 74210 and 72040, based on similarity in resource use in
relation to other procedures in these APCs.
We disagree with the commenters who requested that CPT code 75872
(Venography, epidural, radiological supervision and interpretation),
which was proposed to be assigned to APC 5526, be reassigned to APC
5525. This procedure is a very low volume procedure and is assigned to
APC 5526 based on similarity of the clinical test described by CPT code
75872 to other clinical tests assigned to the APC.
We disagree with the commenters who requested that CPT codes 70470;
70482; 70488; 70492; 70496; 70498; 71275; 72127; 72130; 72133; 72191;
72194; 73202; 73206; 73702; 73706; 74170; 74175; 75574; and 75635,
which were proposed to be assigned to APC 5571 (Level 1 Computed
Tomography with Contrast and Computed Tomography Angiography) be
reassigned to APC 5572 (Level 2 Computed Tomography with Contrast and
Computed Tomography Angiography). The geometric mean cost for these
codes ranges from approximately $250 to approximately $284. The
geometric mean cost of APC 5571 is approximately $248. The geometric
mean cost of APC 5572 is approximately $364. We believe that, given the
geometric mean cost of APC 5571 and 5572, APC 5571 is the more
appropriate APC assignment for the procedures described by these codes.
We disagree with the commenters who requested that CPT codes 72126,
73201, and 74177, which were proposed to be assigned to APC 5572, be
reassigned to APC 5571. The geometric mean cost for these codes range
from approximately $325 to approximately $353. The geometric mean cost
of APC 5572 is approximately $364. The geometric mean cost of APC 5571
is approximately $248. We believe that, given the geometric mean cost
of APCs 5571 and 5572, APC 5572 is the more appropriate assignment for
the procedures described by these codes.
We disagree with the commenters who requested that CPT codes 70544
(Magnetic resonance angiography) and 70547 (Magnetic resonance
angiography, neck; without contrast material(s)), which were proposed
to be assigned to APC 5581 (Magnetic Resonance Imaging and Magnetic
Resonance Angiography without Contrast), be reassigned to a requested
new APC 5583 (Magnetic Resonance Imaging and Magnetic Resonance
Angiography Without Contrast Followed by With Contrast). We do not
believe that there is sufficient clinical or resource dissimilarity in
the proposed APC groupings to warrant the creation of a third level.
We disagree with the commenters who requested that CPT codes 70545,
70546, 70548, 70549, C8902, C8911, C8914, C8920, C8933, and C8936,
which were proposed to be assigned to APC 5582, be reassigned to a
requested new APC 5583 (Magnetic Resonance Angiography [MRA] Without
Contrast Followed by With Contrast). We do not believe it is necessary
to separate MRA imaging services from MRI imaging services by creating
an additional APC within this clinical family. The aforementioned MRA
CPT codes do not represent clinically distinct imaging services from
MRI CPT codes assigned to APC 5582 because MRA scans are often included
with a MRI scan. Further, the resource costs of the aforementioned MRA
CPT codes are not significantly different, but are very much in line
with the resource costs of non-MRA imaging services.
We disagree with the commenters who requested that CPT codes 76705,
76801, 76830, 76872, 76881, 93888, and 93931, which were proposed to be
assigned to APC 5532 (Level 2 Ultrasound and Related Services), be
reassigned to APC 5531 (Level 1 Ultrasound and Related Services). The
geometric mean cost of the procedures described by these codes ranges
from approximately $122 to approximately $134. The geometric mean cost
of APC 5532 is approximately $161. The geometric mean cost of 5531 is
approximately $96. We believe that, given the geometric mean cost of
APC 5531 and APC 5532, APC 5532 is the more appropriate assignment for
the procedures described by these codes.
We disagree with the commenters who requested that CPT code 75557
(Cardiac magnetic resonance imaging for morphology and function without
contrast material), which was proposed to be assigned to APC 5581
(Magnetic
[[Page 70397]]
Resonance Imaging and Magnetic Resonance Angiography without Contrast),
be reassigned to APC 5592 (Level 2 Nuclear Medicine and Related
Services). The geometric mean cost for the procedure described by CPT
code 75557 is approximately $283. The geometric mean cost for APC 5581
is approximately $286. The geometric mean cost for APC 5592 is
approximately $462. Based on the geometric mean costs of APC 5581 and
APC 5592, we believe APC 5581 is the more appropriate assignment for
the procedure described by CPT code 75557. We also disagree with the
commenters regarding their requests for APC reassignment of CPT codes
78457 and 78458. These two codes describe nuclear medicine tests and
therefore are being assigned to APCs in that series.
We disagree with the commenters who requested that we reassign the
following new CY 2016 codes as indicated:
CPT code 50430, which was proposed to be assigned to APC
5524 and requested by the commenters to be reassigned to APC 5372;
CPT code 73522, which was proposed to be assigned to APC
5522 and requested by the commenters to be reassigned to APC 5523;
CPT code 72084, which was proposed to be assigned to APC
5522 and requested by the commenters to be reassigned to APC 5524; and
CPT code 47537, which was proposed to be assigned to APC
5391 and requested by the commenters to be reassigned to APC 5351.
Under our established policy, for new codes, we determine APC
assignment based on clinical and resource similarities to existing
codes. Because the procedures for these codes are not reflected in
available CY 2014 claims data because of their newness, we believe that
the proposed APCs are appropriate. We will consider reassignment of
these codes as claims data become available.
Comment: One commenter requested that CMS reassign the procedure
described by CPT code 91200 (Liver elastography, mechanically induced
shear wave (e.g., vibration), without imaging, with interpretation and
report) from proposed APC 5531 (Level 1 Ultrasound and Related
Services) to proposed APC 5532 (Level II Ultrasound and Related
Services). The commenter stated that the procedure described by this
code is assigned to APC 0266 (Level II Diagnostic and Screening
Ultrasound) for CY 2015. The commenter acknowledged that the CPT code
is new for CY 2015 and that cost information is not reflected in our CY
2014 claims data. Therefore, the commenter believed that, in the
absence of claims data for CPT code 91200, it is inappropriate for CMS
to propose assignment to a lower paying APC in CY 2016. In addition,
the commenter requested that CMS change the proposed assigned status
indicator of ``Q1'' to ``S'' because this procedure is not typically
performed with other procedures of status indicator ``S,'' ``T,'' or
``V'' and therefore should be a separately payable service.
Response: We agree with the commenter. Therefore, for CY 2016, we
are reassigning the procedure described by CPT code 91200 to APC 5532
(Level II Ultrasound and Related Services) with status indicator ``S.''
Comment: One commenter requested that CMS reassign CPT code 75571
(Computed tomography, heart, without contrast material, with
quantitative evaluation of coronary calcium) from proposed APC 5731
(Level 1 Minor Procedures) to proposed APC 5570 (Computed Tomography
without Contrast) because the commenter believed that the procedure
described by CPT code 75571 is similar to the procedure described by
CPT code 71250, which was proposed to be assigned to APC 5570.
Response: Based on the latest available CY 2014 hospital claims
data, the geometric mean cost of the procedure described by CPT code
75571 is approximately $13, based on 4,225 single claims. Therefore, we
believe that the procedure described by CPT code 75571 is appropriately
assigned to APC 5731.
After consideration of the public comments we received, we are
finalizing our proposal, with modification, to reconfigure the imaging-
related procedures into 26 APCs. Table 32 below lists the final CY 2016
APCs that result from the consolidation and restructuring of the
current radiology and nuclear medicine services APCs. The final payment
rates for the specific CPT imaging-related services are included in
Addendum B to this final rule with comment period. The final payment
rates for the specific APCs to which we are assigning the imaging-
related services are included in Addendum A to this final rule with
comment period. Both OPPS Addenda A and B are available via the
Internet on the CMS Web site.
Table 32--CY 2016 Imaging-Related Procedures APCs
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5521........................... Level 1 X-Ray and Related Services.
5522........................... Level 2 X-Ray and Related Services.
5523........................... Level 3 X-Ray and Related Services.
5524........................... Level 4 X-Ray and Related Services.
5525........................... Level 5 X-Ray and Related Services.
5526........................... Level 6 X-Ray and Related Services.
5531........................... Level 1 Ultrasound and Related
Services.
5532........................... Level 2 Ultrasound and Related
Services.
5533........................... Level 3 Ultrasound and Related
Services.
5534........................... Level 4 Ultrasound and Related
Services.
5561........................... Level 1 Echocardiogram with Contrast.
5562........................... Level 2 Echocardiogram with Contrast.
5570........................... Computed Tomography without Contrast.
5571........................... Level 1 Computed Tomography with
Contrast and Computed Tomography
Angiography.
5572........................... Level 2 Computed Tomography with
Contrast and Computed Tomography
Angiography.
5581........................... Magnetic Resonance Imaging and Magnetic
Resonance Angiography without
Contrast.
5582........................... Magnetic Resonance Imaging and Magnetic
Resonance Angiography with Contrast.
5591........................... Level 1 Nuclear Medicine and Related
Services.
5592........................... Level 2 Nuclear Medicine and Related
Services.
5593........................... Level 3 Nuclear Medicine and Related
Services.
5594........................... Level 4 Nuclear Medicine and Related
Services.
8004........................... Ultrasound Composite.
8005........................... CT and CTA without Contrast Composite.
8006........................... CT and CTA with Contrast Composite.
8007........................... MRI and MRA without Contrast Composite.
8008........................... MRI and MRA with Contrast Composite.
------------------------------------------------------------------------
9. Orthopedic Procedures
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs that
contain orthopedic-related procedures. For CY 2016, we proposed to
restructure the OPPS APC groupings for orthopedic surgery procedures to
more appropriately reflect similar costs and clinical characteristics
of the procedures within each APC grouping
[[Page 70398]]
in the context of the OPPS. The current APCs for orthopedic-related
procedures are primarily divided according to anatomy and the type of
musculoskeletal procedure. After reviewing these APCs, we believe that
the current APC structure is based on clinical categories that do not
necessarily reflect significant differences in the delivery of these
services in the HOPD. The current level of granularity for these APCs
results in groupings that are unnecessarily narrow for the purposes of
a prospective payment system. For example, we see no reason for
purposes of OPPS payment to continue to separate musculoskeletal
procedures that do not involve the hand or foot from procedures that do
include the hand or foot.
Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR 39262), for
CY 2016, we proposed to restructure and consolidate the APCs for
orthopedic surgery procedures. We stated in the proposed rule that we
believe that this proposed restructuring and consolidation would result
in APC groupings that would more appropriately reflect a prospective
payment system that is based on payment for clinically consistent APC
groupings and not code-specific payment rates while maintaining
clinical and resource homogeneity. Table 29 of the proposed rule listed
the current CY 2015 APCs that contain orthopedic-related procedures,
and Table 30 of the proposed rule listed the proposed CY 2016 APCs that
would result from the proposed restructuring and consolidation of the
current orthopedic-related procedures APCs. We invited public comments
on this proposal.
Comment: Some commenters generally concurred with the consolidation
and reconfiguration of the orthopedic-related procedures APCs. However,
many commenters expressed concern that the ranges of geometric mean
costs for procedures assigned to the proposed orthopedic-related
procedures APCs are too broad, resulting in payment misalignments for
certain procedures. Many other commenters opposed the proposed
restructuring of these APCs and asserted that the proposed revised
reconfiguration is neither clinically homogeneous nor resource use
homogeneous. Several of these commenters recommended that CMS either
delay reconfiguration of the orthopedic-related procedures or maintain
larger groupings based on anatomical region.
Response: In our effort to improve the similarity in resource use
and clinical characteristics within the orthopedic-related APC
groupings, we proposed to revise the existing orthopedic-related
procedures APCs for CY 2016. We believe that the proposed revised
orthopedic-related procedures APCs more appropriately reflect the
resource costs and clinical characteristics of the procedures within
each APC. We do not agree that creating orthopedic-related procedures
APCs based on the specific anatomical region treated by the procedure
is necessary or appropriate. For example, an orthopedic surgeon might
perform a 1-hour procedure on a patient's leg and then perform a 1-hour
procedure using similar instruments and supplies, among others, on a
different patient's arm, and the hospital resources consumed in both
cases would be very similar, which would support assignment of these
procedures in the same APC. There is no purpose to group the leg
procedure in an APC dedicated to leg procedures and the arm procedure
in an APC dedicated to arm procedures if they are both orthopedic
surgeries that consume similar hospital resources. Likewise, we do not
agree that it is either necessary or appropriate to create an APC for
high-cost, very low volume orthopedic-related procedures. We believe
that establishing more inclusive categories of the orthopedic-related
procedures is more appropriate for future ratesetting under the OPPS
because the restructured APCs have more clinically appropriate
groupings, while improving resource similarity. However, we agree with
the commenters who were concerned that the proposed four levels of
musculoskeletal APCs resulted in extremely wide geometric mean cost
ranges, and in response to their comments, we have added a fifth level
to the musculoskeletal APC grouping. Several procedures that were
proposed to be assigned to APC 5123 (Level 3 Musculoskeletal
Procedures) are now reassigned APC 5124 (Level 4 Musculoskeletal
Procedures) for CY 2016. Similarly, several procedures that were
proposed to be assigned to APC 5124 (Level 4 Musculoskeletal
Procedures) are now reassigned to new APC 5125 (Level 5 Musculoskeletal
Procedures) for CY 2016.
Comment: One commenter expressed concern with the proposed payment
for the services described by CPT code 27279 (Sacroiliac join
stabilization for arthrodesis, percutaneous or minimally invasive
(indirect visualization), includes obtaining and applying autograft or
allograft (structural or morselized) when performed, includes image
guidance when performed (e.g., CT or fluoroscopic), which the commenter
considered would result in an underpayment. The commenter stated that
CPT code 27279 became effective January 1, 2015 and is the successor
code to CPT code 0334T (Sacroiliac join stabilization for arthrodesis,
percutaneous or minimally invasive (indirect visualization), includes
obtaining and applying autograft or allograft (structural or
morselized) when performed, includes image guidance when performed
(e.g., CT or fluoroscopic)), and that the CY 2014 claims data for
services described by CPT code 0334T is appropriate to use to set the
CY 2016 payment rate for procedures described by CPT code 27279. The
commenter stated that the proposed payment rate for procedures assigned
to APC 5124 (Level 4 Musculoskeletal Procedures) is approximately
$9,266, which is a rate that does not cover the cost of the procedure
described by CPT code 27279, which had a proposed geometric mean cost
of approximately $16, 816. The commenter requested that CMS reassign
the procedure described by CPT code 27279 to an APC that has a payment
rate that is comparable to the actual cost of the procedure.
Response: As previously mentioned in response to commenters'
concerns regarding the wide range of costs associated with the
musculoskeletal procedures APC group, we revised the musculoskeletal
procedures APC grouping by adding a fifth level, APC 5125 (Level 5
Musculoskeletal Procedures). With the addition of APC 5125, we
reassigned certain procedures from Level 4 (APC 5124) in the proposed
rule to new Level 5 based on the geometric mean costs of the
procedures. Therefore, in this final rule with comment period, for CY
2015, we are revising the APC assignment for the procedure described by
CPT 27279 from APC 5124 to APC 5125. The geometric mean cost of APC
5125 is approximately $11,027, which is higher than the proposed
geometric mean cost of APC 5124 of approximately $9,789.
Comment: A few commenters disagreed with the proposed APC
assignment for kyphoplasty CPT code 22513 (Percutaneous vertebral
augmentation, including cavity creation (fracture reduction and bone
biopsy included when performed) using mechanical device (e.g.,
kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation,
inclusive of all imaging guidance; thoracic) and CPT code 22514
(Percutaneous vertebral augmentation, including cavity creation
(fracture reduction and bone biopsy included
[[Page 70399]]
when performed) using mechanical device (e.g., kyphoplasty), 1
vertebral body, unilateral or bilateral cannulation, inclusive of all
imaging guidance; lumbar) to APC 5123 (Level 3 Musculoskeletal
Procedures). Specifically, the commenters stated that these two
kyphoplasty procedure codes are not clinically homogenous with the
other procedures assigned to APC 5123 and that the proposed APC payment
would underpay facilities for these procedures, thus negatively
affecting beneficiary access.
Response: We appreciate the stakeholders' concern that the proposed
assignment of the procedures described by CPT codes 22513 and 22514 to
APC 5123 will cause outpatient facilities to stop offering minimally
invasive outpatient procedures for patients with vertebral compression
fractures, forcing these patients toward more expensive alternatives.
Because CPT codes 22513 and 22514 were established January 1, 2015, our
CY 2014 hospital claims data do not include costs for these procedures.
Therefore, we proposed the APC assignment for these two codes based on
similarities in resource cost to former kyphoplasty CPT codes 22523
through 22525. However, as discussed above, in this final rule with
comment period, we are adding a fifth level to the musculoskeletal APC
groupings (APC 5215) for CY 2016, and are reassigning the procedures
described by CPT codes 22513 and 22514 from proposed APC 5124 (Level 4
Musculoskeletal Procedures) to APC 5125. We believe that this
reassignment will improve resource and clinically homogeneity. However,
we will continue to monitor service utilization trends in the HOPD for
kyphoplasty and other minimally invasive procedures for patients with
vertebral compression and consider APC reassignment in future
rulemaking.
Comment: A few commenters believed that CMS used inaccurate CY 2014
claims data for the following auditory osseointegrated system implant
codes:
CPT code 69714 (Auditory osseointegrated device
implantation with attachment to sound processor, without
mastoidectomy);
CPT code 69715 (Auditory osseointegrated device
implantation with attachment to sound processor, with mastoidectomy);
CPT code 69717 (Removal and replacement of existing
osseointegrated implant, with attachment to sound processor, without
mastoidectomy); and
CPT code 69718 (Removal and replacement of existing
osseointegrated implant, with attachment to sound processor, with
mastoidectomy).
Specifically, the commenters expressed skepticism about the low
volume of claims that reported the above codes and the underreporting
of the device cost described by CPT code L8690 (Auditory
osseointegrated device). The commenters recommended that CMS not reduce
the APC payment for these procedures because of incorrectly coded
claims.
Response: As we described in section II.A. of this final rule with
comment period on the OPPS ratesetting methodology, ``Beyond our
standard OPPS trimming methodology . . . that we apply to those claims
that have passed various types of claims processing edits, it is not
our general policy to judge the accuracy of hospital coding and
charging for purposes of ratesetting'' (75 FR 71838). We use the latest
available hospital claims data for these procedures to assign these
procedures to APCs. Based on that data, we are assigning the procedure
described by CPT code 69714 (which has a geometric mean cost of
approximately $9,483) and by CPT code 69715 (which has a geometric mean
cost of approximately $11,337) to APC 5125 (which has a geometric mean
cost of approximately $11,027). We are assigning the procedure
described by CPT code 69717 (which has a geometric mean cost of
approximately $5,923) to APC 5123 (which has a geometric mean cost of
approximately $5,200). We are assigning the procedure described by CPT
code 69718 (which has a geometric mean cost of approximately $6,858) to
APC 5124 (which has a geometric mean cost of approximately $7,392).
Comment: One commenter requested the reassignment of the procedure
described by CPT code 23397 (Muscle transfer, any type, shoulder or
upper arm; multiple) from proposed APC 5122 (Level 2 Musculoskeletal
Procedures) to proposed APC 5123 (Level 3 Musculoskeletal Procedures)
because of clinical and resource use homogeneity with the procedure
described by CPT code 23395 (Muscle transfer, any type, shoulder or
upper arm; single) that is assigned to APC 5123.
Response: We believe that the procedure described by CPT code 23397
is appropriately assigned to APC 5122 based on clinical and resource
use homogeneity with other procedures in the APC. We disagree with the
commenter's recommendation to reassign CPT code 23397 from APC 5122 to
APC 5123. The geometric mean cost of the procedure described by CPT
code 22397 is approximately $3,598 based on only one single claim (out
of two total claims) and is higher than the APC geometric mean cost of
APC 5122, which is approximately $2,507. However, the APC geometric
mean cost for APC 5123 is approximately $5,200. Because of the very low
claims volume for CPT code 23397, it is not appropriate at this time to
reassign the procedure code to a higher paying APC.
Comment: Several commenters requested that CMS reassign the
services described by CPT codes 29580 (Strapping; Unna boot), 29581
(Application of multi-layer compression system; leg (below knee),
including ankle and foot), and 29450 (Application of clubfoot cast with
molding or manipulation, long or short leg from proposed APC 5102
(Level 2 Strapping and Cast Application) to proposed APC 5101 (Level 1
Strapping and Cast Application) because the services described by these
codes are neither clinically consistent nor similar in cost to other
procedures assigned to APC 5102.
Response: Based on our review of the clinical characteristics and
resource costs of the services described by CPT codes 29580, 29581, and
29450 that are reflected in the latest claims data, we agree with the
commenters that it would be more appropriate to group the procedures
described by these codes with similar procedures assigned to APC 5101.
Therefore, we are reassigning the services described by CPT codes
29580, 29581, and 29450 from proposed APC 5102 to APC 5101 for CY 2016.
After consideration of the public comments we received, we are
finalizing our proposal, with the modification of adding a Level 5
Musculoskeletal APC, to reconfigure the orthopedic-related procedures
into 10 APCs. Table 33 below lists the final CY 2016 APCs that result
from the restructuring and consolidation of the current orthopedic-
related procedures APCs. The final payment rates for the specific CPT
orthopedic-related procedure codes are included in Addendum B to this
final rule with comment period. The final payment rates for the
specific APCs to which we are assigning the orthopedic-related
procedures codes are included in Addendum A to this final rule with
comment period. Both OPPS Addenda A and B are available via the
Internet on the CMS Web site.
Table 33--CY 2016 Orthopedic-Related Procedures APCs
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5101........................... Level 1 Strapping and Cast Application.
[[Page 70400]]
5102........................... Level 2 Strapping and Cast Application.
5111........................... Level 1 Closed Treatment Fracture and
Related Services.
5112........................... Level 2 Closed Treatment Fracture and
Related Services.
5113........................... Level 3 Closed Treatment Fracture and
Related Services.
5121........................... Level 1 Musculoskeletal Procedures.
5122........................... Level 2 Musculoskeletal Procedures.
5123........................... Level 3 Musculoskeletal Procedures.
5124........................... Level 4 Musculoskeletal Procedures.
5125........................... Level 5 Musculoskeletal Procedures.
------------------------------------------------------------------------
10. Pathology Services
For CY 2016, we proposed to assign pathology services to one of the
following APCs: APCs 5671, 5672, 5673, and 5674 (Levels 1 through 4
Pathology, respectively); APC 5681 (Transfusion Laboratory Procedures);
and APCs 5731, 5732, 5733, and 5734 (Levels 1 through 4 Minor
Procedures, respectively). The packaging of payment for pathology
services is discussed in section II.A.3. of this final rule with
comment period.
Comment: One commenter requested that CMS reassign the following
CPT codes (that were new in CY 2015 and currently do not have available
associated claims data) to APC 5673 (Level 3 Pathology):
CPT code 88344 (Immunohistochemistry or
immunocytochemistry, per specimen; each multiplex antibody stain
procedure);
CPT code 88366 (In situ hybridization (e.g., fish), per
specimen; each multiplex probe stain procedure);
CPT code 88374 (Morphometric analysis, in situ
hybridization (quantitative or semi-quantitative), using computer-
assisted technology, per specimen; each multiplex probe stain
procedure); and
CPT code 88377 (Morphometric analysis, in situ
hybridization (quantitative or semi-quantitative), manual, per
specimen; each multiplex probe stain procedure).
The commenter believed that these CPT codes should be assigned to
the Level 3 Pathology APC (APC 5673) because these are multiplex codes
and are inherently more resource intensive than the corresponding
single antibody/single probe procedures, for example, CPT code 88342,
which are currently assigned to APC 5673.
Response: We agree with the commenters. Therefore, for CY 2016, we
are reassigning CPT codes 88344, 88366, 88374, and 88377 to APC 5673.
Comment: One commenter requested that CMS reassign CPT code 88121
(Cytopathology, in situ hybridization (e.g., fish), urinary tract
specimen with morphometric analysis, 3-5 molecular probes, each
specimen; using computer-assisted technology) from APC 5672 to APC 5673
because related CPT code 88120 (Cytopathology, in situ hybridization
(e.g., fish), urinary tract specimen with morphometric analysis, 3-5
molecular probes, each specimen; manual) is assigned to APC 5673, the
Level 3 Pathology APC. The commenter asserted that, because the
resources used for services described by CPT code 88121 are similar to
the resources used for services described by CPT 88120, both of these
two CPT codes should be assigned to APC 5673.
Response: Analysis of the latest CY 2014 claims data used for this
final rule with comment period shows the geometric mean cost of
services described by CPT code 88121 is approximately $132, and the
geometric mean cost of services described by CPT code 88120 is
approximately $154. Calculation of the geometric mean costs for the
services described by these codes resulted in CPT code 88121 being
assigned to APC 5672 (Level 2 Pathology) and CPT code 88120 being
assigned to APC 5673 (Level 3 Pathology). The geometric cost of CPT
code 88121 is at the top of the range of costs services assigned to APC
5672, and the geometric cost of CPT code 88120 is at the bottom of the
range costs of services assigned to APC 5673. This situation sometimes
occurs even for somewhat similar services because APC groupings by
definition have boundaries that divide the levels within an APC series
such as the four levels for pathology services. We believe that the
services described by CPT code 88121 are appropriately assigned to APC
5672. Therefore, for CY 2016, we are not reassigning the services
described by CPT code 88121 from APC 5672 to APC 5673 as the commenter
requested.
Comment: Some commenters urged CMS to maintain the existing,
separately payable status indicators (that is, ``S'' or ``T'') for a
number of codes within the proposed nine reconfigured APC families
instead of assigning them to a conditional packaging status indicator
(that is, ``Q1'' or ``Q2''). One commenter provided a list of 70 codes
and requested that CMS assign them to separately payable status
indicators. Among the list of 70 codes provided by the commenter were
14 pathology services codes that, as a result of the APC restructuring
policy, were proposed for CY 2016 to be assigned to either APC 5681
(Transfusion Laboratory Procedures) or to APC 5732 (Level 2 Minor
Procedures) or APC 5733 (Level 3 Minor Procedures).
Response: Prior to our proposal, we reviewed all of the services
associated with the proposed nine families. We believe that the
procedures and services that we proposed to assign to a conditional
packaging status indicator are ancillary and dependent in relation to
the other procedures within the same family groupings with which they
are most commonly furnished. Based on our review and input from CMS
clinical staff, we believe that the codes that we proposed to
conditionally package are appropriate. In addition, the APC to which we
proposed to assign most of the 14 pathology services codes for CY 2016,
APC 5681 (Transfusion Laboratory Procedures), is the successor APC to
CY 2015 APC 0345 (Level I Transfusion Laboratory Procedures). APC 0345
was designated in CY 2015 as an APC for conditionally packaged
ancillary services (79 FR 66822). In the proposed rule, 3 of the 14
pathology codes in question were proposed to be assigned to either APC
5732 (Level 2 Minor Procedures) or APC 5733 (Level 3 Minor Procedures).
These APCs are the successor APCs to the CY 2015 APCs 0340 (Level II
Minor Procedures) and 0420 (Level III Minor Procedures), which were
also designated in CY 2015 as APCs for conditionally packaged ancillary
services (79 FR 66822). Therefore, we believe that the services
assigned to APCs 5681, 5732, and 5733 are appropriately assigned a
conditionally packaged status indicator. Further, based on the clinical
nature of the services and our understanding of the procedures, we
believe that assigning them to a conditional packaging status indicator
will create incentives for hospitals and their physician partners to
work together to establish appropriate protocols that will eliminate
unnecessary services where they exist and institutionalize approaches
to providing necessary services more efficiently. Therefore, after
consideration of the public comments we received, we are finalizing our
proposal to assign the 14 pathology services codes in question status
indicator ``Q1'' for CY 2016.
[[Page 70401]]
11. Radiology Oncology Procedures and Services
a. Therapeutic Radiation Treatment Preparation
(1) Teletherapy Planning
For CY 2016, we proposed the following four-level configuration for
the Therapeutic Radiation Treatment Preparation APCs:
APC 5611 (Level 1 Therapeutic Radiation Treatment
Preparation);
APC 5612 (Level 2 Therapeutic Radiation Treatment
Preparation);
APC 5613 (Level 3 Therapeutic Radiation Treatment
Preparation); and
APC 5614 (Level 4 Therapeutic Radiation Treatment
Preparation).
Procedures described by CPT codes 77306 (Teletherapy isodose plan;
simple (1 or 2 unmodified ports directed to a single area of interest),
includes basic dosimetry calculation(s)) and 77307 (Teletherapy isodose
plan; complex (multiple treatment areas, tangential ports, the use of
wedges, blocking, rotational beam, or special beam considerations),
includes basic dosimetry calculation(s)) were considered new codes for
CY 2015 and assigned to APC 0304 (Level I Therapeutic Radiation
Treatment Preparation) in the CY 2015 OPPS/ASC final rule with comment
period. In the CY 2016 OPPS/ASC proposed rule, we proposed to reassign
procedures described by CPT codes 77306 and 77307 to proposed new APC
5611.
Comment: One commenter who responded to the CY 2015 OPPS/ASC final
rule with comment period and the CY 2016 OPPS/ASC proposed rule
requested that CMS reassign procedures described by CPT codes 77306 and
77307 to a higher level APC within the group of Therapeutic Radiation
Treatment Preparation APCs. The commenter stated that the procedures
described by these new codes have greater resource intensity than their
predecessor codes because these procedures now include services that
were formerly separately reportable.
Response: We agree with the commenter. We also believe that it is
likely that the procedures described by the complex code, CPT code
77307, requires more resources than the procedures described by CPT
code 77306. Therefore, for CY 2016, we are modifying our proposal and
assigning the procedures described by CPT code 77306 to new APC 5612
and the procedures described by CPT code 77307 to new APC 5613 for CY
2016.
(2) Intensity Modulated Radiotherapy (IMRT) Planning
In the CY 2016 OPPS/ASC proposed rule, we proposed to assign
procedures described by CPT code 77301 (Intensity modulated
radiotherapy plan, including dose-volume histograms for target and
critical structure partial tolerance specifications) was assigned to
new APC 5614. We proposed new APC 5614 as the highest level APC in the
group of Therapeutic Radiation Treatment Preparation APCs.
Since 2008, CMS has provided coding guidance for claims reporting
CPT code 77301 in the Medicare Claims Processing Manual, Chapter 4,
Section 200.3.2, which states the following: ``Payment for the services
identified by CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336,
and 77370 is included in the APC payment for IMRT planning when these
services are performed as part of developing an IMRT plan that is
reported using CPT code 77301. Under those circumstances, these codes
should not be billed in addition to CPT code 77301 for IMRT planning.''
In addition to this CMS Manual guidance, there is National Correct
Coding Initiative (NCCI) guidance in the NCCI Policy Manual for
Medicare Services, Chapter 9, page IX-17, which states the following:
``12. Intensity modulated radiotherapy (IMRT) plan (CPT code 77301)
includes therapeutic radiology simulation-aided field settings.
Simulation field settings for IMRT should not be reported separately
with CPT codes 77280 through 77295. Although procedure-to-procedure
edits based on this principle exist in NCCI for procedures performed on
the same date of service, these edits should not be circumvented by
performing the two procedures described by a code pair edit on
different dates of service.''
Comment: A few commenters requested that CMS clarify its coding
guidance on reporting services involving IMRT planning on claims.
Several commenters stated that the service described by CPT code 77290
(Therapeutic radiology simulation-aided field setting; complex) should
be separately reported from the services described by CPT code 77301
for patients receiving IMRT planning. These commenters believed that
the services described by CPT code 77290 are never performed as part of
IMRT planning services and, therefore, should be allowed to be reported
separately from the services described by CPT 77301. Another commenter
stated that recent coding guidance issued by the American Society for
Radiation Oncology (ASTRO) also has caused confusion for hospitals and
requested that CMS clarify its reporting guidance for IMRT planning in
light of the recent ASTRO coding guidance. The commenter referred to
the ASTRO Coding Guidance Articles, Process of Care: Treatment
Preparation, which is available on the ASTRO Web site at: https://
www.astro.org/Practice-Management/Radiation-Oncology-Coding/Coding-
Guidance/Articles/Process-of-Care_Treatment-Preparation.aspx. The
ASTRO guidance states in part that ``[I]f IMRT is the chosen modality
for treating the patient, a simulation code (e.g., CPT code 77290)
cannot be reported separately prior to completion of the IMRT treatment
plan, even if the two services are performed on separate days.'' The
commenter further believed that ASTRO's guidance should only apply to
physician billing and not to hospital outpatient billing.
Response: We disagree with these commenters. We believe that the
types of services included in IMRT treatment planning include
simulation. Although the commenter believed that simulation is never
included as part of IMRT planning services, we believe CMS'
longstanding Manual and coding guidance issued in CY 2008 has been
precise in conveying its policy and instructions regarding coding for
IMRT services and that, generally, IMRT services have been properly
reported by hospitals.
It is our policy that payments for the services identified by CPT
codes 77280 through 77295 are included in the APC payment for IMRT
planning services, and that the services described by these CPT codes
should not be reported separately from services described by CPT code
77301, regardless of when the various services that comprise CPT code
77301 are performed. If a hospital submits a claim that separately
reports services described by one of these simulation CPT codes in
addition to separately reporting IMRT planning services that are
performed, we would consider this reporting to constitute unbundling of
the APC payment, which is prohibited. We will revise and update the
Medicare Claims Processing Manual and coding guidance in the near
future to ensure that this policy is more directly stated. The
clarified coding guidance will state the following:
``Payment for the services identified by CPT codes 77014, 77280
through 77295, 77305 through 77321, 77331, and 77370 is included in the
APC payment for CPT code 77301 (IMRT planning). These codes should not
be reported in addition to CPT code 77301 (on either the same or a
different date of service)
[[Page 70402]]
unless these services are being performed in support of a separate and
distinct non-IMRT radiation therapy for a different tumor.''
Comment: One commenter requested that CMS reassign the services
described by CPT code 77301 to a higher level APC to reflect the
additional resource utilization involved with CT simulation, in
addition to the resource-intensive IMRT planning services included as
services described by CPT code 77301.
Response: We proposed to assign the service described by CPT code
77301 to new proposed APC 5614, which is the highest level APC in the
Therapeutic Radiation Treatment Preparation APC group. We believe that
the service described by CPT code 77301 is a therapeutic radiation
treatment preparation service and that it clinically aligns with other
services within in the Therapeutic Radiation Treatment Preparation APC
group. The final geometric mean cost of the services described by CPT
code 77301 is approximately $1,125 based on 51,301 single claims (out
of 52,016 total claims), which is comparable to the final geometric
mean cost of approximately $1,074 for new APC 5614. We also believe
that, given the close proximity of the geometric mean cost of services
described by CPT code 77301 to the geometric mean cost of new APC 5614,
this APC assignment is appropriate for CPT code 77301. As we do with
all codes annually, next year we will examine the cost information on
claims reporting services described by CPT code 77301 and determine if
a change to the APC assignment is warranted. In addition, if the
clarification of our coding guidance for IMRT planning services results
in a significant change in the geometric mean cost of services
described by CPT code 77301 in future years, we will consider an
alternative APC assignment for the code other than APC 5614.
b. Radiation Therapy (Including Brachytherapy)
In the CY 2016 OPPS/ASC proposed rule, we proposed the following
five levels for the Radiation Therapy APC group:
APC 5621 (Level 1 Radiation Therapy);
APC 5622 (Level 2 Radiation Therapy);
APC 5623 (Level 3 Radiation Therapy);
APC 5624 (Level 4 Radiation Therapy); and
APC 5625 (Level 5 Radiation Therapy).
We also proposed to create two new APCs for CY 2016: APC 5631
(Single Session Cranial Stereotactic Radiosurgery) and APC 5641
(Brachytherapy). All of these proposed APCs describe various types of
radiation therapy or radiation delivery.
Comment: One commenter requested that CMS reassign the procedure
described by CPT code 0394T (High dose rate electronic brachytherapy,
skin surface application, per fraction, includes basic dosimetry, when
Performed) from proposed APC 5622 to proposed APC 5623, and the
procedure described by CPT code 0395T (High dose rate electronic
brachytherapy, interstitial or intracavitary treatment, per fraction,
includes basic dosimetry, when performed) from proposed APC 5641 to
proposed APC 5624. The commenter believed that these codes should be
assigned to these higher paying APCs because the procedures described
by these new codes include procedures such as dosimetry that were
formerly separately payable under the OPPS.
Response: CPT codes 0394T and 0395T are new codes for CY 2016. The
procedures described by these new codes were mapped to new proposed
APCs 5622 and 5641 based on our best estimate of the likely resource
costs for these procedures. We anticipate that we will have claims data
for the procedures describing these new CPT codes for the CY 2018 OPPS
rulemaking. At this time, we do not believe that we have sufficient
information to support reassigning CPT codes 0394T and 0395T to the
next higher level radiation therapy APC. Therefore, we are finalizing,
as proposed, the APC assignments for procedures described by CPT codes
0394T and 0395T.
Comment: A few commenters requested that CMS reassign the procedure
described by CPT code 77762 (Intracavitary radiation source
application; intermediate) from proposed new APC 5622 to proposed new
5623 because related CPT codes 77761 (Intracavitary radiation source
application; simple) and 77763 (Intracavitary radiation source
application; complex) were both proposed to be assigned to new proposed
APC 5623 in the CY 2016 OPPS/ASC proposed rule. The commenters stated
that, although CMS may lack sufficient claims data for the procedure
described by CPT code 77762, the procedure (the intermediate level of
this code series) is similar in terms of clinical characteristics and
resource use to the procedures described by CPT codes 77761 and 77763
and, therefore, the procedure described by CPT code 77762 should be
assigned to the same APC as these other codes in the intracavitary
radiation source application APC group.
Response: We agree with the commenters that the procedure involving
intermediate intracavitary radiation source application should not be
assigned to a lower level APC than the simple version of this
procedure. After examining claims data for the CPT codes in this APC
group that reported intracavitary radiation source application, we
found that, although the number of claims is relatively small, the
geometric mean cost of the procedure described by CPT code 77763 is
more similar to the geometric mean costs of procedures assigned to new
APC 5624 than that of the procedures assigned to new APC 5623.
Therefore, we are modifying our proposal and reassigning the procedure
described by CPT code 77762 from proposed APC 5622 to APC 5623, and the
procedure described by CPT code 77763 (the complex code) from new APC
5623 to APC 5624 for CY 2016. We also believe that it is appropriate,
for consistency and easy comprehension, to revise the title of some of
the radiation therapy APCs. Depicted in Table 34 below is a listing of
the finalized titles of the radiation therapy APCs. The revisions to
the titles of these APCs do not affect the APC assignment of any of the
codes.
Table 34--Final Radiation Therapy APC Titles for CY 2016
----------------------------------------------------------------------------------------------------------------
Proposed CY 2016 Final CY 2016 APC
Proposed CY 2016 APC No. APC title No. Final CY 2016 APC title
----------------------------------------------------------------------------------------------------------------
5621........................... Level 1--Radiation 5621.............. Level 1--Radiation Therapy.
Therapy.
5622........................... Level 2--Radiation 5622.............. Level 2--Radiation Therapy.
Therapy.
5623........................... Level 3--Radiation 5623.............. Level 3--Radiation Therapy.
Therapy.
5641........................... Brachytherapy..... 5624.............. Level 4--Radiation Therapy.
5624........................... Level 4--Radiation 5625.............. Level 5--Radiation Therapy.
Therapy.
5625........................... Level 5--Radiation 5626.............. Level 6--Radiation Therapy.
Therapy.
[[Page 70403]]
5631........................... Single Session 5627.............. Level 7--Radiation Therapy.
Cranial
Stereotactic
Radiosurgery.
----------------------------------------------------------------------------------------------------------------
In summary, for CY 2016, the simple and intermediate intracavitary
radiation source application codes, CPT codes 77761 and 77762, are
assigned to new APC 5623, and the complex intracavitary radiation
source application code, CPT code 77763, is assigned to APC 5624.
Comment: Several commenters requested that CMS estimate costs for
the new CY 2016 high dose rate (HDR) brachytherapy codes (CPT codes
77767 through 77772) to include the cost of the dose calculation, which
is now a part of the services described by the HDR brachytherapy codes.
The commenters believed that if CMS included these additional costs,
the calculations would result in increased payment rates for the APCs
to which the HDR brachytherapy codes are assigned.
Response: We believe that these commenters may have misunderstood
our ratesetting methodology as it applies to new codes. We generally do
not model costs for new codes and incorporate modeled cost data into
our payment rate calculations. Instead, we make an initial APC
assignment for new codes based on predecessor code APC assignments and
other information that allows for a suitable APC assignment until
claims data is available for the new codes. We do not believe the
commenters' suggested approach is appropriate under our established
ratesetting methodology for new codes.
c. Fractionated Stereotactic Radiosurgery (SRS)
For CY 2016, we proposed to reassign the services described by CPT
code 77373 (Stereotactic body radiation therapy, treatment delivery,
per fraction to 1 or more lesions, including image guidance, entire
course not to exceed 5 fractions) from APC 0066 (Level V Radiation) to
APC 5625 (Level 5 Radiation Therapy), with a proposed payment rate of
approximately $1,699.
Comment: Several commenters disagreed with the proposed APC
assignment of the services described by CPT code 77373 to APC 5625. In
particular, the commenters were concerned that the proposed payment
rate for the services described by CPT code 77373 equates to a
reduction of 11 percent in payment when compared to the payment rate
for CY 2015. The commenters believed that the proposed payment is not
reflective of the actual costs of providing fractionated SRS services.
The commenters also expressed concerns about the accuracy of the
hospital cost data on fractionated SRS services used to set the
proposed payment rate. They believed that hospitals have miscoded the
service by reporting CPT code 77372 (Radiation treatment delivery,
stereotactic radiosurgery (SRS), complete course of treatment of
cranial lesion(s) consisting of 1 session; linear accelerator based)
for the first fraction, and instead have reported the services
described by CPT code 77373. Several commenters requested that CMS
increase the proposed payment rate of approximately $1,699 for APC 5625
by at least $630 to more accurately capture the costs of providing this
therapy, or alternatively, assign services described by CPT code 77373
to a stable APC, such as a new technology APC, for a period of 3 years
to allow for the reporting of appropriate claims data to use to
calculate a more appropriate payment. One commenter recommended that
CMS reassign CPT code 77373 to New Technology--Level 25 ($3,500-
$4,000), with a payment rate of approximately $3,750.
Response: We believe that we have adequate claims data for services
described by CPT code 77373 because fractionated/multi-session SRS is
not a new technology. For the CY 2016 ratesetting, there are 59,853
single claims (out of 64,629 total claims) for the services described
by CPT code 77373, which is an adequate volume for ratesetting
purposes. Although CPT code 77373 was not recognized under the OPPS
until January 1, 2014, the code has been in existence since January 1,
2007. Hospital outpatient facilities have been reporting the SRS CPT
codes to other payers since the codes were established in 2007. We
believe that hospital outpatient facilities have had sufficient time to
educate themselves on how to appropriately report the services
described by CPT code 77373. We do not agree that assigning the
services described by CPT code 77373 to a New Technology APC is
appropriate, given the robust claims data we have from CY 2014.
Miscoding of procedures and services by hospitals is generally not an
area that we investigate or attempt to remedy by substituting other
payment rates for the payment rate calculated from the claims data
according to our standard methodology.
We note that (as discussed above) the APC number and title for APC
5625, the APC to which the services described by CPT code 77373 are
assigned, have been changed to APC 5626 (Level 6 Radiation Therapy). In
addition, as discussed in section III.D.15.b. of this final rule with
comment period, because the procedure codes describing MRgFUS treatment
are being reassigned to other APCs, CPT code 77373 is the only
procedure code assigned to APC 5626.
In summary, after consideration of the public comments we received,
we are modifying our proposal and assigning the services described by
CPT code 77373 to APC 5626 for CY 2016. The final CY 2016 payment rate
for the services described by CPT code 77373 can be found in Addendum B
to this final rule with comment period (which is available via the
Internet on the CMS Web site).
12. Skin Procedures
As a part of our CY 2016 comprehensive review of the structure of
the APCs and procedure code assignments, we examined the APCs that
describe skin procedures. Based on our evaluation of the hospital
outpatient claims data available for the CY 2016 OPP/ASC proposed rule,
we proposed to restructure all of the APCs for skin-related procedures
by combining the debridement and skin procedures APCs to more
appropriately reflect the resource costs and clinical characteristics
of the procedures assigned to each APC. Clinically, the services
assigned to the current debridement APC grouping are similar to the
services assigned to the current skin procedures APCs. Therefore, we
believe that the services assigned to these two APC groupings would be
more appropriately represented by combining the services into a single
APC grouping described as skin procedures and related services. We
believe that the proposed consolidation and restructuring of these APCs
more appropriately categorizes all of the skin procedures and related
services with different resource use, such that the services within
each proposed newly configured APC are comparable based on the
homogeneity of clinical characteristics and resource costs.
[[Page 70404]]
Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR 39262 through
39263), for CY 2016, we proposed to consolidate and restructure the
skin and debridement APCs into a single APC grouping. Table 31 of the
proposed rule listed the current CY 2015 APCs that contain skin and
debridement procedures, and Table 32 of the proposed rule listed the
proposed CY 2016 APCs that would result from the proposed consolidation
and restructuring of the current skin procedures and related services
APCs into a single APC grouping. We invited public comments on this
proposal.
We received several public comments related to the proposed APC
assignments for certain skin-related services and procedures and one
comment specifically relating to the proposed restructuring of the skin
procedures APCs. A summary of the public comments and our responses are
below.
Comment: Some commenters expressed concern with CMS' proposal to
consolidate the skin substitute and skin debridement APCs, and stated
that the proposed reconfiguration reduces the clinical cohesiveness of
the procedures assigned to the APC grouping and could negatively impact
payments for these services. One commenter stated that the proposed
reconfigured APC 5051 (Level 1 Skin Procedures) and APC 5053 (Level 3
Skin Procedures) combine simple and complex procedures under the APCs
that make no distinctions in the clinical characteristics and resource
costs for certain procedures. The commenter requested that CMS
reconsider its proposal and work with clinical experts to refine the
structure of these APCs that reflects the clinical cohesiveness and
resource use associated with these services. Another commenter
disagreed with CMS' rationale that the proposed restructuring and
consolidation of these APCs would more appropriately reflect the
comparable costs and clinical characteristics of the procedures
assigned to each APC and stated that combining the debridement and skin
procedure APCs produces broad categories with wide payment variations,
which creates inappropriate resource distinctions for certain
procedures.
Response: We disagree with the commenters. We believe that the
reconfigured skin procedure APCs all include clinically similar
procedures with similar resource costs. We also believe that the range
of procedure costs in each of the skin procedure APCs is appropriate,
and there are no violations of the 2 times rule within these APCs. The
CY 2015 APC structure separated skin procedures from debridement and
destruction procedures, which resulted in procedures that were
otherwise similar skin procedures being assigned to different APCs (if
the procedures also were debridement and destruction procedures). The
CY 2015 structure resulted in similar procedures involving the skin
procedure being assigned to different APCs based on a procedure being
labelled either debridement/destruction or a skin procedure.
Debridement of skin is a skin procedure; therefore, assignment to a
skin procedure APC is appropriate. We do not believe this distinction
is the most appropriate way to distinguish procedures involving the
skin because debridement of skin is a skin procedure. Therefore, we
believe that the services assigned to these two APC groups are more
appropriately classified as skin procedures and related services in a
single APC group. We believe that the proposed consolidation and
restructuring of these APCs more appropriately categorizes all of the
similar skin procedures and related services with different resource
use, such that the services within each proposed newly configured APC
are comparable based on the homogeneity of clinical characteristics and
resource costs. We also believe that restructuring the APC groupings
decreases overlapping cost ranges among APCs in a series and,
consequently, allows CMS to pay for these procedures and services
through a skin procedures APC series that is more clinically
homogeneous and that contain procedures with similar costs.
Comment: One commenter stated that the proposed payment rate for
APC 5053 would result in substantial underpayment for procedures and
services involving the low-cost skin substitute products compared to
procedures and services involving the high-cost skin substitute
products. Specifically, the commenter indicated that facilities using
the low-cost skin substitute products would experience a reduction in
payment between approximately $274 and $290 per treatment session. The
commenter believed that the potential underpayment associated with the
use of low-cost skin substitute products would ultimately incentivize
the use of the high-cost skin products, and result in greater overall
expenditures to the Medicare program. Therefore, the commenter
recommended that CMS create a new APC level in addition to the APC
Level 3 and APC Level 4 for the skin procedures and related services
APC grouping to eliminate this perceived incentive and discrepancy.
Response: We again reviewed all of the skin procedures and related
services and the APC assignments for this final rule with comment
period. Based on our evaluation of the latest hospital outpatient
claims data used for this final rule with comment period, we are
revising the proposed APC assignments for several skin procedures
within the Skin Procedures APC grouping. Specifically, we are modifying
our proposal by reassigning certain procedures from proposed APC 5053
to APC 5052 (Level 2 Skin Procedures) to more appropriately reflect the
homogeneity of the resource costs associated with the other procedures
assigned to APC 5052. In light of this modification, we do not believe
that creating a new level within the skin procedures and related
services APC groupings is necessary. We believe that the reassignment
of certain procedures results in improved clinical homogeneity and
resource costs for all of the skin procedures within the skin
procedures groups.
Comment: Some commenters urged CMS to maintain the existing,
separately payable status indicator assignments (that is, status
indicators ``S'' or ``T'') for several procedure codes included within
the proposed nine reconfigured APC grouping, instead of assigning these
procedures to a status indicator that would generate a conditionally
packaged payment (that is, either status indicator ``Q1'' or ``Q2'').
One commenter provided a list of 70 procedure codes and requested that
CMS reassign the listed procedures to status indicators that would
generate separate payment for the services described by those procedure
codes. Among the listed 70 procedure codes in the commenter's request,
36 describe skin procedures that, as a result of the proposed APC
restructuring and consolidation, were proposed for CY 2016 to be
reassigned to APC 5051.
Response: Prior to developing our proposal, we reviewed all of the
procedures and services associated with the proposed reconfigured nine
APCs skin procedures and related services groupings. Based on our
review and input from CMS clinical staff, we believe that the proposed
assignment of the procedures and services to a status indicator that
indicates them as conditionally packaged is appropriate because these
services are considered ancillary and dependent in relation to the
other procedures with which they are most commonly furnished. In
addition, the APC to which the 36 procedure codes listed by the
[[Page 70405]]
commenter were proposed to be assigned for CY 2016, APC 5051, is the
successor APC to the CY 2015 APC 0012 (Level I Debridement &
Destruction). APC 0012 was designated in CY 2015 as an APC containing
procedures that are considered ancillary services for which payment is
conditionally packaged. Therefore, we believe that the procedures and
services proposed to be reassigned to APC 5051 also should be
appropriately assigned to a status indicator that conditionally
packages payment for these services. Further, based on the clinical
nature of the services and our understanding of the procedures, we
believe that the proposed assignments for these procedures and services
to a status indicator indicating conditional packaging will create
incentives for hospitals and their physician partners to work together
to establish appropriate protocols that will eliminate providing
unnecessary services where these instances exist and institutionalize
approaches to providing necessary services more efficiently. Therefore,
in this final rule with comment period, we are assigning status
indicator ``Q1'' to the 36 skin procedure codes identified by the
commenter in the nine reconfigured APC groupings for CY 2016.
After consideration of the public comments we received, we are
finalizing our proposal to restructure and consolidate the skin
procedures and related services APCs, with one modification. We are
revising the APC assignment for several procedures, which are listed in
Addendum B to this final rule with comment period, by reassigning them
from APC 5053 to APC 5052 to appropriately reflect the resource costs
associated with the procedures. We also are assigning the 36 procedure
codes describing skin procedure and related services identified by the
commenter to status indicator ``Q1'' for CY 2016.
a. Negative Pressure Wound Therapy (NPWT) Services
As listed in Addendum B to the CY 2016 OPPS/ASC proposed rule, we
proposed to reassign the NPWT services to two separate APCs.
Specifically, as listed in Table 35 below, we proposed to reassign the
durable medical equipment (DME)-related NPWT CPT codes 97605 and 97606
from APC 0012 (Level I Debridement & Destruction) and APC 0015 (Level
II Debridement & Destruction), respectively, to proposed APC 5051
(Level 1 Skin Procedures), with a proposed payment rate of
approximately $120, and the disposable NPWT CPT codes 97607 and 97608
from APC 0015 to proposed APC 5052 (Level 2 Skin Procedures), with a
proposed payment rate of approximately $166.
Table 35--Proposed APC Assignment for the NPWT Services for CY 2016
----------------------------------------------------------------------------------------------------------------
Proposed CY
CY 2015 OPPS CY 2015 2016 OPPS Proposed CY
CY 2015 CPT/HCPCS code Long descriptor status OPPS APC status 2016 OPPS
indicator indicator APC
----------------------------------------------------------------------------------------------------------------
97605..................... Negative pressure wound Q1 0012 Q1 5051
therapy (e.g., vacuum
assisted drainage
collection), including
topical application(s), wound
assessment, and
instruction(s) for ongoing
care, per session; total
wound(s) surface area less
than or equal to 50 square
centimeters.
97606..................... Negative pressure wound T 0015 Q1 5051
therapy (e.g., vacuum
assisted drainage
collection), including
topical application(s), wound
assessment, and
instruction(s) for ongoing
care, per session; total
wound(s) surface area greater
than 50 square centimeters.
97607..................... Negative pressure wound T 0015 T 5052
therapy, (e.g., vacuum
assisted drainage
collection), utilizing
disposable, non-durable
medical equipment including
provision of exudate
management collection system,
topical application(s), wound
assessment, and instructions
for ongoing care, per
session; total wound(s)
surface area less than or
equal to 50 square
centimeters.
97608..................... Negative pressure wound T 0015 T 5052
therapy, (e.g., vacuum
assisted drainage
collection), utilizing
disposable, non-durable
medical equipment including
provision of exudate
management collection system,
topical application(s), wound
assessment, and instructions
for ongoing care, per
session; total wound(s)
surface area greater than 50
square centimeters.
----------------------------------------------------------------------------------------------------------------
We note that the DME-related NPWT CPT codes 97605 and 97606 were
effective January 1, 2005. The disposable NPWT CPT codes 97607 and
97608 were effective January 1, 2015. However, the predecessor codes
for the CY 2015 disposable NPWT procedure codes, specifically HCPCS
codes G0456 and G0457, became effective January 1, 2013, and were
deleted on December 31, 2014, when the NWPT replacement CPT codes
became effective.
Comment: Some commenters disagreed with CMS' proposal to assign the
procedures described by DME-related NPWT CPT codes 97605 and 97606 to
OPPS status indicator ``Q1.'' The commenters believed that these
procedures should be treated as independent clinical procedures and not
ancillary services, and requested that CMS not finalize its proposal to
assign these procedures to OPPS status indicator ``Q1.''
Response: We believe that the commenters may have misunderstood the
meaning of OPPS status indicator ``Q1.'' Assigning a procedure to OPPS
status indicator ``Q1'' indicates that payment for the service is
conditionally packaged under the OPPS. A criterion under the
conditional packaging policy is that payment for a service is packaged
when it is provided in combination with a significant procedure on the
same date of service, but the service is separately paid when it is
reported on the claim without a significant procedure. Below is an
excerpt from Addendum D1 to the CY 2016 OPPS/ASC proposed rule that
shows the definition of status indicator ``Q1.''
[[Page 70406]]
Addendum D1--Proposed OPPS Payment Status Indicators for CY 2016
------------------------------------------------------------------------
Status indicator Item/code/service OPPS payment status
------------------------------------------------------------------------
Q1.................... STV-Packaged Codes... Paid under OPPS; Addendum
B displays APC
assignments when
services are separately
payable.
(1) Packaged APC payment
if billed on the same
date of service as a
HCPCS code assigned
status indicator ``S,''
``T,'' or ``V.''
(2) In other
circumstances, payment
is made
through a separate APC
payment.
------------------------------------------------------------------------
In the case of the procedures described by CPT codes 97605 and
97606, payment for these procedures is included in the payment for the
significant procedure when these procedures are reported in combination
with HCPCS codes that are assigned to either status indicators ``S,''
``T,'' or ``V.'' Alternatively, the procedures are separately paid when
performed alone, or when they are reported in combination with HCPCS
codes that described procedures assigned to a status indicator other
than ``S,'' ``T,'' or ``V.'' We believe that ``Q1'' is the most
appropriate status indicator assignment for the DME-related NPWT CPT
codes 97605 and 97606 because the services described by these codes are
often provided in combination with other wound treatments and
procedures.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to assign DME-related
NPWT CPT codes 97605 and 97606 to OPPS status indicator ``Q1'' for CY
2016. The complete list of the OPPS payment status indicators and their
definitions for CY 2016 is displayed in Addendum D1 to this final rule
with comment period, which is available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
In addition, we are finalizing our proposal, without modification, to
reassign the DME-related NWPT CPT codes 97605 and 97606 from CY 2015
APCs 0012 and 0015, respectively, to APC 5051 for CY 2016. The final CY
2016 payment rate for the procedures described by CPT codes 97605 and
97605 can be found in Addendum B to this final rule with comment period
(which is available via the Internet on the CMS Web site).
Comment: Several commenters opposed CMS' proposal to reassign the
disposable NWPT procedures, specifically the procedures described by
the disposable NWPT CPT codes 97607 and 97608 from CY 2015 APC 0015 to
APC 5052 for CY 2016. The commenters believed that the claims data used
to set the payment rates for these two procedures are flawed and do not
reflect the actual costs incurred by hospitals for providing this
treatment. The commenters opined that, because of the confusion related
to the accurate coding of the procedures described by the predecessor
HCPCS G-codes (HCPCS codes G0456 and G0457), hospitals have
continuously miscoded this service in CY 2013 and CY 2014 by reporting
charges for the DME-related NPWT CPT codes 97605 and 97606 instead of
charges for the disposable NWPT CPT codes 97607 and 97608 when these
services were actually provided. Some commenters stated that the
resource costs associated with the disposable NPWT procedures, which
require the use of disposable NPWT supplies, is significantly higher
than the resource costs associated with the DME-related NPWT service,
which requires the use of a device that is not paid for under the OPPS,
but rather is paid based on the DMEPOS fee schedule. One commenter
indicated that, based on its internal analysis, the costs of disposable
NPWT devices may be as low as $200 and as high as over $800. Another
commenter noted that if an average acquisition cost is approximately
$194 for a particular disposable NPWT device, a provider may incur
costs ranging from approximately $312 to $358 to provide this
treatment. The commenters believed that the proposed payment rate for
APC 5052 does not reflect the cost of the disposable NWPT supplies used
in furnishing the service. Therefore, the commenters urged CMS not to
finalize the proposed reassignment of these procedures to APC 5052 and,
instead, reassign the procedures to APC 5053 (Level 3 Skin Procedures),
which the commenters believed more appropriately compare to the actual
resource costs associated with providing the service. Another commenter
requested that CMS reassign the disposable NWPT CPT codes to an
appropriate APC based on an estimated payment rate of $305.10 for the
procedure. One commenter suggested that, if the alternative of
reassigning the disposable NWPT CPT codes to APC 5053 was not
achievable, CMS consider creating a sixth skin procedures APC that
would be comprised of clinically homogenous wound care services
proposed for reassignment to APCs 5052 and 5053. The commenter believed
that creating this new APC would eliminate any potential violations of
the 2 times rule within proposed APC 5052 or APC 5053.
Response: As reflected in Table 16 of the CY 2016 OPPS/ASC proposed
rule (80 FR 39258), there are no violations of the 2 times rule within
APC 5052. For CY 2016, our analysis of the CY 2014 claims data
available for the proposed rule did not show any violations of the 2
times rule within APC 5052 (which included the proposed reassigned
disposable NPWT procedures) because the lowest cost of a procedure
described by a CPT code with significant claims data assigned to APC
5052 was approximately $158 (for CPT code 36471), while the highest
cost of a procedure described by a CPT code with significant claims
data was approximately $277 (for CPT code 96913). We note that the
geometric mean cost for the procedure described by HCPCS code G0456
(which became CPT code 97607, effective January 1, 2015) was
approximately $176 based on 6,655 single claims (out of 8,826 total
claims) and approximately $203 for the procedure described by HCPCS
G0457 (which became CPT code 97608, effective January 1, 2015) based on
409 single claims (out of 779 total claims). The CY 2016 OPPS/ASC
proposed rule claims data was based on claims submitted between January
1, 2014, through December 31, 2014, and processed on or before December
31, 2014.
For this final rule with comment period, the claims data is based
on the same CY 2014 claims data updated to include those claims that
were processed on or before June 30, 2015. Our analysis of the final
rule claims data initially showed a violation of the 2 times rule
within APC 5053. To eliminate the violation of the 2 times rule, we
reassigned some of the
[[Page 70407]]
procedures at the lower end of the cost range of APC 5053 to APC 5052.
After modifying the proposed reassignment of a few codes from APC 5053
to 5052, the disposable NPWT procedures remain appropriately assigned
to APC 5052 based on the comparability of the geometric mean costs.
Specifically, our final rule claims data show a geometric mean cost of
approximately $174 for procedures described by HCPCS code G0456 based
on 7,301 single claims (out of 9,699 total claims) and approximately
$216 for procedures described by HCPCS code G0457 based on 449 single
claims (out of 858 total claims). The lowest cost of a procedure
described by a CPT code with significant claims data assigned to APC
5052 is approximately $163 (for CPT code 36471), while the highest cost
of a procedure described by a CPT code with significant claims data is
approximately $299 (for CPT code 10120). The geometric mean costs of
approximately $174 (for HCPCS code G0456) and $216 (for HCPCS code
G0457) fall within this range without creating any violations of the 2
times rule. However, if we modify our proposal and reassign the
procedures described by HCPCS codes G0456 and G0457 to APC 5053, a
violation of the 2 times rule would exist. In addition, we do not
believe that it is appropriate or necessary to create a sixth level
within the skin procedures APC groupings. The geometric mean cost of
APC 5052 is approximately $236 and the geometric mean cost of APC 5053
is approximately $449. We believe that these levels represent a
meaningful separation between geometric mean costs without creating a
wider range of costs between adjacent levels in an APC series.
Regarding the commenters' assertions that hospitals are miscoding
claims or are not appropriately charging for disposable NPWT services
and supplies and their requests that we disregard the claims data, we
repeat our general policy: ``Beyond our standard OPPS trimming
methodology . . . that we apply to those claims that have passed
various types of claims processing edits, it is not our general policy
to judge the accuracy of hospital coding and charging for purposes of
ratesetting'' (75 FR 71838). Therefore, because we do not judge the
accuracy of hospital coding and charging, we will not disregard any
claims data for services involving disposable NPWT procedures and
supplies in calculating the payment rate for these procedures. In
addition, it is not our policy to use any information (such as
invoices, statements from companies who sell the medical devices used
in the procedure, various reports from consultants, among others) other
than hospital claims data for determining payment rates. As we do every
year, we will reevaluate the APC assignment for the procedures
involving disposable NPWT services and supplies in preparation for the
CY 2017 rulemaking cycle. We remind hospitals that we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS.
After consideration of the public comments we received, we are
finalizing our proposal, without modification. Specifically, we are
reassigning the disposable NWPT CPT codes 97607 and 97608 to APC 5052
for CY 2016. Table 36 below lists the final OPPS status indicator and
APC assignments for CPT codes 97605, 97606, 97607, and 97608 for CY
2016. The final CY 2016 payment rates for these codes can be found in
Addendum B to this final rule with comment period (which is available
via the Internet on the CMS Web site).
Table 36--Final Apc Assignment for the NPWT Services for CY 2016
----------------------------------------------------------------------------------------------------------------
Proposed CY Final CY
2016 OPPS Proposed CY 2016 OPPS Final CY
CY 2016 CPT/HCPCS code Long descriptor status 2016 OPPS status 2016 OPPS
indicator APC indicator APC
----------------------------------------------------------------------------------------------------------------
97605..................... Negative pressure wound Q1 5051 Q1 5051
therapy (e.g., vacuum
assisted drainage
collection), including
topical application(s), wound
assessment, and
instruction(s) for ongoing
care, per session; total
wound(s) surface area less
than or equal to 50 square
centimeters.
97606..................... Negative pressure wound Q1 5051 Q1 5051
therapy (e.g., vacuum
assisted drainage
collection), including
topical application(s), wound
assessment, and
instruction(s) for ongoing
care, per session; total
wound(s) surface area greater
than 50 square centimeters.
97607..................... Negative pressure wound T 5052 T 5052
therapy, (e.g., vacuum
assisted drainage
collection), utilizing
disposable, non-durable
medical equipment including
provision of exudate
management collection system,
topical application(s), wound
assessment, and instructions
for ongoing care, per
session; total wound(s)
surface area less than or
equal to 50 square
centimeters.
97608..................... Negative pressure wound T 5052 T 5052
therapy, (e.g., vacuum
assisted drainage
collection), utilizing
disposable, non-durable
medical equipment including
provision of exudate
management collection system,
topical application(s), wound
assessment, and instructions
for ongoing care, per
session; total wound(s)
surface area greater than 50
square centimeters.
----------------------------------------------------------------------------------------------------------------
b. Platelet Rich Plasma (PRP)
As listed in Addendum B to the CY 2016 OPPS/ASC proposed rule, we
proposed to assign HCPCS code G0460 (Autologous platelet rich plasma
for chronic wounds/ulcers, including phlebotomy, centrifugation, and
all other preparatory procedures, administration and dressings, per
treatment) to APC 5053 (Level 3 Skin Procedure), with a proposed
payment rate of approximately $305.
Comment: Some commenters disagreed with CMS' proposed assignment of
HCPCS code G0460 to APC 5053 and recommended that CMS consider
assigning the code to either APC 1511 (New Technology--Level 11 ($900-
$1000)) or 1548 (New Technology--Level 11 ($900-$1000)), with a
proposed payment rate of approximately $950. One commenter stated that
the proposed payment rate for APC 5053 is inadequate and does not
[[Page 70408]]
take into account the full components of providing the service
described by HCPCS code G0460 and the Coverage with Evidence
Development (CED) complexity associated with HCPCS code G0460. In
addition, the commenter believed that a violation of the 2 times rule
exists within APC 5053 when HCPCS code G0460 is assigned to this APC
and, therefore, urged CMS to consider assigning HCPCS code G0460 to New
Technology APC 1511 rather than APC 5053. Further, the commenter opined
that the repeated payment adjustment for this service is causing
significant confusion in the market place and hampering the success of
Medicare's CED protocol. The commenter stated that assigning HCPCS code
G0460 to either APC 1511 or APC 1548 would provide participating
hospitals and sponsored sites predictability in payment levels for the
service described by HCPCS code G0460.
Response: Table 16 of the CY 2016 OPPS/ASC proposed rule (80 FR
39255) listed the three APCs that violated the 2 times rule for
ratesetting and which we proposed to except from the 2 times rule for
CY 2016. APC 5053 does not appear on that list. For CY 2016, our
analysis of the CY 2014 claims data available for the proposed rule
showed that no violations of the 2 times rule existed within APC 5053
because the geometric mean cost for the service described by HCPCS code
G0460 did not fall outside of the acceptable significant costs range.
For purposes of identifying significant HCPCS codes for examination
under the 2 times rule, we consider those codes that have more than
1,000 single major claims, or codes that have both greater than 99
single major claims and contribute at least 2 percent of the single
major claims used to establish the APC geometric mean cost to be
significant. This longstanding policy of when a HCPCS code is
considered significant for purposes of the 2 times rule was based on
the premise that we believe a subset of 1,000 claims is negligible
within the set of approximately 120 million single procedure or single
session claims we use for establishing geometric mean costs. Similarly,
procedures described by a HCPCS code for which there are fewer than 99
single claims or which comprises less than 2 percent of the single
major claims within an APC will have a negligible impact on the APC
geometric mean cost.
Based on our analysis of the claims data used for the proposed
rule, there was no violation of the 2 times rule within APC 5053 when
HCPCS code G0460 was assigned to this APC. Specifically, our data
revealed that the lowest cost procedure with significant claims data
($305 for CPT code 11042) and the highest cost procedure with
significant claims data ($595 for HCPCS code C5271) met the 2 times
rule for APC 5053 whose geometric mean cost was approximately $322.
Section 1833(t)(9) of the Act requires the Secretary to review
certain components of the OPPS not less often than annually, and to
revise the groups, relative payment weights, and other adjustments that
take into account changes in medical practices, changes in
technologies, and the addition of new services, new cost data, and
other relevant information and factors. Consistent with the
requirements set forth in section 1833(t)(9), we annually review all
the items and services within an APC group to determine, with respect
to comparability of the use of resources, if the geometric mean cost of
the highest cost item or service within an APC group is more than 2
times greater than the geometric mean cost of the lowest cost item or
service within that same group. In making this determination, we review
our claims data and determine whether we need to make changes to the
current APC assignments for the following year.
We acknowledge the commenters' concerns. However, based on our
analysis of the claims data available for this final rule with comment
period, we believe that the services described by HCPCS code G0460 more
appropriately align with the other services assigned to APC 5054 (Level
4 Skin Procedures) than services assigned either to APC 1511 or APC
1548. We note that the proposed rule claims data was based on claims
submitted between January 1, 2014, through December 31, 2014, and
processed on or before December 31, 2014. However, for this final rule
with comment period, the cost data also includes claims that were
processed on or before June 30, 2015. Specifically, our claims data
show a geometric mean cost of approximately $1,579 based on 35 single
claims (out of 52 total claims) for HCPCS code G0460. We believe that
the geometric mean cost of the service described by HCPCS code G0460
(approximately $1,579) is comparable to the geometric mean cost of APC
5054.
Therefore, after consideration of the public comments we received,
we are finalizing our proposal to assign the service described by HCPCS
code G0460 to one of the reconfigured skin procedure APCs, with one
modification. We are assigning the service described by HCPCS code
G0460 to APC 5054 (rather than proposed APC 5053) for CY 2016. The
final CY 2016 payment rate for HCPCS code G0460 can be found in
Addendum B to this final rule with comment period (which is available
via the Internet on the CMS Web site). We remind the commenters that,
as we do every year, we will again review the APC assignment for all
items, procedures, and services, for the CY 2017 rulemaking cycle.
In summary, after consideration of the public comments we received,
we are finalizing our proposed APC reconfiguration for the skin
procedures and related services APCs, with the modifications described
earlier. Table 37 below lists the final CY 2016 APCs that result from
the consolidation and restructuring of the current skin procedures and
related services APCs into a single APC grouping. The final payment
rates for the specific CPT or Level II HCPCS skin procedure codes can
be found in Addendum B to this final rule with comment period, while
the final payment rates for the specific APCs to which the skin
procedures and related services are assigned can be found in Addendum A
to this final rule with comment period. Both OPPS Addenda A and B are
available via the Internet on the CMS Web site.
Table 37--CY 2016 APCs Assignment for Skin Procedures
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5051.................................. Level 1 Skin Procedures.
5052.................................. Level 2 Skin Procedures.
5053.................................. Level 3 Skin Procedures.
5054.................................. Level 4 Skin Procedures.
5055.................................. Level 5 Skin Procedures.
------------------------------------------------------------------------
13. Urology and Related Services
In the CY 2016 OPPS/ASC proposed rule (80 FR 39263), for the CY
2016 OPPS update, based on our evaluation of the latest hospital
outpatient claims data used for the proposed rule, we proposed to
revise all of the APCs for urology and related services APCs to more
appropriately reflect the resource costs and clinical characteristics
of the procedures assigned to each APC. Currently, several of the
urology and related services APCs are differentiated based on resource
costs of the procedures and services rather than the clinical
similarity when compared to the other procedures and services assigned
to the APC. We believe that establishing more inclusive categories of
the urology and related services is more appropriate for future
ratesetting under the OPPS because the proposed restructured APCs have
a more clinically appropriate granularity, while improving the balance
of resource similarities for all of the procedures
[[Page 70409]]
assigned to these APCs. In addition, we believe that this proposed
revision and consolidation of APCs would more appropriately categorize
all of the urology and related services within an APC grouping such
that the services and procedures assigned to each proposed newly
configured APC are most appropriately comparable with respect to
clinical characteristics and resource use. Therefore, for CY 2016, we
proposed to restructure and consolidate the urology and related
services APCs into a single APC grouping. Table 33 of the proposed rule
listed the CY 2015 urology and related services APCs and status
indicator assignments, and Table 34 of the proposed rule listed the CY
2016 APCs that would result from the proposed consolidation and
restructuring of the current urology and related services APCs into a
single APC grouping. We invited public comments on this proposal.
Comment: Some commenters supported the proposed consolidation and
reconfiguration of the urology and related services APCs, but expressed
concern that the significant differences between the APC payment rates
for the procedures and related services assigned to the proposed APCs
are too broad, which could result in payment misalignments for certain
procedures and services that utilize expensive supplies and equipment.
Many other commenters disagreed with the proposed consolidation because
they believed that the proposed APC reconfigurations and procedure
reassignments are neither clinically or resource homogeneous. Several
commenters stated that, although the existing urology APC 0163 (Level
IV Cystourethroscopy and Other Genitourinary Procedures) is also
diverse, similar to the proposed revised urology APCs, the procedures
are based on expensive technology and single disease treatments. In
addition, several commenters expressed concern with the proposed
payment for the shockwave lithotripsy procedure described by CPT code
50590 (Lithotripsy, extracorporeal shock wave). The commenters stated
that shockwave lithotripsy is grouped in APC 5374 (Level 4 Urology and
Related Services) with other procedures that are non-lithotripsy
related and do not have the same capital expenditures. The commenters
believed that assigning the shockwave lithotripsy procedure to the
proposed reconfigured urology and related services APC 5374 would
significantly underpay providers for the cost of the procedure and
noted that the resources used to perform shockwave lithotripsy
procedures are significantly greater than the resources used to perform
many of the other procedures assigned to APC 5374. The commenters
explained that the shockwave lithotripsy procedure involves the use of
highly specialized capital equipment that cost approximately $50,000
with an additional $80,000 to $100,000 per year contract maintenance,
as well as the assistance of a certified technician. The commenters
suggested that CMS consider modifying its proposal for restructuring
and reconfiguring the urology and related services APCs by assigning
the shockwave lithotripsy procedure to its own APC, separating APC 5374
into two APCs and grouping the APCs based on disease process (for
example, BPH and stone extraction, among others). The commenters
believed that these changes would simplify the APC groupings and create
an APC structure that is more rational. Another commenter recommended
separating APC 5374 into two APCs: One APC that has lower cost/resource
use, with a payment rate of approximately $2,150; and the other APC
with higher cost/resource use, with a payment rate of approximately
$3,091. The commenter believed that such a change to the structure and
configuration of APC 5374 would improve the distribution of the urology
and related services procedures assigned to this APC and reduce
overpayments and underpayments for the services and procedures that are
currently proposed to be assigned to the proposed APCs.
Response: As part of our overall effort to improve the homogeneity
of resource costs and clinical characteristic within the APC groupings,
we proposed to revise the existing urology and related services APCs
for CY 2016. We believe that the proposed restructuring and
reconfiguration of the urology and related services APCs more
appropriately reflect the homogeneity of resource costs and clinical
characteristics of the procedures assigned within each APC.
Although we do not agree with the commenters' suggestion that
creating urology and related services APCs based on the specific
disease treated by the procedure is necessary or appropriate, we
understand some of the commenters' concerns. We continue to believe
that establishing more inclusive categories of urology and related
services is more appropriate for future ratesetting under the OPPS
because the restructured APCs are comprised of more clinically
appropriate groupings, while improving the balance of resource
similarities for all of the procedures assigned to these APCs. However,
in response to the concerns raised by the commenters, we are modifying
our proposal by reassigning some of the procedures to APC 5374 to APC
5373 (Level 3 Urology and Related Services) and APC 5375 (Level 5
Urology and Related Services) rather than reassigning them to APC 5374.
Specifically, the procedures that are being reassigned to APC 5375 are
assigned status indicator ``J1'' because APC 5375 is a C-APC, and one
of the procedures reassigned to APC 5375 is the shockwave lithotripsy
procedure (described by CPT code 50590).
Based on the commenters' feedback and our analysis of the latest
hospital outpatient claims data used for this final rule with comment
period, we believe that the procedure described by CPT code 50590 is
more appropriately assigned to APC 5375 than APC 5374. The geometric
mean cost for the procedure described by CPT code 50590 is
approximately $3,243 based on 44,088 single claims (out of 44,403 total
claims), which is comparable to the geometric mean cost of
approximately $3,551 for APC 5375. Because we have modified our
proposal and are reassigning certain procedures from APC 5374 to APCs
5373 and 5375, we do not believe that it is necessary or appropriate to
divide APC 5374 into two separate APCs. We believe that the
modifications to our proposal to restructure and reconfigure APCs 5373,
5374, and 5375 appropriately group the urology and related services
based on the homogeneity of the clinical characteristics and resource
use.
Comment: One commenter requested that CMS reassign the following
two laser vaporization procedures used to treat benign prostatic
hyperplasia from APC 5374 to APC 5375:
CPT code 52647 (Laser coagulation of prostate, including
control of postoperative bleeding, complete (vasectomy, meatotomy,
cystourethroscopy, urethral calibration and/or dilation, and internal
urethrotomy are included if performed); and
CPT code 52648 (Laser vaporization of prostate, including
control of postoperative bleeding, complete (vasectomy, meatotomy,
cystourethroscopy, urethral calibration and/or dilation, internal
urethrotomy and transurethral resection of prostate are included if
performed)).
The commenter believed that these two procedures are similar to the
procedure described by CPT code 52649 (Laser enucleation of the
prostate with morcellation, including control of postoperative
bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral
calibration
[[Page 70410]]
and/or dilation, internal urethrotomy and transurethral resection of
prostate are included if performed)), which was proposed to be
reassigned to APC 5375.
Response: Based on input from our clinical advisors and analysis of
the latest hospital outpatient claims data used for this final rule
with comment period, we agree with the commenter that the procedures
described by CPT codes 52647 and 52648 would be more appropriately
reassigned to APC 5375. Our claims data show that the geometric mean
cost of the procedure described by CPT code 52647 is approximately
$3,296 based on 392 single claims (out of 393 total claims), and the
geometric mean cost of the procedure described by CPT code 52648 is
approximately $3,696 based on 20,813 single claims (out of 21,015 total
claims). Based on our latest review, we believe that the geometric mean
costs for procedures described by CPT codes 52647 and 52648 are similar
to the geometric mean cost of other procedures assigned to APC 5375,
whose geometric mean cost is approximately $3,551.
Therefore, after consideration of the public comments received, we
are finalizing our proposal, with modification, to reassign CPT codes
52647 and 52648 to APC 5375. The final CY 2016 payment rates for the
procedures described by CPT codes 52647, 52648, and 52649 can be found
in Addendum B to this final rule with comment period (which is
available via the Internet on the CMS Web site).
Comment: One commenter noted that, although the proposed
reconfiguration of the urology and related services APCs would increase
the payment rates for some services, the proposed reconfiguration would
also decrease the payment rates for other procedures. In particular,
the commenter expressed concern that the proposed reassignment would
result in underpayment for the following CPT codes:
51741 (Complex uroflowmetry (e.g., calibrated electronic
equipment));
55700 (Biopsy, prostate; needle or punch, single or
multiple, any approach); and
52000 (Cystourethroscopy (separate procedure)).
The commenter stated that the proposed restructuring would decrease
the payment rate for the procedure described by CPT code 51741 by 18
percent within a single year. The commenter added that, similarly,
payment rates for the procedures described by CPT codes 55700 and 52000
would experience a decrease of 8 percent and 5 percent, respectively.
The commenter expressed concern with the instability in payment rates,
which the commenter suggested would hinder a hospital's ability to
negotiate with suppliers and manufacturers on the purchase price of
certain devices and services. Specifically, the commenter stated that,
in order for hospitals to be able to forecast for the future and invest
in technologies that are essential for providing high quality care,
they need to be able to rely on stable and predictable payment rates.
Response: We appreciate the commenter's input. Based on our review
of the latest hospital outpatient claims data used for this final rule
with comment period, we believe that reassigning CPT code 51741 to APC
5721 (Level 1 Diagnostic Tests and Related Services) improves the
homogeneity of resource use and clinical characteristics of the
procedures in this APC. In addition, we believe that the proposed APC
assignments for the procedures described by CPT codes 55700 and 52000
are optimal. Our claims data reveal that CPT code 55700 has a geometric
mean cost of approximately $1,475, which is comparable to the geometric
mean cost of approximately $1,576 for APC 5373 (Level 3 Urology and
Related Services). We also believe that the procedure described by CPT
code 55700 is appropriately grouped in APC 5373 with clinically similar
procedures. Further, we believe that CPT code 52000, whose geometric
mean cost is approximately $574, is more appropriately assigned to APC
5372 (Level 2 Urology and Related Services), whose geometric mean cost
is approximately $549. We do not believe that we should assign CPT code
52000 to the next higher level in the urology and related services APC,
which is APC 5373 (Level 3 Urology and Related Services) and has a
geometric mean cost of approximately $1,576, as this would result in a
significant overpayment for the procedure. Moreover, reassigning CPT
code 52000 from APC 5372 to APC 5373 would create a violation of the 2
times rule within APC 5373.
Overall, we believe that the proposed restructuring and
reconfiguration of the urology and related services APCs appropriately
reflect the similar resource costs and clinical characteristics of the
procedures within each APC. We also believe that establishing broader
categories of urology and related services APCs (as compared to CY
2015) is more appropriate for future ratesetting under the OPPS because
the restructured APCs support greater similarities in clinical
characteristic and resource use of procedures assigned to APCs, while
improving the homogeneity of the APC structure.
In addition, section 1833(t)(9) of the Act requires the Secretary
to review certain components of the OPPS not less often than annually,
and to revise the groups, relative payment weights, and other
adjustments that take into account changes in medical practices,
changes in technologies, and the addition of new services, new cost
data, and other relevant information and factors. Consistent with the
requirements set forth in section 1833(t)(9) of the Act, we annually
review all the items and services within an APC group to determine,
with respect to comparability of the use of resources, if the geometric
mean cost of the highest cost item or service within an APC group is
more than 2 times greater than the geometric mean cost of the lowest
cost item or service within that same group. In making this
determination, we review our claims data and determine whether we need
to make changes to the current APC assignments for the following year.
Consequently, as we do every year for all services and procedures under
the OPPS, we will again review the claims data for the procedures
described by CPT codes 51741, 52000, and 55700 for the CY 2017
rulemaking cycle.
Therefore, after consideration of the public comments received, we
are finalizing our proposal for CPT codes 55700 and 52000 to APC 5373
and 5372, respectively. However, we are finalizing our proposal for CPT
code 51741 with modification by reassigning this procedure from APC
5734 to APC 5721 based on clinical and resource homogeneity within APC
5721. The final CY 2016 payment rate for CPT codes 51741, 55700, and
52000 can be found in Addendum B to this final rule with comment period
(which is available via the Internet on the CMS Web site).
Comment: One commenter expressed concern with the volume of
procedures proposed to be reassigned to proposed APC 5374. In addition,
the commenter was concerned that the proposed payment rates would
result in underpayments for the following three CPT codes:
50590 (Lithotripsy, extracorporeal shock wave);
52601 (Transurethral electrosurgical resection of
prostate, including control of postoperative bleeding, complete
(vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or
dilation, and internal urethrotomy are included); and
52648 (Laser vaporization of prostate, including control
of
[[Page 70411]]
postoperative bleeding, complete (vasectomy, meatotomy,
cystourethroscopy, urethral calibration and/or dilation, internal
urethrotomy and transurethral resection of prostate are included if
performed).
Response: As we discussed above, we are modifying our proposed APC
assignments for the procedures described by CPT codes 50590 and 52648
by reassigning the procedures from APC 5374 to APC 5375 for CY 2016,
based on our evaluation of the latest hospital outpatient claims data
used for this final rule with comment period. Similarly, we examined
our latest claims data for CPT code 52601 and found that its geometric
mean cost is comparable to that of APC 5375. Specifically, our claims
data revealed that the procedure described by CPT code 52601 has a
geometric mean cost of approximately $3,529 based on 27,568 single
claims (out of 27,864 total claims), which is comparable to the
geometric mean cost of approximately $3,551 for APC 5375.
Therefore, after consideration of the public comments received, we
are finalizing our proposal, with modification, by reassigning the
procedures described by CPT codes 50590, 52601, and 52648 to APC 5375
for CY 2016. The final CY 2016 payment rate for CPT codes 50590, 52601,
and 52648 can be found in Addendum B to this final rule with comment
period (which is available via the Internet on the CMS Web site).
We are finalizing our proposal, with modification, to reconfigure
the urology and related services into seven APCs. Table 38 below lists
the final CY 2016 APCs that result from the consolidation and
restructuring of the current urology procedures APCs into a single APC
grouping. The final payment rates for the specific CPT or Level II
HCPCS urology and related services codes are included in Addendum B to
this final rule with comment period. The final payment rates for the
specific APCs to which we are reassigning the urology and related
services codes are included in Addendum A to this final rule with
comment period. Both OPPS Addenda A and B are available via the
Internet on the CMS Web site.
Table 38--CY 2016 APCs Assigned to Urology and Related Services
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5371................................ Level 1 Urology and Related
Services.
5372................................ Level 2 Urology and Related
Services.
5373................................ Level 3 Urology and Related
Services.
5374................................ Level 4 Urology and Related
Services.
5375................................ Level 5 Urology and Related
Services.
5376................................ Level 6 Urology and Related
Services.
5377................................ Level 7 Urology and Related
Services.
------------------------------------------------------------------------
14. Vascular Procedures (Excluding Endovascular Procedures)
In the CY 2016 OPPS/ASC proposed rule (80 FR 39263 through 39264),
for the CY 2016 OPPS update, based on our evaluation of the latest
hospital outpatient claims data available for the proposed rule, we
proposed to restructure all of the vascular procedure-related APCs
(excluding endovascular procedures) to more appropriately reflect the
costs and clinical characteristics of the procedures within each APC.
We stated in the proposed rule that we believe that this proposed
restructuring of APCs for vascular procedures more accurately
categorizes all of the vascular procedures within an APC group, such
that the services within each proposed newly configured APC are more
comparable clinically and with respect to resource use. Table 35 of the
CY 2016 OPPS/ASC proposed rule (80 FR 39263) lists the vascular
procedures APCs for CY 2015, and Table 36 of the CY 2016 OPPS proposed
rule (80 FR 39264) lists the proposed vascular procedures APCs for CY
2016. We invited public comments on this proposal.
Comment: One commenter noted that CPT code 93503 (Insertion and
placement of flow directed catheter (e.g., Swan-Ganz) for monitoring
purposes) and CPT code 93505 (Endomyocardial biopsy) are proposed to be
assigned to APC 5181 (Level 1 Vascular Procedures), and stated that the
codes are not clinically homogenous. The commenter believed that the
APC assignment for these two codes could destabilize the APC and
recommended a delay in implementation of these restructured APCs. In
addition, the commenter stated that the procedures described by CPT
codes 36818 (Arteriovenous anastomosis, open; by upper arm cephalic
vein transposition), 36821 (direct, any site (e.g., Cimino type)
(separate procedure)) and 36831 (Thrombectomy, open, arteriovenous
fistula without revision, autogenous or nonautogenous dialysis graft
(separate procedure)) are proposed to be assigned to APC 5182 (Level 2
Vascular Procedures) but all of the procedures described by these codes
have a significant volume of claims (that is, greater than 1,000) and
would be substantially underpaid under their APC assignment relative to
their geometric mean costs. For these codes, the commenter suggested a
delay in implementation or reassignment to APC 5183 (Level 3 Vascular
Procedures). Another commenter recommended that four cardiac procedures
that were proposed to be assigned to APC 5181, specifically CPT 33215
(Repositioning of previously implanted transvenous pacemaker or
implantable defibrillator (right atrial or right ventricular)
electrode), CPT 33226 (Repositioning of previously implanted cardiac
venous system (left ventricular) electrode (including removal,
insertion and/or replacement with existing generator)), CPT 93503, and
CPT 93505, instead be assigned to APC 5188 (Diagnostic Cardiac
Catheterization). The commenter also recommended the reassignment of
the following CPT codes to APC 5183: CPT code 36222 (Selective catheter
placement, common carotid or innominate artery, unilateral, any
approach, with angiography of the ipsilateral extracranial carotid
circulation and all associated radiological supervision and
interpretation, includes angiography of the cervicocerebral arch, when
performed); CPT code 36223 (Selective catheter placement, common
carotid or innominate artery, unilateral, any approach, with
angiography of the ipsilateral intracranial carotid circulation and all
associated radiological supervision and interpretation, includes
angiography of the extracranial carotid and cervicocerebral arch, when
performed); and CPT code 36225 (Selective catheter placement,
subclavian or innominate artery, unilateral, with angiography of the
ipsilateral vertebral circulation and all associated radiological
supervision and interpretation, includes angiography of the
cervicocerebral arch, when performed). The commenter believed that
these procedures, which were proposed to be assigned to APC 5526 (Level
6 X-Ray and Related Services), would better align with the procedures
assigned to APC 5183 because they are similar procedures with similar
clinical characteristics.
Another commenter suggested that the procedures described by CPT
37799
[[Page 70412]]
(Unlisted procedure, vascular surgery), and CPT 93505 be reassigned
from APC 5181 to 5182; that the procedure described by CPT 37501
(Unlisted vascular endoscopy procedure) be reassigned from APC 5181 to
APC 5183; and that the procedure described by CPT 36566 (Insertion of
tunneled centrally inserted central venous access device, requiring 2
catheters via 2 separate venous access sites; with subcutaneous
port(s)) and CPT 36861 (External cannula declotting (separate
procedure; with balloon catheter) be reassigned from APC 5182 to APC
5183. The commenter believed that these suggested revisions would be
more appropriate clinically and with respect to resource use.
Response: We agree with some of the comments on the APC assignment
change requests and disagree with others. Table 39 below lists all
codes that were commented on and our decision on the final APC
assignment.
Table 39--Vascular Procedures With Specific Commenter Recommendations, Final CMS Decisions, Final APC Assignment and Final Status Indicators
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Final CY
2016 OPPS Proposed CY Commenter 2016 OPPS Final CY
CPT/HCPCS code Short descriptor status 2016 OPPS requested APC CMS decision status 2016 OPPS
indicator APC indicator APC
--------------------------------------------------------------------------------------------------------------------------------------------------------
33215..................... Reposition pacing-defib T 5181 5188 Disagree................... T 5181
lead.
36222..................... Place cath carotid/inom Q2 5526 5183 Disagree................... Q2 5526
art.
33226..................... Reposition l ventric lead T 5181 5188 Disagree................... T 5182
36223..................... Place cath carotid/inom T 5526 5183 Agree...................... Q2 5183
art.
36225..................... Place cath subclavian art Q2 5526 5183 Disagree................... Q2 5526
36566..................... Insert tunneled cv cath.. T 5182 5183 Agree...................... T 5183
36818..................... Av fuse uppr arm cephalic T 5182 5183 Disagree................... T 5182
36821..................... Av fusion direct any site T 5182 5183 Disagree................... T 5182
36831..................... Open thrombect av fistula T 5182 5183 Disagree................... T 5182
36861..................... Cannula declotting....... T 5182 5183 Agree...................... T 5183
37501..................... Vascular endoscopy T 5181 5183 Disagree................... T 5181
procedure.
37799..................... Vascular surgery T 5181 5182 Disagree................... T 5181
procedure.
93503..................... Insert/place heart T 5181 5188 Disagree................... T 5181
catheter.
93505..................... Biopsy of heart lining... T 5181 5182 or 5188 Agree with 5182............ T 5182
--------------------------------------------------------------------------------------------------------------------------------------------------------
All of the APCs proposed for the codes listed in Table 39 above and
all of the APCs suggested by commenters contain procedures involving
the vascular system. For the codes with which we agree with the
commenters, there is greater resource similarity between the procedure
in question and the procedures in the APC requested by the commenter
than the procedures in the proposed APC. In most cases where we
disagree with the commenter in Table 39 above, the opposite is true,
and resource similarity is greater for the proposed APC. By greater
resource similarity, we mean that the geometric mean cost of the
procedure is closer to the geometric mean cost of the APC to which we
are assigning the code than it is to the APC to which the commenter
requested assignment of the code.
For CPT code 33215, we do not agree that the code should be
reassigned from APC 5181to 5188. The final geometric mean cost of the
procedure described by CPT code 33215 is approximately $1,575 and the
final geometric mean cost of APC 5181 is approximately $903. The final
geometric mean cost of APC 5188 is approximately $2,668. We believe
that, given the significant resource dissimilarity between CPT code
33215 and APC 5188, APC 5188 is not an appropriate APC assignment.
For the procedure described by CPT code 36222, we do not agree that
the procedure code should be reassigned from proposed APC 5526 to APC
5183. The final geometric mean cost of the procedure described by CPT
code 36222 is approximately $2,677, and the final geometric mean cost
of APC 5526 is approximately $2,845. The final geometric mean cost of
APC 5183 is approximately $3,971. We believe that, given the
significant resource dissimilarity between CPT code 36222 and APC 5183,
APC 5183 is not an appropriate APC assignment.
For the procedure described by CPT code 33226, we do not agree that
the procedure should be reassigned from proposed APC 5181 to APC 5188.
The final geometric mean cost of the procedure described by CPT code
33226 is approximately $2,190 and the final geometric mean cost of APC
5181 is approximately $903. The final geometric mean cost of APC 5188
is approximately $2,667. Upon further evaluation, based on resource use
and clinical similarity to other assigned procedures, we believe that
the appropriate APC assignment for CPT code 33226 is APC 5182, which
has a final geometric mean cost of approximately $2,352.
For the procedure described by CPT code 36225, we do not agree that
it should be reassigned from proposed APC 5526 to APC 5183. The final
geometric mean cost of the procedure described by CPT code 36225 is
approximately $2,717 and the final geometric mean cost of APC 5526 is
approximately $2,845. The final geometric mean cost of APC 5183 is
approximately $3,971. We believe that, given the significant resource
dissimilarity between the procedure described by CPT code 36225 and the
procedures assigned to APC 5183, APC 5183 is not an appropriate APC
assignment.
For the procedure described by CPT code 36818, we do not agree that
it should be reassigned from proposed APC 5182 to APC 5183. The final
geometric mean cost of the procedure described by CPT code 36818 is
approximately $2,960 and the final geometric mean cost of APC 5182 is
approximately $2,352. The final geometric mean cost of APC 5183 is
approximately $3,971. We believe that, given the significant resource
dissimilarity between the procedure described by CPT code 36818 and the
procedures assigned to APC 5183, APC 5183 is not an appropriate APC
assignment.
For the procedure described by CPT code 36821, we do not agree that
it should be reassigned from proposed APC 5182 to APC 5183. The final
[[Page 70413]]
geometric mean cost of the procedure described by CPT code 36821 is
approximately $2,880 and the final geometric mean cost of APC 5182 is
approximately $2,352. The final geometric mean cost of APC 5183 is
approximately $3,971. We believe that, given the significant resource
dissimilarity between the procedure described by CPT code 36821 and the
procedures assigned to APC 5183, APC 5183 is not an appropriate APC
assignment.
For the procedure described by CPT code 36831, we do not agree that
it should be reassigned from proposed APC 5182 to APC 5183. The final
geometric mean cost of the procedure described by CPT code 36831 is
approximately $2,961 and the final geometric mean cost of APC 5182 is
approximately $2,352. The final geometric mean cost of APC 5183 is
approximately $3,971. We believe that, given the significant resource
dissimilarity between the procedure described by CPT code 36831and the
procedures assigned to APC 5183, APC 5183 is not an appropriate APC
assignment.
Regarding CPT codes 37799 and 37501, these are unlisted procedure
codes, and according to our established policy, these codes are always
assigned to the lowest level APC within a group.
For the procedure described by CPT code 93503, we do not agree that
it should be reassigned from proposed APC 5181 to APC 5188. The final
geometric mean cost of the procedure described by CPT code 93503 is
approximately $1,460 and the final geometric mean cost of APC 5181 is
approximately $903. The final geometric mean cost of APC 5188 is
approximately $2,667. We believe that, given the significant resource
dissimilarity between the procedure described by CPT code 93503 and the
procedures assigned to APC 5188, APC 5188 is not an appropriate APC
assignment.
After considering the public comments we received on the
reorganization and restructuring of the vascular procedures APC family,
we are finalizing the proposed APC structure depicted in Table 40 below
and the proposed code assignments with the exception of those codes
noted in Table 40 for which we are finalizing APC assignments that
differ from the proposed rule in response to public comments. The final
payment rates for the vascular procedure codes are included in Addendum
B to this final rule with comment period (which is available via the
Internet on the CMS Web site).
Table 40--CY 2016 Vascular Procedures APCs
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC group title
------------------------------------------------------------------------
5181................................ Level 1 Vascular Procedures.
5182................................ Level 2 Vascular Procedures.
5183................................ Level 3 Vascular Procedures.
------------------------------------------------------------------------
15. Other Procedures and Services
a. Ear, Nose, Throat (ENT) Procedures
For CY 2016, as a part of our review, restructuring, and
reorganization of the OPPS APCs, we proposed to consolidate the APCs
for ear, nose, and throat (ENT) procedures from seven levels in CY 2015
to six levels for CY 2016.
Comment: One commenter believed that the proposed consolidation of
the ENT procedure APCs into six levels results in APC groups that
contain a volume of procedures that is too large. The commenter
requested that CMS add an APC grouping between proposed Level 4 and
Level 5. The commenter did not provide any discussion regarding any
problem caused by our proposed consolidation of the ENT APCs.
Response: We disagree with the commenter that the ENT APC groups
are too large. The cost ranges for the procedures within this APC
series are within the 2 times rule limit. Moreover, many of the
services assigned to these APC groups are low-volume services.
Therefore, we do not believe that it is necessary to create a seventh
level in the ENT procedures APC group for a small number of low-volume
procedures. We will continue to monitor this APC grouping, and we will
consider any adjustments as the need arises in the future.
b. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS)
In the CY 2016 OPPS/ASC proposed rule, we proposed to assign new CY
2016 CPT code 0398T (Magnetic resonance image guided high intensity
focused ultrasound (MRgFUS), stereotactic ablation lesion, intracranial
for movement disorder including stereotactic navigation and frame
placement when performed) to APC 5625 (Level 5 Radiation Therapy), with
a proposed payment of approximately $1,699. We also assigned CPT code
0398T to comment indicator ``NP'' in Addendum B to indicate that the
code is new for CY 2016 with a proposed APC assignment and that public
comments would be accepted on the proposed APC assignment for the new
code. The procedure described by CPT code 0398T involves treatment of
an essential tremor using an MRgFUS procedure. We note that CPT code
0398T will be effective January 1, 2016. However, this code was listed
as 03XXA (the 5-digit CMS placeholder code) in Addendum B, O, and Q2 of
the CY 2016 OPPS/ASC proposed rule. We invited public comments on our
proposed APC assignment for CY 2016.
In addition to proposing to assign the procedure described by CPT
code 0398T to APC 5625, we also proposed to reassign the existing
MRgFUS procedures to APC 5625, specifically the procedures described by
following CPT/HCPCS codes:
CPT code 0071T (Focused ultrasound ablation of uterine
leiomyomata, including mr guidance; total leiomyomata volume less than
200 cc of tissue);
CPT code 0072T (Focused ultrasound ablation of uterine
leiomyomata, including mr guidance; total leiomyomata volume greater or
equal to 200 cc of tissue); and
HCPCS code C9734 (Focused ultrasound ablation/therapeutic
intervention, other than uterine leiomyomata, with magnetic resonance
(mr) guidance).
Comment: Commenters disagreed with the proposed assignment of the
procedure described by CPT code 0398T to APC 5625, and requested that
CMS not finalize the proposed APC assignment. The commenters believed
that the resources associated with the procedure described by CPT code
0398T are significantly different from the resources associated with
MRgFUS procedures that are also being proposed for reassignment to APC
5625. Specifically, the commenters stated that the resource costs
associated with MRgFUS procedures for the treatment of essential tremor
are significantly greater than the resource costs for the treatment of
uterine fibroids (described by CPT codes 0071T and 0072T) or pain
palliation for metastatic bone cancer (described by HCPCS code C9734)
because procedures involving MRgFUS treatment for essential tremor
requires additional unique resources that are not required with either
uterine fibroids or pain palliation MRgFUS treatments. The commenters
further explained that, while MRgFUS has been approved by the FDA for
the treatment of uterine fibroids and pain palliation for metastatic
bone cancer, it has not been approved for the treatment of essential
tremor. The commenters also indicated that MRgFUS treatment for
essential tremor is still in the clinical trial stage. Therefore, the
commenters believed that it would be inappropriate to assign CPT code
0398T to APC 5626, which is the same APC that the existing MRgFUS
[[Page 70414]]
procedures are being proposed to be reassigned.
Furthermore, the commenters believed that CMS' proposal to assign
the procedure described by CPT code 0398T to an APC without any
available claims data could undervalue the payment for the procedure
and ultimately prevent hospitals from furnishing the procedure to
Medicare beneficiaries once it becomes FDA-approved. Another commenter
noted that approval of the equipment associated with the MRgFUS
procedure for the treatment of an essential tremor would not be
approved by the FDA until the end of 2016. Therefore, the commenter
stated that it would be unlikely that any Medicare beneficiaries would
be eligible for the MRgFUS treatment for essential tremor before CY
2017. To ensure an accurate APC assignment, the commenters requested
that CMS not finalize an APC assignment for the procedure described by
CPT code 0398T, and instead wait until additional data become available
for ratesetting purposes Another commenter stated that assigning the
procedure described by CPT code 0398T to APC 5625 is inappropriate
because the APC's title, ``Level 5 Radiation Therapy'' indicates that
procedures assigned to this APC describe procedures involving radiation
therapies, and that MRgFUS procedures, including the procedure
described by CPT code 0398T, do not involve the delivery of radiation
or radiation therapy and, therefore, cannot be considered ``radiation
therapies.''
Response: We acknowledge that the FDA-approved indication for use
and approval of the necessary equipment used in association with the
procedure described by CPT code 0398T may not be granted during CY
2016, and that there are no claims data available for ratesetting
purposes. Therefore, we agree with the commenters that it would be more
appropriate to not finalize the APC assignment for the procedure
described by CPT code 0398T at this time. As a result, this procedure
code will be assigned to OPPS status indicator ``E,'' effective January
1, 2016, to indicate that the service is not paid by Medicare under the
OPPS. Once the procedure and associated equipment involved with the
MRgFUS treatment for essential tremor has received FDA approval and we
have available claims data to use for ratesetting purposes, we will
reevaluate the APC assignment for CPT code 0398T.
Comment: One commenter believed that, based on the APC title, APC
5625 describes procedures involving the delivery of radiation or
radiation therapies, which does not adequately describe the procedures
described by CPT codes 0071T and 0072T and HCPCS code C9734.
Consequently, the commenter requested that CMS reassign CPT codes 0071T
and 0072T to C-APC 5376 (Level 6 Urology and Related Services) and
HCPCS code C9734 to C-APC 5124 (Level 4 Musculoskeletal Procedures).
The commenter indicated that it performed its own internal analysis of
the associated cost of providing these services and, based on its
findings, believed that the resource use associated with these
procedures (CPT codes 0071T and 0072T and HCPCS code C9734) is similar
to the resource use associated with the procedures assigned to APC 5376
and APC 5124.
Response: CPT codes 0071T and 0072T became effective January 1,
2005, and HCPCS code C9734 became effective April 1, 2013. Based on our
analysis of the latest hospital outpatient claims data used for this
final rule with comment period, which are claims submitted between
January 1, 2014, and December 31, 2014, and processed on or before June
30, 2015, we do not have any single claims that reported any of the
three MRgFUS procedures. Therefore, we agree with the commenter that
APC 5625 is not the most appropriate APC assignment for these three
MRgFUS procedures based on clinical characteristics because these three
MRgFUS procedures do not involve the delivery of radiation or radiation
therapy. In addition, given the lack of single claims data for the
procedures described by CPT codes 0071T and 0072T and HCPCS code C9734,
we do not agree with the commenters' suggested APC assignments for
these procedures. We believe that the clinical characteristics of the
three MRgFUS procedures are significantly similar to the clinical
characteristics of the procedures assigned to APCs 5414 (Level 4
Gynecologic Procedures) and 5122 (Level 2 Musculoskeletal Procedures).
Therefore, we are reassigning the procedures described by CPT codes
0071T and 0072T to APC 5414, and the procedures described by HCPCS code
C9734 to APC 5122.
After consideration of the public comments we received, we are
modifying our proposals and reassigning the procedures described by CPT
codes 0071T and 0072T to APC 5414 and the procedures described by HCPCS
code C9734 to APC 5122. In addition, we are not finalizing our proposed
APC assignment for the procedure described by CPT code 0398T because
the equipment associated with the performance of the procedure has not
received FDA approval. As we previously stated, CPT code 0398T is
assigned to OPPS status indicator ``E'' (Not paid by Medicare when
submitted on outpatient claims (any outpatient bill type), effective
January 1, 2016, to indicate that the service is not paid by Medicare
under the OPPS. Once the procedure involving MRgFUS treatment for
essential tremor receives FDA approval and we have available claims
data for ratesetting purposes, we will reevaluate the APC assignment
for CPT code 0398T. The final CY 2016 payment rate for CPT codes
0071Tand 0072T and HCPCS code C9734 can be found in Addendum B to this
final rule with comment period (which is available via the Internet on
the CMS Web site).
c. Stem Cell Transplant
For CY 2016, we proposed to continue to pay for stem cell
transplant procedures as we have done for many years through APCs 5271
(Blood Product Exchange) and 5281 (Apheresis and Stem Cell Procedures).
Specifically, we proposed to assign the procedure described by CPT code
38240 (Hematopoietic progenitor cell (HPC); allogenic transplantation
per donor) to APC 5281 (Apheresis/Stem Cell and Related Services), for
which we proposed a CY 2016 geometric mean cost of approximately
$3,217.
Comment: Commenters opposed the proposed payment rate for the
procedure described by CPT code 38240. The commenters stated that the
current CY 2015 outpatient payment rate does not provide adequate
payment for the total cost of an hematopoietic cell transplants (HCT),
particularly donor cell acquisition costs. Commenters asked that CMS
consider changing its payment methodology for donor cell acquisition
costs and made the following specific requests of CMS to: (1) Create a
separate, dedicated cost center line for HCT, similar to how it
established the cost center line for Implantable Devices, MRIs, CT
Scans, and Cardiac Catheterizations; (2) work with the NUBC to release
a new, dedicated revenue code for providers to use when reporting their
HCT donor search and cell acquisition charges; (3) create payment
parity for the donor search and cell acquisition component of HCT
between the inpatient and outpatient settings; (4) recognize the search
and procurement costs associated with HCT transplant and develop a
reasonable cost basis solution for HCT that mimics the acquisition cost
procedures for solid organ transplantation; (5) if CMS chooses not to
consider number (4) request, find a
[[Page 70415]]
way to incorporate the donor search and cell acquisition charges
reported through revenue code 819 into the overall outpatient
transplant APC rate (The commenters suggested that CMS could
incorporate this suggested change by creating a Composite APC whereby
it identifies the allogenic transplant CPT code and a revenue code 0819
and creates an appropriate payment rate, or that CMS could study
applying the C-APC concept to HCT.); (6) require transplant centers to
submit their actual cost information on the UB-04s for patients
receiving both allogeneic related and unrelated transplants; and (7)
instruct providers to report their actual cost on the revenue code 0819
claim line item in order for CMS to apply a default CCR of 1.0 for
claims reporting outpatient allogeneic HCT procedures (This would be
defined by the presence of an outpatient allogeneic CPT procedure
code.). In addition, one commenter asked that CMS describe clearly in
the preamble to the final rule that it is incumbent on hospitals to
report their entire donor search and cell acquisition charges on the
recipient's transplant claim.
Response: We continue to believe that the procedure described by
CPT code 38240 is appropriately assigned to APC 5281 because its
geometric mean cost and clinical characteristics are similar to other
procedures assigned to APC 5281. We note the commenters' concerns that
donor acquisition cost is not appropriately captured in the current
payment methodology for HCT procedures. As we have previously stated,
allogeneic harvesting procedures, which are performed not on the
beneficiary but on a donor, cannot be paid separately under the OPPS
because hospitals may bill and receive payment only for services
provided to the Medicare beneficiary who is the recipient of the HCT
procedure, and whose illness is being treated with the transplant. We
stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR
60575) and in section 231.11 of Chapter 4 of the Medicare Claims
Processing Manual (Pub. 100-04) that payment for allogeneic stem cell
acquisition services (such as harvesting procedures and donor
evaluation) is packaged into the payment for the transplant procedure
(either the Medicare Severity Diagnosis Related Group (MS-DRG) when the
transplant is performed on an inpatient basis, or the APC when the
transplant is performed on an outpatient basis). Hospitals should
report all allogeneic outpatient HCT procedure acquisition charges on
the recipient's outpatient claim as uncoded charges under revenue code
0819.
In response to comments concerning the creation of a dedicated cost
center and/or revenue code for HCT procedures, payment parity for the
donor search and cell acquisition component of HCT procedures between
the inpatient and outpatient settings, requiring transplant centers to
submit their actual cost information on the UB-04s for both allogeneic
related and unrelated transplant patients, and applying a default CCR
of 1.0 for outpatient allogeneic HCT claims, we note that we did not
make any such proposals in the CY 2016 OPPS/ASC proposed rule.
Therefore, we consider these comments outside the scope of the proposed
rule and are not responding to them in this final rule with comment
period. We will take these suggestions into consideration for future
rulemaking.
While converting the outpatient stem cell transplant APCs to
composite APCs or C-APCs would reduce to a small degree the
differential between the OPPS payment rate and the costs as represented
in the public comment we received, it would only provide a relatively
modest increase in payment, consistent with our previous data studies
on this issue. We believe that we need to further examine the costs
associated with outpatient stem cell transplant services and how their
costs could best be captured for ratesetting purposes in the OPPS.
These transplant services remain low-volume in the HOPD. However, we
will continue to monitor this issue and the volume of outpatient
allogeneic transplant services.
After consideration of the public comments we received, we are
finalizing our CY 2016 proposal, and continuing to assign the services
described by CPT code 38240 to APC 5281, for which the final CY 2016
geometric mean cost is approximately $3,155.
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
1. Expiration of Transitional Pass-Through Payments for Certain Devices
a. Background
Section 1833(t)(6)(B)(iii) of the Act sets forth the period for
which a device category eligible for transitional pass-through payments
under the OPPS may be in effect. The implementing regulation at 42 CFR
419.66(g) provides that this pass-through payment eligibility period
begins on the date CMS establishes a particular transitional pass-
through category of devices. The eligibility period is for at least 2
years but no more than 3 years. We may establish a new device category
for pass-through payment in any quarter. Under our established policy,
we base the pass-through status expiration date for a device category
on the date on which pass-through payment is effective for the
category; that is, the date CMS establishes a particular category of
devices eligible for transitional pass-through payments. We propose and
finalize the dates for expiration of pass-through status for device
categories as part of the OPPS annual update.
We also have an established policy to package the costs of the
devices that are no longer eligible for pass-through payments into the
costs of the procedures with which the devices are reported in the
claims data used to set the payment rates (67 FR 66763). Brachytherapy
sources, which are now separately paid in accordance with section
1833(t)(2)(H) of the Act, are an exception to this established policy.
b. CY 2016 Policy
As stated earlier, section 1833(t)(6)(B)(iii) requires that, under
the OPPS, a category of devices be eligible for transitional pass-
through payments for at least 2 years, but not more than 3 years. There
currently are four device categories eligible for pass-through payment:
HCPCS code C1841 (Retinal prosthesis, includes all internal and
external components) was established effective October 1, 2013. HCPCS
code C2624 (Implantable wireless pulmonary artery pressure sensor with
delivery catheter, including all system components) was established
effective January 1, 2015. HCPCS code C2623 (Catheter, transluminal
angioplasty, drug-coated, non-laser) was established effective April 1,
2015. HCPCS code C2613 (Lung biopsy plug with delivery system) was
established effective July 1, 2015. The pass-through payment status of
the device category for HCPCS code C1841 will end on December 31, 2015.
Therefore, in accordance with our established policy, in the CY 2016
OPPS/ASC proposed rule (80 FR 39264), we proposed, beginning with CY
2016, to package the costs of the HCPCS code C1841 devices into the
costs related to the procedures with which the device is reported in
the hospital claims data.
We stated in the proposed rule that if we create any new device
categories for pass-through payment status during the remainder of CY
2015 or during CY 2016, we will propose future expiration dates in
accordance with Sec. 419.66(g).
We did not receive any public comments on this proposal. Therefore,
[[Page 70416]]
we are finalizing our proposal to expire device pass-through payments
for the device described by HCPCS code C1841, effective January 1,
2016.
2. Annual Rulemaking Process in Conjunction With Quarterly Review
Process for Device Pass-Through Payment Applications
a. Background
Section 1833(t)(6)(B) of the Act requires payment to be made on a
``pass-through'' basis for designated medical devices. As part of
implementing the statute through regulations, we have continued to
believe that it is important for hospitals to receive pass-through
payments for devices that offer substantial clinical improvement in the
treatment of Medicare beneficiaries to facilitate access by
beneficiaries to the advantages of the new technology. Conversely, we
have noted that the need for additional payments for devices that offer
little or no clinical improvement over previously existing devices is
less apparent. In such cases, these devices can still be used by
hospitals, and hospitals will be paid for them through appropriate APC
payment. Moreover, a goal is to target pass-through payments for those
devices where cost considerations might be most likely to interfere
with patient access (66 FR 55852; 67 FR 66782; and 70 FR 68629).
As specified in regulations at 42 CFR 419.66(b)(1) through (b)(3),
to be eligible for transitional pass-through payment under the OPPS, a
device must meet the following criteria: (1) If required by FDA, the
device must have received FDA approval or clearance (except for a
device that has received an FDA investigational device exemption (IDE)
and has been classified as a Category B device by the FDA), or another
appropriate FDA exemption; (2) the device must be determined reasonable
and necessary for the diagnosis or treatment of an illness or injury or
to improve the functioning of a malformed body part, as provided under
section 1862(a)(1)(A) of the Act; and (3) the device must be an
integral part of the service, is used for one patient only, comes in
contact with human tissue, and is surgically implanted or inserted,
whether or not it remains with the patient when the patient is released
from the hospital. A device is not eligible if it is any of the
following, as specified at Sec. 419.66(b)(4): Equipment, an
instrument, apparatus, implement, or item of this type for which
depreciation and financing expenses are recovered as depreciation
assets as defined in Chapter 1 of the Medicare Provider Reimbursement
Manual (CMS Pub. 15-1); or a material or supply furnished incident to a
service (for example, a suture, customized surgical kit, or clip, other
than a radiological site marker).
Separately, we use the following criteria, as set forth under Sec.
419.66(c), to determine whether a category of devices should be
established. The device to be included in the category must--
Not be appropriately described by an existing category or
by any category previously in effect established for transitional pass-
through payments, and was not being paid for as an outpatient service
as of December 31, 1996;
Have an average cost that is not ``insignificant''
relative to the payment amount for the procedure or service with which
the device is associated as determined under Sec. 416.66(d); and
Demonstrate a substantial clinical improvement, that is,
substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment.
More details on the requirements for device pass-through payment
applications are included on the CMS Web site in the application form
itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section.
The current OPPS process for applying for a new device category for
transitional pass-through payment is subregulatory; that is, device or
implantable biological or skin substitute manufacturers, hospitals, or
other interested parties may apply to the agency through an application
process available online. The application determination process is
handled outside of rulemaking. Applications are accepted by CMS on a
rolling basis and determinations are made on a quarterly basis.
Decisions by CMS to approve an application for a device for pass-
through payment under the OPPS are announced quarterly through a
subregulatory process via program transmittal and are communicated
directly to the applicant. Approvals are then referenced in our annual
rulemaking as a means to establish payment periods. Currently, denials
of applications for devices for pass-through payment status under the
OPPS are communicated directly to the applicant and not announced
publicly through rulemaking, program transmittal, or other public
forum. Applicants for pass-through payment for a device whose
application is denied may submit a reconsideration request to CMS. The
applicant must send a written letter that explains the reasons for the
request for reconsideration of CMS' decision, along with any additional
information or evidence that may not have been included with the
original application that may further support the reconsideration
request. Currently, reconsiderations of denials of devices for pass-
through payment under the OPPS are handled similarly to previous
denials through direct communication with the applicant.
Over the years, stakeholders have opined that the current OPPS
device pass-through payment application process lacks transparency and
consistent approval standards. That is, stakeholders have suggested
that the unavailability to the public of specific information about
application decisions makes it difficult to determine if there are
consistent approval standards because there is no public knowledge
regarding which applications are rejected and which criteria are not
met. Likewise, for approved applications, there is a lack of the
specific information available to the public that led to approval of
the application. Some stakeholders have requested that CMS increase
transparency in the device pass-through payment application process by
notifying the public, through rulemaking, of the number of applications
received each year in aggregate and, for each application, include in
rulemaking the preliminary decision, any additional details included in
follow-up with the applicant, and the final decision, including the
rationale for the approval or denial of the application. Stakeholders
also have requested that CMS consult with industry and other
stakeholders during the application review process.
We agree with stakeholders that the current OPPS device pass-
through payment application process could benefit from increased
transparency and stakeholder input. Therefore, in the CY 2016 OPPS/ASC
proposed rule (80 FR 39265), for CY 2016, we proposed changes to the
OPPS device pass-through payment application process to help achieve
the goals of increased transparency and stakeholder input. We proposed
to align a portion of the OPPS device pass-through payment application
process with the already established Hospital Inpatient Prospective
Payment System (IPPS) application process for new medical services and
new technology add-on payments. (We refer readers to sections
1886(d)(5)(K) and (d)(5)(L) of the Act and 42 CFR 412.87 and 412.88 for
additional information on the IPPS process for approval of new medical
[[Page 70417]]
services and technologies for new technology add-on payment under the
IPPS.) Frequently, an applicant will apply for both device pass-through
payments under the OPPS and for new technology add-on payments under
the IPPS. Both the OPPS and the IPPS require that the applicant
demonstrate that the technology represents a substantial clinical
improvement relative to existing technologies. Approvals and denials of
applications for new technology add-on payments under the IPPS are
finalized through annual rulemaking. We discuss the specific changes
that we proposed for the transitional medical device pass-through
payment application process under the OPPS in the section below.
b. Revisions to the Application Process for Device Pass-Through
Payments
In the CY 2016 OPPS/ASC proposed rule (80 FR 39265), we proposed,
beginning in CY 2016, to add a rulemaking component to the current
quarterly device pass-through payment application process. That is, we
proposed to supplement the quarterly process by including a description
of applications received (whether they are approved or denied) as well
as our rationale for approving or denying the application in the next
applicable OPPS proposed rule. This proposed revised process would
include providing information related to the establishment of the new
device category, the cost thresholds, and the substantial clinical
improvement criterion. For applications that are approved during the
quarterly review process, based on public comments received in response
to proposed rulemaking, we proposed that we would either continue to
maintain device pass-through payment status or finalize a policy to
discontinue pass-through payment status. In the rare case in which an
applicant is approved during the quarterly process and then a decision
is made in rulemaking to reverse the approval, the applicant could
reapply with new information, in advance of the following year's
proposed rule, assuming that the device would still be considered new,
as described in the section below. A summary description of the
application would be included in the proposed rule, along with a
proposal to approve or deny device pass-through payment status and a
final decision would be provided in the final rule after consideration
of public comments. The information requested in the device pass-
through payment application itself would not change as a result of the
proposed process changes.
For applications that we deny during the quarterly review process,
we proposed to include the same type of information that we include for
approved devices in the next applicable OPPS proposed rule and, after
consideration of public comments received, could revisit our decision
and either uphold the original decision of denial or approve the
application based on additional evidence submitted through the
rulemaking process. The final decision would be published in the
appropriate final rule. In lieu of the informal reconsideration process
that has been in place prior to CY 2016 for denied applications, we
would only provide opportunity to reconsider applications that are
denied through the rulemaking process. We proposed to allow applicants
whose applications are denied through the quarterly review process to
withdraw their applications if they do not wish to go through the
rulemaking process. If such a decision is made, the quarterly review
decision to deny device pass-through payment for the application would
be considered final and there would be no further reconsideration
process available. By providing an opportunity for public comment, we
believe that we would not only make the device pass-through payment
application and review process more transparent, but also would assure
that applicants have the benefit of public input on the ultimate
decision to approve or deny an application for device pass-through
payments under the OPPS.
Currently, the deadline for device pass-through payment application
submission is the first business day in March, June, September, and
December of a year for consideration for the next quarter (at the
earliest) of the calendar year. For example, under our proposal, CMS'
decision on an application that is submitted by the first business day
in March would likely be presented in that calendar year's OPPS
proposed rule (assuming the application that is submitted is complete).
Decisions on applications received after the first business day in
March would be included in the OPPS proposed rule for the following
calendar year.
In response to requests for more transparency and public input on
the device pass-through payment application process, we considered
moving entirely to a yearly process through rulemaking and eliminating
quarterly submissions. However, in an effort to maintain flexibility
under the OPPS process for device pass-through payment applications, we
believe that maintaining the quarterly process in addition to adding
the annual rulemaking process may be beneficial because applications
approved on a quarterly basis would be granted access to pass-through
payments as soon as possible for approved devices. In addition, all
applications would be considered through the rulemaking process, which
would provide increased transparency and allow public input that would
be considered in making a final determination. We invited public
comments on this proposed approach as well as on whether moving to a
rulemaking process entirely would be more helpful to further increase
transparency and further align the review of applications submitted
under both the IPPS and the OPPS.
Comment: Commenters generally supported the addition of an annual
rulemaking process, while maintaining a quarterly submission process.
The commenters, in particular, supported the increased transparency and
stakeholder input that would occur with an annual rulemaking component
because it would increase both equity and predictability in the
process. In addition, the commenters supported providing the industry
with necessary information regarding approval standards and the
opportunity for Medicare beneficiaries to have access to this important
information.
Response: We appreciate the commenters' support. We agree that our
proposal to add a rulemaking element to the device pass-through process
will increase transparency and stakeholder input in the device pass-
through process. We also believe that seeking public comment through
rulemaking on pass-through applications will allow for a more rigorous
review of applications and will enable prospective applicants to gain
insights to help with the development of their applications.
Comment: Some commenters suggested that CMS publicize all final
decisions and their rationale on a quarterly basis, in addition to the
yearly rulemaking process.
Response: Under our current quarterly review process, we include
information about proper coding for applications that are approved for
pass-through payment in the quarterly transmittals called ``change
requests'' (CRs). We do not currently publish any information about
applications that are not approved. We do not believe it is necessary
to notify the public of submitted applications and our decisions
outside of the annual rulemaking process. That is, we believe that
notifying the public annually of applications under review for
rulemaking and, ultimately our decisions on pass-through payment
[[Page 70418]]
status in the final rule, provides sufficient transparency and is
consistent with most other payment determinations. However, we will
continue to publish coding information for applications approved on a
quarterly basis through our quarterly CRs. In addition, we are
finalizing in this final rule with comment period a policy that
applicants whose applications are not approved through the quarterly
review process may elect to withdraw their application from
consideration in the next applicable rulemaking cycle.
Comment: Several commenters expressed concern that, under the
proposed process with respect to applications that are denied upon
quarterly review, the ability of submitters to have their applications
reconsidered in a timely manner is limited. In addition, the commenters
believed that having a reconsideration process moved to annual
rulemaking (instead of having opportunity on a quarterly basis) would
lead to lengthy gaps between receipt of a denial and the ability to
submit additional documentation. The commenters were particularly
concerned about timeliness in light of the proposal to more strictly
define ``newness'' for device pass-through applications. One commenter
also believed that there was potential for a backlog of applications by
moving to an annual decision-making process. One commenter suggested
that CMS evaluate reconsiderations quarterly for cases in which new
data became available and allow for a 60-day public comment period
through a separate Federal Register publication process, outside of the
annual rulemaking process.
Response: We are sensitive to the commenters' concern about the
timeliness of review of denied quarterly applicants. However, we do not
believe that a quarterly reconsideration process with a 60-day comment
period in addition to notice-and-comment rulemaking is necessary. As
noted earlier, the public has been supportive of the benefits of having
device pass-through payment applications go through a public rulemaking
process. While we appreciate the comment about a potential backlog of
applications, we do not anticipate a backlog based on the prior and
current volume of applications received.
In response to the commenters' concerns about applications that are
denied upon quarterly review not having the ability to be reconsidered
on a quarterly basis, we note that, as described in the section below,
the proposed newness period only applies to the date upon which an
application must be submitted through the quarterly application
process. Therefore, a quarterly denial should not impact the ability of
an application from being considered through the next applicable annual
rulemaking cycle, so long as the quarterly application was submitted
within 3 years of the initial FDA approval or clearance. Nonetheless,
in response to comments articulating concerns about applications that
receive a denial upon quarterly review, we are modifying our proposal
in this final rule with comment period. Specifically, rather than
denying an application based on quarterly review, for applications that
we do not approve based upon the evidence available during the
quarterly review process, we will instead seek public comment on the
application in the next applicable rulemaking cycle. No special
reconsideration process would be necessary, as no decision would be
made until the rulemaking process is complete. Applicants could submit
new data, such as clinical trial results published in a peer-reviewed
journal, for consideration in advance of the following year's proposed
rule and during the public comment period under the rulemaking process.
Comment: Several commenters expressed concern about the possibility
of quarterly approvals being reversed through the rulemaking process.
The commenters emphasized that there should be a high bar to reversing
quarterly approved applications and believed that such a reversal would
cause disruption for Medicare beneficiaries who may anticipate
utilizing the device. One commenter suggested that, if a quarterly
approved device pass-through applicant is denied in the final rule, CMS
should consider any subsequent reapplication for that application on a
quarterly basis.
Response: As we stated in our proposed rule, we expect that it
would be a rare case where an application that was approved for device
pass-through payment under the quarterly review process is reversed in
the annual rulemaking process. However, we will consider all public
comments on each application, including clinical evidence that may not
have been available upon the quarterly review of the application.
Individuals, including the manufacturers of devices under review for
device pass-through payment, also would be able to submit public
comments demonstrating how the device meets the device pass-through
payment criteria. As stated previously in this section, we do not
believe that a quarterly reconsideration process in addition to notice-
and-comment rulemaking is necessary. We note that, in the case in which
an applicant is approved during the quarterly process and then a
decision is made in rulemaking to reverse the approval, the applicant
could reapply with a new quarterly application that provides new
information, in advance of the following year's proposed rule, assuming
that the device is still new, which would be the case if the new
quarterly application is submitted within 3 years of the initial FDA
approval or clearance.
After consideration of the public comments we received, we are
finalizing our proposal for processing applications for new device
pass-through payments with one modification. Specifically, beginning in
CY 2016, we are adopting a policy that all device pass-through payment
applications submitted through the quarterly subregulatory process will
be subject to notice-and-comment rulemaking in the next applicable OPPS
annual rulemaking cycle. However, rather than denying an application
based on quarterly review, for applications that we do not approve
based upon the evidence available during the quarterly review process,
we will instead seek public comment on the application in the next
applicable annual rulemaking cycle. Under this final policy, all
applications that are approved upon quarterly review will automatically
be included in the next applicable OPPS annual rulemaking cycle, while
submitters of applications that are not approved upon quarterly review
will have the option of being included in the next applicable OPPS
annual rulemaking cycle or withdrawing their application from
consideration entirely. No special reconsideration process would be
necessary, as no denial decision would be made except through the
annual rulemaking process. Applicants will be able to submit new data,
such as clinical trial results published in a peer-reviewed journal,
for consideration during the public comment process for the proposed
rule. This process allows those applications that we are able to
determine meet all the criteria for device pass-through payment under
the quarterly review process to receive timely pass-through payment
status, while still allowing for a transparent, public review process
for all applications.
c. Criterion for Newness
Since the inception of transitional pass-through payments for
medical devices on April 7, 2000, we have not had any specific criteria
to evaluate the newness of the device for purposes of determining
eligibility and receiving
[[Page 70419]]
device pass-through payment under the OPPS. We believe that one
consideration in determining whether a new category is warranted should
be whether or not the device seeking such new category status is itself
new. We believe that transitional pass-through payments for devices
under the OPPS are intended as an interim measure to allow for adequate
payment for new innovative technology while we collect the necessary
data to incorporate the costs for these devices into the base APC rate
(66 FR 55861). Typically, there is a lag of 2 to 3 years from the point
when a new device is first introduced on the U.S. market (generally on
the date that the device receives FDA approval) until it is reflected
in our claims data.
Existing regulations at Sec. 419.66(b)(1) specify that, if
required by the FDA, the device must have received FDA approval or
clearance (except for a device that has received an FDA investigational
device exemption (IDE) and has been classified as a Category B device
by the FDA in accordance with Sec. Sec. 405.203 through 405.207 and
405.211 through 405.215 of the regulations), or meet another
appropriate FDA exemption. This existing regulatory provision does not
address the issue of how dated these device approvals, clearances, or
exemptions may be. As a result, a device that has received FDA
approval, clearance, or exemption, and has been available on the U.S.
market for several years, could apply for and possibly be approved for
pass-through payments for a new device category if the device is not
described by any of the existing (either currently active or expired)
categories established for transitional device pass-through payments.
Over the years, we have received applications for device pass-through
payment for devices that have been on the U.S. market for several
years. We do not believe that this is consistent with the intent of the
regulation. Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR
39266), we proposed to modify the medical device eligibility
requirement at Sec. 419.66(b)(1) to provide that, not only must a
device, if required, receive FDA premarket approval or clearance
(except for a device that has received an FDA investigational device
exemption (IDE) and has been classified as a Category B device by the
FDA in accordance with Sec. Sec. 405.203 through 405.207 and 405.211
through 405.215 of the regulations) or meet another appropriate FDA
exemption from premarket approval or clearance, but also that,
beginning with applications submitted on or after January 1, 2016, CMS
will consider only applications for a medical device submitted within 3
years from the date of the initial FDA approval or clearance. That is,
we proposed to add a requirement to ensure that medical devices falling
under Sec. 419.66(b)(1) and seeking device pass-through payment must
be ``new.'' This proposed adjustment also would further align the OPPS
device pass-through process with the IPPS process for new medical
services and new technology add-on payments (42 CFR 412.87(b)(2) and 78
FR 50570) by adding the requirement that the device be new.
Specifically, we proposed to reflect in Sec. 419.66(b)(1) that,
beginning with applications submitted on or after January 1, 2016, a
device will only be eligible for transitional pass-through payment
under the OPPS if, in cases where the device requires FDA approval,
clearance, or exemption, the device meets the newness criterion; that
is, the date of original or initial FDA approval or clearance and U.S.
market availability is within 3 years from the date of the application
for transitional pass-through payment. We invited public comments on
this proposal.
Comment: Some commenters supported the proposed newness criterion.
They believed that the proposed newness criterion would provide greater
certainty for applicants and that it would more closely align with the
IPPS new technology add-on criteria.
Response: We appreciate the commenters' support. We agree that this
criterion will provide additional clarity for device pass-through
applicants.
Comment: Several commenters opposed the proposed addition of the
newness criterion. They believed that the criterion was unnecessary.
Other commenters offered alternative proposals for defining newness
that mirror the FDA approval processes. Specifically, some commenters
suggested that any application that was approved by the FDA under the
510(k) or PMA process should be considered new, and some commenters
suggested that any technology, for which the FDA establishes a new
product code, be considered ``new'' for purposes of device pass-through
payments. In addition, the commenters who opposed the newness criterion
stated that it may have unforeseen and unintended consequences that
could result in limiting beneficiary access to beneficial new
technologies, with specific concern about delay in availability on the
U.S. market or to limited sales that would prevent generation of
adequate claims data.
Response: We believe that the payment adjustment for transitional
pass-through payments for devices under the OPPS is intended as an
interim measure to allow for adequate payment of a new innovative
technology while we collect the necessary data to incorporate the costs
for these devices into the base APC rate (66 FR 55861). We believe that
instituting a newness criterion will help to ensure that only those
devices that are truly new and that could not have already been
sufficiently reflected in our claims data are eligible to receive these
enhanced payments. In our experience, we have received applications for
devices that received FDA approval several years prior to the
submission of the pass-through payment application. Sometimes these
devices have not been well-adopted by the medical community due to
issues such as changes in device ownership or difficulties with coding
and payment. However, we believe that the primary intent of
transitional pass-through payments is to address dissemination of new
technology. We believe that adopting a newness criterion will help
ensure that applications that represent devices newly available on the
market that have not had time to be incorporated into the OPPS claims
data will be considered for the additional pass-through payments.
In response to suggestions to use the FDA definitions for newness,
although FDA approval or clearance is required for a device pass-
through payment application to be considered (unless the device is
exempt, as described in Sec. 419.66(b)(1)), we do not believe that a
new product code from the FDA, which is used by FDA to classify and
track a medical device, is relevant in CMS' consideration of whether
the device is new for the purposes of device pass-through payment. A
new device, as designated by the FDA, may be substantially similar to
an existing technology. That is, even if a technology receives a new
FDA approval, it may not be necessarily considered ``new'' for purposes
of device pass-through payments under the OPPS because a substantially
similar product has been approved by the FDA and has been on the U.S.
market for more than 2 to 3 years. Given the length of time that a
substantially similar product has been on the U.S. market, its costs
would already be incorporated into the base APC rate. Lastly, we note
that the newness criterion only applies to the 3-year window in which
an applicant can apply for device pass-through payments and does not
affect the amount of time that a new device would be eligible for pass-
through payments should it be approved.
[[Page 70420]]
Comment: One commenter suggested that, similar to the IPPS new
technology add-on payment process, CMS should follow a timeline for FDA
approval of a device by a date that coincides with the ability to
include the application in the proposed rule. Specifically, the
commenter suggested that applicants be required to have received FDA
approval by no later than the first business day in June, in order to
be considered in that calendar year rulemaking process.
Response: We proposed to supplement the quarterly device pass-
through review process by adding a yearly rulemaking process. Under
this proposed policy, which we are finalizing in this final rule with
comment period, all applicants will have already undergone a quarterly
review process prior to consideration in the annual rulemaking. Under
existing policy, devices are already required to have FDA approval or
clearance, with exceptions as noted at Sec. 419.66(b)(1), before a
review can be completed. Therefore, we do not believe that FDA approval
or clearance by a June 1 date is necessary for the annual rulemaking
process.
We wish to clarify that we specified ``initial'' FDA clearance or
approval in Sec. 419.66(b)(1) because, in some cases, the FDA will
provide supplemental approvals or clearances for a device after the
initial approval or clearance. We intended to convey that the 3-year
timeframe for submitting a device pass-through payment application
would be triggered by the FDA initial approval or clearance, and not by
any subsequent FDA approvals or clearances.
Comment: Some commenters noted that new products frequently
experience delays in approval by FDA before these technologies are
available on the U.S. market and recommended that the period of newness
begin with the date of first sale. One commenter opposed the proposed
newness criterion but requested that, if the agency finalized the
proposal, CMS develop necessary exceptions to the newness criterion for
situations in which the 3-year newness window would be
``unreasonable.''
Response: We understand the commenters' concerns about delays in
approved devices being available on the U.S. market. We also note that
the IPPS new technology add-on process recognizes a date later than the
FDA approval as the appropriate starting date for ``newness'' if there
is a documented delay in market availability (69 FR 49002 through
49003). For the OPPS, we believe that the payment adjustment for
transitional pass-through payments for devices is intended as an
interim measure to allow for adequate payment of new innovative
technology while we collect the necessary data to incorporate the costs
for these devices into the base APC rate (66 FR 55861). Typically,
there is a lag of 2 to 3 years from the point when a new device is
first introduced on the U.S. market (generally on the date that the
device receives FDA approval) until it is reflected in our claims data.
However, we recognize that, in some cases, FDA approval or clearance
may not correspond to the date upon which the device becomes available
on the U.S. market. That is, we recognize that there may be cases where
the product initially is unavailable to Medicare beneficiaries
following FDA approval, such as in cases of a delay in bringing the
product to the U.S. market (for instance, manufacturing issues or other
Federal regulatory issues, such as a national coverage determination of
noncoverage in the Medicare population). Therefore, we are modifying
our proposal and will consider newness to begin on the later of initial
FDA approval or clearance date or U.S. market availability if there is
a documented, verifiable delay in market availability.
Comment: One commenter suggested that CMS delay the newness
criterion until CY 2017 rulemaking to allow for more information and
clarity.
Response: We believe that we have received useful stakeholder input
on this proposal, and we are modifying our proposal in response to
concerns raised by a number of commenters. We do not agree that there
is a need for delay in implementation.
After consideration of the public comments we received, we are
finalizing our proposal to add a newness criterion (under the
regulations at Sec. 419.66(b)(1)) for CY 2016 for approval of new
device pass-through payments, with a modification that newness will
begin on the later of the initial FDA approval or clearance date or
U.S. market availability if there is a documented, verifiable delay in
market availability.
3. Provisions for Reducing Transitional Pass-Through Payments To Offset
Costs Packaged Into APC Groups
a. Background
Section 1833(t)(6)(D)(ii) of the Act sets the amount of additional
pass-through payment for an eligible device as the amount by which the
hospital's charges for a device, adjusted to cost (the cost of the
device), exceeds the portion of the otherwise applicable Medicare
outpatient department fee schedule amount (the APC payment amount)
associated with the device. We have an established policy to estimate
the portion of each APC payment rate that could reasonably be
attributed to the cost of the associated devices that are eligible for
pass-through payments (66 FR 59904) for purposes of estimating the
portion of the otherwise applicable APC payment amount associated with
pass-through devices. For eligible device categories, we deduct an
amount that reflects the portion of the APC payment amount that we
determine is associated with the cost of the device, defined as the
device APC offset amount, from the charges adjusted to cost for the
device, as provided by section 1833(t)(6)(D)(ii) of the Act, to
determine the pass-through payment amount for the eligible device. We
have consistently used an established methodology to estimate the
portion of each APC payment rate that could reasonably be attributed to
the cost of an associated device eligible for pass-through payment,
using claims data from the period used for the most recent
recalibration of the APC rates (72 FR 66751 through 66752). We
establish and update the applicable device APC offset amounts for
eligible pass-through device categories through the transmittals that
implement the quarterly OPPS updates. In the unusual case where the
device offset amount exceeds the device pass-through payment amount,
the regular APC rate would be paid.
We published a list of all procedural APCs with the CY 2015
portions (both percentages and dollar amounts) of the APC payment
amounts that we determined are associated with the cost of devices on
the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. The dollar amounts
are used as the device APC offset amounts. In addition, in accordance
with our established practice, the device APC offset amounts in a
related APC are used in order to evaluate whether the cost of a device
in an application for a new device category for pass-through payment is
not insignificant in relation to the APC payment amount for the service
related to the category of devices, as specified in our regulations at
Sec. 419.66(d).
Beginning January 1, 2010, we include packaged costs related to
implantable biologicals in the device offset calculations in accordance
with our policy that the pass-through evaluation process and payment
methodology for implantable biologicals that are surgically inserted or
implanted (through a surgical incision or a natural orifice) and that
are newly approved for pass-through status beginning on or after
January 1, 2010, be the device pass-
[[Page 70421]]
through process and payment methodology only (74 FR 60476). Beginning
January 1, 2015, skin substitutes are evaluated for pass-through status
and payment using the device pass-through evaluation process (79 FR
66888).
b. CY 2016 Policy
In the CY 2016 OPPS/ASC proposed rule (80 FR 39267), we proposed to
continue, for CY 2016, our established methodology to estimate the
portion of each APC payment rate that could reasonably be attributed to
(that is, reflect) the cost of an associated device eligible for pass-
through payment, using claims data from the period used for the most
recent recalibration of the APC payment rates. We also proposed to
continue our established policies for calculating and setting the
device APC offset amounts for each device category eligible for pass-
through payment. In addition, we proposed to continue to review each
new device category on a case-by-case basis to determine whether device
costs associated with the new category are already packaged into the
existing APC structure. If device costs that are packaged into the
existing APC structure are associated with the new category, we
proposed to deduct the device APC offset amount from the pass-through
payment for the device category. As stated earlier, these device APC
offset amounts also would be used in order to evaluate whether the cost
of a device in an application for a new device category for pass-
through payment is not insignificant in relation to the APC payment
amount for the service related to the category of devices (Sec.
419.66(d)).
In addition, we proposed to update the list of all procedural APCs
with the final CY 2016 portions of the APC payment amounts that we
determine are associated with the cost of devices on the CMS Web site
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html so that this information is available
for use by the public in developing potential CY 2016 device pass-
through payment applications and by CMS in reviewing those
applications.
In response to the CY 2016 OPPS/ASC proposed rule, we received a
few public comments that related to aspects of the pass-through device
policy on which we did not propose changes. The comments addressed
highly technical and operational matters and pertained to matters that
are addressed in subregulatory guidance. Therefore, we believe these
public comments are outside of the scope of the proposed rule, and we
are not addressing them in this final rule with comment period. We note
that the public may contact us via other means to discuss these types
of issues.
In this final rule with comment period, we are finalizing the
proposed pass-through device policy for reducing transitional pass-
through payments to offset costs packaged into APC groups, without
modification.
B. Device-Intensive Procedures
1. Background
Under the OPPS, device-intensive APCs are defined as those APCs
with a device offset greater than 40 percent (79 FR 66795). In
assigning device-intensive status to an APC, the device costs of all of
the procedures within the APC are calculated and the geometric mean
device offset of all of the procedures must exceed 40 percent. Almost
all of the procedures assigned to device-intensive APCs utilize
devices, and the device costs for the associated HCPCS codes exceed the
40-percent threshold. The no cost/full credit and partial credit device
policy (79 FR 66872 through 66873) applies to device-intensive APCs and
is discussed in detail in section IV.B.3. of this final rule with
comment period. A related device policy is the requirement that
procedures assigned to certain (formerly device-dependent) APCs require
the reporting of a device code on the claim (79 FR 66795).
2. Changes to the Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed below in Table 41 (the formerly
device-dependent APCs) is reported on the claim.
Table 41--APCs That Require a Device Code To Be Reported on a Claim When
a Procedure Assigned to one of These APCs Is Reported for CY 2015
------------------------------------------------------------------------
CY 2015 APC CY 2015 APC title
------------------------------------------------------------------------
0039.............................. Level III Neurostimulator.
0061.............................. Level II Neurostimulator.
0083.............................. Level I Endovascular.
0084.............................. Level I EP.
0085.............................. Level II EP.
0086.............................. Level III EP.
0089.............................. Level III Pacemaker.
0090.............................. Level II Pacemaker.
0107.............................. Level I ICD.
0108.............................. Level II ICD.
0202.............................. Level V Gynecologic Procedures.
0227.............................. Implantation of Drug Infusion.
0229.............................. Level II Endovascular.
0259.............................. Level VII ENT Procedures.
0293.............................. Level IV Intraocular.
0318.............................. Level IV Neurostimulator.
0319.............................. Level III Endovascular.
0384.............................. GI Procedures with Stents.
0385.............................. Level I Urogenital.
0386.............................. Level II Urogenital.
0425.............................. Level V Musculoskeletal.
0427.............................. Level II Tube/Catheter.
0622.............................. Level II Vascular Access.
0648.............................. Level IV Breast Surgery.
0652.............................. Insertion of IP/Pl. Cath.
0655.............................. Level IV Pacemaker.
------------------------------------------------------------------------
There are 10 APCs listed in Table 41 that are not device-intensive
APCs; that is, their device offsets do not exceed 40 percent. As
discussed in the CY 2016 OPPS/ASC proposed rule (80 FR 39267), we do
not believe that we should continue to require device codes on claims
for procedures that are not assigned to device-intensive APCs because
the relative device costs do not exceed the device-intensive threshold
of 40 percent. Unlike with device-intensive APCs, we believe it is not
necessary to require the reporting of a device code for reporting
device charges on a claim because the relative device costs are much
less significant than those associated with device-intensive APCs. We
believe that device code reporting requirements should only apply to
the device-intensive APCs because these APCs have significant device
costs that are associated with particular devices. We noted that, in CY
2015 (79 FR 66794 through 66795), we applied the device code reporting
requirements to those formerly device-dependent APCs that also met the
device-intensive APC definition. However, as stated in the CY 2016
OPPS/ASC proposed rule (80 FR 39268), after further consideration, we
no longer believe it is appropriate to restrict the application of this
policy to only the subset of device-intensive APCs that were formerly
device-dependent and now believe the device code reporting requirements
should apply to all device-intensive APCs, regardless of whether or not
the APC was formerly device-dependent. We believe that the device
coding requirement should apply to
[[Page 70422]]
procedures assigned to all device-intensive APCs because these are the
APCs with significant device costs. Therefore, for CY 2016, we proposed
that only the procedures that require the implantation of a device that
are assigned to a device-intensive APC would require a device code on
the claim. The list of device-intensive APCs was listed in Table 38 of
the CY 2016 OPPS/ASC proposed rule (80 FR 39268).
In the CY 2016 OPPS/ASC proposed rule, we proposed that the claims
processing edits are such that any device code, when reported on a
claim with a procedure assigned to an APC listed in Table 38 of the
proposed rule (80 FR 39268), would satisfy the edit. Claims submitted
with a procedure code requiring a device assigned to an APC listed in
Table 38 of the proposed rule, but without any device code reported on
the claim, would be returned to the provider.
Comment: A number of commenters supported CMS' proposal to apply
device code reporting requirements to procedures that require the
implantation of a device and that are assigned to a device-intensive
APC. One commenter who supported the proposal recommended that CMS
continue to monitor claims to evaluate the need to reinstate all device
edits. Other commenters urged CMS to reinstate device-to-procedure
edits. One commenter expressed concern that removal of procedure-to-
device code edits could potentially cause device-to-procedure code
mismatches in the CY 2015 claims data, which, ultimately, could result
in incorrect APC payment rates. One commenter requested that CMS
require device coding for any procedure that has a device offset of
greater than 40 percent, regardless of whether the procedure is
assigned to a device-intensive APC. A few commenters requested that CMS
remove APC 5221 from the ``device intensive'' APC list because the
procedures described by the HCPCS codes assigned to APC 5221 represent
procedures for device removal, revision, and repair, which do not
require or include the device itself.
Response: We appreciate the commenters' support. We will continue
to monitor the claims data to ensure that hospitals continue reporting
appropriate device codes on the claims for device-intensive APCs. We
continue to believe that the elimination of device-to-procedure edits
and procedure-to-device edits is appropriate due to the experience
hospitals now have in coding and reporting these claims fully. For the
more costly devices, we believe the C-APCs will reliably reflect the
cost of the device if charges for the device are included anywhere on
the claim. We remind the commenters that, under our proposed policy,
hospitals would still be expected to adhere to the guidelines of
correct coding and append the correct device code to the claim when
applicable. We also remind the commenters that, as with all other items
and services recognized under the OPPS, we expect hospitals to code and
report their device costs appropriately, regardless of whether there
are claims processing edits in place. We do not believe that our
proposed policy will result in device-to-procedure code mismatches,
which would require miscoding by hospitals. We continue to expect
hospitals to use an appropriate device code consistent with correct
coding in order to ensure that device costs are always reported on the
claim and that costs are appropriately captured in claims that CMS uses
for ratesetting.
In response to the commenter's request that CMS require device
coding for any procedure that has a device offset of greater than 40
percent, regardless of whether the procedure is assigned to a device-
intensive APC, we note that we did not propose such a policy change.
However, we will take this comment into consideration for future
rulemaking. We also note that APC 5221 does not have a final device
offset of greater than 40 percent. Therefore, we are not finalizing it
as a device-intensive APC for CY 2016.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, that, beginning in CY
2016, only the procedures that require the implantation of a device
that are assigned to a device-intensive APC will require a device code
on the claim. We also are finalizing, without modification, our
proposal that the claims processing edits are such that any device
code, when reported on a claim with a procedure assigned to an APC
listed in Table 42 below will satisfy the edit.
Table 42 below lists the CY 2016 device-intensive APCs.
Table 42--CY 2016 Device-Intensive APCs
------------------------------------------------------------------------
Renumbered CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
1565.............................. New Technology--Level 28 ($5,000-
$5,500).
1599.............................. New Technology--Level 48 ($90,000-
$100,000).
5125.............................. Level 5 Musculoskeletal Procedures.
5166.............................. Level 6 ENT Procedures.
5192.............................. Level 2 Endovascular Procedures.
5193.............................. Level 3 Endovascular Procedures.
5222.............................. Level 2 Pacemaker and Similar
Procedures.
5223.............................. Level 3 Pacemaker and Similar
Procedures.
5224.............................. Level 4 Pacemaker and Similar
Procedures.
5231.............................. Level 1 ICD and Similar Procedures.
5232.............................. Level 2 ICD and Similar Procedures.
5377.............................. Level 7 Urology and Related
Services.
5462.............................. Level 2 Neurostimulator and Related
Procedures.
5463.............................. Level 3 Neurostimulator and Related
Procedures.
5464.............................. Level 4 Neurostimulator and Related
Procedures.
5471.............................. Implantation of Drug Infusion
Device.
5493.............................. Level 3 Intraocular Procedures.
5494.............................. Level 4 Intraocular Procedures.
------------------------------------------------------------------------
3. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
Credit Devices
a. Background
To ensure equitable OPPS payment when a hospital receives a device
without cost or with full credit, in CY 2007, we implemented a policy
to reduce the payment for specified device-dependent APCs by the
estimated portion of the APC payment attributable to device costs (that
is, the device offset) when the hospital receives a specified device at
no cost or with full credit (71 FR 68071 through 68077). Hospitals were
instructed to report no cost/full credit device cases on the claim
using the ``FB'' modifier on the line with the procedure code in which
the no cost/full credit device is used. In cases in which the device is
furnished without cost or with full credit, hospitals are instructed to
report a token device charge of less than $1.01. In cases in which the
device being inserted is an upgrade (either of the same type of device
or to a different type of device) with a full credit for the device
being replaced, hospitals are instructed to report as the device charge
the difference between the hospital's usual charge for the device being
implanted and the hospital's usual charge for the
[[Page 70423]]
device for which it received full credit. In CY 2008, we expanded this
payment adjustment policy to include cases in which hospitals receive
partial credit of 50 percent or more of the cost of a specified device.
Hospitals were instructed to append the ``FC'' modifier to the
procedure code that reports the service provided to furnish the device
when they receive a partial credit of 50 percent or more of the cost of
the new device. We refer readers to the CY 2008 OPPS/ASC final rule
with comment period for more background information on the ``FB'' and
``FC'' modifiers payment adjustment policies (72 FR 66743 through
66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), beginning in CY 2014, we modified our policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit. For CY
2013 and prior years, our policy had been to reduce OPPS payment by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
by the full or partial credit a hospital receives for a replaced
device. Specifically, under this modified policy, hospitals are
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' (Credit Received from the Manufacturer
for a Replaced Medical Device) when the hospital receives a credit for
a replaced device that is 50 percent or greater than the cost of the
device. For CY 2014, we also limited the OPPS payment deduction for the
applicable APCs to the total amount of the device offset when the
``FD'' value code appears on a claim. For CY 2015, we continued our
existing policy of reducing OPPS payment for specified APCs when a
hospital furnishes a specified device without cost or with a full or
partial credit and to use the three criteria established in the CY 2007
OPPS/ASC final rule with comment period (71 FR 68072 through 68077) for
determining the APCs to which our CY 2015 policy will apply (79 FR
66872 through 66873).
b. Policy for CY 2016
For CY 2016 and subsequent years, in the CY 2016 OPPS/ASC proposed
rule (80 FR 39268), we proposed to continue our existing policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit.
Specifically, for CY 2016, we proposed to continue to reduce the OPPS
payment, for the device-intensive APCs listed in Table 38 of the
proposed rule (80 FR 39268), by the full or partial credit a provider
receives for a replaced device. Under this proposed policy, hospitals
would continue to be required to report on the claim the amount of the
credit in the amount portion for value code ``FD'' when the hospital
receives a credit for a replaced device that is 50 percent or greater
than the cost of the device. In CY 2015 and prior years, we specified a
list of costly devices to which this APC payment adjustment would
apply. As discussed in the CY 2016 OPPS/ASC proposed rule (80 FR
39269), upon further consideration of our existing value code ``FD''
APC payment adjustment policy and the ability to deduct the actual
amount of the device credit from the OPPS payment, regardless of the
cost of the individual device, instead of a percentage of the device
offset, we no longer believe it is necessary to restrict the
application of this policy to a specific list of costly devices (most
recently listed in Table 27 of the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66873)) as was necessary under the ``FB''/``FC''
modifier payment adjustment policy, which made APC payment adjustments
as a percentage of the applicable device offset amount. Under the CY
2015 policy, the actual amount of the device credit can be
appropriately reported in the amount portion of value code ``FD'' and
deducted from the OPPS payment for all no cost/full credit and partial
credit devices furnished in conjunction with a procedure assigned to a
device-intensive APC. Therefore, for CY 2016 and subsequent years, we
proposed to no longer specify a list of devices to which the OPPS
payment adjustment for no cost/full credit and partial credit devices
would apply. Instead, we proposed to apply this APC payment adjustment
to all replaced devices furnished in conjunction with a procedure
assigned to a device-intensive APC when the hospital receives a credit
for a replaced specified device that is 50 percent or greater than the
cost of the device.
For CY 2016 and subsequent years, in the CY 2016 OPPS/ASC proposed
rule (80 FR 39269), we also proposed to continue using the three
criteria established in the CY 2007 OPPS/ASC final rule with comment
period for determining the APCs to which our proposed CY 2016 policy
would apply (71 FR 68072 through 68077). Specifically: (1) All
procedures assigned to the selected APCs must involve implantable
devices that would be reported if device insertion procedures were
performed; (2) the required devices must be surgically inserted or
implanted devices that remain in the patient's body after the
conclusion of the procedure (at least temporarily); and (3) the APC
must be device-intensive; that is, the device offset amount must be
significant, which is defined as exceeding 40 percent of the APC cost.
We continue to believe these criteria are appropriate because no-cost
devices and device credits are likely to be associated with particular
cases only when the device must be reported on the claim and is of a
type that is implanted and remains in the body when the beneficiary
leaves the hospital. We believe that the reduction in payment is
appropriate only when the cost of the device is a significant part of
the total cost of the APC into which the device cost is packaged, and
that the 40-percent threshold is a reasonable definition of a
significant cost. As noted earlier in this section, APCs with a device
offset that exceed the 40-percent threshold are called device-intensive
APCs.
Comment: A number of commenters supported CMS' proposed policy. One
commenter recommended that CMS continue to provide lists of both the
device-intensive APCs and the device HCPCS codes for which a credit
would need to be reported.
Response: We appreciate the commenters' support. As stated in the
proposed rule (80 FR 39269), we no longer believe it is necessary to
restrict the application of this policy to a specific list of costly
devices as was necessary under the ``FB''/``FC'' modifier payment
adjustment policy. Therefore, we no longer believe it is necessary to
specify a list of devices to which the OPPS payment adjustment for no
cost/full credit and partial credit devices would apply.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue to reduce
the OPPS payment, for the device-intensive APCs (listed in Table 42 of
this final rule with comment period), by the full or partial credit a
provider receives for a replaced device. We also are finalizing our
proposal, without modification, to no longer specify a list of devices
to which the OPPS payment adjustment for no cost/full credit and
partial credit devices would apply and instead, apply this APC payment
adjustment to all replaced devices furnished in conjunction with a
procedure assigned
[[Page 70424]]
to a device-intensive APC when the hospital receives a credit for a
replaced specified device that is 50 percent or greater than the cost
of the device. In addition, we are finalizing our proposal, without
modification, to continue using the three criteria established in the
CY 2007 OPPS/ASC final rule with comment period for determining the
APCs to which the CY 2016 device intensive policy will apply.
As discussed in the CY 2016 OPPS/ASC proposed rule (80 FR 39269),
we examined the offset amounts calculated from the CY 2016 claims data
and the clinical characteristics of the CY 2016 APCs to determine which
APCs meet the criteria for CY 2016. The full list of device-intensive
APCs to which the payment adjustment policy for no cost/full credit and
partial credit devices would apply in CY 2016 is included in Table 42
of this final rule with comment period.
4. Adjustment to OPPS Payment for Discontinued Device-Intensive
Procedures
It has been our longstanding policy to instruct hospitals to use an
appropriate modifier on a claim to report when a procedure is
discontinued, partially reduced, or canceled. Specifically, when
appropriate, hospitals are instructed to append modifiers ``73,''
``74,'' and ``52'' to report and be paid for expenses incurred in
preparing a patient for a procedure and scheduling a room for
performing the procedure where the service is subsequently discontinued
(Medicare Claims Processing Manual (Pub. 100-04, Chapter 4, Section
20.6.4). The circumstances identifying when it is appropriate to append
modifier ``73,'' ``74,'' or ``52'' to a claim are detailed below.
Modifier ``73'' is used by the hospital to indicate that a
procedure requiring anesthesia was terminated due to extenuating
circumstances or to circumstances that threatened the well-being of the
patient after the patient had been prepared for the procedure
(including procedural pre-medication when provided), and been taken to
the room where the procedure was to be performed, but prior to
administration of anesthesia. For purposes of billing for services
furnished in the HOPD, anesthesia is defined to include local, regional
block(s), moderate sedation/analgesia (``conscious sedation''), deep
sedation/analgesia, or general anesthesia. Modifier ``73'' was created
so that the costs incurred by the hospital to prepare the patient for
the procedure and the resources expended in the procedure room and
recovery room (if needed) could be recognized for payment even though
the procedure was discontinued. Modifier ``73'' results in a payment
rate of 50 percent of the full OPPS payment for the procedure.
Modifier ``74'' is used by the hospital to indicate that a
procedure requiring anesthesia was terminated after the induction of
anesthesia or after the procedure was started (for example, the
incision made, the intubation started, and the scope inserted) due to
extenuating circumstances or to circumstances that threatened the well-
being of the patient. This modifier may also be used to indicate that a
planned surgical or diagnostic procedure was discontinued, partially
reduced, or canceled at the physician's discretion after the
administration of anesthesia. For purposes of billing for services
furnished in the HOPD, anesthesia is defined to include local, regional
block(s), moderate sedation/analgesia (``conscious sedation''), deep
sedation/analgesia, or general anesthesia. Modifier ``74'' was created
so that the costs incurred by the hospital to initiate the procedure
(preparation of the patient, procedure room, and recovery room) could
be recognized for payment even though the procedure was discontinued
prior to completion. Modifier ``74'' results in a payment rate of 100
percent of the full OPPS payment for the procedure.
Modifier ``52'' was revised in CY 2012 and is used by the hospital
to indicate partial reduction, cancellation, or discontinuation of
services for which anesthesia is not planned. (We refer readers to the
January 2012 Update of the Hospital Outpatient Prospective Payment
System (OPPS), Transmittal 2386, Change Request 7672, dated January 13,
2012.) The modifier provides a means for reporting reduced services
without disturbing the identification of the basic service. Modifier
``52'' results in a payment rate of 50 percent of the full OPPS payment
for the procedure.
When a procedure assigned to a device-intensive APC is discontinued
either prior to administration of anesthesia or for a procedure that
does not require anesthesia, we presume that, in the majority of cases,
the device was not used and remains sterile such that it could be used
for another case. In these circumstances, under current policy,
hospitals could be paid twice by Medicare for the same device, once for
the initial procedure that was discontinued and again when the device
is actually used. Accordingly, for CY 2016, in the CY 2016 OPPS/ASC
proposed rule (80 FR 39269 through 39270), we proposed that, for
procedures involving implantable devices that are assigned to a device-
intensive APC (defined as those APCs with a device offset greater than
40 percent), we would reduce the APC payment amount for discontinued
device-intensive procedures, where anesthesia has not been administered
to the patient or the procedure does not require anesthesia, by 100
percent of the device offset amount prior to applying the additional
payment adjustments that apply when the procedure is discontinued. We
proposed to restrict the policy to device-intensive APCs so that the
adjustment would not be triggered by the use of an inexpensive device
whose cost would not constitute a significant portion of the total
payment rate for an APC. We did not propose to deduct the device offset
amount from a procedure that was discontinued after anesthesia was
administered (modifier ``74'') because we believe that it may be more
likely that devices involved with such procedures may no longer be
sterile, such that they could be restocked and used for another case.
However, we solicited public comments on how often the device becomes
ineligible for use in a subsequent case and whether we should deduct
the device offset amount from claims with modifier ``74'' as well. In
addition, we proposed to amend the existing regulations at 42 CFR
419.44(b) accordingly.
Comment: Commenters generally opposed the proposal. The commenters
disagreed with CMS' assumption that devices involved in discontinued
procedures were able to be used for another case. One commenter noted,
for example, that a nurse may unpack and breach the sterility of
implantable devices and other sterile supplies prior to the decision to
proceed with the surgery and before the administration of anesthesia.
The commenters also noted that companies do not routinely provide
information on how to resterilize the devices after the packaging has
been opened. The commenters urged CMS not to finalize the proposals,
absent a study or evidence that showed that devices remain sterile in
discontinued procedures.
Response: We note that the commenters did not provide a clinical
reason for why an implantable device would need to be opened in advance
of a procedure. Although we acknowledge that some hospitals may choose
to open devices prior to the start of the surgery, we do not believe
that this practice is necessary. We continue to believe that, in the
majority of cases, supplies for a procedure can be arrayed in advance
of the procedure, and that implantable devices that are assigned to a
device-
[[Page 70425]]
intensive APC could be opened when ready for insertion. Further, in the
case of a device that became unsterile but was not ultimately used in a
procedure, in addition to information that is already available from
the FDA about resterilizing reusable medical devices, we note that the
manufacturer may provide information on how to ``resterilize'' such a
device. We would expect that the hospital would take necessary steps to
avoid having to throw away an unused device, especially in
circumstances involving expensive devices.
Comment: Some commenters supported CMS' existing policy to reduce
the APC payment for procedures that were discontinued, but requested
that CMS not reduce any of the device cost associated with the
procedure. Specifically, the commenters requested that CMS: (1) Reduce
the full APC payment amount by the device offset; (2) apply the
discontinued procedure reduction; and (3) add back to the full device
offset amount the reduced payment rate to arrive a payment rate that
incorporates the cost of the discarded device and supplies related to
the procedure.
Response: We continue to believe that device costs are not incurred
when the device remains unopened and sterile. While there may be some
scenarios under which a device is opened prior to the decision to
cancel the procedure, the OPPS is based on a system of averages, and we
believe that, overall, those instances will be balanced by those cases
where the device that would have been used is not opened prior to the
decision to cancel the procedure. As discussed later in this section,
we are not finalizing our proposal with respect to cases for which
anesthesia is not planned (modifier ``52''). Accordingly, the device
offset amount will not be deducted from device-intensive procedures
involving modifier ``52.''
Comment: Several commenters urged CMS to review the use of revenue
code 0278 for claims that included modifier ``52'' or ``73.'' One
commenter noted that, because the OPPS is a system based on averages,
if the number of discontinued procedures under Medicare is small,
payment for device costs associated with such procedures where the
device is opened but unused is likely to be balanced out by other cases
involving the device.
Another commenter stated that, in the absence of a study or other
evidence that demonstrated that devices remain sterile in procedures
with modifiers ``52'' and ``73'' appended to the claim, it is
inappropriate to implement the proposed payment reductions. Several
commenters cited to an external analysis of 1,500 claims that had a
device-intensive procedure code reporting either modifier ``52'' or
``73'' where approximately two-thirds of the time, these claims also
contained a charge using revenue code 0278. Some commenters requested
that CMS conduct a more detailed analysis of the proposed policy to
better understand whether devices can be used for another case. One
commenter requested that CMS provide information in the final rule on
the number of claims for device-intensive procedures on which modifier
``52'' or ``73'' is appended.
Another commenter suggested that a hospital could apply a token
charge for the device as a mechanism to note that the device was opened
on a canceled procedure because the use of modifier ``52'' or ``73''
does not provide specific information on whether or not the device was
opened. The commenter believed that the token charge would provide a
mechanism for gathering information that would inform whether the use
of these modifiers should reduce the overall APC payment by the full
offset amount and the 50-percent reduction in payment.
Some commenters noted that, because the APC payment is based on the
average cost of all cases, the APC weights should already reflect a
reduced cost for the unused device based on the mechanics of CMS'
costing methodology and, therefore, this policy may penalize the
hospital twice.
Response: In response to commenters' request, we analyzed Medicare
claims data from CY 2014. We found that, among those claims that
contained modifier ``52'' or ``73,'' charges under revenue code 0278
(Implantable Device) for device-intensive procedures were rare.
Specifically, we found that, for device-intensive procedures, there
were 597 claims on which modifier ``52'' was appended, and 116 claims
on which modifier ``73'' was appended. Based on a total of 527,138
device-intensive procedures performed in CY 2014, we determine that
approximately 0.14 percent of device-intensive procedures are canceled
prior to anesthesia or do not require anesthesia.
In response to the comments regarding use of revenue code 0278, we
remind the commenters that a charge under revenue code 0278 should only
be posted when the cost associated with an implantable device is
incurred. With respect to the suggestion to require a token charge for
devices that were compromised in canceled procedures, we note that we
are already able to gather information regarding canceled procedures
through the use of revenue code 0278 on claims that also contain
modifier ``52,'' ``73,'' or ``74.'' Therefore, we disagree that there
is a need to add a token charge for the purpose of identifying when a
device was opened on a canceled procedure.
With respect to the comment that the APC relative weights already
reflect the cost of canceled procedures, we note that, to the extent
that a device is unused for the canceled procedure and is instead used
on another case, the APC payment rate may be inappropriately inflated
because the cost of the unused device may be included in the canceled
procedure case (as evidenced by charges on the claim for the device).
Therefore, we continue to believe that it is appropriate to deduct the
device offset for discontinued procedures reported on claims to which
modifier ``73'' is appended. As discussed below, we are not finalizing
our proposal to deduct the device offset amount from the APC payment
amount for device procedures for which modifier ``52'' is appended to
the claim.
Comment: One commenter asked CMS to clarify the use of modifier
``52'' on claims for device-intensive procedures because the commenter
believed it would be a rare occurrence that an implantable device would
be used for a procedure for which anesthesia was not planned.
Response: Our analysis of CY 2014 Medicare claims data confirms
that modifier ``52,'' which is used for procedures for which anesthesia
was not planned, is rarely appended with a device-intensive procedure.
We agree with the commenter that it would be rare that an implantable
device would be used for procedures for which anesthesia was not
planned because anesthesia is commonly used in procedures that involve
surgically implanting a device. Accordingly, we are not finalizing our
proposal to deduct the device offset amount from device-intensive APC
payment amounts for discontinued procedures involving modifier ``52.''
Comment: Commenters supported CMS' decision not to include the use
of modifier ``74'' under the proposed policy. The commenters stated
that, in cases in which the device implantation is canceled after
receipt of anesthesia, it was likely that sterile devices would have
been opened and rendered useless for another patient and the facility
will have incurred the full cost of the device.
Response: We appreciate the insights offered in response to our
solicitation for comment on whether to deduct the device offset amount
when a device procedure case is canceled after
[[Page 70426]]
administration of anesthesia (modifier ``74'').
After consideration of the public comments we received, we are
finalizing our proposed policy, with modification, under the regulation
at Sec. 419.44(b). Specifically, for procedures involving implantable
devices that are assigned to a device-intensive APC (defined as those
APCs with a device offset greater than 40 percent), we will reduce the
APC payment amount for discontinued device-intensive procedures, where
anesthesia has not been administered to the patient (as evidenced by
the presence of modifier ``73''), by 100 percent of the device offset
amount prior to applying the additional payment adjustments that apply
when the procedure is discontinued. As discussed earlier in this
section, we are not finalizing this policy for procedures for which
anesthesia is not planned and the procedure is discontinued (as
evidenced by the presence of modifier ``52'').
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs of
Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout this final rule with comment period, the
term ``biological'' is used because this is the term that appears in
section 1861(t) of the Act. ``Biological'' as used in this final rule
with comment period includes (but is not necessarily limited to)
``biological product'' or ``biologic'' as defined in the Public Health
Service Act. As enacted by the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), this provision
requires the Secretary to make additional payments to hospitals for:
Current orphan drugs, as designated under section 526 of the Federal
Food, Drug, and Cosmetic Act; current drugs and biologicals and
brachytherapy sources used in cancer therapy; and current
radiopharmaceutical drugs and biologicals. ``Current'' refers to drugs
or biologicals that are outpatient hospital services under Medicare
Part B for which payment was made on the first date the hospital OPPS
was implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biologicals that were not being paid for as an HOPD
service as of December 31, 1996 and whose cost is ``not insignificant''
in relation to the OPPS payments for the procedures or services
associated with the new drug or biological. For pass-through payment
purposes, radiopharmaceuticals are included as ``drugs.'' As required
by statute, transitional pass-through payments for a drug or biological
described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a
period of at least 2 years, but not more than 3 years, after the
payment was first made for the product as a hospital outpatient service
under Medicare Part B. CY 2016 pass-through drugs and biologicals and
their designated APCs are assigned status indicator ``G'' in Addenda A
and B to this final rule with comment period, which are available via
the Internet on the CMS Web site.
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. If the drug or biological is covered under
a competitive acquisition contract under section 1847B of the Act, the
pass-through payment amount is determined by the Secretary to be equal
to the average price for the drug or biological for all competitive
acquisition areas and the year established under such section as
calculated and adjusted by the Secretary. However, we note that the
Part B drug competitive acquisition program (CAP) has been postponed
since CY 2009, and such a program has not been reinstated for CY 2016.
This methodology for determining the pass-through payment amount is
set forth in regulations at 42 CFR 419.64. These regulations specify
that the pass-through payment equals the amount determined under
section 1842(o) of the Act minus the portion of the APC payment that
CMS determines is associated with the drug or biological. Section 1847A
of the Act establishes the average sales price (ASP) methodology, which
is used for payment for drugs and biologicals described in section
1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP
methodology, as applied under the OPPS, uses several sources of data as
a basis for payment, including the ASP, the wholesale acquisition cost
(WAC), and the average wholesale price (AWP). In this final rule with
comment period, the term ``ASP methodology'' and ``ASP-based'' are
inclusive of all data sources and methodologies described therein.
Additional information on the ASP methodology can be found on the CMS
Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
The pass-through application and review process for drugs and
biologicals is explained on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. Drugs and Biologicals With Expiring Pass-Through Payment Status in
CY 2015
In the CY 2016 OPPS/ASC proposed rule (80 FR 39270), we proposed
that the pass-through status of 12 drugs and biologicals would expire
on December 31, 2015, as listed in Table 39 of the proposed rule (80 FR
39271). All of these drugs and biologicals will have received OPPS
pass-through payment for at least 2 years and no more than 3 years by
December 31, 2015. These drugs and biologicals were approved for pass-
through status on or before January 1, 2014. With the exception of
those groups of drugs and biologicals that are always packaged when
they do not have pass-through status (specifically, anesthesia drugs;
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure (including diagnostic
radiopharmaceuticals, contrast agents, and stress agents); and drugs
and biologicals that function as supplies when used in a surgical
procedure), our standard methodology for providing payment for drugs
and biologicals with expiring pass-through status in an upcoming
calendar year is to determine the product's estimated per day cost and
compare it with the OPPS drug packaging threshold for that calendar
year (which is $100 for CY 2016), as discussed further in section
V.B.2. of the proposed rule and this final rule with comment period. If
the estimated per day cost for the drug or biological is less than or
equal to the applicable OPPS drug packaging threshold, we proposed to
package payment for the drug or biological into the payment for the
associated procedure in the upcoming calendar year. If the estimated
per day cost of the drug or biological is greater than the OPPS drug
packaging threshold, we proposed to provide separate payment at the
applicable relative ASP-based payment amount (which is ASP+6 percent
for CY 2016, as discussed further in section V.B.3. of the proposed
rule and this final rule with comment period).
Comment: A few commenters recommended that CMS continue pass-
[[Page 70427]]
through payment status for new drugs, specifically diagnostic
radiopharmaceuticals and contrast agents, for a full 3 years. The
commenters asserted that providing pass-through payment status for 3
years would help provide a more current and accurate data set on which
to base payment amounts of the procedure when the diagnostic
radiopharmaceutical or contrast agent is subsequently packaged. The
commenters further recommended that CMS expire pass-through payment
status for drugs and biologicals on a quarterly as opposed to an annual
basis.
Response: We appreciate the commenters' recommendation that we
authorize OPPS pass-through payment for new drugs, including contrast
agents and diagnostic radiopharmaceuticals, for 3 full years and that
we expire pass-through status on a quarterly basis. While we are not
accepting this recommendation for CY 2016, we will take it under
consideration as we review our OPPS pass-through payment policy for CY
2017.
However, for CY 2016, as we stated in the CYs 2012 through 2015
OPPS/ASC final rules with comment period (76 FR 74287; 77 FR 68363; 78
FR 75010; and 79 FR 66875, respectively), and as described in section
V.A. of this final rule with comment period, section
1833(t)(6)(c)(i)(II) of the Act permits CMS to make pass-through
payments for a period of at least 2 years, but not more than 3 years,
after the product's first payment as a hospital outpatient service
under the OPPS. We continue to believe that this period of payment
appropriately facilitates dissemination of these new products into
clinical practice and facilitates the collection of sufficient hospital
claims data reflective of their costs for future OPPS ratesetting. Our
longstanding practice has been to provide pass-through payment for a
period of 2 to 3 years, with expiration of pass-through payment status
proposed and finalized through the annual rulemaking process. Each
year, when proposing to expire the pass-through payment status of
certain drugs and biologicals, we examine our claims data for these
products. We observe that hospitals typically have incorporated these
products into their chargemasters based on the utilization and costs
observed in our claims data. Under the existing pass-through payment
policy, we begin pass-through payment on a quarterly basis, depending
on when applications are submitted to us for consideration. We are
confident that the period of time for which drugs, biologicals,
contrast agents, and radiopharmaceuticals receive pass-through payment
status, which is at least 2 but no more than 3 years, is appropriate
for CMS to collect the sufficient amount of data to make a packaging
determination.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to expire the pass-
through payment status of the 12 drugs and biologicals listed in Table
43 below. Table 43 lists the drugs and biologicals for which pass-
through payment status will expire on December 31, 2015, the status
indicators, and the assigned APCs for CY 2016.
Table 43--Drugs and Biologicals for Which Pass-Through Payment Status
Expires December 31, 2015
------------------------------------------------------------------------
Final CY 2016
CY 2016 HCPCS code CY 2016 long status Final CY 2016
descriptor indicator APC
------------------------------------------------------------------------
A9520.............. Technetium Tc 99m N N/A
tilmanocept,
diagnostic, up to
0.5 millicuries.
C9132.............. Prothrombin K 9132
complex
concentrate
(human), Kcentra,
per i.u. of
Factor IX
activity.
J1556.............. Injection, immune K 9130
globulin
(Bivigam), 500 mg.
J3060.............. Injection, K 9294
taliglucerase
alfa, 10 units.
J7315.............. Mitomycin, N N/A
ophthalmic, 0.2
mg.
J7316.............. Injection, K 9298
Ocriplasmin,
0.125mg.
J9047.............. Injection, K 9295
carfilzomib, 1 mg.
J9262.............. Injection, K 9297
omacetaxine
mepesuccinate,
0.01 mg.
J9354.............. Injection, ado- K 9131
trastuzumab
emtansine, 1 mg.
J9400.............. Injection, Ziv- K 9296
Aflibercept, 1 mg.
Q4122.............. Dermacell, per N N/A
square centimeter.
Q4127.............. Talymed, per N N/A
square centimeter.
------------------------------------------------------------------------
3. Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing
Pass-Through Payment Status in CY 2016
In the CY 2016 OPPS/ASC proposed rule (80 FR 39271), we proposed to
continue pass-through payment status in CY 2016 for 32 drugs and
biologicals. None of these drugs and biologicals will have received
OPPS pass-through payment for at least 2 years and no more than 3 years
by December 31, 2015. These drugs and biologicals, which were approved
for pass-through status between January 1, 2013, and July 1, 2015, were
listed in Table 40 of the proposed rule (80 FR 39272). The APCs and
HCPCS codes for these drugs and biologicals approved for pass-through
status through July 1, 2015 were assigned status indicator ``G'' in
Addenda A and B to the proposed rule. Addenda A and B to the proposed
rule are available via the Internet on the CMS Web site.
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is associated with the
drug or biological. Payment for drugs and biologicals with pass-through
status under the OPPS is currently made at the physician's office
payment rate of ASP+6 percent. We stated in the proposed rule that we
believe it is consistent with the statute to propose to continue to
provide payment for drugs and biologicals with pass-through status at a
proposed rate of ASP+6 percent in CY 2016, which is the amount that
drugs and biologicals receive under section 1842(o) of the Act.
Therefore, for CY 2016, we proposed to pay for pass-through drugs
and biologicals at ASP+6 percent, equivalent to the rate these drugs
and biologicals would receive in the physician's office setting in CY
2016. We proposed that a $0.00 pass-through payment amount would be
paid for most pass-through drugs and biologicals under the CY 2016 OPPS
because the difference between the amount authorized under section
1842(o) of the Act, which was proposed at ASP+6 percent, and the
portion of the
[[Page 70428]]
otherwise applicable OPD fee schedule that the Secretary determines is
appropriate, which was proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
Contrast agents; diagnostic radiopharmaceuticals; anesthesia drugs;
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure; and drugs and biologicals
that function as supplies when used in a surgical procedure), we
proposed that their pass-through payment amount would be equal to ASP+6
percent for CY 2016 because, if not for their pass-through status,
payment for these products would be packaged into the associated
procedure.
In addition, we proposed to continue to update pass-through payment
rates on a quarterly basis on the CMS Web site during CY 2016 if later
quarter ASP submissions (or more recent WAC or AWP information, as
applicable) indicate that adjustments to the payment rates for these
pass-through drugs or biologicals are necessary. For a full description
of this policy, we refer readers to the CY 2006 OPPS/ASC final rule
with comment period (70 FR 68632 through 68635).
In CY 2016, as is consistent with our CY 2015 policy for diagnostic
and therapeutic radiopharmaceuticals, we proposed to provide payment
for both diagnostic and therapeutic radiopharmaceuticals that are
granted pass-through payment status based on the ASP methodology. As
stated above, for purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2016, we proposed to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which was proposed at ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
proposed to provide pass-through payment at WAC+6 percent, the
equivalent payment provided to pass-through drugs and biologicals
without ASP information. If WAC information also is not available, we
proposed to provide payment for the pass-through radiopharmaceutical at
95 percent of its most recent AWP.
Comment: Several commenters supported CMS' proposal to provide
payment at ASP+6 percent for drugs, biologicals, contrast agents, and
radiopharmaceuticals that are granted pass-through payment status. A
few commenters requested that CMS provide an additional payment for
radiopharmaceuticals that are granted pass-through payment status.
Response: As discussed above, the statute provides that mandated
pass-through payment for pass-through drugs and biologicals for CY 2015
equals the amount determined under section 1842(o) of the Act minus the
portion of the otherwise applicable APC payment that CMS determines is
associated with the drug or biological. Therefore, the pass-through
payment is determined by subtracting the otherwise applicable payment
amount under the OPPS (ASP+6 percent for CY 2015) from the amount
determined under section 1842(o) of the Act (ASP+6 percent).
Regarding the commenters' request that CMS provide an additional
payment for radiopharmaceuticals that are granted pass-through payment
status, we note that, for CY 2016, consistent with our CY 2015 payment
policy for diagnostic and therapeutic radiopharmaceuticals, we proposed
to provide payment for both diagnostic and therapeutic
radiopharmaceuticals with pass-through payment status based on the ASP
methodology. As stated above, the ASP methodology, as applied under the
OPPS, uses several sources of data as a basis for payment, including
the ASP, the WAC if the ASP is unavailable, and 95 percent of the
radiopharmaceutical's most recent AWP if both the ASP and WAC are
unavailable. For purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2016, we proposed to follow the standard ASP
methodology to determine its pass-through payment rate under the OPPS
to account for the acquisition and pharmacy overhead costs, including
compounding costs. We continue to believe that a single payment is
appropriate for diagnostic radiopharmaceuticals with pass-through
payment status in CY 2016, and that the payment rate of ASP+6 percent
(or WAC or AWP if ASP is not available) is appropriate to provide
payment for both a radiopharmaceutical's acquisition cost and any
associated nuclear medicine handling and compounding costs. We refer
readers to section V.B.3. of this final rule with comment period for
further discussion of payment for therapeutic radiopharmaceuticals
based on ASP information submitted by manufacturers. We also refer
readers to the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1633-P.html.
After consideration of the public comments we received, we are
finalizing our proposal to provide payment for drugs, biologicals,
diagnostic and therapeutic radiopharmaceuticals, and contrast agents
that are granted pass-through payment status based on the ASP
methodology. If a diagnostic or therapeutic radiopharmaceutical
receives pass-through payment status during CY 2016, we will follow the
standard ASP methodology to determine the pass-through payment rate
that drugs receive under section 1842(o) of the Act, which is ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
will provide pass-through payment at WAC+6 percent, the equivalent
payment provided to pass-through drugs and biologicals without ASP
information. If WAC information also is not available, we will provide
payment for the pass-through radiopharmaceutical at 95 percent of its
most recent AWP.
As discussed in more detail in section II.A.3. of the proposed rule
and this final rule with comment period, we implemented a policy
whereby payment for the following nonpass-through items is packaged
into payment for the associated procedure: Policy-packaged drugs that
include drugs, biologicals, and radiopharmaceuticals that function as
supplies when used in a diagnostic test or procedure (including but not
limited to contrast agents, stress agents, and diagnostic
radiopharmaceuticals), anesthesia drugs; and drugs and biologicals that
function as supplies when used in a surgical procedure (for example,
skin substitutes). As stated earlier, pass-through payment is the
difference between the amount authorized under section 1842(o) of the
Act and the portion of the otherwise applicable OPD fee schedule that
the Secretary determines is associated with the drug or biological.
Because payment for a drug that is policy-packaged would otherwise be
packaged if the product did not have pass-through payment status, we
believe the otherwise applicable OPPS payment amount would be equal to
the policy-packaged drug APC offset amount for the associated clinical
APC in which the drug or biological is utilized. The calculation of the
policy-packaged drug APC offset amounts is described in more detail in
section V.A.4. of this final rule with comment period. It follows that
the copayment for the nonpass-through payment portion (the otherwise
applicable fee schedule amount that we also would offset from payment
for the
[[Page 70429]]
drug or biological if a payment offset applies) of the total OPPS
payment for those drugs and biologicals, therefore, would be accounted
for in the copayment for the associated clinical APC in which the drug
or biological is used. Section 1833(t)(8)(E) of the Act provides that
the amount of copayment associated with pass-through items is equal to
the amount of copayment that would be applicable if the pass-through
adjustment was not applied. Therefore, as we did in CY 2015, we
proposed to continue to set the associated copayment amount to zero for
CY 2016 for pass-through drugs and biologicals that would otherwise be
packaged if the item did not have pass-through payment status. The 32
drugs and biologicals that we proposed to continue to have pass-through
payment status for CY 2016 or have been granted pass-through payment
status as of July 2015 were shown in Table 40 of the proposed rule (80
FR 39272).
Comment: Commenters supported the proposal to continue to set to
zero the associated copayment amounts for pass-through diagnostic
radiopharmaceuticals and contrast agents that would otherwise be
packaged if the product did not have pass-through payment status for CY
2016. The commenters noted that this policy is consistent with
statutory requirements and provides cost-saving benefits to Medicare
beneficiaries.
Response: We appreciate the commenters' support. As discussed in
the CY 2016 OPPS/ASC proposed rule (80 FR 39271 through 39272), we
believe that, for drugs and biologicals that are ``policy-packaged,''
the copayment for the nonpass-through payment portion of the total OPPS
payment for this subset of drugs and biologicals is accounted for in
the copayment of the associated clinical APC in which the drug or
biological is used. Section 1833(t)(8)(E) of the Act provides that the
amount of copayment associated with pass-through items is equal to the
amount of copayment that would be applicable if the pass-through
adjustment was not applied. Therefore, we believe that the copayment
amount should be zero for drugs and biologicals that are ``policy-
packaged,'' including diagnostic radiopharmaceuticals and contrast
agents. We also believe that the copayment amount should be zero for
pass-through anesthesia drugs that would otherwise be packaged if the
item did not have pass-through payment status.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue to set the
associated copayment amount for pass-through diagnostic
radiopharmaceuticals, contrast agents, and anesthesia drugs that would
otherwise be packaged if the item did not have pass-through payment
status to zero for CY 2016 and for future years. The 38 drugs and
biologicals that continue pass-through payment status for CY 2016 or
have been granted pass-through payment status as of January 2016 are
shown in Table 44 below.
Table 44--Drugs and Biologicals With Pass-Through Payment Status in CY 2016
----------------------------------------------------------------------------------------------------------------
CY 2016 status
CY 2015 HCPCS code CY 2016 HCPCS code CY 2016 long descriptor indicator CY 2016 APC
----------------------------------------------------------------------------------------------------------------
A9586................... A9586................... Florbetapir f18, G 1664
diagnostic, per study
dose, up to 10 millicuries.
C9025................... J9035................... Injection, ramucirumab, 5 G 1488
mg.
C9026................... J3380................... Injection, vedolizumab, 1 G 1489
mg.
C9027................... C9027................... Injection, pembrolizumab, 1 G 1490
mg.
C9349................... C9349................... PuraPly, and PuraPly G 1657
Antimicrobial, any type,
per square centimeter.
C9442................... J9032................... Injection, belinostat, 10 G 1658
mg.
C9443................... J0875................... Injection, dalbavancin, 5 G 1659
mg.
C9444................... J2407................... Injection, oritavancin, 10 G 1660
mg.
C9445................... J0596................... Injection, c-1 esterase G 9445
inhibitor (human),
Ruconest, 10 units.
C9446................... J3090................... Injection, tedizolid G 1662
phosphate, 1 mg.
C9447................... C9447................... Injection, phenylephrine G 1663
and ketorolac, 4 ml vial.
C9449................... J9039................... Injection, blinatumomab, 1 G 9449
mcg.
C9450................... J7313................... Injection, fluocinolone G 9450
acetonide intravitreal
implant, 0.01 mg.
C9451................... J2547................... Injection, peramivir, 1 mg. G 9451
C9452................... J0695................... Injection, ceftolozane 50 G 9452
mg and tazobactam 25 mg.
C9453................... J9299................... Injection, nivolumab, 1 mg. G 9453
C9454................... J2502................... Injection, pasireotide long G 9454
acting, 1 mg.
C9455................... J2860................... Injection, siltuximab, 10 G 9455
mg.
C9497................... C9497................... Loxapine, inhalation G 9497
powder, 10 mg.
C9022................... J1322................... Injection, elosulfase alfa, G 1480
1mg.
Q9970................... J1439................... Injection, ferric G 9441
carboxymaltose, 1 mg.
J1446................... J1446................... Injection, TBO-Filgrastim, G 1477
5 micrograms.
C9023................... J3145................... Injection, testosterone G 1487
undecanoate, 1 mg.
C9134................... J7181................... Factor XIII (antihemophilic G 1746
factor, recombinant),
Tretten, per i.u.
C9133................... J7200................... Factor ix (antihemophilic G 1467
factor, recombinant),
Rixubus, per i.u.
C9135................... J7201................... Factor ix (antihemophilic G 1486
factor, recombinant),
Alprolix, per i.u.
J7508................... J7508................... Tacrolimus, Extended G 1465
Release, Oral, 0.1 mg.
C9021................... J9301................... Injection, obinutuzumab, 10 G 1476
mg.
J9371................... J9371................... Injection, Vincristine G 1466
Sulfate Liposome, 1 mg.
Q4121................... Q4121................... Theraskin, per square G 1479
centimeter.
Q9975................... J7205................... Injection, factor viii, fc G 1656
fusion protein,
(recombinant), per i.u.
Q9978................... J8655................... Netupitant (300mg) and G 9448
palonosetron (0.5 mg).
C9456................... J1833................... Injection, isavuconazonium G 9456
sulfate, 1 mg.
C9457................... Q9950................... Injection, sulfur G 9457
hexafluoride lipid
microsphere, per ml.
N/A..................... C9458................... Florbetaben F18, G 9458
diagnostic, per study
dose, up to 8.1
millicuries.
N/A..................... C9459................... Flutemetamol F18, G 9459
diagnostic, per study
dose, up to 5 millicuries.
N/A..................... C9460................... Injection, cangrelor, 1 mg. G 9460
Q5101................... Q5101................... Injection, Filgrastim (G- G 1822
CSF), Biosimilar, 1
microgram.
----------------------------------------------------------------------------------------------------------------
[[Page 70430]]
4. Provisions for Reducing Transitional Pass-Through Payments for
Policy-Packaged Drugs and Biologicals To Offset Costs Packaged Into APC
Groups
a. Background
Prior to CY 2008, diagnostic radiopharmaceuticals and contrast
agents were paid separately under the OPPS if their mean per day costs
were greater than the applicable year's drug packaging threshold. In CY
2008 (72 FR 66768), we began a policy of packaging payment for all
nonpass-through diagnostic radiopharmaceuticals and contrast agents as
ancillary and supportive items and services into their associated
nuclear medicine and radiology procedures. Therefore, beginning in CY
2008, nonpass-through diagnostic radiopharmaceuticals and contrast
agents were not subject to the annual OPPS drug packaging threshold to
determine their packaged or separately payable payment status, and
instead all non-pass-through diagnostic radiopharmaceuticals and
contrast agents were packaged as a matter of policy.
Beginning in CY 2014, in the CY 2014 OPPS/ASC final rule with
comment period (78 FR 74925), we finalized a policy to package nonpass-
through drugs, biologicals, and radiopharmaceuticals that function as
supplies when used in a diagnostic test or procedure. This category
includes diagnostic radiopharmaceuticals, contrast agents, stress
agents, and other diagnostic drugs. In addition, beginning in CY 2014,
we finalized the packaging of all drugs and biologicals that function
as supplies when used in a surgical procedure (including but not
limited to skin substitutes and implantable biologicals). These
packaging policies are codified at 42 CFR 419.2(b).
b. Payment Offset Policy for Diagnostic Radiopharmaceuticals
As previously noted, radiopharmaceuticals are considered to be
drugs for OPPS pass-through payment purposes. As described above,
section 1833(t)(6)(D)(i) of the Act specifies that the transitional
pass-through payment amount for pass-through drugs and biologicals is
the difference between the amount paid under section 1842(o) of the Act
and the otherwise applicable OPD fee schedule amount. Because a payment
offset is necessary in order to provide an appropriate transitional
pass-through payment, we deduct from the pass-through payment for
diagnostic radiopharmaceuticals an amount reflecting the portion of the
APC payment associated with predecessor radiopharmaceuticals in order
to ensure no duplicate radiopharmaceutical payment is made.
In CY 2009, we established a policy to estimate the portion of each
APC payment rate that could reasonably be attributed to the cost of
predecessor diagnostic radiopharmaceuticals when considering a new
diagnostic radiopharmaceutical for pass-through payment (73 FR 68638
through 68641). Specifically, we use the policy-packaged drug offset
fraction for APCs containing nuclear medicine procedures, calculated as
1 minus the following: The cost from single procedure claims in the APC
after removing the cost for policy-packaged drugs divided by the cost
from single procedure claims in the APC. To determine the actual APC
offset amount for pass-through diagnostic radiopharmaceuticals that
takes into consideration the otherwise applicable OPPS payment amount,
we multiply the policy-packaged drug offset fraction by the APC payment
amount for the nuclear medicine procedure with which the pass-through
diagnostic radiopharmaceutical is used and, accordingly, reduce the
separate OPPS payment for the pass-through diagnostic
radiopharmaceutical by this amount. For CY 2016, as we did in CY 2015,
we proposed to continue to apply the diagnostic radiopharmaceutical
offset policy to payment for pass-through diagnostic
radiopharmaceuticals. In the proposed rule, we indicated that, for CY
2016, there will be three diagnostic radiopharmaceuticals with pass-
through payment status under the OPPS: (1) HCPCS code A9586
(Florbetapir f18, diagnostic, per study dose, up to 10 millicuries);
(2) HCPCS code C9458 (Florbetaben F18, diagnostic, per study dose, up
to 8.1 millicuries); and (3) HCPCS code C9459 (Flutemetamol F18,
diagnostic, per study dose, up to 5 millicuries). We currently apply
the established radiopharmaceutical payment offset policy to pass-
through payment for these products.
Table 41 of the proposed rule (80 FR 39273) displayed the proposed
APCs to which nuclear medicine procedures would be assigned in CY 2016
and for which we expect that an APC offset could be applicable in the
case of diagnostic radiopharmaceuticals with pass-through status.
We did not receive any public comments on our proposed policy.
Therefore, we are finalizing our proposal, without modification, to
continue to apply the diagnostic radiopharmaceutical offset policy to
payment for pass-through diagnostic radiopharmaceuticals. We will
continue to reduce the payment amount for procedures in the APCs listed
in Table 45 in this final rule with comment period by the full policy-
packaged offset amount appropriate for diagnostic radiopharmaceuticals.
Table 45 below displays the APCs to which nuclear medicine procedures
are assigned in CY 2016 and for which an APC offset may be applicable
in the case of diagnostic radiopharmaceuticals with pass-through
status.
Table 45--APCs to Which A Diagnostic Radiopharmaceutical Offset May Be
Applicable In CY 2016
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5591.............................. Level 1 Nuclear Medicine and Related
Services.
5592.............................. Level 2 Nuclear Medicine and Related
Services.
5593.............................. Level 3 Nuclear Medicine and Related
Services.
5594.............................. Level 4 Nuclear Medicine and Related
Services.
------------------------------------------------------------------------
c. Payment Offset Policy for Contrast Agents
Section 1833(t)(6)(D)(i) of the Act specifies that the transitional
pass-through payment amount for pass-through drugs and biologicals is
the difference between the amount paid under section 1842(o) of the Act
and the otherwise applicable OPD fee schedule amount. Because a payment
offset is necessary in order to provide an appropriate transitional
pass-through payment, we deduct from the pass-through payment for
contrast agents an amount reflecting the portion of the APC payment
associated with predecessor contrast agents in order to ensure no
duplicate contrast agent payment is made.
In CY 2010, we established a policy to estimate the portion of each
APC payment rate that could reasonably be attributed to the cost of
predecessor contrast agents when considering new contrast agents for
pass-through payment (74 FR 60482 through 60484). Specifically, we use
the policy-packaged drug offset fraction for procedural APCs,
calculated as 1 minus the following: The cost from single procedure
claims in the APC after removing the cost for policy-packaged drugs
divided by the cost from single procedure claims in the APC. To
determine the actual APC offset amount for pass-through contrast agents
that takes into consideration the otherwise applicable OPPS payment
amount, in the CY 2016 OPPS/ASC proposed rule (80 FR 39273), we
proposed to multiply the policy packaged drug offset fraction
[[Page 70431]]
by the APC payment amount for the procedure with which the pass-through
contrast agent is used and, accordingly, reduce the separate OPPS
payment for the pass-through contrast agent by this amount. For CY
2016, as we did in CY 2015, we proposed to continue to apply our
standard contrast agents offset policy to payment for any pass-through
contrast agents (we refer readers to the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66879) for the final CY 2015 policy and the
CY 2016 OPPS/ASC proposed rule (80 FR 39273) for the proposed CY 2016
policy).
There is currently one contrast agent with pass-through payment
status under the OPPS. HCPCS code Q9950 (Injection, sulfur hexafluoride
lipid microsphere, per ml) was granted pass-through payment status
beginning October 1, 2015. We currently apply the established pass-
through payment offset policy to pass-through payment for this product.
For CY 2016, we proposed to identify procedural APCs for which we
expect a contrast offset could be applicable in the case of a pass-
through contrast agent as any procedural APC with a policy-packaged
drug amount greater than $20 that is not a nuclear medicine APC
identified in Table 41 of the proposed rule, and these APCs were
displayed in Table 42 of the proposed rule. The methodology used to
determine a proposed threshold cost for application of a contrast agent
offset policy is described in detail in the CY 2010 OPPS/ASC final rule
with comment period (74 FR 60483 through 60484). For CY 2016 and
subsequent years, we proposed to continue to recognize that when a
contrast agent with pass-through status is billed with any procedural
APC listed in Table 42 of the proposed rule (80 FR 39273 through
39274), a specific offset based on the procedural APC would be applied
to payment for the contrast agent to ensure that duplicate payment is
not made for the contrast agent.
We did not receive any public comments on this proposal. Therefore,
we are finalizing our proposal for CY 2016 without modification. We
will continue to recognize that when a contrast agent with pass-through
payment status is billed with any procedural APC listed in Table 46
below, a specific offset based on the procedural APC will be applied to
the payment for the contrast agent to ensure that duplicate payment is
not made for the contrast agent.
Table 46--APCs to Which a Contrast Agent Payment Offset Are Applicable
for CY 2016
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5181.............................. Level 1 Vascular Procedures and
Related Services.
5182.............................. Level 2 Vascular Procedures and
Related Services.
5183.............................. Level 3 Vascular Procedures and
Related Services.
5188.............................. Diagnostic Cardiac Catheterization.
5191.............................. Level 1 Endovascular Procedures.
5192.............................. Level 2 Endovascular Procedures.
5193.............................. Level 3 Endovascular Procedures.
5351.............................. Level 1 Percutaneous Abdominal/
Biliary Procedures and Related
Services.
5352.............................. Level 2 Percutaneous Abdominal/
Biliary Procedures and Related
Services.
5523.............................. Level 3 X-Ray and Related Services.
5524.............................. Level 4 X-Ray and Related Services.
5525.............................. Level 5 X-Ray and Related Services.
5526.............................. Level 6 X-Ray and Related Services.
5561.............................. Level 1 Echocardiogram With
Contrast.
5562.............................. Level 2 Echocardiogram With
Contrast.
5571.............................. Computed Tomography With Contrast
and Computed Tomography
Angiography.
5582.............................. Magnetic Resonance Imaging and
Magnetic Resonance Angiography With
Contrast.
5881.............................. Ancillary Outpatient Service When
Patient Expires.
8006.............................. CT and CTA With Contrast Composite.
8008.............................. MRI and MRA With Contrast Composite.
------------------------------------------------------------------------
d. Payment Offset Policy for Drugs, Biologicals, and
Radiopharmaceuticals That Function as Supplies When Used in a
Diagnostic Test or Procedure (Other Than Diagnostic
Radiopharmaceuticals and Contrast Agents and Drugs and Biologicals That
Function as Supplies When Used in a Surgical Procedure)
Section 1833(t)(6)(D)(i) of the Act specifies that the transitional
pass-through payment amount for pass-through drugs and biologicals is
the difference between the amount paid under section 1842(o) of the Act
and the otherwise applicable OPD fee schedule amount. In the CY 2014
OPPS/ASC final rule with comment period (78 FR 74925), we finalized our
policy to package drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure and
drugs and biologicals that function as supplies when used in a surgical
procedure. As a part of this policy, we specifically finalized that
skin substitutes and stress agents used in myocardial perfusion imaging
(MPI) be policy packaged in CY 2014, in addition to diagnostic
radiopharmaceuticals, contrast agents, and anesthesia drugs (78 FR
75019). Because a payment offset is necessary in order to provide an
appropriate transitional pass-through payment, we finalized a policy
for CY 2014 to deduct from the pass-through payment for skin
substitutes and stress agents an amount reflecting the portion of the
APC payment associated with predecessor skin substitutes and stress
agents in order to ensure no duplicate skin substitute or stress agent
payment is made (78 FR 75019).
In CY 2014, we established a policy to estimate the portion of each
APC payment rate that could reasonably be attributed to the cost of
predecessor skin substitutes or stress agents when considering a new
skin substitute or stress agent for pass-through payment (78 FR 75019).
Specifically, in the case of pass-through skin substitutes, we use the
policy-packaged drug offset fraction for skin substitute procedural
APCs, calculated as 1 minus the following: The cost from single
procedure claims in the APC after removing the cost for policy-packaged
drugs divided by the cost from single procedure claims in the APC.
Because policy-packaged radiopharmaceuticals also would be included in
the drug offset fraction for the APC to which MPI procedures are
assigned, in the case of pass-through stress agents, we use the policy-
packaged drug offset fraction for the procedural APC, calculated as 1
minus the following: The cost from single procedure claims in the APC
after removing the cost for policy-packaged drugs excluding policy-
packaged diagnostic radiopharmaceuticals divided by the cost from
single procedure claims in the APC. To determine the actual APC offset
amount for pass-through skin substitutes and pass-through stress agents
that takes into consideration the otherwise applicable OPPS payment
amount, we multiply the policy-packaged drug offset fraction by the APC
payment amount for the procedure with which the pass-through skin
substitute or pass-through stress agent is used and, accordingly,
reduce the separate OPPS payment for the pass-through skin substitute
or pass-through stress agent by this amount (78 FR 75019). In the CY
2016 OPPS/ASC
[[Page 70432]]
proposed rule (80 FR 39274), for CY 2016, as we did in CY 2015, we
proposed to continue to apply the skin substitute and stress agent
offset policy to payment for pass-through skin substitutes and stress
agents.
In the proposed rule, we indicated that, for 2016, there will be
two skin substitutes (HCPCS codes Q4121 and C9349) with pass-through
payment status under the OPPS. We will apply the skin substitute
payment offset policy to pass-through payment for these products. Table
43 of the CY 2016 OPPS/ASC proposed rule (80 FR 39274) displayed the
proposed APCs to which skin substitute procedures would be assigned in
CY 2016 and for which we expect that an APC offset could be applicable
in the case of skin substitutes with pass-through status.
Although there are currently no stress agents with pass-through
status under the OPPS, we believe that a payment offset is necessary in
the event that a new stress agent is approved for pass-through status
during CY 2016 in order to provide an appropriate transitional pass-
through payment for new stress agents. Table 44 of the CY 2016 OPPS/ASC
proposed rule (80 FR 39274) displayed the proposed APCs to which MPI
procedures would be assigned in CY 2016 and for which we expect that an
APC offset could be applicable in the case of a stress agent with pass-
through status.
We did not receive any public comments on these proposals.
Therefore, we are finalizing our proposal, without modification, to
recognize that when a skin substitute with pass-through payment status
is billed with any procedural APC listed in Table 47 below, a specific
offset based on the procedural APC will be applied to the payment for
the skin substitute to ensure that duplicate payment is not made for
the skin substitute. In addition, when a stress agent with pass-through
payment status is billed with any procedural APC listed in Table 48
below, a specific offset based on the procedural APC will be applied to
the payment for the stress agent to ensure that duplicate payment is
not made for the stress agent.
Table 47--APCs to Which a Skin Substitute Payment Offset Are Applicable
for CY 2016
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5054.............................. Level 4 Skin Procedures.
5055.............................. Level 5 Skin Procedures.
------------------------------------------------------------------------
Table 48--APCs to Which a Stress Agent Payment Offset Are Applicable for
CY 2016
------------------------------------------------------------------------
CY 2016 APC CY 2016 APC title
------------------------------------------------------------------------
5722.............................. Level 2 Diagnostic Tests and Related
Services.
5593.............................. Level 3 Nuclear Medicine and Related
Services.
------------------------------------------------------------------------
As we proposed, we will continue to post annually on the CMS Web
site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html a file that contains the APC offset
amounts that will be used for that year for purposes of both evaluating
cost significance for candidate pass-through device categories and
drugs and biologicals and establishing any appropriate APC offset
amounts. Specifically, the file will continue to provide the amounts
and percentages of APC payment associated with packaged implantable
devices, policy-packaged drugs, and threshold packaged drugs and
biologicals for every OPPS clinical APC.
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
1. Background
Under the policies that we established for the CY 2013 OPPS, we
currently pay for drugs, biologicals, and radiopharmaceuticals that do
not have pass-through payment status in one of two ways: (1) As a
packaged payment included in the payment for the associated service, or
(2) as a separate payment (individual APCs). We explained in the April
7, 2000 OPPS final rule with comment period (65 FR 18450) that we
generally package the cost of drugs and radiopharmaceuticals into the
APC payment rate for the procedure or treatment with which the products
are usually furnished. Hospitals do not receive separate payment for
packaged items and supplies, and hospitals may not bill beneficiaries
separately for any packaged items and supplies whose costs are
recognized and paid within the national OPPS payment rate for the
associated procedure or service.
Packaging costs into a single aggregate payment for a service,
procedure, or episode-of-care is a fundamental principle that
distinguishes a prospective payment system from a fee schedule. In
general, packaging the costs of items and services into the payment for
the primary procedure or service with which they are associated
encourages hospital efficiencies and also enables hospitals to manage
their resources with maximum flexibility.
2. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Background
As indicated in section V.B.1. of this final rule with comment
period, in accordance with section 1833(t)(16)(B) of the Act, the
threshold for establishing separate APCs for payment of drugs and
biologicals was set to $50 per administration during CYs 2005 and 2006.
In CY 2007, we used the four quarter moving average Producer Price
Index (PPI) levels for Pharmaceutical Preparations (Prescription) to
trend the $50 threshold forward from the third quarter of CY 2005 (when
the Pub. L. 108-173 mandated threshold became effective) to the third
quarter of CY 2007. We then rounded the resulting dollar amount to the
nearest $5 increment in order to determine the CY 2007 threshold amount
of $55. Using the same methodology as that used in CY 2007 (which is
discussed in more detail in the CY 2007 OPPS/ASC final rule with
comment period (71 FR 68085 through 68086)), we set the packaging
threshold for establishing separate APCs for drugs and biologicals at
$95 for CY 2015 (79 FR 66882).
Following the CY 2007 methodology, for the CY 2016 OPPS/ASC
proposed rule (80 FR 39275), we used the most recently available four
quarter moving average PPI levels to trend the $50 threshold forward
from the third quarter of CY 2005 to the third quarter of CY 2016 and
rounded the resulting dollar amount ($100.22) to the nearest $5
increment, which yielded a figure of $100. In performing this
calculation, we used the most recent forecast of the quarterly index
levels for the PPI for Pharmaceuticals for Human Use (Prescription)
(Bureau of Labor Statistics (BLS) series code WPUSI07003) from CMS'
Office of the Actuary (OACT). We refer below to this series generally
as the PPI for Prescription Drugs.
Based on the calculations described above, we proposed a packaging
threshold for CY 2016 of $100. For a more detailed discussion of the
OPPS drug packaging threshold and the use of the PPI for Prescription
Drugs, we refer readers to the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68085 through 68086).
Following the CY 2007 methodology, for this CY 2016 OPPS/ASC final
rule with comment period, we used the most recently available four
quarter moving averaging PPI levels to trend the $50
[[Page 70433]]
threshold forward from the third quarter of CY 2005 to the third
quarter of CY 2015 and rounded the resulting dollar amount ($97.22) to
the nearest $5 increment, which yielded a figure of $100. In performing
this calculation, we used the most recent forecast of the quarterly
index levels for the PPI for Pharmaceuticals for Human Use
(Prescription) (Bureau of Labor Statistics) series code WPUSI07003)
from CMS' Office of the Actuary (OACT). Therefore, for this CY 2016
OPPS/ASC final rule with comment period, using the CY 2007 OPPS
methodology, we are establishing a packaging threshold for CY 2016 of
$100.
b. Cost Threshold for Packaging of Payment for HCPCS Codes That
Describe Certain Drugs, Certain Biologicals, and Therapeutic
Radiopharmaceuticals (``Threshold-Packaged Drugs'')
In the CY 2016 OPPS/ASC proposed rule (80 FR 39275), to determine
the proposed CY 2016 packaging status for all nonpass-through drugs and
biologicals that are not policy packaged, we calculated, on a HCPCS
code-specific basis, the per day cost of all drugs, biologicals, and
therapeutic radiopharmaceuticals (collectively called ``threshold-
packaged'' drugs) that had a HCPCS code in CY 2014 and were paid (via
packaged or separate payment) under the OPPS. We used data from CY 2014
claims processed before January 1, 2015 for this calculation. However,
we did not perform this calculation for those drugs and biologicals
with multiple HCPCS codes that include different dosages, as described
in section V.B.2.c. of the proposed rule, or for the following policy-
packaged items that we proposed to continue to package in CY 2016:
Anesthesia drugs; contrast agents; stress agents; diagnostic
radiopharmaceuticals; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure; and
drugs and biologicals that function as supplies when used in a surgical
procedure.
In order to calculate the per day costs for drugs, biologicals, and
therapeutic radiopharmaceuticals to determine their proposed packaging
status in CY 2016, we used the methodology that was described in detail
in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and
finalized in the CY 2006 OPPS final rule with comment period (70 FR
68636 through 68638). For each drug and biological HCPCS code, we used
an estimated payment rate of ASP+6 percent (which is the payment rate
we proposed for separately payable drugs and biologicals for CY 2016,
as discussed in more detail in section V.B.3.b. of the proposed rule)
to calculate the CY 2016 proposed rule per day costs. We used the
manufacturer submitted ASP data from the fourth quarter of CY 2014
(data that were used for payment purposes in the physician's office
setting, effective April 1, 2015) to determine the proposed rule per
day cost.
As is our standard methodology, for CY 2016, we proposed to use
payment rates based on the ASP data from the fourth quarter of CY 2014
for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to the proposed rule (which
are available via the Internet on the CMS Web site) because these were
the most recent data available for use at the time of development of
the proposed rule. These data also were the basis for drug payments in
the physician's office setting, effective April 1, 2015. For items that
did not have an ASP-based payment rate, such as some therapeutic
radiopharmaceuticals, we used their mean unit cost derived from the CY
2014 hospital claims data to determine their per day cost.
We proposed to package items with a per day cost less than or equal
to $100, and identify items with a per day cost greater than $100 as
separately payable. Consistent with our past practice, we cross-walked
historical OPPS claims data from the CY 2014 HCPCS codes that were
reported to the CY 2015 HCPCS codes that we displayed in Addendum B to
the proposed rule (which is available via the Internet on the CMS Web
site) for proposed payment in CY 2016.
Comment: The majority of the commenters opposed the continuation of
the OPPS packaging threshold of $100 for CY 2016. The commenters
believed that, over several years, CMS has rapidly increased the
packaging threshold, which contradicts congressional intent. As such,
the commenters recommended that CMS eliminate the packaging threshold
and provide separate payment for all drugs with HCPCS codes or freeze
the packaging threshold at the current level ($95).
Response: The commenters did not specify how they believed our
policy is inconsistent with congressional intent. However, as we stated
in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68086),
we believe that packaging certain items is a fundamental component of a
prospective payment system, that updating the packaging threshold of
$50 for the CY 2005 OPPS is consistent with industry and government
practices, and that the PPI for Prescription Drugs is an appropriate
mechanism to gauge Part B drug inflation. Therefore, because packaging
is a fundamental component of a prospective payment system that
continues to provide important flexibility and efficiency in the
delivery of high quality hospital outpatient services, we are not
adopting commenters' recommendations to pay separately for all drugs,
biologicals, and radiopharmaceuticals for CY 2016, or to eliminate the
packaging threshold, or to freeze the packaging threshold at $95.
After consideration of the public comments we received, and
consistent with our methodology for establishing the packaging
threshold using the most recent PPI forecast data, we are adopting a CY
2016 packaging threshold of $100.
Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in this CY 2016 OPPS/ASC final
rule with comment period, we used ASP data from the first quarter of CY
2015, which is the basis for calculating payment rates for drugs and
biologicals in the physician's office setting using the ASP
methodology, effective July 1, 2015, along with updated hospital claims
data from CY 2014. We note that we also used these data for budget
neutrality estimates and impact analyses for this CY 2016 OPPS/ASC
final rule with comment period.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B to this final rule with comment
period are based on ASP data from the third quarter of CY 2015. These
data are the basis for calculating payment rates for drugs and
biologicals in the physician's office setting using the ASP
methodology, effective July 1, 2015. These payment rates will then be
updated in the January 2016 OPPS update, based on the most recent ASP
data to be used for physician's office and OPPS payment as of January
1, 2016. For items that do not currently
[[Page 70434]]
have an ASP-based payment rate, we recalculated their mean unit cost
from all of the CY 2014 claims data and updated cost report information
available for this CY 2016 final rule with comment period to determine
their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in the CY 2016 OPPS/
ASC proposed rule may be different from the same drug HCPCS code's
packaging status determined based on the data used for this CY 2016
OPPS/ASC final rule with comment period. Under such circumstances, we
proposed to continue to follow the established policies initially
adopted for the CY 2005 OPPS (69 FR 65780) in order to more equitably
pay for those drugs whose cost fluctuates relative to the proposed CY
2016 OPPS drug packaging threshold and the drug's payment status
(packaged or separately payable) in CY 2015. Specifically, for CY 2016,
consistent with our historical practice, we proposed to apply the
following policies to these HCPCS codes for drugs, biologicals, and
therapeutic radiopharmaceuticals whose relationship to the drug
packaging threshold changes based on the updated drug packaging
threshold and on the final updated data:
HCPCS codes for drugs and biologicals that were paid
separately in CY 2015 and that were proposed for separate payment in CY
2016, and that then have per day costs equal to or less than the CY
2016 final rule drug packaging threshold, based on the updated ASPs and
hospital claims data used for the CY 2016 final rule, would continue to
receive separate payment in CY 2016.
HCPCS codes for drugs and biologicals that were packaged
in CY 2015 and that were proposed for separate payment in CY 2016, and
that then have per day costs equal to or less than the CY 2016 final
rule drug packaging threshold, based on the updated ASPs and hospital
claims data used for the CY 2016 final rule, would remain packaged in
CY 2016.
HCPCS codes for drugs and biologicals for which we
proposed packaged payment in CY 2016 but then have per day costs
greater than the CY 2016 final rule drug packaging threshold, based on
the updated ASPs and hospital claims data used for the CY 2016 final
rule, would receive separate payment in CY 2016.
We did not receive any public comments on our proposed policy to
apply the established policies initially adopted for the CY 2005 OPPS
(69 FR 65780) in order to more equitably pay for those drugs whose cost
fluctuates relative to the CY 2016 OPPS drug packaging threshold and
the drug's payment status (packaged or separately payable) in CY 2016.
Therefore, we are finalizing our proposal, without modification, for CY
2016.
c. High Cost/Low Cost Threshold for Packaged Skin Substitutes
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to finalize the packaging of
skin substitutes, we also finalized a methodology that divides the skin
substitutes into a high cost group and a low cost group, in order to
ensure adequate resource homogeneity among APC assignments for the skin
substitute application procedures (78 FR 74933). For the CY 2014
update, assignment to the high cost or low cost skin substitute group
depended upon a comparison of the July 2013 ASP+6 percent payment
amount for each skin substitute to the weighted average payment per
unit for all skin substitutes. The weighted average was calculated
using the skin substitute utilization from the CY 2012 claims data and
the July 2013 ASP+6 percent payment amounts. The high cost/low cost
skin substitute threshold for CY 2014 was $32 per cm\2\. Skin
substitutes that had a July 2013 ASP+6 percent amount above $32 per
cm\2\ were classified in the high cost group, and skin substitutes that
had a July 2013 ASP+6 percent amount at or below $32 per cm\2\ were
classified in the low cost group. Any new skin substitutes without
pricing information were assigned to the low cost category until
pricing information was available to compare to the $32 per cm\2\
threshold for CY 2014. Skin substitutes with pass-through payment
status were assigned to the high cost category, with an offset applied
as described in section V.A.4.d. of the CY 2015 OPPS/ASC proposed rule
(79 FR 40996).
As discussed in the CY 2015 OPPS/ASC proposed rule (79 FR 40998
through 40999) and final rule with comment period (79 FR 66882 through
66885), after the effective date of the CY 2014 packaging policy, some
skin substitute manufacturers brought the following issues to our
attention regarding the CY 2014 methodology for determining the high
cost/low cost threshold:
Using ASP to determine a product's placement in the high
or low cost category may unfairly disadvantage the limited number of
skin substitute products that are sold in large sizes (that is, above
150 cm\2\). Large size skin substitute products are primarily used for
burns that are treated on an inpatient basis. These manufacturers
contended that nonlinear pricing for skin substitute products sold in
both large and small sizes results in lower per cm\2\ prices for large
sizes. Therefore, the use of ASP data to categorize products into high
and low cost categories can result in placement of products that have
significant inpatient use of the large, lower-priced (per cm\2\) sizes
into the low cost category, even though these large size products are
not often used in the hospital outpatient department.
Using a weighted average ASP to establish the high/low
cost categories, combined with the drug pass-through policy, will lead
to unstable high/low cost skin substitute categories in the future.
According to one manufacturer, under our CY 2014 policy, manufacturers
with products on pass-through payment status have an incentive to set a
very high price because hospitals are price-insensitive to products
paid with pass-through payments. As these new high priced pass-through
skin substitutes capture more market share, the weighted average ASP
high cost/low cost threshold could escalate rapidly, resulting in a
shift in the assignment of many skin substitutes from the high cost
category to the low cost category.
We agreed with stakeholder concerns regarding the potential
instability of the high/low cost categories associated with the drug
pass-through policy, as well as stakeholder concerns about the
inclusion of large-sized products that are primarily used for
inpatients in the ASP calculation, when ASP is used to establish the
high cost/low cost categories. As an alternative to using ASP data, in
the CY 2015 OPPS/ASC final rule with comment period, we established the
high cost/low cost threshold using an alternative methodology (that is,
the weighted average mean unit cost (MUC) for all skin substitute
products from claims data) that we believed may provide more stable
high/low cost categories and resolve the issue associated with large
sized products because the MUC will be derived from hospital outpatient
claims only. We indicated that the threshold was based on costs from
hospital outpatient claims data instead of manufacturer reported sales
prices that would not include larger sizes primarily used for inpatient
burn cases.
[[Page 70435]]
As discussed in the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66884), after consideration of the public comments we received
on the CY 2015 OPPS/ASC proposed rule, we finalized a policy for CY
2015 to maintain the high cost/low cost APC structure for skin
substitute procedures in CY 2015, and we revised the existing
methodology used to establish the high/low cost threshold with the
alternative MUC methodology. We also finalized for CY 2015 the policies
that skin substitutes with pass-through payment status would be
assigned to the high cost category, and that skin substitutes with
pricing information but without claims data to calculate an MUC would
be assigned to either the high cost or low cost category based on the
product's ASP+6 percent payment rate. If ASP is not available, we
stated we would use WAC+6 percent or 95 percent of AWP to assign a
product to either the high cost or low cost category. We also finalized
a policy for CY 2015 that any new skin substitutes without pricing
information will be assigned to the low cost category until pricing
information is available to compare to the CY 2015 threshold. We stated
that new skin substitute manufacturers must submit pricing information
to CMS no later than the 15th of the third month prior to the effective
date of the next OPPS quarterly update. For example, for a new skin
substitute with new pricing information to be included in the July 1,
2015 OPPS update and designated as included in the high cost group,
verifiable pricing information must have been provided to CMS no later
than April 15, 2015.
We stated in the CY 2015 OPPS/ASC final rule with comment period
(79 FR 66884) that we would evaluate the per day cost (PDC) methodology
and compare it to the MUC methodology in CY 2016 once CY 2014 claims
data were available. As discussed in the CY 2016 OPPS/ASC proposed rule
(80 FR 39277), for CY 2016, we analyzed CY 2014 claims data to
calculate a threshold using both the MUC and PDC methods. To calculate
a per patient, per day cost for each skin substitute product, we
multiplied the total units by the mean unit cost and divided the
product by the total number of days. We posted a file on the CMS Web
site that provides details on the CY 2016 high/low cost status for each
skin substitute product based on a MUC threshold (rounded to the
nearest $1) of $25 per cm\2\ and a PDC threshold (rounded to the
nearest $1) of $1,050. The file is available on the CMS Web site at:
https://www.cms.gov/apps/ama/license.asp?file=/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/CMS-1633-P-OPPS-Skin-Substitute.zip.
For CY 2016, based on these calculations, we proposed to determine
the high/low cost status for each skin substitute product based on
either a product's geometric MUC exceeding the geometric MUC threshold
or the product's PDC exceeding the PDC threshold. As discussed in the
CY 2016 OPPS/ASC proposed rule (80 FR 39277), skin substitutes that
exceed either of these thresholds would be assigned to the high cost
group and all other products would be assigned to the low cost group.
As demonstrated in the aforementioned file that we posted on the CMS
Web site, we noted that the majority of high cost products remain high
cost under both methodologies. The products shifting to the high-cost
category from the low-cost category varied in size. Observing fairly
consistent results with both methodologies, we stated in the proposed
rule that we believe that, together, both thresholds constitute a more
robust methodology for identifying high cost skin substitute products.
We indicated in the CY 2016 OPPS/ASC proposed rule (80 FR 39277)
that we would continue to assign skin substitutes with pass-through
payment status to the high cost category, and skin substitutes with
pricing information but without claims data to calculate a geometric
MUC or PDC will be assigned to either the high cost or low cost
category based on the product's ASP+6 percent payment rate as compared
to the MUC threshold. If ASP is not available, we would use WAC+6
percent or 95 percent of AWP to assign a product to either the high
cost or low cost category. New skin substitutes without pricing
information would be assigned to the low cost category until pricing
information is available to compare to the CY 2016 MUC threshold.
For CY 2016, we also proposed to remove all implantable biologicals
from the skin substitute cost group list because these products are
typically used in internal surgical procedures to reinforce or repair
soft tissue, and are not typically used to promote healing of wounds on
the skin. The implantable biologicals that we proposed to remove for
the skin cost group were identified in Table 45 of the CY 2016 OPPS/ASC
proposed rule (80 FR 39277). Implantable biologicals are treated as
packaged surgical supplies under the OPPS, which are captured under 42
CFR 419.2(b)(4).
Comment: Several commenters supported CMS' proposal to revise the
methodology used to establish the high/low cost threshold from using
only a geometric mean unit cost methodology (GMUC) to using either a
GMUC methodology or a per day cost (PDC) methodology for all skin
substitutes using CY 2014 claims data. The commenters agreed that
either methodology would promote stability of assignment to the high
and low cost categories and not disadvantage skin substitute products
that are sold in large sizes. Commenters also supported using available
pricing data for skin substitutes without claims data.
Response: We appreciate the commenters' support. We believe that
adopting a policy of using either a GMUC methodology or a PDC
methodology will stabilize cost group assignment.
Comment: A few commenters supported CMS' proposal to remove
implantable biologicals from the skin substitute cost group list.
However, one commenter asked that CMS not remove HCPCS code Q4107
(GraftJacket) because, while this code describes an implantable
biological, the biological does have dual usage as a skin substitute.
Response: Based on information provided by the commenter on the
duality of use for GraftJacket, we agree that HCPCS code Q4107 should
remain on the skin substitute list.
After consideration of the public comments we received, we are
finalizing our proposal to remove the implantable biological products
(excluding the proposed removal of HCPCS code Q4107 included in the
proposed rule) identified in Table 49 below from the skin substitute
cost group list for CY 2016.
Table 49--Implantable Biologicals for Removal From Skin Substitute Cost
Group List
------------------------------------------------------------------------
CY 2016 status
CY 2016 HCPCS code CY 2016 short descriptor indicator
------------------------------------------------------------------------
C9358...................... SurgiMend, fetal.......... N
[[Page 70436]]
C9360...................... SurgiMend, neonatal....... N
Q4125...................... Arthroflex................ N
Q4130...................... Strattice TM.............. N
Q4142...................... Xcm biologic tiss matrix N
1cm.
------------------------------------------------------------------------
Table 46 of the CY 2016 OPPS/ASC proposed rule (80 FR 39278) showed
the proposed CY 2016 high cost/low cost status for each product based
on our combined threshold methodology. As noted earlier, for the
proposed rule we posted a file on the CMS Web site that provides more
information on the high cost/low cost disposition of each product for
each threshold methodology. We stated in the proposed rule that, for
this CY 2016 OPPS/ASC final rule with comment period, we would update
the MUC and PDC threshold amounts using the most recently available CY
2014 claims data and CY 2015 pricing information. The final CY 2016
high cost/low cost status for each skin substitute product is based on
a weighted average geometric mean unit cost threshold of $26, and a
weighted average per day cost threshold of $773.
We proposed that a skin substitute that is assigned to the high
cost group in CY 2015 and exceeds either the MUC or PDC in the proposed
rule for CY 2016 would be assigned to the high cost group for CY 2016,
even if it no longer exceeds the MUC or PDC CY 2016 thresholds based on
updated claims data and pricing information used in this CY 2016 final
rule with comment period.
After consideration of the public comments we received, we are
finalizing our proposal to maintain the high/low cost APC structure for
skin substitute procedures in CY 2016, and our proposal to revise the
current methodology used to establish the high/low cost threshold with
methodology based on either the geometric mean unit cost or a per day
cost. We also are finalizing our proposal that, for CY 2016, skin
substitutes with pass-through payment status will be assigned to the
high cost category. Skin substitutes with pricing information but
without claims data to calculate an MUC will be assigned to either the
high cost or low cost category based on the product's ASP+6 percent
payment rate. If ASP is not available, we will use WAC+6 percent or 95
percent of AWP to assign a product to either the high cost or low cost
category. We also are finalizing our proposal that any new skin
substitutes without pricing information will be assigned to the low
cost category until pricing information is available to compare to the
CY 2016 threshold. New skin substitute manufacturers must submit
pricing information to CMS no later than the 15th of the third month
prior to the effective date of the next OPPS quarterly update. For
example, for a new skin substitute with new pricing information to be
included in the July 1 OPPS update and designated as included in the
high cost group, verifiable pricing information must be provided to CMS
no later than April 15. Table 50 below shows the skin substitute
assignments to high cost and low cost groups for CY 2016.
Table 50--Skin Substitute Assignments to High Cost and Low Cost Groups for CY 2016
----------------------------------------------------------------------------------------------------------------
CY 2016 high/low
CY 2016 Short CY 2016 status CY 2015 high/low status based on
CY 2016 HCPCS code descriptor HCPCS Code dosage indicator status based on weighted MUC or
weighted MUC weighted PDC
----------------------------------------------------------------------------------------------------------------
C9349 *........... PuraPly, PuraPly 1 cm\2\........... G High............. High.
antimic.
C9363............. Integra Meshed 1 cm\2\........... N High............. High.
Bil Wound Mat.
Q4100............. Skin Substitute, 1 cm\2\........... N Low.............. Low.
NOS.
Q4101............. Apligraf......... 1 cm\2\........... N High............. High.
Q4102............. Oasis Wound 1 cm\2\........... N Low.............. Low.
Matrix.
Q4103............. Oasis Burn Matrix 1 cm\2\........... N Low.............. High.
Q4104............. Integra BMWD..... 1 cm\2\........... N High............. High.
Q4105............. Integra DRT...... 1 cm\2\........... N High............. High.
Q4106............. Dermagraft....... 1 cm\2\........... N High............. High.
Q4107............. GraftJacket...... 1 cm\2\........... N High............. High.
Q4108............. Integra Matrix... 1 cm\2\........... N High............. High.
Q4110............. Primatrix........ 1 cm\2\........... N High............. High.
Q4111............. Gammagraft....... 1 cm\2\........... N Low.............. Low.
Q4115............. Alloskin......... 1 cm\2\........... N Low.............. Low.
Q4116............. Alloderm......... 1 cm\2\........... N High............. High.
Q4117............. Hyalomatrix...... 1 cm\2\........... N Low.............. Low.
Q4119............. Matristem Wound 1 cm\2\........... N Low.............. Low.
Matrix.
Q4120............. Matristem Burn 1 cm\2\........... N Low.............. High.
Matrix.
Q4121 *........... Theraskin........ 1 cm\2\........... G High............. High.
Q4122............. Dermacell........ 1 cm\2\........... N High............. High.
Q4123............. Alloskin......... 1 cm\2\........... N High............. High.
Q4124............. Oasis Tri-layer 1 cm\2\........... N Low.............. Low.
Wound Matrix.
Q4126............. Memoderm/derma/ 1 cm\2\........... N High............. High.
tranz/integup.
Q4127............. Talymed.......... 1 cm\2\........... N High............. High.
[[Page 70437]]
Q4128............. Flexhd/ 1 cm\2\........... N High............. High.
Allopatchhd/
Matrixhd.
Q4129............. Unite Biomatrix.. 1 cm\2\........... N High............. Low.
Q4131............. Epifix........... 1 cm\2\........... N High............. High.
Q4132............. Grafix Core...... 1 cm\2\........... N High............. High.
Q4133............. Grafix Prime..... 1 cm\2\........... N High............. High.
Q4134............. hMatrix.......... 1 cm\2\........... N High............. Low.
Q4135............. Mediskin......... 1 cm\2\........... N Low.............. Low.
Q4136............. Ezderm........... 1 cm\2\........... N Low.............. Low.
Q4137............. Amnioexcel or 1 cm\2\........... N High............. High.
Biodexcel, 1cm.
Q4138............. Biodfence 1 cm\2\........... N High............. High.
DryFlex, 1cm.
Q4140............. Biodfence 1cm.... 1 cm\2\........... N High............. High.
Q4141............. Alloskin ac, 1cm. 1 cm\2\........... N High............. High.
Q4143............. Repriza, 1cm..... 1 cm\2\........... N Low.............. Low.
Q4146............. Tensix, 1CM...... 1 cm\2\........... N Low.............. Low.
Q4147............. Architect ecm, 1 cm\2\........... N High............. High.
1cm.
Q4148............. Neox 1k, 1cm..... 1 cm\2\........... N High............. High.
Q4150............. Allowrap DS or 1 cm\2\........... N High............. High.
Dry 1 sq cm.
Q4151............. AmnioBand, 1 cm\2\........... N Low.............. Low.
Guardian 1 sq cm.
Q4152............. Dermapure 1 1 cm\2\........... N High............. Low.
square cm.
Q4153............. Dermavest 1 1 cm\2\........... N High............. High.
square cm.
Q4154............. Biovance 1 square 1 cm\2\........... N High............. Low.
cm.
Q4156............. Neox 100 1 square 1 cm\2\........... N High............. Low.
cm.
Q4157............. Revitalon 1 1 cm\2\........... N Low.............. Low.
square cm.
Q4158............. MariGen 1 square 1 cm\2\........... N Low.............. Low.
cm.
Q4159............. Affinity 1 square 1 cm\2\........... N High............. High.
cm.
Q4160............. NuShield 1 square 1 cm\2\........... N High............. High.
cm.
Q4161 **.......... Bio-Connekt per 1 cm\2\........... N N/A.............. Low.
square cm.
Q4162 **.......... Amnio bio and 1 cm\2\........... N N/A.............. Low.
woundex flow.
Q4163 **.......... Amnion bio and 1 cm\2\........... N N/A.............. Low.
woundex sq cm.
Q4164 **.......... Helicoll, per 1 cm\2\........... N N/A.............. Low.
square cm.
Q4165 **.......... Keramatrix, per 1 cm\2\........... N N/A.............. Low.
square cm.
----------------------------------------------------------------------------------------------------------------
*Pass-through status in CY 2016.
**New HCPCS code for CY 2016.
d. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological But Different Dosages
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66776), we began recognizing, for OPPS payment purposes, multiple HCPCS
codes reporting different dosages for the same covered Part B drugs or
biologicals in order to reduce hospitals' administrative burden by
permitting them to report all HCPCS codes for drugs and biologicals. In
general, prior to CY 2008, the OPPS recognized for payment only the
HCPCS code that described the lowest dosage of a drug or biological.
During CYs 2008 and 2009, we applied a policy that assigned the status
indicator of the previously recognized HCPCS code to the associated
newly recognized code(s), reflecting the packaged or separately payable
status of the new code(s).
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believed that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, in the CY 2016
OPPS/ASC proposed rule (80 FR 39279), we proposed to continue our
policy to make packaging determinations on a drug-specific basis,
rather than a HCPCS code-specific basis, for those HCPCS codes that
describe the same drug or biological but different dosages in CY 2016.
For CY 2016, in order to propose a packaging determination that is
consistent across all HCPCS codes that describe different dosages of
the same drug or biological, we aggregated both our CY 2014 claims data
and our pricing information at ASP+6 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
the CY 2016 OPPS/ASC proposed rule and, as is our current policy for
determining the packaging status of other drugs, we used the mean unit
cost available from the CY 2014 claims data to make the proposed
packaging determinations for these drugs: HCPCS code J3471 (Injection,
hyaluronidase, ovine, preservative free, per 1 usp unit (up to 999 usp
units)) and HCPCS code J3472 (Injection, hyaluronidase, ovine,
preservative free, per 1000 usp units).
For all other drugs and biologicals that have HCPCS codes
describing different doses, we then multiplied the proposed weighted
average ASP+6
[[Page 70438]]
percent per unit payment amount across all dosage levels of a specific
drug or biological by the estimated units per day for all HCPCS codes
that describe each drug or biological from our claims data to determine
the estimated per day cost of each drug or biological at less than or
equal to $100 (so that all HCPCS codes for the same drug or biological
would be packaged) or greater than $100 (so that all HCPCS codes for
the same drug or biological would be separately payable).
The proposed packaging status of each drug and biological HCPCS
code to which this methodology would apply in CY 2016 was displayed in
Table 47 of the CY 2016 OPPS/ASC proposed rule (80 FR 39279 through
39280).
We did not receive any public comments on this proposal. Therefore,
we are finalizing our CY 2016 proposal, without modification, to
continue to make packaging determinations on a drug-specific basis,
rather than a HCPCS code-specific basis, for those HCPCS codes that
describe the same drug or biological but different dosages. Table 51
below displays the packaging status of each drug and biological HCPCS
code to which our methodology applies for CY 2016.
Table 51--HCPCS Codes to Which the CY 2016 Drug-Specific Packaging
Determination Methodology Applies
------------------------------------------------------------------------
CY 2016 HCPCS code CY 2016 Long descriptor CY 2016 SI
------------------------------------------------------------------------
C9257...................... Injection, bevacizumab, K
0.25 mg.
J9035...................... Injection, bevacizumab, 10 K
mg.
J1020...................... Injection, N
methylprednisolone
acetate, 20 mg.
J1030...................... Injection, N
methylprednisolone
acetate, 40 mg.
J1040...................... Injection, N
methylprednisolone
acetate, 80 mg.
J1070...................... Injection, testosterone N
cypionate, up to 100 mg.
J1080...................... Injection, testosterone N
cypionate, 1 cc, 200 mg.
J1460...................... Injection, gamma globulin, N
intramuscular, 1 cc.
J1560...................... Injection, gamma globulin, N
intramuscular over 10 cc.
J1642...................... Injection, heparin sodium, N
(heparin lock flush), per
10 units.
J1644...................... Injection, heparin sodium, N
per 1000 units.
J1850...................... Injection, kanamycin N
sulfate, up to 75 mg.
J1840...................... Injection, kanamycin N
sulfate, up to 500 mg.
J2788...................... Injection, rho d immune N
globulin, human,
minidose, 50 micrograms
(250 i.u.).
J2790...................... Injection, rho d immune N
globulin, human, full
dose, 300 micrograms
(1500 i.u.).
J2920...................... Injection, N
methylprednisolone sodium
succinate, up to 40 mg.
J2930...................... Injection, N
methylprednisolone sodium
succinate, up to 125 mg.
J3120...................... Injection, testosterone N
enanthate, up to 100 mg.
J3130...................... Injection, testosterone N
enanthate, up to 200 mg.
J3471...................... Injection, hyaluronidase, N
ovine, preservative free,
per 1 usp unit (up to 999
usp units).
J3472...................... Injection, hyaluronidase, N
ovine, preservative free,
per 1000 usp units.
J7050...................... Infusion, normal saline N
solution , 250 cc.
J7040...................... Infusion, normal saline N
solution, sterile (500 ml
= 1 unit).
J7030...................... Infusion, normal saline N
solution , 1000 cc.
J7515...................... Cyclosporine, oral, 25 mg. N
J7502...................... Cyclosporine, oral, 100 mg N
J8520...................... Capecitabine, oral, 150 mg K
J8521...................... Capecitabine, oral, 500 mg K
J9250...................... Methotrexate sodium, 5 mg. N
J9260...................... Methotrexate sodium, 50 mg N
------------------------------------------------------------------------
3. Payment for Drugs and Biologicals Without Pass-Through Status That
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
Separately Payable and Packaged Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY 2006 and subsequent years be equal to the average
acquisition cost for the drug for that year as determined by the
Secretary, subject to any adjustment for overhead costs and taking into
account the hospital acquisition cost survey data collected by the
Government Accountability Office (GAO) in CYs 2004 and 2005, and later
periodic surveys conducted by the Secretary as set forth in the
statute. If hospital acquisition cost data are not available, the law
requires that payment be equal to payment rates established under the
methodology described in section 1842(o), section 1847A, or section
1847B of the Act, as calculated and adjusted by the Secretary as
necessary. Most physician Part B drugs are paid at ASP+6 percent
pursuant to section 1842(o) and section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
OPPS
[[Page 70439]]
payment rates for SCODs to take into account overhead and related
expenses, such as pharmacy services and handling costs. Section
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead
and related expenses and to make recommendations to the Secretary
regarding whether, and if so how, a payment adjustment should be made
to compensate hospitals for overhead and related expenses. Section
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
weights for ambulatory procedure classifications for SCODs to take into
account the findings of the MedPAC study.
It has been our longstanding policy to apply the same treatment to
all separately payable drugs and biologicals, which include SCODs, and
drugs and biologicals that are not SCODs. Therefore, we apply the
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply it to separately payable
drugs and biologicals that are not SCODs, which is a policy
determination rather than a statutory requirement. In the CY 2016 OPPS/
ASC proposed rule (80 FR 39280), we proposed to apply section
1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and
biologicals, including SCODs. Although we do not distinguish SCODs in
this discussion, we note that we are required to apply section
1833(t)(14)(A)(iii)(II) of the Act to SCODs, but we also are applying
this provision to other separately payable drugs and biologicals,
consistent with our history of using the same payment methodology for
all separately payable drugs and biologicals.
Since CY 2006, we have attempted to establish a drug payment
methodology that reflects hospitals' acquisition costs for drugs and
biologicals while taking into account relevant pharmacy overhead and
related handling expenses. We have attempted to collect more data on
hospital overhead charges for drugs and biologicals by making several
proposals that would require hospitals to change the way they report
the cost and charges for drugs. None of these proposals were adopted
due to significant stakeholder concern, including that hospitals stated
that it would be administratively burdensome to report hospital
overhead charges. We established a payment policy for separately
payable drugs and biologicals, authorized by section
1833(t)(14)(A)(iii)(I) of the Act, based on an ASP+X amount that is
calculated by comparing the estimated aggregate cost of separately
payable drugs and biologicals in our claims data to the estimated
aggregate ASP dollars for separately payable drugs and biologicals,
using the ASP as a proxy for average acquisition cost (70 FR 68642
through 68643). We referred to this methodology as our standard drug
payment methodology. Taking into consideration comments made by the
pharmacy stakeholders and acknowledging the limitations of the reported
data due to charge compression and hospitals' reporting practices, we
added an ``overhead adjustment'' in CY 2010 (an internal adjustment of
the data) by redistributing cost from coded and uncoded packaged drugs
and biologicals to separately payable drugs in order to provide more
appropriate payments for drugs and biologicals in the HOPD. We
continued this methodology, and we further refined it in CY 2012 by
finalizing a policy to update the redistribution amount for inflation
and to keep the redistribution ratio constant between the proposed rule
and the final rule. For a detailed discussion of our OPPS drug payment
policies from CY 2006 to CY 2012, we refer readers to the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68383 through 68385).
Because of continuing uncertainty about the full cost of pharmacy
overhead and acquisition cost, based in large part on the limitations
of the submitted hospital charge and claims data for drugs, in the CY
2013 OPPS/ASC final rule with comment period (77 FR 68386), we
indicated our concern that the continued use of the standard drug
payment methodology (including the overhead adjustment) still may not
appropriately account for average acquisition and pharmacy overhead
cost and, therefore, may result in payment rates that are not as
predictable, accurate, or appropriate as they could be. Section
1833(t)(14)(A)(iii)(II) of the Act requires an alternative methodology
for determining payment rates for SCODS wherein, if hospital
acquisition cost data are not available, payment shall be equal
(subject to any adjustment for overhead costs) to payment rates
established under the methodology described in section 1842(o), 1847A,
or 1847B of the Act. We refer to this alternative methodology as the
``statutory default.'' In the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68386), we noted that section 1833(t)(14)(A)(iii)(II) of
the Act authorizes the Secretary to calculate and adjust, as necessary,
the average price for a drug in the year established under section
1842(o), 1847A, or 1847B of the Act, as the case may be, in determining
payment for SCODs. Pursuant to sections 1842(o) and 1847A of the Act,
Part B drugs are paid at ASP+6 percent when furnished in physicians'
offices. We indicated that we believe that establishing the payment
rates based on the statutory default of ASP+6 percent is appropriate as
it yields increased predictability in payment for separately payable
drugs and biologicals under the OPPS and, therefore, we finalized our
proposal for CY 2013 to pay for separately payable drugs and
biologicals at ASP+6 percent based on section 1833(t)(14)(A)(iii)(II)
of the Act (the statutory default). We also finalized our proposal that
the ASP+6 percent payment amount for separately payable drugs and
biologicals requires no further adjustment and represents the combined
acquisition and pharmacy overhead payment for drugs and biologicals,
that payments for separately payable drugs and biologicals are included
in the budget neutrality adjustments under the requirements in section
1833(t)(9)(B) of the Act, and that the budget neutral weight scaler is
not applied in determining payments for these separately paid drugs and
biologicals for CY 2013 (77 FR 68389). We continued our final policy of
paying the statutory default for both CY 2014 and CY 2015.
b. CY 2016 Payment Policy
In the CY 2016 OPPS/ASC proposed rule (80 FR 39281), for CY 2016
and subsequent years, we proposed to continue our CY 2015 policy and
pay for separately payable drugs and biologicals at ASP+6 percent
pursuant to section 1833(t)(14)(A)(iii)(II) of the Act (the statutory
default). We proposed that the ASP+6 percent payment amount for
separately payable drugs and biologicals requires no further adjustment
and represents the combined acquisition and pharmacy overhead payment
for drugs and biologicals. We also proposed that payments for
separately payable drugs and biologicals are included in the budget
neutrality adjustments, under the requirements in section 1833(t)(9)(B)
of the Act, and that the budget neutral weight scaler is not applied in
determining payments for these separately paid drugs and biologicals.
Comment: Commenters supported CMS' proposal to pay for separately
payable drugs and biologicals based on the statutory default rate of
ASP+6 percent. A few commenters supported CMS' proposal, but
recommended that CMS examine ways to compensate hospitals for the
unique, higher overhead and handling costs associated with therapeutic
radiopharmaceuticals.
Response: We appreciate the commenters' support. We continue to
[[Page 70440]]
believe that ASP+6 percent based on the statutory default is
appropriate for hospitals for CY 2016 and that this percentage amount
includes payment for acquisition and overhead cost. We see no evidence
that an additional overhead adjustment is required for separately
payable drugs, biologicals, and therapeutic radiopharmaceuticals for CY
2016.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to pay for separately
payable drugs and biologicals at ASP+6 percent based on section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default). The ASP+6
percent payment amount for separately payable drugs and biologicals
requires no further adjustment and represents the combined acquisition
and pharmacy overhead payment for drugs and biologicals for CY 2016. In
addition, we are finalizing our proposal that payment for separately
payable drugs and biologicals be included in the budget neutrality
adjustments, under the requirements of section 1833(t)(9)(B) of the
Act, and that the budget neutral weight scaler is not applied in
determining payment of these separately paid drugs and biologicals.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to this final rule with comment period
(available via the Internet on the CMS Web site), which illustrate the
final CY 2016 payment of ASP+6 percent for separately payable non-pass-
through drugs and biologicals and ASP+6 percent for pass-through drugs
and biologicals, reflect either ASP information that is the basis for
calculating payment rates for drugs and biologicals in the physician's
office setting effective October 1, 2015, or WAC, AWP, or mean unit
cost from CY 2014 claims data and updated cost report information
available for this final rule with comment period. In general, these
published payment rates are not reflective of actual January 2016
payment rates. This is because payment rates for drugs and biologicals
with ASP information for January 2016 will be determined through the
standard quarterly process where ASP data submitted by manufacturers
for the fourth quarter of 2015 (October 1, 2015 through December 31,
2015) are used to set the payment rates that are released for the
quarter beginning in January 2016 near the end of December 2015. In
addition, payment rates for drugs and biologicals in Addenda A and B to
this final rule with comment period for which there was no ASP
information available for October 2015 are based on mean unit cost in
the available CY 2014 claims data. If ASP information becomes available
for payment for the quarter beginning in January 2016, we will price
payment for these drugs and biologicals based on their newly available
ASP information. Finally, there may be drugs and biologicals that have
ASP information available for this final rule with comment period
(reflecting October 2015 ASP data) that do not have ASP information
available for the quarter beginning in January 2016. These drugs and
biologicals will then be paid based on mean unit cost data derived from
CY 2014 hospital claims. Therefore, the payment rates listed in Addenda
A and B to this final rule with comment period are not for January 2016
payment purposes and are only illustrative of the CY 2016 OPPS payment
methodology using the most recently available information at the time
of issuance of this final rule with comment period.
4. Payment Policy for Therapeutic Radiopharmaceuticals
Beginning in CY 2010 and continuing for CY 2015, we established a
policy to pay for separately paid therapeutic radiopharmaceuticals
under the ASP methodology adopted for separately payable drugs and
biologicals. If ASP information is unavailable for a therapeutic
radiopharmaceutical, we base therapeutic radiopharmaceutical payment on
mean unit cost data derived from hospital claims. We believe that the
rationale outlined in the CY 2010 OPPS/ASC final rule with comment
period (74 FR 60524 through 60525) for applying the principles of
separately payable drug pricing to therapeutic radiopharmaceuticals
continues to be appropriate for nonpass-through, separately payable
therapeutic radiopharmaceuticals in CY 2016. Therefore, in the CY 2016
OPPS/ASC proposed rule (80 FR 39281), we proposed for CY 2016 to pay
all nonpass-through, separately payable therapeutic
radiopharmaceuticals at ASP+6 percent, based on the statutory default
described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full
discussion of ASP-based payment for therapeutic radiopharmaceuticals,
we refer readers to the CY 2010 OPPS/ASC final rule with comment period
(74 FR 60520 through 60521). We also proposed to rely on CY 2014 mean
unit cost data derived from hospital claims data for payment rates for
therapeutic radiopharmaceuticals for which ASP data are unavailable and
to update the payment rates for separately payable therapeutic
radiopharmaceuticals according to our usual process for updating the
payment rates for separately payable drugs and biologicals on a
quarterly basis if updated ASP information is available. For a complete
history of the OPPS payment policy for therapeutic
radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule
with comment period (69 FR 65811), the CY 2006 OPPS final rule with
comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60524).
The proposed CY 2016 payment rates for nonpass-through separately
payable therapeutic radiopharmaceuticals were included in Addenda A and
B to the proposed rule (which are available via the Internet on the CMS
Web site).
Comment: Several commenters supported CMS' proposal to pay for
separately payable therapeutic radiopharmaceuticals under the statutory
default payment rate of ASP+6 percent if ASP data are submitted to CMS.
Response: We appreciate the commenters' support. We continue to
believe that providing payment for therapeutic radiopharmaceuticals
based on ASP or mean unit cost if ASP information is not available
would provide appropriate payment for these products. When ASP data are
not available, we believe that paying for therapeutic
radiopharmaceuticals using mean unit cost will appropriately pay for
the average hospital acquisition and associated handling costs of
nonpass-through separately payable therapeutic radiopharmaceuticals. As
we stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR
60523), although using mean unit cost for payment for therapeutic
radiopharmaceuticals when ASP data are not available is not the usual
OPPS process (the usual process relies on alternative data sources such
as WAC or AWP when ASP information is temporarily unavailable, prior to
defaulting to the mean unit cost from hospital claims data), we
continue to believe that WAC or AWP is not an appropriate proxy to
provide OPPS payment for average therapeutic radiopharmaceutical
acquisition cost and associated handling costs when manufacturers are
not required to submit ASP data. Payment based on WAC or AWP under the
established OPPS methodology for payment of separately payable drugs
and biologicals is usually temporary for a calendar quarter until a
manufacturer is able to submit the required ASP data in accordance with
the quarterly ASP submission timeframes for reporting under section
1847A of the Act. Because ASP reporting for OPPS payment of
[[Page 70441]]
separately payable therapeutic radiopharmaceuticals is not required, a
manufacturer's choice to not submit ASP could result in payment for a
separately payable therapeutic radiopharmaceutical based on WAC or AWP
for a full year, a result that we believe would be inappropriate.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue to pay all
nonpass-through, separately payable therapeutic radiopharmaceuticals at
ASP+6 percent. We also are finalizing our proposal to continue to rely
on CY 2014 mean unit cost data derived from hospital claims data for
payment rates for therapeutic radiopharmaceuticals for which ASP data
are unavailable. The CY 2016 final rule payment rates for nonpass-
through separately payable therapeutic radiopharmaceuticals are
included in Addenda A and B to this final rule with comment period
(which are available via the Internet on the CMS Web site).
5. Payment Adjustment Policy for Radioisotopes Derived From Non-Highly
Enriched Uranium Sources
Radioisotopes are widely used in modern medical imaging,
particularly for cardiac imaging and predominantly for the Medicare
population. Technetium-99 (Tc-99m), the radioisotope used in the
majority of such diagnostic imaging services, is currently produced in
legacy reactors outside of the United States using highly enriched
uranium (HEU).
The United States would like to eliminate domestic reliance on
these reactors, and is promoting the conversion of all medical
radioisotope production to non-HEU sources. Alternative methods for
producing Tc-99m without HEU are technologically and economically
viable, and conversion to such production has begun and is expected to
be completed by CY 2017. We expect this change in the supply source for
the radioisotope used for modern medical imaging will introduce new
costs into the payment system that are not accounted for in the
historical claims data.
Therefore, for CY 2013, we finalized a policy to provide an
additional payment of $10 for the marginal cost for radioisotopes
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium
source, full cost recovery add-on per study dose) once per dose along
with any diagnostic scan or scans furnished using Tc-99m as long as the
Tc-99m doses used can be certified by the hospital to be at least 95
percent derived from non-HEU sources. The time period for this
additional payment was not to exceed 5 years from January 1, 2013 (77
FR 68321).
We stated in the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68316) that our expectation was that the transition to non-HEU
sourced Mo-99 would be completed within 4 to 5 years and that there
might be a need to make differential payments for a period of 4 to 5
years. We further stated that we would reassess, and propose if
necessary, on an annual basis whether such an adjustment continued to
be necessary and whether any changes to the adjustment were warranted.
As discussed in the CY 2015 OPPS/ASC final rule with comment period (79
FR 66892), we reassessed this payment for CY 2015 and did not identify
any new information that would cause us to modify payment. We stated
that we were continuing the policy of providing an additional $10
payment for radioisotopes produced by non-HEU sources for CY 2015. We
also stated that, although we will reassess this policy annually,
consistent with the original policy in the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68321), we do not anticipate that this
additional payment would extend beyond CY 2017.
We reassessed this payment for CY 2016 and did not identify any new
information that would cause us to modify payment. Therefore, in the CY
2016 OPPS/ASC proposed rule (80 FR 39282), for CY 2016, we proposed to
continue to provide an additional $10 payment for radioisotopes
produced by non-HEU sources.
Comment: A few commenters requested that CMS extend payment for
HCPCS code Q9969 to CY 2017 and beyond.
Response: We stated in our CY 2013 OPPS/ASC final rule with comment
period (77 FR 68316) that our expectation was that the transition to
non-HEU sourced Mo-99 would be completed within 4 to 5 years and that
there might be a need to make differential payments for a period of 4
to 5 years. We further stated that we would reassess, and propose if
necessary, on an annual basis whether such an adjustment continued to
be necessary and whether any changes to the adjustment were warranted.
We reassessed this payment for CY 2016 and have not identified any new
information that would cause us to modify payment at this time. We are
continuing the policy of providing an additional $10 payment for
radioisotopes produced by non-HEU sources for CY 2016. Although we will
reassess this policy annually, consistent with the original policy in
the CY 2013 OPPS/ASC final rule with comment period (77 FR 68321), we
do not anticipate that this additional payment would extend beyond CY
2017.
6. Payment for Blood Clotting Factors
For CY 2015, we provided payment for blood clotting factors under
the same methodology as other non-pass-through separately payable drugs
and biologicals under the OPPS and continued paying an updated
furnishing fee (79 FR 66893). That is, for CY 2015, we provided payment
for blood clotting factors under the OPPS at ASP+6 percent, plus an
additional payment for the furnishing fee. We note that when blood
clotting factors are provided in physicians' offices under Medicare
Part B and in other Medicare settings, a furnishing fee is also applied
to the payment. The CY 2015 updated furnishing fee was $0.197 per unit.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39282), for CY 2016,
we proposed to pay for blood clotting factors at ASP+6 percent,
consistent with our proposed payment policy for other nonpass-through,
separately payable drugs and biologicals, and to continue our policy
for payment of the furnishing fee using an updated amount. Our policy
to pay for a furnishing fee for blood clotting factors under the OPPS
is consistent with the methodology applied in the physician office and
inpatient hospital setting. These methodologies were first articulated
in the CY 2006 OPPS final rule with comment period (70 FR 68661) and
later discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66765). The proposed furnishing fee update was based on the
percentage increase in the Consumer Price Index (CPI) for medical care
for the 12-month period ending with June of the previous year. Because
the Bureau of Labor Statistics releases the applicable CPI data after
the MPFS and OPPS/ASC proposed rules are published, we were not able to
include the actual updated furnishing fee in the proposed rules.
Therefore, in accordance with our policy, as finalized in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66765), we proposed to
announce the actual figure for the percent change in the applicable CPI
and the updated furnishing fee calculated based on that figure through
applicable program instructions and posting on the CMS Web site at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/
[[Page 70442]]
McrPartBDrugAvgSalesPrice/index.html.
Comment: Commenters supported CMS' proposal to continue to apply
the furnishing fee for blood clotting factors provided in the OPD. The
commenters also supported CMS' proposal to pay for separately payable
drugs at ASP+6 percent based on the statutory default for CY 2016.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to provide payment for
blood clotting factors under the same methodology as other separately
payable drugs and biologicals under the OPPS and to continue payment of
an updated furnishing fee. We will announce the actual figure of the
percent change in the applicable CPI and the updated furnishing fee
calculation based on that figure through the applicable program
instructions and posting on the CMS Web site.
7. Payment for Non-Pass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173) did not address the OPPS payment in CY 2005
and subsequent years for drugs, biologicals, and radiopharmaceuticals
that have assigned HCPCS codes, but that do not have a reference AWP or
approval for payment as pass-through drugs or biologicals. Because
there was no statutory provision that dictated payment for such drugs,
biologicals, and radiopharmaceuticals in CY 2005, and because we had no
hospital claims data to use in establishing a payment rate for them, we
investigated several payment options for CY 2005 and discussed them in
detail in the CY 2005 OPPS final rule with comment period (69 FR 65797
through 65799).
For CYs 2005 to 2007, we implemented a policy to provide separate
payment for new drugs, biologicals, and radiopharmaceuticals with HCPCS
codes (specifically those new drug, biological, and radiopharmaceutical
HCPCS codes in each of those calendar years that did not crosswalk to
predecessor HCPCS codes) but which did not have pass-through status, at
a rate that was equivalent to the payment they received in the
physician's office setting, established in accordance with the ASP
methodology for drugs and biologicals, and based on charges adjusted to
cost for radiopharmaceuticals. Beginning in CY 2008 and continuing
through CY 2015, we implemented a policy to provide payment for new
drugs and biologicals with HCPCS codes (except those that are policy-
packaged), but which did not have pass-through status and were without
OPPS hospital claims data, at an amount consistent with the final OPPS
payment methodology for other separately payable non-pass-through drugs
and biologicals for the given year.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39282), for CY 2016,
we proposed to continue this policy and provide payment for new drugs,
biologicals, and therapeutic radiopharmaceuticals that do not have
pass-through status at ASP+6 percent, consistent with the proposed CY
2016 payment methodology for other separately payable non-pass-through
drugs, biologicals, and therapeutic radiopharmaceuticals, which was
proposed to be ASP+6 percent as discussed earlier in this section. We
stated that we believe this proposed policy would ensure that new
nonpass-through drugs, biologicals, and therapeutic
radiopharmaceuticals would be treated like other drugs, biologicals,
and therapeutic radiopharmaceuticals under the OPPS.
For CY 2016, we also proposed to continue to package payment for
all new nonpass-through policy-packaged products (diagnostic
radiopharmaceuticals; contrast agents; stress agents; anesthesia drugs;
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure; and drugs and biologicals
that function as supplies when used in a surgical procedure) with HCPCS
codes but without claims data (those new proposed CY 2016 HCPCS codes
that do not replace predecessor HCPCS codes). This is consistent with
the CY 2014 final packaging policy for all existing nonpass-through
diagnostic radiopharmaceuticals; contrast agents; anesthesia drugs;
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure; and drugs and biologicals
that function as supplies when used in a surgical procedure, as
discussed in more detail in section II.A.3. of this final rule with
comment period.
In accordance with the OPPS ASP methodology, in the absence of ASP
data, for CY 2016 and subsequent years, we proposed to continue our
policy of using the WAC for the product to establish the initial
payment rate for new nonpass-through drugs and biologicals with HCPCS
codes, but which are without OPPS claims data. However, we noted that
if the WAC is also unavailable, we would make payment at 95 percent of
the product's most recent AWP. We also proposed to assign status
indicator ``K'' (Separately paid nonpass-through drugs and biologicals,
including therapeutic radiopharmaceuticals) to HCPCS codes for new
drugs and biologicals without OPPS claims data and for which we have
not granted pass-through status. With respect to new nonpass-through
drugs and biologicals for which we do not have ASP data, we proposed
that once their ASP data become available in later quarterly
submissions, their payment rates under the OPPS would be adjusted so
that the rates would be based on the ASP methodology and set to the
proposed ASP-based amount (proposed for CY 2016 at ASP+6 percent) for
items that have not been granted pass-through status. This proposed
policy, which utilizes the ASP methodology for new nonpass-through
drugs and biologicals with an ASP, is consistent with prior years'
policies for these items and would ensure that new nonpass-through
drugs and biologicals would be treated like other drugs and biologicals
under the OPPS, unless they are granted pass-through status.
Similarly, we proposed to continue to base the initial payment for
new therapeutic radiopharmaceuticals with HCPCS codes, but which do not
have pass-through status and are without claims data, on the WACs for
these products if ASP data for these therapeutic radiopharmaceuticals
are not available. If the WACs also are unavailable, we proposed to
make payment for new therapeutic radiopharmaceuticals at 95 percent of
the products' most recent AWP because we would not have mean costs from
hospital claims data upon which to base payment. As we proposed with
new drugs and biologicals, we proposed to continue our policy of
assigning status indicator ``K'' to HCPCS codes for new therapeutic
radiopharmaceuticals without OPPS claims data for which we have not
granted pass-through status.
Consistent with other ASP-based payment, for CY 2016, we proposed
to announce any changes to the payment amounts for new drugs and
biologicals in this CY 2016 OPPS/ASC final rule with comment period and
also on a quarterly basis on the CMS Web site during CY 2016 if later
quarter ASP submissions (or more recent WACs or AWPs) indicate that
changes to the payment rates for these drugs and biologicals are
necessary. The payment rates for new therapeutic radiopharmaceuticals
also would be changed accordingly based on later quarter ASP
submissions. We note that
[[Page 70443]]
the new CY 2016 HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals were not available at the time of development of
the proposed rule. However, these drugs, biologicals, and therapeutic
radiopharmaceuticals are included in Addendum B to this CY 2016 OPPS/
ASC final rule with comment period (which is available via the Internet
on the CMS Web site), where they are assigned comment indicator ``NI.''
This comment indicator reflects that their interim final OPPS treatment
is open to public comment in this CY 2016 OPPS/ASC final rule with
comment period.
There are several nonpass-through drugs and biologicals that were
payable in CY 2014 and/or CY 2015 for which we did not have CY 2014
hospital claims data available for the proposed rule and for which
there are no other HCPCS codes that describe different doses of the
same drug, but which have pricing information available for the ASP
methodology. In order to determine the packaging status of these
products for CY 2016, we proposed to continue our policy to calculate
an estimate of the per day cost of each of these items by multiplying
the payment rate of each product based on ASP+6 percent, similar to
other nonpass-through drugs and biologicals paid separately under the
OPPS, by an estimated average number of units of each product that
would typically be furnished to a patient during 1 day in the hospital
outpatient setting. This rationale was first adopted in the CY 2006
OPPS/ASC final rule with comment period (70 FR 68666 through 68667).
We proposed to package items for which we estimated the per day
administration cost to be less than or equal to $100 and to pay
separately for items for which we estimated the per day administration
cost to be greater than $100 (with the exception of diagnostic
radiopharmaceuticals; contrast agents; stress agents; anesthesia drugs;
drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure; and drugs and biologicals
that function as supplies when used in a surgical procedure, which we
proposed to continue to package regardless of cost) in CY 2016. We also
proposed that the CY 2016 payment for separately payable items without
CY 2014 claims data would be ASP+6 percent, similar to payment for
other separately payable nonpass-through drugs and biologicals under
the OPPS. In accordance with the ASP methodology paid in the
physician's office setting, in the absence of ASP data, we proposed to
use the WAC for the product to establish the initial payment rate and,
if the WAC is also unavailable, we would make payment at 95 percent of
the most recent AWP available. The proposed estimated units per day and
status indicators for these items were displayed in Table 48 of the
proposed rule (80 FR 39284).
Finally, there were 33 drugs and biologicals, shown in Table 49 of
the proposed rule (80 FR 39284), that were payable in CY 2014 but for
which we lacked CY 2014 claims data and any other pricing information
for the ASP methodology for the CY 2016 OPPS/ASC proposed rule. For CY
2010, we finalized a policy to assign status indicator ``E'' (Not paid
by Medicare when submitted on outpatient claims [any outpatient bill
type]) whenever we lacked claims data and pricing information and were
unable to determine the per day cost of a drug or biological. In
addition, we noted that we would provide separate payment for these
drugs and biologicals if pricing information reflecting recent sales
became available mid-year for the ASP methodology.
For CY 2016, as we finalized in CY 2015 (79 FR 66894), we proposed
to continue to assign status indicator ``E'' to drugs and biologicals
that lack CY 2014 claims data and pricing information for the ASP
methodology. All drugs and biologicals without CY 2014 hospital claims
data or data based on the ASP methodology that were assigned status
indicator ``E'' on this basis at the time of the proposed rule for CY
2016 were displayed in Table 49 of the proposed rule (80 FR 39284). We
also proposed to continue our policy to assign the products status
indicator ``K'' and pay for them separately for the remainder of CY
2016 if pricing information becomes available.
We did not receive any specific public comments regarding our
proposed payment for nonpass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes, but without OPPS hospital claims
data. Many commenters supported our proposal to pay for separately
payable drugs at ASP+6 percent under the statutory default. However,
these comments were not specific to new drugs and biologicals with
HCPCS codes but without OPPS claims data.
After consideration of the public comments we received, we are
finalizing our CY 2016 proposal without modification, including our
proposal to assign drug or biological products status indicator ``K''
and pay for them separately for the remainder of CY 2015 if pricing
information becomes available. Table 52 below shows the drugs and
biologicals without CY 2014 claims data. Table 53 shows the drugs and
biologicals without CY 2014 claims data and without pricing information
for the ASP methodology.
Table 52--Drugs and Biologicals Without CY 2014 Claims Data
----------------------------------------------------------------------------------------------------------------
Estimated
average number CY 2016 status
CY 2016 HCPCS code CY 2016 long descriptor of units per indicator CY 2016 APC
day
----------------------------------------------------------------------------------------------------------------
90581.......................... Anthrax vaccine, for 1 N N/A
subcutaneous or intramuscular
use.
C9293.......................... Injection, glucarpidase, 10 400 K 9293
units.
J0215.......................... Injection, alefacept, 0.5 mg.. 29 K 1633
J0630.......................... Injection, calcitonin salmon, 2 K 1433
up to 400 units.
J1324.......................... Injection, enfuvirtide, 1 mg.. 169 K 1361
J1556.......................... Inj, Imm Glob Bivigam, 500mg.. 78 K 9130
J2670.......................... Tolazoline hcl injection...... 1 K 1457
J3060.......................... Inj, Taliglucerace Alfa 10 u.. 479 K 9294
J3355.......................... Injection, urofollitropin, 75 2 K 1741
IU.
J3489.......................... Injection, Zoledronic Acid, 4 K 1356
1mg.
J7191.......................... Factor VIII (porcine)......... 8,500 K 1464
J7196.......................... Injection, antithrombin 268 K 1332
recombinant, 50 IU.
J7316.......................... Inj, Ocriplasmin, 0.125 mg.... 3 K 9298
J7513.......................... Daclizumab, parenteral........ 5 K 1612
J8650.......................... Nabilone, oral, 1 mg.......... 4 K 1424
[[Page 70444]]
J9047.......................... Injection, carfilzomib, 1 mg.. 57 K 9295
J9262.......................... Inj, omacetaxine mep, 0.01mg.. 481 K 9297
J9306.......................... Injection, pertuzumab, 1 mg... 450 K 1471
J9354.......................... Inj, Ado-trastuzumab Emt 1mg.. 262 K 9131
J9400.......................... Inj, ziv-aflibercept, 1mg..... 326 K 9296
Q2050.......................... Injection, Doxorubicin 7 K 7046
Hydrochloride, Liposomal, Not
Otherwise Specified, 10 mg.
Q3027.......................... Injection, Interferon Beta-1a, 3 K 1472
1 mcg For Intramuscular Use.
----------------------------------------------------------------------------------------------------------------
Table 53--Drugs and Biologicals Without CY 2014 Claims Data and Without
Pricing Information for the ASP Methodology
------------------------------------------------------------------------
CY 2016 status
CY 2016 HCPCS code CY 2016 long descriptor indicator
------------------------------------------------------------------------
90296...................... Diphtheria antitoxin, E
equine, any route.
90477...................... Adenovirus vaccine, type E
7, live, for oral use.
90681...................... Rotavirus vaccine, human, E
attenuated, 2 dose
schedule, live, for oral
use.
J0190...................... Injection, biperiden E
lactate, per 5 mg.
J0205...................... Injection, alglucerase, E
per 10 units.
J0350...................... Injection, anistreplase, E
per 30 units.
J0365...................... Injection, aprotonin, E
10,000 kiu.
J0395...................... Injection, arbutamine hcl, E
1 mg.
J0710...................... Injection, cephapirin E
sodium, up to 1 gm.
J0888...................... Epoetin Beta, non-esrd.... E
J1180...................... Injection, dyphylline, up E
to 500 mg.
J1433...................... Inj Ferric Pyrophosphate E
Cit.
J1435...................... Injection, estrone, per 1 E
mg.
J1452...................... Injection, fomivirsen E
sodium, intraocular, 1.65
mg.
J1562...................... Injection, immune globulin E
(vivaglobin), 100 mg.
J1655...................... Injection, tinzaparin E
sodium, 1000 iu.
J1835...................... Injection, itraconazole, E
50 mg.
J2513...................... Injection, pentastarch, E
10% solution, 100 ml.
J2725...................... Injection, protirelin, per E
250 mcg.
J2940...................... Injection, somatrem, 1 mg. E
J3320...................... Injection, spectinomycin E
dihydrochloride, up to 2
gm.
J3400...................... Injection, triflupromazine E
hcl, up to 20 mg.
J7505...................... Muromonab-cd3, parenteral, E
5 mg.
J8562...................... Fludarabine phosphate, E
oral, 10 mg.
J9160...................... Injection, denileukin E
diftitox, 300 micrograms.
J9215...................... Injection, interferon, E
alfa-n3, (human leukocyte
derived), 250,000 iu.
J9300...................... Injection, gemtuzumab E
ozogamicin, 5 mg.
Q0515...................... Injection, sermorelin E
acetate, 1 microgram.
Q9980...................... Hyaluronan or derivative, E
GenVisc 850, for intra-
articular injection, 1 mg.
------------------------------------------------------------------------
C. Self-Administered Drugs (SADs) Technical Correction
Sections 1861(s)(2)(A) and (s)(2)(B) of the Act define covered
``medical and other health services'' to include both ``services and
supplies'' and ``hospital services'', which both, in turn, include
drugs and biologicals not usually self-administered by the patient. Our
regulations at 42 CFR 410.29 set forth limitations on payment of drugs
and biologicals under Medicare Part B, and capture the description of
self-administered drugs noted in sections 1861(s)(2)(A) and (s)(2)(B)
of the Act. In our review of Sec. 410.29, which defines exclusions to
Medicare Part B payment for drugs and biologicals, we noted that
paragraph (a), as currently written, excludes payment for any drug or
biological that can be self-administered. In the CY 2016 OPPS/ASC
proposed rule (80 FR 39285), we proposed to make a technical correction
that would amend the description of these drugs and biologicals at
Sec. 410.29(a) to more appropriately reflect the statutory language.
Specifically, we proposed to delete the phrase ``any drug or biological
that can be self-administered'' and replace it with the phrase ``any
drug or biological which is usually self-administered by the patient''.
We did not receive any public comments on this proposal. Therefore,
we are finalizing our proposed technical correction to Sec. 410.29 to
amend the description of self-administered drugs and biologicals to
more appropriately reflect the statutory language.
D. OPPS Payment for Biosimilar Biological Products
1. Background
The Affordable Care Act authorized an abbreviated pathway for the
licensing of biosimilar biological products. Under this abbreviated
pathway, a proposed biological product that is demonstrated to be
biosimilar to a reference product can rely on certain existing
scientific knowledge about the safety, purity, and potency of the
reference product to support licensure. Section 3139 of the
[[Page 70445]]
Affordable Care Act amended section 1847A of the Act to add the
definition of biosimilar biological product and set forth a payment
methodology for biosimilar biological products. In 2010, CMS published
regulations for the payment for biosimilar biological products that are
administered in a physician's office (75 FR 73393 through 73394).
However, at that time, it was not clear how or when the new Food and
Drug Administration (FDA) approval pathway would be implemented or when
biosimilar products would be approved.
The FDA approved the first biosimilar under the new pathway on
March 6, 2015. In the CY 2016 OPPS/ASC proposed rule (80 FR 39285), we
stated that by the end of 2015, we anticipated that the FDA may approve
several more biosimilar biological products, including products that
have a common previously licensed reference product. Although we
described our Medicare Part B payment policy for biosimilar biological
products when administered in the physician office setting in the CY
2011 MPFS final rule with comment period, we did not describe how
payment would be made for these products when administered in the
hospital outpatient department.
2. Payment Policy for Biosimilar Biological Products
Section 1833(t)(14)(A)(iii) of the Act defines payment policy for
separately covered outpatient drugs (SCODs), and currently, CMS pays
for SCODs under the payment methodology set forth at section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default). Through
rulemaking, CMS adopted this payment methodology to apply to separately
payable drugs and biologicals that are not SCODs. Under this authority,
the payment rate for SCODs and applicable separately payable drugs and
biologicals is determined in accordance with sections 1842(o) and 1847A
of the Act, which generally equates to average sales price (ASP) plus 6
percent.
As noted above, the Affordable Care Act amended section 1847A of
the Act to add the definition of biosimilar biological product and set
forth a payment methodology for biosimilar biological products. Since
the statutory authority under section 1833(t)(14)(A)(iii)(II) of the
Act authorizes payment in accordance with section 1847A of the Act, and
provides additional discretionary authority for such payments to be
calculated and adjusted by the Secretary as necessary, we believe that
it is reasonable to adopt a policy to pay for biosimilar biological
products as provided under section 1847A(b)(8) of the Act. Therefore,
in the CY 2016 OPPS/ASC proposed rule (80 FR 39285), we proposed to
extend the application of the methodology for determining the amount of
payment applicable to SCODs authorized by section
1833(t)(14)(A)(iii)(II) of the Act, which, through rulemaking, is
applicable to separately paid drugs and biologicals, to biosimilar
biological products provided under the OPPS. This equates to a payment
determined under section 1847A of the Act. That is, we proposed to pay
for biosimilar biological products based on the payment allowance of
the product as determined under section 1847A of the Act. In addition,
we proposed that nonpass-through biosimilar biological products would
be subject to our threshold-packaged policy as described in section
V.B.2. of the proposed rule and this final rule with comment period.
Consistent with our established OPPS drug, biological, and
radiopharmaceutical payment policy, we proposed that HCPCS coding and
modifiers for biosimilar biological products will be based on policy
established under the CY 2016 MPFS rule. We stated in the proposed rule
that public comments on HCPCS codes and modifiers for biosimilar
biological products should be submitted in response to the CY 2016 MPFS
proposed rule.
We received several public comments on the proposed HCPCS coding
and modifiers for biosimilar biological products. As proposed, under
the OPPS, we will use the HCPCS codes and modifiers for biosimilar
biological products based on policy established under the CY 2016 MPFS
final rule with comment period. Therefore, we are considering the
public comments received on biosimilar biological product HCPCS coding
and modifiers in response to the CY 2016 OPPS/ASC proposed rule to be
outside the scope to the proposed rule and we are not addressing them
in this CY 2016 OPPS/ASC final rule with comment period. We refer
readers to the CY 2016 MPFS final rule with comment period.
We are finalizing our proposal, without modification, to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the Act. In addition, we
are finalizing our proposal, without modification, to subject nonpass-
through biosimilar biological products to our annual threshold-packaged
policy.
3. OPPS Transitional Pass-Through Payment Policy for Biosimilar
Biological Products
Section 1833(t)(6)(D)(i) of the Act specifies that the transitional
pass-through payment amount for pass-through drugs and biologicals is
the difference between the amount paid under section 1842(o) of the Act
and the otherwise applicable hospital outpatient department fee
schedule amount. Because section 1842(o)(1)(C) of the Act cross
references section 1847A of the Act, we believe that it is reasonable
to infer that biosimilar biological products are eligible for
transitional pass-through payment, and that such payment amount may be
set as the difference between the amount paid under section 1842(o) of
the Act (that is, the payment allowance of the product determined under
section 1847A(b)(8) of the Act) and the otherwise applicable hospital
outpatient department fee schedule amount. Therefore, in the CY 2016
OPPS/ASC proposed rule (80 FR 39285), we proposed to extend pass-
through payment eligibility to biosimilar biological products and to
establish pass-through payment based on the difference between the
amount paid under section 1842(o) of the Act (that is, the payment
allowance of the product determined under section 1847A(b)(8) of the
Act) and the otherwise applicable hospital outpatient department fee
schedule amount.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39285), we solicited
public comments on our proposed payment policies for biosimilar
biological products, including whether biosimilar biological products
should be eligible for transitional pass-through payment, and the
appropriate methodologies for determining payment for biosimilar
biological products eligible for transitional pass-through payment.
Comment: Commenters supported our proposed policy to extend pass-
through payment eligibility to biosimilar biological products.
Response: We appreciate the commenters' support. We clarify that
pass-through payment will be made to the first eligible biosimilar
biological product to a reference product. Subsequent biosimilar
biological products to a reference product will not meet the newness
criterion at 42 CFR 419.64, and therefore will be ineligible for pass-
through payment.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to extend pass-through
payment eligibility to biosimilar biological products and to establish
[[Page 70446]]
pass-through payment based on the difference between the amount paid
under section 1842(o) of the Act (that is, the payment allowance of the
product determined under section 1847A(b)(8) of the Act) and the
otherwise applicable hospital outpatient department fee schedule
amount.
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payments for drugs, biologicals,
radiopharmaceuticals, and categories of devices for a given year to an
``applicable percentage,'' currently not to exceed 2.0 percent of total
program payments estimated to be made for all covered services under
the OPPS furnished for that year. If we estimate before the beginning
of the calendar year that the total amount of pass-through payments in
that year would exceed the applicable percentage, section
1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction
in the amount of each of the transitional pass-through payments made in
that year to ensure that the limit is not exceeded. We estimate the
pass-through spending to determine whether payments exceed the
applicable percentage and the appropriate prorata reduction to the
conversion factor for the projected level of pass-through spending in
the following year to ensure that total estimated pass-through spending
for the prospective payment year is budget neutral, as required by
section 1833(t)(6)(E) of the Act.
For devices, developing an estimate of pass-through spending in CY
2016 entails estimating spending for two groups of items. The first
group of items consists of device categories that are currently
eligible for pass-through payment and that will continue to be eligible
for pass-through payment in CY 2016. The CY 2008 OPPS/ASC final rule
with comment period (72 FR 66778) describes the methodology we have
used in previous years to develop the pass-through spending estimate
for known device categories continuing into the applicable update year.
The second group of items consists of items that we know are newly
eligible, or project may be newly eligible, for device pass-through
payment in the remaining quarters of CY 2015 or beginning in CY 2016.
The sum of the CY 2016 pass-through estimates for these two groups of
device categories equals the total CY 2016 pass-through spending
estimate for device categories with pass-through status. We base the
device pass-through estimated payments for each device category on the
amount of payment as established in section 1833(t)(6)(D)(ii) of the
Act, and as outlined in previous rules, including the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75034 through 75036). We note
that, beginning in CY 2010, the pass-through evaluation process and
pass-through payment for implantable biologicals newly approved for
pass-through payment beginning on or after January 1, 2010 that are
surgically inserted or implanted (through a surgical incision or a
natural orifice) use the device pass-through process and payment
methodology (74 FR 60476). As has been our past practice (76 FR 74335),
in the CY 2016 OPPS/ASC proposed rule (80 FR 39286), for CY 2016, we
proposed to include an estimate of any implantable biologicals eligible
for pass-through payment in our estimate of pass-through spending for
devices. Similarly, we finalized a policy in CY 2015 that applications
for pass-through payment for skin substitutes and similar products be
evaluated using the medical device pass-through process and payment
methodology (76 FR 66885 to 66888). Therefore, as we did beginning in
CY 2015, for CY 2016, we also proposed to include an estimate of any
skin substitutes and similar products in our estimate of pass-through
spending for devices.
We did not receive any public comments on our proposed methodology
or the proposed estimate for pass-through spending for devices.
Therefore, we are finalizing our proposal to base the pass-through
estimate for devices on our established methodology, as described
above.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. We note that the Part B drug CAP program has been postponed
since CY 2009, and such a program has not been reinstated for CY 2016.
Because, as we proposed to pay for most non-pass-through separately
payable drugs and biologicals under the CY 2016 OPPS at ASP+6 percent,
as we discussed in section V.B.3. of the proposed rule and this final
rule with comment period, which represents the otherwise applicable fee
schedule amount associated with most pass-through drugs and
biologicals, and because, as we proposed to pay for CY 2016 pass-
through drugs and biologicals at ASP+6 percent, as we discussed in
section V.A. of the proposed rule, our estimate of drug and biological
pass-through payment for CY 2016 for this group of items is $0, as
discussed below.
Furthermore, payment for certain drugs, specifically diagnostic
radiopharmaceuticals and contrast agents without pass-through status,
will always be packaged into payment for the associated procedures and
these products will not be separately paid. In addition, we policy-
package all nonpass-through drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure and drugs and biologicals that function as
supplies when used in a surgical procedure, as discussed in section
II.A.3. of this final rule with comment period. In the CY 2016 OPPS/ASC
proposed rule (80 FR 39286), we proposed that all of these policy-
packaged drugs and biologicals with pass-through status would be paid
at ASP+6 percent, like other pass-through drugs and biologicals, for CY
2016. Therefore, our estimate of pass-through payment for policy-
packaged drugs and biologicals with pass-through status approved prior
to CY 2016 is not $0, as discussed below. In section V.A.4. of this
final rule with comment period, we discuss our policy to determine if
the costs of certain policy-packaged drugs or biologicals are already
packaged into the existing APC structure. If we determine that a
policy-packaged drug or biological approved for pass-through payment
resembles predecessor drugs or biologicals already included in the
costs of the APCs that are associated with the drug receiving pass-
through payment, we proposed to offset the amount of pass-through
payment for the policy-packaged drug or biological. For these drugs or
biologicals, the APC offset amount is the portion of the APC payment
for the specific procedure performed with the pass-through drug or
biological, which we refer to as the policy-packaged drug APC offset
amount. If we determine that an offset is appropriate for a specific
policy-packaged drug or biological receiving
[[Page 70447]]
pass-through payment, we proposed to reduce our estimate of pass-
through payments for these drugs or biologicals by this amount.
Similar to pass-through estimates for devices, the first group of
drugs and biologicals requiring a pass-through payment estimate
consists of those products that were recently made eligible for pass-
through payment and that will continue to be eligible for pass-through
payment in CY 2016. The second group contains drugs and biologicals
that we know are newly eligible, or project will be newly eligible in
the remaining quarters of CY 2015 or beginning in CY 2016. The sum of
the CY 2016 pass-through estimates for these two groups of drugs and
biologicals equals the total CY 2016 pass-through spending estimate for
drugs and biologicals with pass-through status.
B. Estimate of Pass-Through Spending
In the CY 2016 OPPS/ASC proposed rule (80 FR 39286), we proposed to
set the applicable pass-through payment percentage limit at 2.0 percent
of the total projected OPPS payments for CY 2016, consistent with
section 1833(t)(6)(E)(ii)(II) of the Act, and our OPPS policy from CY
2004 through CY 2015 (79 FR 66897 through 66898).
For the first group, consisting of device categories that are
currently eligible for pass-through payment and will continue to be
eligible for pass-through payment in CY 2016, there are three active
categories for CY 2016. For CY 2015, we established one new device
category subsequent to the publication of the CY 2015 OPPS/ASC proposed
rule, HCPCS code C2624 (Implantable wireless pulmonary artery pressure
sensor with delivery catheter, including all system components), that
was effective January 1, 2015. We estimated in the proposed rule that
HCPCS code C2624 will cost $50.5 million in pass-through expenditures
in CY 2016. Effective Apri1 1, 2015, we established that HCPCS code
C2623 (Catheter, transluminal angioplasty, drug-coated, non-laser) will
be eligible for pass-through payment. We estimated that HCPCS code
C2623 will cost $73 million in pass-through expenditures in CY 2016.
Effective July 1, 2015, we established that HCPCS code C2613 (Lung
biopsy plug with delivery system) will be eligible for pass-through
payment. We estimated that HCPCS code C2613 will cost $3.3 million in
pass-through expenditures in CY 2016. Based on the three device
categories of HCPCS codes C2624, C2623, and C2613, in the CY 2016 OPPS/
ASC proposed rule (80 FR 39287), we proposed an estimate for the first
group of devices of $126.8 million.
We did not receive any public comments on our proposed estimate for
the first group of devices that included HCPCS codes C2624, C2623 and
C2613. Therefore, we are finalizing the proposed estimate for this
first group of devices of $126.8 million for CY 2016.
In estimating our proposed CY 2016 pass-through spending for device
categories in the second group, we included: Additional device
categories that we estimated could be approved for pass-through status
subsequent to the development of the proposed rule and before January
1, 2016; and contingent projections for new device categories
established in the second through fourth quarters of CY 2016. In the CY
2016 OPPS/ASC proposed rule (80 FR 39287), we proposed to use the
general methodology described in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66778), while also taking into account recent
OPPS experience in approving new pass-through device categories. For
the proposed rule, the estimate of CY 2016 pass-through spending for
this second group of device categories was $10 million.
We did not receive any public comments on our proposed estimate for
the second group of devices. Therefore, we are finalizing the proposed
estimate for this second group of devices of $10 million for CY 2016.
To estimate proposed CY 2016 pass-through spending for drugs and
biologicals in the first group, specifically those drugs and
biologicals recently made eligible for pass-through payment and
continuing on pass-through payment status for CY 2016, we proposed to
use the most recent Medicare physician claims data regarding their
utilization, information provided in the respective pass-through
applications, historical hospital claims data, pharmaceutical industry
information, and clinical information regarding those drugs or
biologicals to project the CY 2016 OPPS utilization of the products.
For the known drugs and biologicals (excluding policy-packaged
diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals,
and radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure, and drugs and biologicals that function
as supplies when used in a surgical procedure) that will be continuing
on pass-through payment status in CY 2016, we estimate the pass-through
payment amount as the difference between ASP+6 percent and the payment
rate for nonpass-through drugs and biologicals that will be separately
paid at ASP+6 percent, which is zero for this group of drugs. Because
payment for policy-packaged drugs and biologicals is packaged if the
product was not paid separately due to its pass-through status, we
proposed to include in the CY 2016 pass-through estimate the difference
between payment for the policy-packaged drug or biological at ASP+6
percent (or WAC+6 percent, or 95 percent of AWP, if ASP or WAC
information is not available) and the policy-packaged drug APC offset
amount, if we determine that the policy-packaged drug or biological
approved for pass-through payment resembles a predecessor drug or
biological already included in the costs of the APCs that are
associated with the drug receiving pass-through payment. For the
proposed rule, using the proposed methodology described above, we
calculated a CY 2016 proposed spending estimate for this first group of
drugs and biologicals of approximately $5.2 million.
We did not receive any public comments on our proposed methodology
for calculating the spending estimate for the first group of drugs and
biologicals.
For this final rule with comment period, using the methodology
described above, we calculated a final CY 2016 spending estimate for
the first group of drugs and biologicals of approximately $12.8
million.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39287), we also
estimated proposed CY 2016 pass-through spending for drugs and
biologicals in the second group (that is, drugs and biologicals that we
knew at the time of development of the proposed rule were newly
eligible for pass-through payment in CY 2016, additional drugs and
biologicals that we estimated could be approved for pass-through status
subsequent to the development of the proposed rule and before January
1, 2016, and projections for new drugs and biologicals that could be
initially eligible for pass-through payment in the second through
fourth quarters of CY 2016). We proposed to use utilization estimates
from pass-through applicants, pharmaceutical industry data, clinical
information, recent trends in the per unit ASPs of hospital outpatient
drugs, and projected annual changes in service volume and intensity as
our basis for making the CY 2016 pass-through payment estimate. We also
proposed to consider the most recent OPPS experience in approving new
pass-through drugs and biologicals. Using our proposed methodology for
estimating CY 2016 pass-through payments for this second group of
[[Page 70448]]
drugs, we calculated a proposed spending estimate for this second group
of drugs and biologicals of approximately $4.6 million.
We did not receive any public comments on our proposed methodology
for calculation of the spending estimate of the second group of drugs
and nonimplantable biologicals, and therefore are finalizing its use in
this final rule with comment period for CY 2016.
For this final rule with comment period, using our finalized
methodology for estimating CY 2016 pass-through payments for this
second group of drugs, we calculated a spending estimate for this
second group of drugs and biologicals of approximately $11.2 million.
Our CY 2016 estimate for total pass-through spending for drugs and
biologicals (spending for the first group of drugs and biologicals
($12.8 million) plus spending for the second group of drugs and
biologicals ($11.2 million)) equals approximately $24 million.
In summary, in accordance with the methodology described above in
this section, for this final rule with comment period, we estimate that
total pass-through spending for the device categories and the drugs and
biologicals that are continuing to receive pass-through payment in CY
2016 and those device categories, drugs, and biologicals that first
become eligible for pass-through payment during CY 2016 will be
approximately $160.8 million (approximately $136.8 million for device
categories and approximately $24 million for drugs and biologicals),
which represents 0.26 percent of total projected OPPS payments for CY
2016. Therefore, we estimate that pass-through spending in CY 2016 will
not amount to 2.0 percent of total projected OPPS CY 2016 program
spending.
VII. OPPS Payment for Hospital Outpatient Visits
A. Payment for Hospital Outpatient Clinic and Emergency Department
Visits
Since April 7, 2000, we have instructed hospitals to report
facility resources for clinic and emergency department (ED) hospital
outpatient visits using the CPT E/M codes and to develop internal
hospital guidelines for reporting the appropriate visit level (65 FR
18451). Because a national set of hospital-specific codes and
guidelines does not currently exist, we have advised hospitals that
each hospital's internal guidelines that determine the levels of clinic
and ED visits to be reported should follow the intent of the CPT code
descriptors, in that the guidelines should be designed to reasonably
relate the intensity of hospital resources to the different levels of
effort represented by the codes.
While many hospitals have advocated for hospital-specific national
guidelines for visit billing since the OPPS started in 2000, and we
have signaled in past rulemaking our intent to develop guidelines, this
complex undertaking has proven challenging. Our work with interested
stakeholders, such as hospital associations, along with a contractor,
has confirmed that no single approach could consistently and accurately
capture hospitals' relative costs. Public comments received on this
issue, as well as our own knowledge of how clinics operate, have led us
to conclude that it is not feasible to adopt a set of national
guidelines for reporting hospital clinic visits that can accommodate
the enormous variety of patient populations and service-mix provided by
hospitals of all types and sizes throughout the country. Moreover, no
single approach has been broadly endorsed by the stakeholder community.
With respect to outpatient clinic visits, in the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75036 through 75045), we
finalized a policy that created alphanumeric HCPCS code G0463 (Hospital
outpatient clinic visit for assessment and management of a patient) for
hospital use only, representing any and all clinic visits under the
OPPS, and assigned HCPCS code G0463 to APC 0634 (Hospital Clinic
Visits). We also finalized a policy to use CY 2012 claims data to
develop the CY 2014 OPPS payment rates for HCPCS code G0463 based on
the total geometric mean cost of the levels one through five CPT E/M
codes for clinic visits (five levels for new patient clinic visits and
five levels for established patient clinic visits) previously
recognized under the OPPS (CPT codes 99201 through 99205 and 99211
through 99215). In addition, we finalized a policy to no longer
recognize a distinction between new and established patient clinic
visits.
With respect to ED visits, in the CY 2014 OPPS/ASC final rule with
comment period (78 FR 75036 through 75043), we also stated our policy
that we would continue to use our existing methodology to recognize the
existing CPT codes for Type A ED visits as well as the five HCPCS codes
that apply to Type B ED visits, and to establish the OPPS payment under
our established standard process. We refer readers to the CY 2014 OPPS/
ASC final rule with comment period for a detailed discussion of the
public comments and our rationale for the CY 2014 policies (78 FR 75036
through 75043).
In the CY 2016 OPPS/ASC proposed rule (80 FR 39287 through 39288),
for CY 2016, we proposed to continue the current policy, adopted in CY
2014, for clinic and ED visits. HCPCS code G0463 (for hospital use
only) will represent any and all clinic visits under the OPPS. As part
of our broader initiative to restructure APCs across the OPPS to
collectively group services that are clinically similar and have
similar resource costs within the same APC, we proposed to reassign
HCPCS code G0463 from existing APC 0634 to renumbered APC 5012 (Level 2
Examinations and Related Services), formerly APC 0632. Renumbered APC
5012 includes other services that are clinically similar with similar
resource costs to HCPCS code G0463, such as HCPCS code G0402 (Initial
preventive physical examination). We proposed to use CY 2014 claims
data to develop the CY 2016 OPPS payment rate for HCPCS code G0463
based on the total geometric mean cost of HCPCS code G0463, as CY 2014
is the first year for which claims data are available for this code.
Finally, as we established in the CY 2014 OPPS/ASC final rule with
comment period (78 FR 75042), there is no longer a policy to recognize
a distinction between new and established patient clinic visits.
Comment: A few commenters requested that CMS discontinue the single
HCPCS G-code for reporting clinic visits and return to a reporting
structure that recognizes differences in clinical acuity and resource
utilization. The commenters expressed concern that CMS' clinic visit
coding policy creates a payment bias that unfairly penalizes certain
providers, such as cancer hospitals, which provide care for more
severely ill Medicare beneficiaries. One commenter believed that
utilization of the single HCPCS G-code for reporting clinic visits does
not provide a distinction between new and established patients and is
administratively burdensome, as HCPCS G-codes are only recognized by
Medicare.
Response: We believe that the spectrum of hospital resources
provided during an outpatient hospital clinic visit is appropriately
captured and reflected in the single level payment for clinic visits.
We believe the proposed payment rate for APC 5012 represents an
appropriate payment for clinic visits as it is based on the geometric
mean costs of all visits. Although the cost for any given clinic visit
may be higher or lower than the geometric mean cost of APC 5012, the
payment remains appropriate to the hospital delivering a variety of
[[Page 70449]]
clinic visits. The high volume of claims used for ratesetting for HCPCS
code G0463 allows us to have accurate data upon which to develop
appropriate payment rates. With regard to specific concerns for
hospitals that treat patients with a more complex case-mix, we note
that the relatively low estimated cost of clinic visits overall would
result in lesser underpayment or overpayment for hospitals that may
serve a population with a more complex case-mix. In addition, past
stakeholder and commenter support for eliminating distinctions for new
and established patients (78 FR 75040 through 75041) suggests that
hospitals prefer the administrative ease of not tracking new or
established patients. Consistent with our longstanding practice, we
will continue to monitor clinic visit costs under the OPPS.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue to use HCPCS
code G0463 (for hospital use only) to represent any and all clinic
visits under the OPPS for CY 2016. In addition, we are finalizing our
proposal to reassign HCPCS code G0463 from existing APC 0634 to
renumbered APC 5012 and to use CY 2014 claims data to develop the CY
2016 OPPS payment rate for HCPCS code G0463 based on the total
geometric mean cost of HCPCS code G0463, as CY 2014 is the first year
for which claims data are available for this code. We note again that,
as we established in the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75042), we no longer have a policy to recognize a
distinction between new and established patient clinic visits.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
75040), we stated that additional study was needed to fully assess the
most suitable payment structure for ED visits, including the particular
number of visit levels that would not underrepresent resources required
to treat the most complex patients, such as trauma patients, and that
we believed it was best to delay any change in ED visit coding while we
reevaluate the most appropriate payment structure for Type A and Type B
ED visits. At this time, we continue to believe that additional study
is needed to assess the most suitable payment structure for ED visits.
Therefore, in the CY 2016 OPPS/ASC proposed rule (80 FR 39288), we did
not propose any change in ED visit coding. Rather, for CY 2016, we
proposed to continue to use our existing methodology to recognize the
existing five CPT codes for Type A ED visits as well as the five HCPCS
codes that apply to Type B ED visits, and to establish the proposed CY
2016 OPPS payment rates using our established standard process. We
stated that we may propose changes to the coding and APC assignments
for ED visits in future rulemaking.
Comment: Commenters supported CMS' proposal to continue its current
methodology to recognize the existing five CPT codes for Type A ED
visits, as well as the five HCPCS codes for Type B ED visits for CY
2016, and to establish the associated CY 2016 OPPS payment rates using
its standard process. One commenter urged CMS to develop standard ED
visit guidelines for a 5-level E/M system for the ED.
Response: We appreciate the commenters' support. As we have in the
past (76 FR 74345 through 74346), we acknowledge that it would be
desirable to many hospitals to have national ED visit guidelines for a
5-level E/M system for the ED. However, we also understand that it
would be disruptive and administratively burdensome to other hospitals
that have successfully adopted internal guidelines to have to implement
new national guidelines, particularly while we address the problems
that would inevitably arise with the implementation of a new set of
guidelines being applied by thousands of hospitals.
Comment: One commenter recommended, as an alternative to our
proposed policy, that CMS develop, on a short-term basis, a set of
three trauma[hyphen]specific HCPCS codes for all trauma patients for
whom a trauma team is activated. The commenter also recommended that
CMS consider a long-term restructuring of payment for trauma care,
developed by specifically taking the following steps:
CMS should rigorously evaluate historical trauma cases
data to better understand the precise nature of trauma care and how it
is reimbursed.
Armed with this understanding, CMS should develop a
complete value-based reimbursement model for trauma care, distinct from
the fee-for-service reimbursement for ED visits, based on the
conceptual framework of the Trauma Center Association of America
(TCAA).
CMS should test its value-based reimbursement model
through a pilot program or simulation to ensure that it accurately
compensates trauma centers for providing an appropriate level of care.
CMS should incorporate its restructured model into the
hospital OPPS as expeditiously as possible.
Response: We appreciate the alternatives presented by the
commenter. We will take this recommendation into consideration as we
continue to study and fully consider the most appropriate payment
structure for Type A and Type B ED visits.
After consideration of the public comments we received, we are
finalizing our proposals, without modification, to continue to use our
existing methodology to recognize the existing CPT codes for Type A ED
visits as well as the five HCPCS codes that apply to Type B ED visits,
and to establish the CY 2016 OPPS payment rates using our established
standard process. We intend to further explore the issues described
above related to ED visits, including concerns about excessively costly
patients, such as trauma patients. We note that we may propose changes
to the coding and APC assignments for ED visits in the future
rulemaking.
B. Payment for Critical Care Services
For the history of the payment policy for critical care services,
we refer readers to the CY 2014 OPPS/ASC final rule with comment period
(78 FR 75043). In the CY 2014 OPPS/ASC final rule with comment period,
we continued to use the methodology established in the CY 2011 OPPS/ASC
final rule with comment period for calculating a payment rate for
critical care services that includes packaged payment of ancillary
services, for example electrocardiograms, chest X-rays, and pulse
oximetry. Critical care services are described by CPT codes 99291
(Critical care, evaluation and management of the critically ill or
critically injured patient; first 30-74 minutes) and 99292 (Critical
care, evaluation and management of the critically ill or critically
injured patient; each additional 30 minutes (List separately in
addition to code for primary service)).
Since CY 2013, we have stated that we would continue to monitor the
hospital claims data for CPT code 99291 in order to determine whether
revisions to our current payment policy for critical care services are
warranted based on changes in hospitals' billing practices. Because the
CY 2011 through CY 2014 claims data (used for CY 2013 through CY 2016
ratesetting, respectively) do not demonstrate any significant change in
hospital billing practices for critical care services, we continue to
believe that it would be inappropriate to pay separately for the
ancillary services that hospitals typically report in addition to CPT
codes for critical care services. Based on this pattern of billing
practices, we continue to believe that packaging ancillary services
into critical care
[[Page 70450]]
services is appropriate. Therefore, in the CY 2016 OPPS/ASC proposed
rule (80 FR 39288), for CY 2016 and subsequent years, we proposed to
continue our policy (that has been in place since CY 2011) to recognize
the existing CPT codes for critical care services and establish a
payment rate based on historical claims data. We also proposed to
continue to implement claims processing edits that conditionally
package payment for the ancillary services that are reported on the
same date of service as critical care services in order to avoid
overpayment.
Comment: One commenter opposed the claims processing edits
conditionally packaging payment for the ancillary services that are
reported on the same date of service as critical care services. The
commenter also encouraged CMS to use recent data in setting the rates
for critical care.
Response: As we stated in the proposed rule (80 FR 39288), because
the CY 2011 through CY 2014 claims data (used for CY 2013 through CY
2016 ratesetting, respectively) do not demonstrate any significant
change in hospital billing practices for critical care services, we
continue to believe that it would be inappropriate to pay separately
for the ancillary services that hospitals typically report in addition
to CPT codes for critical care services. Based on this pattern of
billing practices, we continue to believe that packaging ancillary
services into critical care services is appropriate. We note that CY
2014 claims data used for CY 2016 ratesetting represents the most
recent complete year of available claims data.
After consideration of the public comments we received, we are
finalizing our proposals, without modification, to continue our policy
to recognize the existing CPT codes for critical care services and
establish a payment rate based on historical claims data, and to
continue to implement claims processing edits that conditionally
package payment for the ancillary services that are reported on the
same date of service as critical care services in order to avoid
overpayment.
C. Payment for Chronic Care Management Services
In the CY 2015 OPPS/ASC final rule with comment period, we assigned
CPT code 99490 to APC 0631 (Level 1 Examinations and Related Services),
with a payable status indicator of ``V,'' under general physician
supervision. (We note that in the CY 2016 OPPS/ASC proposed rule (80 FR
39288), for CY 2016 and subsequent years, we proposed to renumber APC
0631 as APC 5011.) The current code descriptor for CPT code 99490 is
``Chronic care management services (CCM), at least 20 minutes of
clinical staff time directed by a physician or other qualified health
care professional, per calendar month), with the following required
elements:
Multiple (two or more) chronic conditions expected to last
at least 12 months, or until the death of the patient;
Chronic conditions place the patient at significant risk
of death, acute exacerbation/decompensation, or functional decline; and
Comprehensive care plan established, implemented, revised,
or monitored.''
CPT code 99490 is a physician-directed service, where the physician
is directing the clinical staff time spent on care management for a
specific patient. As a physician-directed service, payment under the
OPPS for services described by CPT code 99490 is made to the hospital
when the hospital's clinical staff furnishes the service at the
direction of the physician (or other appropriate nonphysician
practitioner) who meets all the requirements to bill for services
described by CPT code 99490 under the MPFS. The billing physician or
nonphysician practitioner directing the CCM services must meet the
requirements to bill CPT code 99490 under the MPFS. These requirements
are the same, regardless of whether the services described by CPT code
99490 are furnished in the office or in the HOPD.
While the services described by CPT code 99490 has been payable
under the OPPS since January 1, 2015, we have received questions about
specific requirements for hospitals to bill this code beyond those
requirements discussed in the CY 2015 MPFS final rule with comment
period (79 FR 67721). In response to these questions, we posted
frequently asked questions (FAQs) and answers on the CMS Web site on
May 8, 2015. These FAQs can be accessed on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/. In reviewing the questions from hospitals on
billing of CCM services, we identified several issues that we believe
need to be clarified. Therefore, in the CY 2016 OPPS/ASC proposed rule
(80 FR 39289), for CY 2016 and subsequent years, we proposed additional
requirements for hospitals to bill and receive OPPS payment for CMM
services described by CPT code 99490. These proposed requirements,
discussed below, are in addition to those already required under the
OPPS for billing for services described by CPT code 99490 in CY 2015.
In accordance with the CPT code descriptor for CPT code 99490, a
hospital can only bill CMM services described by CPT code 99490 and
receive payment under the OPPS for furnishing clinical staff services
under a physician's or other appropriate nonphysician practitioner's
direction to a patient that has multiple (two or more) chronic
conditions expected to last at least 12 months or until the death of
the patient, and that place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline. While we have
always expected the hospital furnishing the clinical staff portion of
CCM services, as described by CPT code 99490, to have an established
relationship with the patient and to provide care and treatment to the
patient during the course of illness (that is, the chronic conditions
that are expected to last at least 12 months), we have not previously
specified through notice-and-comment rulemaking that the hospital must
have an established relationship with the patient as a requirement for
billing and OPPS payment for CMM services described by CPT code 99490.
Therefore, for CY 2016 and subsequent years, we proposed that a
hospital would be able to bill CPT code 99490 for CCM services only
when furnished to a patient who has been either admitted to the
hospital as an inpatient or has been a registered outpatient of the
hospital within the last 12 months and for whom the hospital furnished
therapeutic services. Section 20.2, Chapter 4 of the Medicare Claims
Processing Manual (Pub. 100-04) defines a hospital outpatient as a
person who has not been admitted by the hospital as an inpatient but is
registered on the hospital records as an outpatient and receives
services (other than supplies alone) from the hospital. We believe that
hospitals furnishing services described by CPT code 99490 are, in all
likelihood, already meeting this requirement because they are providing
CCM services described by CPT code 99490 to patients for whom they
already provide care and treatment. However, we proposed to adopt the
relationship requirement as an explicit condition for billing and
payment of CCM services under the OPPS.
As outlined in the CY 2015 MPFS final rule with comment period (79
FR 67721 through 67722), practitioners furnishing and billing CCM
services as described by CPT code 99490 under the MPFS are required to
(1) inform the beneficiary about the availability of the CCM services
from the practitioner and
[[Page 70451]]
obtain his or her written agreement to have the service(s) provided;
(2) document in the beneficiary's medical record that all elements of
the CCM service(s) were explained and offered to the beneficiary,
noting the beneficiary's decision to accept or decline the service; and
(3) inform the beneficiary that only one practitioner can furnish and
be paid for these services during the calendar month service period.
For CY 2016 and subsequent years, we proposed to adopt analogous
requirements for billing services described by CPT code 99490 under the
OPPS. Specifically, we proposed, for CY 2016 and subsequent years, that
hospitals furnishing and billing services described by CPT code 99490
under the OPPS would be required to have documented in the hospital's
medical record the patient's agreement to have the services provided
or, alternatively, to have the patient's agreement to have the CCM
services provided documented in a beneficiary's medical record that the
hospital can access. In addition, for CY 2016 and subsequent years, we
proposed to require hospitals furnishing and billing for the CCM
services described by CPT code 99490 under the OPPS to have documented
in the hospital medical record (or beneficiary medical record that the
hospital can access) that all elements of the CCM services were
explained and offered to the beneficiary, including a notation of the
beneficiary's decision to accept or decline the services. If the
hospital is billing for the CCM services, we would expect the physician
or practitioner under whose direction the services are furnished to
have discussed with the beneficiary that hospital clinical staff will
furnish the services and that the beneficiary could be liable for two
separate copayments from both the hospital and the physician.
Consistent with the MPFS requirement that only one practitioner can
furnish and be paid for services described by CPT code 99490 during the
calendar month service period, we proposed, for the OPPS for CY 2016
and subsequent years, that only one hospital can furnish and be paid
for services described by CPT code 99490 during the calendar month
service period. The physician or other appropriate nonphysician
practitioner directing the CCM services should inform the beneficiary
that only one hospital can furnish and be paid for these services
during the calendar month service period. These proposed requirements
are consistent with and support the MPFS requirements set forth in the
CY 2015 MPFS final rule with comment period (79 FR 67728).
Comment: Commenters generally supported CMS' proposed policy to
adopt billing requirements for CMM services described by CPT code 99490
analogous to those required for billing under the MPFS for CY 2016 and
subsequent years. A few commenters encouraged CMS to continue to
actively work with stakeholders to ensure that the implementation of
these codes will not be administratively burdensome. Another commenter
requested that CMS clarify in the final rule whether one hospital (paid
under OPPS) and one practitioner (paid under the MPFS) may furnish and
be paid for services described by CPT code 99490 during a calendar
month, or whether only one provider across all care settings may be
paid for the service. One commenter requested that CMS amend the
hospital claim form so that the ``place of service'' code can be noted
to permit better data capture and monitoring of the settings in which
CCM services are provided.
Response: We appreciate commenters' support for our proposal. We
look forward to hearing from stakeholders about the administrative
requirements associated with hospital billing of CMM services described
by CPT code 99490.
We reiterate that one hospital (paid under the OPPS) and one
practitioner (paid under the MPFS) may furnish and be paid for services
described by CPT code 99490 during a calendar month when CCM services
are furnished by a physician in an HOPD to an eligible patient.
Specifically, in this scenario, the physician or nonphysician
practitioner may bill Medicare for services described by CPT code 99490
under the MPFS and report the hospital outpatient setting as the place
of service. The hospital also may bill for the services described by
CPT code 99490 under the OPPS. The physician or nonphysician
practitioner would be paid under the MPFS at the facility rate, and the
hospital would be paid under the OPPS.
Comment: With respect to the proposed requirement that a patient
must have either been admitted to the hospital as an inpatient or have
been a registered outpatient of the hospital and received therapeutic
services from the hospital within the last 12 months, one commenter
requested that CMS permit a hospital to bill for services described by
CPT 99490 if the physician or nonphysician practitioner providing
general supervision previously furnished CCM services for the
beneficiary, but the physician's or nonphysician practitioner's
practice was subsequently acquired by a hospital that does not have an
established relationship with the patient.
Response: Because only one hospital may furnish CCM services to a
patient during a billing period and the patient's consent to have such
services furnished must be documented in the medical record, we believe
it is necessary for the hospital to have an established relationship
with the patient, as we proposed. We note that a physician or other
qualified nonphysician practitioner who previously billed CCM services
for a patient under the MPFS at the nonfacility rate could continue to
do so (assuming that all requirements for billing under the MPFS are
met). However, if the place of service becomes a hospital outpatient
department, payment under the MPFS would be made. We also believe,
given that patients who receive CCM services have multiple chronic
conditions, patients would be likely to have an established
relationship with the hospital. Accordingly, we do not believe that we
should modify this requirement at this time.
Comment: Commenters requested that CMS: (1) Classify the services
described by CPT code 99490 as a preventive service; and (2) allow for
billing and separate payment of complex chronic care codes (CPT 99487
and 99489) at similar rates to the AMA Relative Value Scale Update
Committee's (RUC's) recommended values.
Response: The services described by CPT code 99490 are not
preventive services because they do not have a USPSTF rating of A or B,
nor are they explicitly defined as a preventive service in the statute.
In addition, the complex CCM services described by CPT codes 99487 and
99489 are currently eligible to be reported when performed in the
outpatient hospital setting and are assigned status indicator ``N,''
which indicates that payment is packaged for these services. We may
consider separate payment for complex CMM services described by CPT
codes 99497 and 99489 in future rulemaking.
After consideration of the public comments we received, we are
finalizing, without modification, our proposal to require hospitals, in
order to bill and receive OPPS payment for CMM services described by
CPT code 99490, to have documented in the hospital's medical record the
patient's agreement to have the services provided or, alternatively, to
have the patient's agreement to have the CCM services provided
documented in a beneficiary's medical record that the hospital can
access. In addition, for CY 2016 and subsequent years, we are requiring
hospitals furnishing and billing for the CCM services described by CPT
code 99490 under the OPPS to have
[[Page 70452]]
documented in the hospital medical record (or beneficiary medical
record that the hospital can access) that all elements of the CCM
services were explained and offered to the beneficiary, including a
notation of the beneficiary's decision to accept or decline the
services. In addition, only one hospital under the OPPS (in addition to
only one practitioner under the MPFS) can furnish and be paid for
services described by CPT code 99490 during the calendar month service
period.
In addition, a number of scope of service elements for CCM services
were finalized as requirements to bill for CCM services described by
CPT code 99490 in the CY 2015 MPFS final rule with comment period (79
FR 67715 through 67728). For CY 2016 and subsequent years, in the CY
2016 OPPS/ASC proposed rule (80 FR 39289 through 39290), we proposed to
require analogous scope of service elements for the CCM services,
listed below, to be met in order for hospitals to bill and receive OPPS
payment for furnishing CCM services described by CPT code 99490.
Specifically, we proposed to require a hospital that bills and receives
OPPS payment for their clinical staff furnishing CCM services described
by CPT code 99490 under the direction of a physician or other qualified
nonphysician practitioner to provide--
Structured recording of demographics, problems,
medications, medication allergies, and the creation of a structured
clinical summary record. A full list of problems, medications, and
medication allergies in the electronic health record (EHR) must inform
the care plan, care coordination, and ongoing clinical care.
Access to care management services 24 hours a day/7 days a
week (providing the beneficiary with a means to make timely contact
with health care providers to address his or her urgent chronic care
needs, regardless of the time of day or day of the week).
Continuity of care with a designated practitioner or
member of the care team with whom the beneficiary is able to get
successive routine appointments.
Care management for chronic conditions, including
systematic assessment of the beneficiary's medical, functional, and
psychosocial needs; system-based approaches to ensure timely receipt of
all recommended preventive care services; medication reconciliation
with review of adherence and potential interactions; and oversight of
beneficiary self-management of medications.
Documentation of the creation of a patient-centered care
plan based on a physical, mental, cognitive, psychosocial, functional,
and environmental assessment or reassessment and an inventory of
resources and supports (a comprehensive care plan for all health
issues). Electronically capture care plan information, make this
information available on a 24 hour/7 day a week basis to all
practitioners furnishing CCM services, and electronically share, as
appropriate, with other practitioners and providers.
A written or electronic copy of the care plan provided to
the beneficiary, and document its provision in the electronic medical
record using certified information technology (IT).
Management of care transitions between and among health
care providers and settings, including referrals to other clinicians;
follow-up after an emergency department visit; and follow-up after
discharges from hospitals, skilled nursing facilities, or other health
care facilities. Electronic transmission of a clinical summary created
using certified health IT to support care transitions.
Coordination with home-based and community-based clinical
service providers required to support the patient's psychosocial needs
and functional deficits. Communication to and from home-based and
community-based providers regarding these patient needs must be
documented in the patient's medical record.
Enhanced opportunities for the beneficiary and any
caregiver to communicate with the practitioner regarding the
beneficiary's care through not only telephone access, but also through
the use of secure messaging, internet, or other asynchronous non-face-
to-face consultation methods.
Lastly, with respect to the EHR, for CY 2016 and subsequent years,
we proposed to adopt the requirements set forth in the CY 2015 MPFS
final rule with comment period (79 FR 67723 through 67724) and detailed
below for billing services described by CPT code 99490 under the OPPS.
Specifically, for CY 2016 and subsequent years, we proposed to require
the use of EHR technology that has been certified under the ONC Health
Information Technology (IT) Certification Program as requisite for
hospitals furnishing and receiving payment under the OPPS for the
clinical staff portion of CCM services, to ensure that hospitals have
adequate capabilities to allow members of the interdisciplinary care
team to have timely access to the most updated information informing
the care plan. We proposed, for hospital payment under the OPPS, that
the CCM services as described by CPT code 99490 must be furnished
using, at a minimum, the Edition(s) of certification criteria that is
acceptable for purposes of the EHR Incentive Programs as of December 31
of the calendar year preceding each MPFS payment year to meet the
following core technology capabilities: Structured recording of
demographics, problems, medications, medication allergies, and the
creation of a structured clinical summary. We also proposed to require
hospitals to use certified IT to fulfill the CCM scope of service
requirements whenever the requirements reference a health or medical
record. This would ensure that requirements for billing CCM services
under the MPFS and the OPPS are consistent throughout each MPFS and
OPPS payment year, and are automatically updated according to the
certification criteria required for the EHR Incentive Programs. For
payment for CCM services under the OPPS in CY 2016, this policy would
allow hospitals to use EHR technology certified to, at a minimum, the
2014 Edition of certification criteria to meet the final core
capabilities for CCM services and to fulfill the scope of service
requirements for CCM services whenever the requirements reference a
health or medical record. The CY 2015 MPFS final rule with comment
period (79 FR 67728) includes a detailed table summarizing when
certified health IT is required to support the scope of service
requirements. We remind stakeholders that, for all electronic sharing
of beneficiary information under our final CCM services policies, HIPAA
standards apply in the usual manner.
Comment: One commenter urged CMS to avoid placing overly burdensome
requirements for billing and payment for services described by CPT code
99490. The commenter recommended that CMS eliminate the requirement for
use of certified EHRs because current certified EHRs do not include
standards and capabilities supporting chronic care management that are
core services for CCM. Another commenter asked that CMS end its tacit
acceptance of information blocking in Federal programs. The commenter
encouraged CMS to create demand side pressure on vendors by limiting
billing for the CCM services to only those providers who use systems
that do not limit information exchange as defined in the ONC report to
Congress. Some commenters encouraged CMS to allow the care plan to be
shared with community providers through facsimile methods when
electronic options are not available.
Response: We disagree with the commenter's assertion that the
requirement for use of a certified EHR
[[Page 70453]]
when performing CCM services is overly burdensome and reiterate our
belief that the use of certified health IT is an important tool for
delivering several core elements of CCM services. We recognize that
certified health IT does not currently possess all of the capabilities
needed to deliver CCM services, and accordingly, we have restricted
requirements around the use of certified EHRs to a narrow set of
elements. We also have provided flexibility with respect to the
technology needed to support elements such as the transmission of
clinical summaries created using certified health IT.
We appreciate the comments regarding the challenges that
information blocking is likely to pose to providers furnishing CCM
services that are required to deliver care coordination services for
beneficiaries. While we did not include any proposal to tie the ability
to bill for CCM services to information blocking in the proposed rule,
we may consider such action in the future. For further information, we
refer readers to ONC's April 2015 Report to Congress on health
information blocking, which is available on the Web site at: http://www.healthit.gov/sites/default/files/reports/info_blocking_040915.pdf.
We believe it is important that providers furnishing CCM services
are able to share care plan information electronically with other
providers to support robust care coordination. We note that we did not
identify any specific electronic tool or format for sharing care plan
information, and we encourage providers furnishing CCM services to
explore a range of innovative solutions in this area. In the future, we
may consider issuing subregulatory guidance providing an exception to
the requirement to transmit clinical summaries and care plan
information electronically by a means other than facsimile, when the
receiving practitioner or provider is not billing Medicare for the CCM
service and is only able or willing to receive the required information
by facsimile.
Comment: One commenter asked CMS to clarify whether the required
EHR system used for CCM is one that has been certified as an inpatient
EHR or as an ambulatory EHR. The commenter also asked CMS to clarify
whether the required EHR system must be able to generate a specific
form of the clinical summary (such as that specified for the
Transitions of Care--create and transmit transition of care/referral
summaries certification criterion--at 45 CFR 170.314(b)(2)) or if there
is discretion for a hospital to use a different format for and the
content of the clinical summary other than a summary that contains any
particular structured content. The commenter asked if there was any
particular prescription for the content and specification of the
clinical summary, including whether such are limited to those required
for certification under Sec. 170.314(b)(2).
Response: In the proposed rule, we did not identify a specific type
of certification for the system used by a provider furnishing CCM
services. We are clarifying that the technology certified for either
the inpatient setting or the outpatient setting may be used to furnish
CCM services, provided it meets the relevant requirements. Furthermore,
we proposed that providers must support care transitions using
electronic transmission of a clinical summary created using certified
health IT, but we did not identify the specific certification criteria
that provider technology must meet. We are clarifying that, as long as
the clinical summary has been created using certified health IT and is
electronically transmitted, providers can meet the CCM requirements.
For instance, the clinical summaries currently generated by EHR systems
in accordance with the 2014 Edition certification criterion for
inpatient settings at Sec. 170.314(b)(2) of the regulations would meet
the requirements to bill for CCM services.
After consideration of the public comments we received, we are
finalizing, without modification, our proposal to require analogous
scope of service elements for the CCM services to be met in order for
hospitals to bill and receive OPPS payment for furnishing CCM services
described by CPT code 99490.
VIII. Payment for Partial Hospitalization Services
A. Background
Partial hospitalization is an intensive outpatient program of
psychiatric services provided to patients as an alternative to
inpatient psychiatric care for individuals who have an acute mental
illness. Section 1861(ff)(1) of the Act defines partial hospitalization
services as the items and services described in paragraph (2)
prescribed by a physician and provided under a program described in
paragraph (3) under the supervision of a physician pursuant to an
individualized, written plan of treatment established and periodically
reviewed by a physician (in consultation with appropriate staff
participating in such program), which sets forth the physician's
diagnosis, the type, amount, frequency, and duration of the items and
services provided under the plan, and the goals for treatment under the
plan. Section 1861(ff)(2) of the Act describes the items and services
included in partial hospitalization services. Section 1861(ff)(3)(A) of
the Act specifies that a PHP is a program furnished by a hospital to
its outpatients or by a CMHC (as defined in subparagraph (B)), and
which is a distinct and organized intensive ambulatory treatment
service offering less than 24-hour-daily care other than in an
individual's home or in an inpatient or residential setting. Section
1861(ff)(3)(B) of the Act defines a CMHC for purposes of this benefit.
Section 1833(t)(1)(B)(i) of the Act provides the Secretary with the
authority to designate the OPD services to be covered under the OPPS.
The Medicare regulations that implement this provision specify, under
42 CFR 419.21, that payments under the OPPS will be made for partial
hospitalization services furnished by CMHCs as well as Medicare Part B
services furnished to hospital outpatients designated by the Secretary,
which include partial hospitalization services (65 FR 18444 through
18445).
Section 1833(t)(2)(C) of the Act, in pertinent part, requires the
Secretary to establish relative payment weights for covered OPD
services (and any groups of such services described in subparagraph
(B)) based on median (or, at the election of the Secretary, mean)
hospital costs using data on claims from 1996 and data from the most
recent available cost reports. In pertinent part, subparagraph (B)
provides that the Secretary may establish groups of covered OPD
services, within a classification system developed by the Secretary for
covered OPD services, so that services classified within each group are
comparable clinically and with respect to the use of resources. In
accordance with these provisions, we have developed the PHP APCs.
Section 1833(t)(9)(A) of the Act requires the Secretary to review, not
less often than annually, and revise the groups, the relative payment
weights, and the wage and other adjustments described in paragraph (2)
to take into account changes in medical practice, changes in
technology, the addition of new services, new cost data, and other
relevant information and factors.
Because a day of care is the unit that defines the structure and
scheduling of partial hospitalization services, we established a per
diem payment methodology for the PHP APCs, effective for services
furnished on or after July 1, 2000 (65 FR 18452 through 18455). Under
this methodology, the
[[Page 70454]]
median per diem costs have been used to calculate the relative payment
weights for PHP APCs.
From CY 2003 through CY 2006, the median per diem costs for CMHCs
fluctuated significantly from year to year, while the median per diem
costs for hospital-based PHPs remained relatively constant. We were
concerned that CMHCs may have increased and decreased their charges in
response to Medicare payment policies. Therefore, we began efforts to
strengthen the PHP benefit through extensive data analysis and policy
and payment changes finalized in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66670 through 66676). We made two refinements to
the methodology for computing the PHP median: The first remapped 10
revenue codes that are common among hospital-based PHP claims to the
most appropriate cost centers; and the second refined our methodology
for computing the PHP median per diem cost by computing a separate per
diem cost for each day rather than for each bill. We refer readers to a
complete discussion of these refinements in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66670 through 66676).
In CY 2009, we implemented several regulatory, policy, and payment
changes, including a two-tiered payment approach for PHP services under
which we paid one amount for days with 3 services under APC 0172 (Level
1 Partial Hospitalization) and a higher amount for days with 4 or more
services under APC 0173 (Level 2 Partial Hospitalization). We refer
readers to section X.B. of the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68688 through 68693) for a full discussion of the two-
tiered payment system. In addition, for CY 2009, we finalized our
policy to deny payment for any PHP claims submitted for days when fewer
than 3 units of therapeutic services are provided (73 FR 68694).
Furthermore, for CY 2009, we revised the regulations at 42 CFR
410.43 to codify existing basic PHP patient eligibility criteria and to
add a reference to current physician certification requirements under
42 CFR 424.24 to conform our regulations to our longstanding policy (73
FR 68694 through 68695). These changes have helped to strengthen the
PHP benefit. We also revised the partial hospitalization benefit to
include several coding updates. We refer readers to section X.C.3. of
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68695
through 68697) for a full discussion of these requirements.
For CY 2010, we retained the two-tiered payment approach for PHP
services and used only hospital-based PHP data in computing the PHP APC
per diem costs, upon which PHP APC per diem payment rates are based. We
used only hospital-based PHP data because we were concerned about
further reducing both PHP APC per diem payment rates without knowing
the impact of the policy and payment changes we made in CY 2009.
Because of the 2-year lag between data collection and rulemaking, the
changes we made in CY 2009 were reflected for the first time in the
claims data that we used to determine payment rates for the CY 2011
rulemaking (74 FR 60556 through 60559).
In CY 2011, in accordance with section 1301(b) of the Health Care
and Education Reconciliation Act of 2010 (HCERA 2010), we amended the
description of a PHP in our regulations to specify that a PHP must be a
distinct and organized intensive ambulatory treatment program offering
less than 24-hour daily care other than in an individual's home or in
an inpatient or residential setting. In addition, in accordance with
section 1301(a) of HCERA 2010, we revised the definition of a CMHC in
the regulations to conform to the revised definition now set forth
under section 1861(ff)(3)(B) of the Act. We discussed our finalized
policies for these two provisions of HCERA 2010 in section X.C. of the
CY 2011 OPPS/ASC final rule with comment period (75 FR 71990).
In the CY 2011 OPPS/ASC final rule with comment period (75 FR
71994), we also established four separate PHP APC per diem payment
rates, two for CMHCs (for Level 1 and Level 2 services) and two for
hospital-based PHPs (for Level 1 and Level 2 services), based on each
provider's own unique data. As stated in the CY 2011 OPPS/ASC proposed
rule (75 FR 46300) and the final rule with comment period (75 FR
71991), for CY 2011, using CY 2009 claims data, CMHC costs had
significantly decreased again. We attributed the decrease to the lower
cost structure of CMHCs compared to hospital-based PHP providers, and
not the impact of the CY 2009 policies. CMHCs have a lower cost
structure than hospital-based PHP providers, in part, because the data
showed that CMHCs generally provide fewer PHP services in a day and use
less costly staff than hospital-based PHPs. Therefore, it was
inappropriate to continue to treat CMHCs and hospital-based providers
in the same manner regarding payment, particularly in light of such
disparate differences in costs. We also were concerned that paying
hospital-based PHPs at a lower rate than their cost structure reflects
could lead to hospital-based PHP closures and possible access problems
for Medicare beneficiaries because hospital-based PHPs are located
throughout the country and, therefore, offer the widest access to PHP
services. Creating the four payment rates (two for CMHCs and two for
hospital-based PHPs) based on each provider's data supported continued
access to the PHP benefit, while also providing appropriate payment
based on the unique cost structures of CMHCs and hospital-based PHPs.
In addition, separation of data by provider type was supported by
several hospital-based PHP commenters who responded to the CY 2011
OPPS/ASC proposed rule (75 FR 71992).
For CY 2011, we instituted a 2-year transition period for CMHCs to
the CMHC APC per diem payment rates based solely on CMHC data. For CY
2011, under the transition methodology, CMHC PHP APCs Level 1 and Level
2 per diem costs were calculated by taking 50 percent of the difference
between the CY 2010 final hospital-based PHP median costs and the CY
2011 final CMHC median costs and then adding that number to the CY 2011
final CMHC median costs. A 2-year transition under this methodology
moved us in the direction of our goal, which is to pay appropriately
for PHP services based on each provider type's data, while at the same
time allowing providers time to adjust their business operations and
protect access to care for beneficiaries. We also stated that we would
review and analyze the data during the CY 2012 rulemaking cycle and,
based on these analyses, we might further refine the payment mechanism.
We refer readers to section X.B. of the CY 2011 OPPS/ASC final rule
with comment period (75 FR 71991 through 71994) for a full discussion.
After publication of the CY 2011 OPPS/ASC final rule with comment
period, a CMHC and one of its patients filed an application for a
preliminary injunction, challenging the OPPS payment rates for PHP
services provided by CMHCs in CY 2011 as adopted in the CY 2011 OPPS/
ASC final rule with comment period (75 FR 71995). We refer readers to
the court case, Paladin Cmty. Mental Health Ctr. v. Sebelius, 2011 WL
3102049 (W.D.Tex. 2011), aff'd, 684 F.3d 527 (5th Cir. 2012) (Paladin).
The plaintiffs in the Paladin case challenged the agency's use of cost
data derived from both hospitals and CMHCs in determining the relative
payment weights for the OPPS payment rates for PHP services furnished
by CMHCs, alleging that section 1833(t)(2)(C) of the
[[Page 70455]]
Act requires that such relative payment weights be based on cost data
derived solely from hospitals. As discussed above, section
1833(t)(2)(C) of the Act requires CMS to establish relative payment
weights for covered OPD services (and any groups of such services)
based on hospital costs. Numerous courts have held that ``based on''
does not mean ``based exclusively on.'' On July 25, 2011, the District
Court dismissed the plaintiffs' complaint and application for a
preliminary injunction for lack of subject-matter jurisdiction, which
the plaintiffs appealed to the United States Court of Appeals for the
Fifth Circuit. On June 15, 2012, the Court of Appeals affirmed the
District Court's dismissal for lack of subject-matter jurisdiction and
found that the Secretary's payment rate determinations for PHP services
are not a facial violation of a clear statutory mandate (Paladin, 684
F.3d at 533).
For CY 2012, as discussed in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74348 through 74352), we determined the relative
payment weights for PHP services provided by CMHCs based on data
derived solely from CMHCs and the relative payment weights for
hospital-based PHP services based exclusively on hospital data. The
statute is reasonably interpreted to allow the relative payment weights
for the OPPS payment rates for PHP services provided by CMHCs to be
based solely on CMHC data and relative payment weights for hospital-
based PHP services to be based exclusively on hospital data. Section
1833(t)(2)(C) of the Act requires the Secretary to establish relative
payment weights for covered OPD services (and any groups of such
services described in subparagraph (B)) based on hospital costs. In
pertinent part, subparagraph (B) provides that the Secretary may
establish groups of covered OPD services so that services classified
within each group are comparable clinically and with respect to the use
of resources. In accordance with subparagraph (B), we developed the PHP
APCs, as set forth in Sec. 419.31 of the regulations (65 FR 18446 and
18447; 63 FR 47559 through 47562 and 47567 through 47569). As discussed
above, PHP services are grouped into APCs.
Based on section 1833(t)(2)(C) of the Act, we believe that the word
``establish'' can be interpreted as applying to APCs at the inception
of the OPPS in 2000 or whenever a new APC is added to the OPPS. In
creating the original APC for PHP services (APC 0033), we did
``establish'' the initial relative payment weight for PHP services,
provided in both hospital-based and CMHC-based settings, only on the
basis of hospital data. Subsequently, from CY 2003 through CY 2008, the
relative payment weights for PHP services were based on a combination
of hospital and CMHC data. For CY 2009, we established new APCs for PHP
services based exclusively on hospital data. Specifically, we adopted a
two-tiered APC methodology (in lieu of the original APC 0033) under
which CMS paid one rate for days with 3 services (APC 0172) and a
different payment rate for days with 4 or more services (APC 0173).
These two new APCs were established using only hospital data. For CY
2011, we added two new APCs (APCs 0175 and 0176) for PHP services
provided by hospitals and based the relative payment weights for these
APCs solely on hospital data. APCs 0172 and 0173 were designated for
PHP services provided by CMHCs and were based on a mixture of hospital
and CMHC data. As the Secretary argued in the Paladin case, the courts
have consistently held that the phrase ``based on'' does not mean
``based exclusively on.'' Thus, the relative payment weights for the
two APCs for PHP services provided by CMHCs in CY 2011 were ``based
on'' hospital data, no less than the relative payment weights for the
two APCs for hospital-based PHP services.
Although we used hospital data to establish the relative payment
weights for APCs 0033, 0172, 0173, 0175, and 0176 for PHP services, we
believe that we have the authority to discontinue the use of hospital
data in determining the OPPS relative payment weights for PHP services
provided by CMHCs. Other parts of section 1833(t)(2)(C) of the Act make
plain that the data source for the relative payment weights is subject
to change from one period to another. Section 1833(t)(2)(C) of the Act
provides that, in establishing the relative payment weights, the
Secretary shall use data on claims from 1996 and use data from the most
recent available cost reports. We used 1996 data (in addition to 1997
data) in determining only the original relative payment weights for
2000. In the ensuing calendar year updates, we continually used more
recent cost report data.
Moreover, section 1833(t)(9)(A) of the Act requires the Secretary
to review not less often than annually and revise the groups, the
relative payment weights, and the wage and other adjustments described
in paragraph (2) to take into account changes in medical practice,
changes in technology, the addition of new services, new cost data, and
other relevant information and factors. For purposes of the CY 2012
update, we exercised our authority under section 1833(t)(9)(A) of the
Act to change the data source for the relative payment weights for PHP
services provided by CMHCs based on new cost data, and other relevant
information and factors.
In the CY 2014 OPPS/ASC final rule with comment period, we
finalized our proposal to base the relative payment weights that
underpin the OPPS APCs, including the four PHP APCs, on geometric mean
costs rather than on the median costs. For CY 2014, we established the
four PHP APC per diem payment rates based on geometric mean cost levels
calculated using the most recent claims and cost data for each provider
type. We refer readers to the CY 2014 OPPS/ASC final rule with comment
period for a more detailed discussion (78 FR 75047 through 75050).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
through 66908), we continued to apply our established policies to
calculate the four PHP APC per diem payment rates based on PHP APC
geometric mean per diem costs using the most recent claims and cost
data for each provider type.
B. PHP APC Update for CY 2016
1. PHP APC Geometric Mean per Diem Costs
In the CY 2016 OPPS/ASC proposed rule (80 FR 39290 through 39299),
for CY 2016, we proposed to continue to apply our established policies
to calculate the four PHP APC per diem payment rates based on geometric
mean per diem costs using the most recent claims and cost data for each
provider type. We proposed to compute CMHC PHP APC geometric mean per
diem costs for Level 1 (3 services per day) and Level 2 (4 or more
services per day) PHP services using only CY 2014 CMHC claims data and
the most recent cost data, and hospital-based PHP APC geometric mean
per diem costs for Level 1 and Level 2 PHP services using only CY 2014
hospital-based PHP claims data and the most recent cost data. These
proposed geometric mean per diem costs were shown in Tables 50 and 51
of the CY 2016 OPPS/ASC proposed rule (80 FR 39295). To prevent
confusion, we referred to the per diem information listed in Tables 50
and 51 of the CY 2016 OPPS/ASC proposed rule as the proposed PHP APC
per diem costs or the proposed PHP APC geometric mean per diem costs,
and the per diem information listed in Addendum A to the CY 2016 OPPS/
ASC proposed rule as the proposed PHP APC per diem payment rates or the
proposed PHP APC geometric mean per diem
[[Page 70456]]
payment rates. The PHP APC per diem costs are the provider-specific
costs derived from the most recent claims and cost data. The PHP APC
per diem payment rates are the national unadjusted payment rates
calculated after applying the OPPS budget neutrality adjustments
described in sections II.A.4. and II.B. of the CY 2016 OPPS/ASC
proposed rule and this final rule with comment period.
As part of the effort to increase the accuracy of the PHP per diem
costs, we completed an extensive analysis of the claims and cost data,
which included provider service usage, coding practices, and the
ratesetting methodology. As part of our analysis, we also identified
aberrant data from several providers that impacted the calculation of
the proposed PHP geometric mean per diem costs. Aberrant data are
claims and/or cost data that are so abnormal that they skew the
resulting geometric mean per diem costs. For example, we found claims
with excessive CMHC charges resulting in CMHC geometric mean costs per
day that were approximately the same as or more than the daily payment
for inpatient psychiatric facility services. For an outpatient program
like PHP, because it does not incur room and board costs such as an
inpatient stay would, these costs per day were excessive. In addition,
we found some CMHCs had very low costs per day (less than $25 per day).
We stated in the CY 2016 OPPS/ASC proposed rule (80 FR 39293) that
without using a trimming process, the data from these providers would
inappropriately skew the geometric mean per diem cost for Level 2 CMHC
PHP services. Without the trim, the CMHC PHP APC geometric mean per
diem cost was $172.62 for Level 2 services, which significantly
diverges from the median cost per day of $148.14. When data are not
skewed and are normally distributed, measures of central tendency such
as the median and geometric mean will be very similar to each other.
The differences between these two measures for CMHCs suggested skewing.
Further analysis of the data confirmed that there were a few providers
with extreme cost per day values, which led us to propose using a
2 standard deviation trim.
During our claims and cost data analysis, we also found aberrant
data from some hospital-based PHP providers. Nearly all hospital-based
PHPs recorded their costs using cost center 9000 (``Clinic'') as the
source for the CCR for individual or group therapy services,
psychiatric testing, and education/training services. These services
comprise the majority of the PHP services provided. The existing OPPS
3 standard deviation trim removed very extreme CCRs for
cost center 9000, which were less than 0.0206 or greater than 28.3446,
by defaulting two providers that failed this trim to their overall
hospital ancillary CCR. However, the calculation of the 3
standard deviations used to define the trim for cost center 9000 was
influenced by these two providers, which had very extreme CCRs of
178.0224 and 272.4451. Because these two hospital-based PHP providers
remained in the data when we calculated the boundaries of the OPPS
3 standard deviation trim, the upper limit of the trim
boundaries was fairly high, at 28.3446. As such, some aberrant CCRs for
cost center 9000 were not trimmed out, and still had high values
ranging from 6.3840 to 19.996. We note in section II.D. of the CY 2016
OPPS/ASC proposed rule that OPPS defines a biased CCR as one that falls
outside the predetermined ceiling threshold for a valid CCR; using CY
2014 cost report data, that threshold is 1.5. The hospital CCR ceiling
thresholds or upper limits are available online at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files-Items/2015-Annual-Policy-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39293), we stated that
we are concerned that including aberrant data in the calculation of the
hospital-based PHP per diem payment rates would inappropriately skew
these payment rates. When we included these aberrant CCRs, which ranged
from 6.3840 to 19.996, in hospital-based PHP cost modeling, the
geometric mean per diem costs were $267.04 for Level 1 services and
$223.39 for Level 2 services. We noted that the geometric mean per diem
cost of the hospital-based PHP Level 1 APC was greater than that of the
hospital-based PHP Level 2 APC, despite fewer services being provided.
This occurred because a relatively higher share of high-CCR service
days was reported for hospital-based PHP Level 1 services compared to
hospital-based PHP Level 2 services. Due to the low volume of hospital-
based PHP Level 1 services, the effect of the high-CCR service days on
the resulting proposed geometric mean per diem costs was relatively
greater than the effect of the high-CCR service days on the resulting
proposed Level 2 geometric mean per diem costs. As such, the hospital-
based Level 1 PHP APC geometric mean per diem costs were higher than
the proposed geometric mean per diem costs for the hospital-based Level
2 PHP APC.
In order to reduce or eliminate the impact of including aberrant
data received from a few CMHCs and hospital-based PHP providers in the
claims data used for ratesetting, in the CY 2016 OPPS/ASC proposed rule
(80 FR 39293), we proposed to use a 2 standard deviation
trim for CMHCs and to apply a CCR greater than five (CCR>5) hospital
service day trim for hospital-based PHP providers for CY 2016 and
subsequent years.
Under the 2 standard deviation trim proposal, we
proposed to exclude any CMHC when the CMHC's cost per day is more than
2 standard deviations from the geometric mean cost per day
for all CMHCs. Our proposed trim on total CMHC costs per day is
performed before stratifying the data by payment tiers (Level 1 and
Level 2 CMHC PHP APCs), and affects both CMHC payment tiers. For
example, based on our CY 2014 claims data used for the proposed CY 2016
ratesetting, the geometric mean cost per day for all CMHCs before
trimming is $168.16. Using the 2 standard deviation trim,
three providers with geometric mean costs per day ranging from as low
as $23.50 to as high as $996.71 were excluded from the ratesetting for
CY 2016. Excluding providers with extremely low or extremely high costs
per day protects CMHCs from having those extreme costs per day
inappropriately skew the CMHC PHP APC geometric mean per diem costs. In
addition, we proposed to use a 2 standard deviation trim
because, when we used this methodology, it aligned the geometric mean
and median per diem costs for the CMHC Level 2 PHP APC payment tier,
which also indicates that the trim removed the skewing in the data
caused by the inclusion of aberrant data received from the three
providers. We stated that we believe that the 2 standard
deviation trim would exclude CMHCs with aberrant data from the
ratesetting process while allowing for the use of as much data as
possible. In addition, we stated that implementing a 2
standard deviation trim on CMHCs would target these aberrancies without
limiting overall per diem cost increases. A 2 standard
deviation trim also is an accepted statistical approach for objectively
mitigating extreme data. For normally distributed data, 2
standard deviations from the mean capture approximately 95 percent of
the data.
In the proposed rule, we applied the 2 standard
deviation trim to the geometric mean costs per day at the CMHC level.
This application would exclude those CMHCs with costs per
[[Page 70457]]
day 2 standard deviations from the geometric mean cost per
day for all CMHCs. Under this proposal, three CMHCs with aberrant data
would be removed from the ratesetting calculations. The exclusion of
these three CMHCs removed from modeling 2,296 CMHC claims out of 25,383
total CMHC claims. We believe that removing aberrant data from modeling
helps prevent inappropriate fluctuations in the payment rates. The
resulting proposed CMHC Level 2 PHP APC geometric mean per diem costs
would be $147.51. The CMHC Level 1 PHP APC geometric mean per diem
costs actually increased slightly when the trim was applied, from
$103.10 to $105.82.
We determined that proposing to use a higher trim level, such as
2.5 or 3 standard deviations from the geometric
mean, did not reduce the skewing caused by the inclusion of data from a
few CMHC providers. In other words, using a higher trim level did not
remove the CMHCs with aberrant data from the ratesetting process.
Further, we stated that we believe that using a trim level lower than
2 standard deviations would remove too much data. If a data
distribution is approximately normally distributed, approximately 68
percent of the data fall within 1 standard deviation of the
mean, and approximately 95 percent of the data fall within 2 standard deviations of the mean. Our goal was to remove
outliers while using as much of the CMHC data as possible.
We did not propose the CCR>5 service day trim for CMHCs, because
longstanding PHP OPPS methodology defaults any CMHC CCR>1 to the
statewide hospital ancillary CCR (we refer readers to the following
section for a review of the PHP OPPS ratesetting methodology). Hospital
statewide CCRs have been less than 1 and are available on the CMS Web
site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files-Items/2015-Annual-Policy-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending. In our
CY 2016 proposed ratesetting process, we identified only one CMHC that
had a CCR>1. This CMHC's CCR was 1.019, and was defaulted to its
appropriate hospital statewide CCR for CY 2016 ratesetting purposes.
We considered applying the 2 standard deviation trim to
hospital-based PHP providers as well. However, the 2
standard deviation trim would have removed 25 hospital-based PHP
providers with aberrant data out of 387 hospital-based PHP providers.
We were concerned about removing data from that many providers, and
sought an alternative that allowed for use of more of the data.
Therefore, we proposed a trim on CCRs, which we believe would be more
effective in removing aberrant data and allowing the use or retention
of more data. Trims on hospital and CMHC CCRs are already used with the
OPPS system, but due to the two very extreme outlier CCRs for cost
center 9000 previously mentioned, the OPPS 3 standard
deviation trim on hospital cost center 9000 CCRs had a higher upper
limit than usual, and therefore did not trim all the claims with
aberrant CCRs. As such, claims with aberrant data remained for some
hospital-based PHPs. Therefore, for hospital-based PHPs, we proposed to
apply a trim on hospital service days when the CCR>5 at the cost center
level.
Under our proposal, the CCR>5 hospital service day trim would
remove hospital-based PHP service days that use a CCR>5 to calculate
costs for at least one of their component services. Unlike the 2 standard deviation trim, which excludes CMHC providers that
fail the trim, the CCR>5 trim would exclude any hospital-based PHP
service day where any of the services on that day are associated with a
CCR>5. For example, assume a hospital-based PHP had a claim with a
service day with one individual therapy service, two group therapy
services, and one occupational therapy service. Assume that the
hospital-based PHP's cost center CCRs associated with these services
were 0.6, 0.6, 0.6, and 6.7, respectively. Because the CCR associated
with the occupational therapy service is greater than 5, this
particular day, and all other days for this provider where occupational
therapy services were provided, would be excluded from the data used in
ratesetting. Applying this trim removed service days from seven
hospital-based PHP providers. After applying the CCR>5 trim, the Level
1 hospital-based PHP APC geometric mean per diem cost changed from
$267.04 to $195.73, and the Level 2 hospital-based PHP geometric mean
per diem cost changed from $223.39 to $218.93. Without including the
aberrant CCR service days in the data used to calculate the proposed
hospital-based PHP APC geometric mean per diem costs, the Level 1
hospital-based PHP APC geometric mean per diem cost is less than the
Level 2 hospital-based PHP APC geometric mean per diem cost.
As an alternative to these proposals for CMHCs and hospital-based
PHPs, we considered proposing a 15-percent cap on changes in the
geometric mean per diem costs. This cap would limit the increase or the
decrease in the geometric mean per diem costs from one year to the next
by capping the change at 15 percent. This cap also would protect
providers from fluctuations in PHP APC per diem payment rates due to
large increases or declines in the geometric mean per diem costs.
However, we did not propose this alternative because we believe that
establishing such a cap would not specifically target aberrant data
from a minority of providers, which was the purpose of our proposals.
Targeting aberrant data is important in order to help stabilize the
PHP APC geometric mean per diem costs for both CMHCs and hospital-based
PHP services. As we receive updated claims and cost files, and as we
continue analyzing PHP data, it is possible that the PHP trims that we
proposed may need refinement. We stated in the CY 2016 OPPS/ASC
proposed rule (80 FR 39294) that we would propose any changes to the
methodology that we finalize later this year through future notice-and-
comment rulemaking.
Therefore, for CY 2016 and subsequent years, we proposed to exclude
any CMHC when the CMHC's costs per day are more than 2
standard deviations from the geometric mean cost per day for all CMHCs
(Level 1 and Level 2), and to exclude hospital-based PHP service days
when a CCR>5 is used to calculate costs for at least one of their
component services (Level 1 and Level 2).
The CY 2016 proposed PHP APC geometric mean per diem costs for
CMHCs calculated under the proposed CY 2016 methodology using CY 2014
claims data and the most recent cost data were $105.82 for Level 1 (3
services per day) CMHC PHP services, and were $147.51 for Level 2 (4 or
more services per day) CMHC PHP services.
The CY 2016 proposed PHP APC geometric mean per diem costs for
hospital-based PHPs calculated under the proposed CY 2016 methodology
using CY 2014 claims data and the most recent cost report data were
$195.73 for Level 1 (3 services per day) hospital-based PHP services,
and were $218.93 for Level 2 (4 or more services per day) hospital-
based PHP services. As we stated in the CY 2016 OPPS/ASC proposed rule
(80 FR 39295), we recognize that several factors may cause a
fluctuation in the PHP APC per diem payment rates, including direct
changes to the PHP APC per diem costs (for example, establishing
separate APCs and associated per diem payment rates for CMHCs and
hospital-based providers based on the provider type's costs), changes
to the OPPS (for example, basing the relative payment weights on
[[Page 70458]]
geometric mean costs), and provider-driven changes (for example, a
provider's decision to change its mix of services or to change its
charges and clinical practice for some services). We refer readers to a
more complete discussion of this issue in the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75049).
The proposed CY 2016 PHP APC geometric mean per diem costs for the
CMHC and hospital-based PHP APCs were shown in Tables 50 and 51 of the
CY 2016 OPPS/ASC proposed rule (80 FR 39295). We noted that Tables 50
and 51 of the proposed rule displayed the proposed PHP APC renumbering
that is part of the proposed reorganization of OPPS APCs described in
section III.D. of the proposed rule. Specifically, we proposed to
renumber the four PHP APCs, that is, APCs 0172, 0173, 0175, and 0176,
as APCs 5851, 5852, 5861, and 5862, respectively. As noted earlier in
this section, we referred readers to Addendum A to the proposed rule
(which is available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) for the proposed PHP APC payment rates. We invited
public comments on these proposals.
Comment: Commenters supported the proposed increase in the PHP
payment rates based on the geometric mean per diem costs calculated
using CY 2014 claims data. One commenter validated the accuracy of the
payment rates by replicating CMS' cost calculations using the CY 2014
claims data. The commenter agreed with the proposed trimming
methodologies to remove aberrant data and believed that these
methodologies would help mitigate inappropriate fluctuations in payment
rates which have occurred in recent years. One commenter noted that
service utilization seems to have stabilized after several years of
decrease, and thanked CMS for the work it has done on PHP payment
policies. Another commenter supported removing aberrant data, but
believed that the same trims should have been used for determining the
geometric mean per diem costs for both CMHCs and hospital-based PHPs.
Response: We appreciate the commenters' support of the proposed PHP
APC payment rates based on the geometric mean per diem costs calculated
using the most recent claims and cost report data and the proposed
trimming methodologies. As discussed below, we are finalizing our
proposed trimming methodologies without modification for CY 2016 and
subsequent years. We also are finalizing our methodology for
calculating the two CMHC PHP APC geometric mean per diem costs without
modification, but are finalizing our methodology for calculating the
two hospital-based PHP APC geometric mean per diem costs with
modification so that we pay a higher payment rate for the PHP APC for
Level 2 services than the PHP APC for Level 1 services, as discussed
below.
We agree with the commenter that PHP utilization has stabilized,
and that the trimming methodologies we proposed and are finalizing in
this final rule with comment period may help to stabilize the PHP APC
payment rates by mitigating fluctuations in payment rates caused by
extremely low or high costs that inappropriately skew the geometric
mean per diem costs. We believe that our inclusion of the detailed PHP
ratesetting methodology in the CY 2016 OPPS/ASC proposed rule (80 FR
39295 through 39299) and in this final rule with comment period will
lead to greater accuracy in provider reporting of claims and cost data,
and thereby lead to greater accuracy in ratesetting and more stability
in the PHP APC per diem costs. We encourage all PHP providers to review
their accounting and billing processes to ensure that their costs are
included in the data used for PHP ratesetting.
With regard to the commenter's concern that the same trims should
be used for both CMHCs and hospital-based PHPs, in the CY 2016 OPPS/ASC
proposed rule (80 FR 39293), we proposed to use a 2
standard deviation trim for CMHCs and to apply a CCR>5 hospital service
day trim for hospital-based PHP providers for CY 2016 and subsequent
years. As noted in section VIII.B.2. of this final rule with comment
period, there are differences in the ratesetting process between
hospital-based PHPs and CMHCs, which are largely due to differences
between the hospital cost reports and the CMHC cost reports, and we
believe that having different trims more appropriately targets aberrant
data for each provider type. We did not propose the CCR>5 service day
trim for CMHCs because the longstanding PHP OPPS methodology defaults
any CMHC CCR>1 to the statewide hospital ancillary CCR, and hospital
statewide CCRs have been less than 1. In our CY 2016 final ratesetting
process, we identified only one CMHC that had a CCR>1. This CMHC's CCR
was 1.019, and was defaulted to its appropriate hospital statewide CCR
for CY 2016 ratesetting purposes. We considered applying the 2 standard deviation trim to hospital-based PHP providers.
However, as stated in the CY 2016 OPPS/ASC proposed rule (80 FR 39294),
the 2 standard deviation trim would have removed 25
hospital-based PHP providers with aberrant data out of 387 hospital-
based PHP providers. Using updated data for this final rule with
comment period, this 2 standard deviation trim would have
removed 22 hospital-based PHP providers with aberrant data out of 388
hospital-based PHP providers. We are concerned about removing data from
that many providers, and the alternative we proposed and are finalizing
allows for use of more data from hospital-based providers. We believe
the trim on CCRs will be more effective in removing aberrant data and
will allow for the use and retention of more data. For these reasons,
we continue to believe the trims that we proposed and are finalizing in
this final rule with comment period are appropriate and effective for
each provider type. We plan to review the trims annually, and would
propose any changes to the trimming methodologies in future rulemaking
as needed.
For this CY 2016 OPPS/ASC final rule with comment period, we used
updated claims and cost data from the final June 2015 update of the CY
2014 Standard Analytic File (SAF) outpatient claims, the June 2015
update of the HCRIS (for development of hospital and statewide CCRs),
and the July 2015 update of the OPSF (for development of CMHC CCRs).
There were 66 CMHCs based on updated CY 2014 claims data in these
files, and all 66 of these providers had CCR data reported in the July
2015 OPSF. We used each CMHC's most recent CCR from the OPSF. As stated
previously, only one CMHC was defaulted to its statewide ancillary CCR
because it had a CCR greater than 1. Two CMHCs were excluded from
modeling because their CCRs failed the OPPS-wide 3 standard
deviation trim. These two providers had CCRs that were extremely low
(CCRs of 0.001 and 0).
The CMHC per diem cost calculations were based upon the actual
charges CMHCs reported on their claims, multiplied by the CCRs
calculated from the actual costs reported on their cost reports. The
data showed that there were some extreme costs per day that ranged from
a low of $10.50 per day to a high of $2,213.83 per day. The 2 standard deviation trim removed CMHCs with costs below $39.47
per day or above $640.29 per day from the cost calculations, resulting
in the exclusion of two CMHCs. In addition, three CMHCs were removed
because all of these CMHCs' service days had zero payments reported.
The final CY 2016 geometric mean per diem costs are
[[Page 70459]]
$98.88 for CMHCs Level 1 PHP services and $149.64 for CMHC Level 2 PHP
services, after we apply the 2 standard deviation trim and
follow the existing OPPS ratesetting procedures.
For this CY 2016 OPPS/ASC final rule with comment period, there
were 400 hospital-based PHPs based on updated claims and cost data. We
used the CCRs calculated at the departmental level from the most recent
hospital cost reports, following the revenue-code-to-cost-center
crosswalk described in section VIII.B.2 of the CY 2016 OPPS/ASC
proposed rule and of this final rule with comment period. Hospital-
based PHPs without a valid CCR calculated from costs in the primary,
secondary, or tertiary cost centers of the crosswalk were defaulted to
their hospital's overall ancillary CCR. Ninety-eight hospital-based
PHPs had at least one PHP revenue center CCR defaulted to the overall
ancillary CCR. We excluded service days for 6 hospital-based PHPs that
failed the proposed CCR>5 trim (before the trim, the CCRs ranged
between 0.0116 and 19.9996), which resulted in excluding all of these 6
providers' service days. We also excluded service days for 2 hospital-
based PHPs that failed the longstanding OPPS trim based on service days
with costs per day greater than 3 standard deviations from
the geometric mean. Again, this resulted in excluding all the service
days for 2 hospital-based PHPs. Finally, 12 hospital-based PHPs were
excluded because all their service days had zero payments reported,
reducing the total population by 20 providers. As a result, 380 total
hospital-based PHPs were used for modeling.
The hospital-based PHP per diem cost calculations were based upon
the actual charges hospital-based PHPs reported on their claims,
multiplied by the CCRs calculated from the actual costs reported on
their cost reports, after applying the proposed trim based on service
days with a CCR>5 and following the usual OPPS ratesetting procedures.
Using the most updated data, the resulting hospital-based PHP geometric
mean per diem costs showed an inversion, with the hospital-based PHP
Level 1 geometric mean per diem costs equaling $218.46 and the
hospital-based PHP Level 2 geometric mean per diem costs equaling
$198.43. While our proposed trim of service days with a CCR>5 was
effective in removing service days associated with aberrant CCRs, it
does not address low or high costs per day that result when a non-
aberrant CCR is multiplied by low or high charges. The inverted
geometric mean per diem costs were influenced by two large-volume
hospital-based PHP providers of Level 2 PHP services, which had low
costs of $93 per day, and three large-volume hospital-based PHP
providers of Level 1 PHP services, which had high costs ranging between
$631 and $1,732 per day. We evaluated the hospital-based Level 1 and
Level 2 service day utilization to determine if Level 1 services
included more individual therapy, which is more costly than group
therapy, and which could explain higher Level 1 costs in spite of
providing fewer services. However, based on updated data, we found that
hospital-based PHP Level 2 services had a slightly higher percentage of
more costly individual therapy days than hospital-based PHP Level 1
services. The percentage of hospital-based PHP Level 1 group therapy
days was nearly identical to the percentage of hospital-based PHP Level
2 group therapy days. Therefore, we believe that the inversion is due
to the influence of a few large volume providers.
We also examined the data without applying any trim and after
applying the 2 standard deviation trim to the updated
hospital-based PHP data as we did for CMHCs. Under both of these
scenarios, the inversion existed. When we did not apply any trim, we
continued to have a problem with aberrant data significantly skewing
the geometric mean per diem costs. When we applied the 2
standard deviation trim, the resulting geometric mean per diem costs
were not as extreme, but the trim would have removed 22 hospital-based
PHPs from the data, which we believe would have removed too many
providers. Further, the five large volume providers discussed above
with low or high costs were still present in the data after these
adjustments had been made.
Therefore, we believe that our proposed CCR>5 trim is the most
appropriate and effective methodology for removing aberrant data while
allowing for the use and retention of data from hospital-based PHP
providers. Although the inversion in the rates exists with this trim,
we believe it was due to five hospital-based PHPs that had costs per
day that were either low or high relative to other providers, but these
costs are not what we would consider aberrant. Therefore, we are
finalizing this policy without modification. We encourage all hospital-
based PHP providers to review the revenue to cost-center crosswalk to
ensure accurate recording of their PHP costs and to ensure that the
relationship between hospital-based PHP charges and hospital-based PHP
costs is accurately reflected in the hospital-based PHP CCRs.
However, we are concerned about the PHP APC geometric mean per diem
costs, which are the basis for the PHP APC payment rates, being lower
for the provision of more services. As such, we are making an
adjustment to the hospital-based PHP APC geometric mean per diem costs
to more equitably and appropriately pay for hospital-based PHP
services. Section 1833(t)(2)(E) of the Act states that the Secretary
shall establish, in a budget neutral manner, other adjustments as
determined to be necessary to ensure equitable payments. The authority
granted to the Secretary under this provision is broad. We believe that
it is not appropriate or equitable to pay a lower payment rate for the
hospital-based PHP APC for Level 2 services, under which 4 or more
services are provided, than for the hospital-based PHP APC for Level 1
services, under which 3 PHP services are provided. Using the authority
set forth in section 1833(t)(2)(E) of the Act, we are making an
equitable adjustment to correct the inversion in the data for CY 2016.
While we considered various methods to equitably adjust these
rates, we ultimately decided to adjust the inverted per diem costs by
first calculating the average percent difference between Level 1 and
Level 2 per diem costs for the last 3 years. The method we chose is
equitable in that it adjusts the inverted Level 1 and Level 2 per diem
costs by the same factor, to result in a percent difference between
these two per diem costs that is the same as the historical 3-year
average. To make the adjustment, we first calculated the average
percent difference between the hospital-based PHP APC per diem costs
for Level 1 and Level 2 services from CY 2013 to CY 2015. We believe a
3-year timeframe is sufficient to reflect recent cost trends. We
calculated the percent difference in hospital-based per diem costs for
Level 1 and for Level 2 services using the per diem costs presented in
the CY 2013, CY 2014, and CY 2015 OPPS/ASC final rules with comment
period. For each of these 3 calendar years, we subtracted the hospital-
based PHP Level 1 per diem cost from the hospital-based PHP Level 2 per
diem cost, and then divided that result by the hospital-based PHP Level
1 per diem cost to calculate the percent difference. We then took the
average of these three percent differences, which equaled 15.96
percent, based on the CY 2013 to CY 2015 final per diem costs. We then
decreased the actual CY 2016 hospital-based PHP APC geometric mean per
diem costs for Level 1 and increased the actual CY 2016 hospital-
[[Page 70460]]
based PHP APC geometric mean per diem costs for Level 2 hospital-based
by the same factor, to result in a 15.96 percent difference.
To equitably adjust the inverted per diem costs, we calculate this
unknown factor by which to increase or decrease the inverted per diem
costs to result in a 15.96 percent difference between those per diem
costs. We used the following formula to solve for this factor:
[GRAPHIC] [TIFF OMITTED] TR13NO15.000
When we use the above formula with the hospital-based PHP APC
geometric mean per diem costs with the inversion and the equitable
adjustment factor ``x'' to correct the inversion, the formula and
resulting calculation become:
[GRAPHIC] [TIFF OMITTED] TR13NO15.001
We then solve for the value of ``x'' using algebra, to result in a
factor of 12.1525 percent. If we increase the CY 2016 inverted
hospital-based PHP APC geometric mean per diem costs for Level 2
services by 12.1525 percent, and decrease the CY 2016 hospital-based
PHP hospital-based PHP APC geometric mean per diem costs for Level 1
services by 12.1525 percent, the resulting CY 2016 hospital-based PHP
APC per diem cost for Level 1 services is $191.91 and the resulting CY
2016 hospital-based PHP APC per diem cost for Level 2 services is
$222.54. The percentage difference between these two equitably adjusted
per diem costs is 15.96 percent. We are finalizing these equitably
adjusted hospital-based PHP APC per diem costs for CY 2016.
Comment: One commenter was concerned about the small sample size of
CMHCs and data used for calculating the geometric mean per diem costs,
and noted that CMHCs with annual revenues of less than $100,000 are not
required to file a full cost report. The commenter also stated that CMS
does not collect salary information from CMHCs on their cost reports.
One commenter believed that CMHCs are being unfairly penalized for
providing more cost effective services than hospital-based PHPs.
Another commenter expressed concern regarding the continued
establishment of CMHC payment rates at levels that are below average
geometric mean costs.
Response: As discussed previously in this final rule with comment
period, there were 66 CMHCs based on updated CY 2014 claims data in
these files, and all 66 of these providers had entries with CCR data
reported in the July 2015 OPSF. We used each CMHC's most recent CCR
from the OPSF. As stated previously, only one CMHC was defaulted to its
statewide ancillary CCR because it had a CCR greater than 1. Two CMHCs
were excluded from modeling because their CCRs failed the OPPS-wide
3 standard deviation trim. These two providers had CCRs
that were extremely low (CCRs of 0.001 and 0). The 2
standard deviation trim removed CMHCs with costs below $39.47 per day
or above $640.29 per day from the cost calculations, resulting in the
exclusion of two CMHCs. In addition, three CMHCs were removed because
all of the CMHCs' service days had zero payments reported. Therefore,
we removed a total of seven CMHCs from the ratesetting modeling. We do
not believe that the exclusion of these seven providers with aberrant
data excessively reduced the CMHC population, but rather it allowed for
the per diem cost determination to be based upon reasonable costs from
nearly all CMHCs. Further, only two of these CMHCs were excluded based
on the 2 standard deviation trim; the others were removed
under our current policies.
We acknowledge that, although all facilities must file a cost
report, MACs have established thresholds that they use in determining a
facility's eligibility to file less than a full cost report. MACs may
authorize a CMHC to file less than a full cost report when they
experience low or no Medicare utilization in a reporting period and
receive correspondingly low interim payment which, in the aggregate,
appears to justify making a final settlement for that period based on
less than a normally required full cost report. In these instances, the
MAC will require the CMHC to furnish the applicable information in
accordance with 42 CFR 413.24(h) and Section 110, Chapter 1 of the
Provider Reimbursement Manual--Part 2 (CMS Pub. 15-2). However, because
CMHC geometric mean per diem costs are the basis for CMHC ratesetting,
we encourage any CMHC that has been authorized by its MAC to file less
than a full cost report to instead file a full cost report.
In response to the comment that CMHCs are being unfairly penalized
for providing more cost effective services than hospital-based PHPs, we
disagree. We consider the effects of exclusions on the modeling
population for both CMHCs and hospital-based PHPs, and we review the
data that we receive to ensure that we pay appropriately for PHP
services furnished by both types of providers. We do not favor either
provider type. Our cost determinations are based upon the data provided
by hospitals and CMHCs using objective mathematical methods. The PHP
APC per diem rates based on PHP APC per diem costs, and because CMHC
PHP APC costs are lower than hospital-based PHP APC costs, CMHC
geometric mean per diem rates are lower than hospital-based PHP
geometric mean per diem rates.
With respect to the commenters' concerns that the CMHC per diem
payment rates are below the geometric mean per diem costs, the CMHC
calculated per diem rates are based on the actual reported costs of
CMHCs used in modeling. Those actual reported costs are used to
calculate the CMHC CCRs, which are applied to the charges CMHCs report
on their claims, and that result in estimated CMHC costs. Therefore,
the rates reflect the data provided by CMHCs. Those costs should
include allowable salary costs. The commenter who stated that CMS does
not collect salary costs on CMHC cost reports is mistaken. The CMHC
cost report provides a column for salaries for the following
categories: Drugs & Biologicals; Occupational Therapy; Psychiatric/
Psychological Services; Individual Therapy; Group Therapy;
Individualized Activity Therapies; Family Counseling; Diagnostic
Services; Patient Training & Education; and Other. These categories may
include salaries for a nurse or social worker, but we do not identify
these specific
[[Page 70461]]
practitioners with their own cost centers. However, the CMHC cost
report must not include the professional services of physicians,
physician assistants, or clinical psychologists if those services are
separately billable. CMHCs should review the cost reporting
instructions, which are available online in CMS Pub. 15-2, Chapter 18,
at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals.html.
Our review of the updated data for calculating the final geometric
mean per diem costs highlights the importance of all PHPs following the
cost reporting and claims accounting procedures discussed in section
VIII.B.2. of this final rule with comment period. CMHCs that do not
include allowable salary costs in their cost reports are inadvertently
removing appropriate costs from the ratesetting process. Likewise,
hospital-based PHPs that do not follow the revenue-code-to-cost-center
crosswalk when determining their costs may inadvertently remove
appropriate costs from the ratesetting process, as the OPPS modeling
for hospitals follows the crosswalk hierarchy. Finally, we note that
errors in revenue and HCPCS coding on claims, which occurred almost
exclusively on hospital-based PHP claims, also may result in removing
appropriate costs from ratesetting. We estimate that, overall,
hospital-based PHP costs were approximately $1.50 per day less than the
costs would have been if PHP providers had used the proper coding as
specified in the Claims Processing Manual.
Comment: Several commenters expressed concern regarding beneficiary
access to PHP services. One commenter questioned whether the proposed
changes would ensure continued beneficiary access and strengthen the
PHP benefit when most CMHCs have ceased providing PHP services and many
CMHCs have ceased doing business altogether. Two commenters stated that
CMS' expressed concern for paying hospital-based PHPs at a lower rate
than their cost structure could lead to closures and possible access
problems. These two providers stated that CMS statement about hospital-
based PHPs offering the widest access to PHP services because they are
located throughout the country implies a strong bias on behalf of
hospitals and a discriminatory stance towards CMHCs.
Response: We acknowledge the commenters' concerns regarding
beneficiary access to PHP services. The final PHP APC per diem costs
for CY 2016 reflect the costs of what providers expend to maintain such
programs, as reported on their claims and cost reports. In comparison
to the CY 2015 geometric mean per diem costs, the final CY 2016
geometric mean per diem costs decreased by 1.3 percent for Level 1 PHP
services provided by CMHCs. However, only 5 percent of CMHC service
days are billed as Level 1 PHP services. The final CY 2016 geometric
mean per diem costs increased substantially for Level 2 PHP services
provided by CMHCs, by 26.2 percent. Compared to the CY 2015 geometric
mean per diem costs for hospital-based PHPs, the final CY 2016
equitably adjusted hospital-based PHP per diem costs increased by 3.2
percent for Level 1 PHP services, and increased by 9.6 percent for
Level 2 PHP services. We believe that these per diem costs, which are
the basis for the payment rates, support continued beneficiary access
and strengthen the PHP benefit. Our PHP methodology provides for a
stable rate structure, and we do not believe that it favors one
provider type over another or diminishes access to PHP services. While
we recognize that CMHCs and hospital-based PHPs provide the same
services, our payment methodology requires that we make payments based
upon provider costs. Hospital-based PHPs have higher costs than CMHCs,
as evidenced by their cost report data, which is the reason hospital-
based PHPs have higher geometric mean per diem costs than CMHCs.
We disagree with the commenters who believed CMS is demonstrating
bias against CMHCs with respect to access to PHP services by
referencing CMS' language in the proposed rule regarding hospital-based
PHPs offering the widest access to care because they are located across
the country. While it is true that hospital-based PHPs offer the widest
access to PHP services because they are located across the country, we
greatly value the access to PHP services provided by CMHCs as well. We
want to ensure that CMHCs remain a viable option as providers of mental
health care. We are concerned if any payment rate would contribute to
providers ceasing operations. We have demonstrated our commitment to
stabilize and ensure accuracy in payment for PHP services in part by
our extensive analysis of the PHP payment data, and our publishing a
detailed review of the PHP payment methodology for both CMHCs and
hospital-based PHPs. We appreciate the services that all PHPs provide
to those individuals with mental health issues, and remain committed to
strengthening access to both CMHC PHP services and hospital-based PHP
services.
Comment: One commenter expressed concern and objections regarding
the continuing use of four PHP APC per diem payment rates based on
geometric mean per diem costs for each provider type, and the adverse
impact the proposed rates for CY 2016 will have again on few remaining
CMHC providers across the country.
Response: The OPPS system pays for outpatient services provided,
such as and including partial hospitalization services. This system
bases payment on the geometric mean costs of providing services using
provider data from claims and cost reports. We calculate the PHP APC
per diem payment rates based on the data provided for each type of
provider in order to pay for services. We believe this system provides
appropriate payment for partial hospitalization services based on
provider costs. The final PHP APC per diem costs for CY 2016 reflect
the costs of what providers expend to maintain such programs, as
reported on their claims and cost reports. With regard to CMHC rates
specifically, as stated previously, in comparison to the CY 2015
geometric mean per diem costs, the final CY 2016 geometric mean per
diem costs decreased by 1.3 percent for Level 1 PHP services provided
by CMHCs. However, only 5 percent of CMHC service days are billed as
Level 1 PHP services. The final CY 2016 geometric mean per diem costs
increased substantially for Level 2 PHP services provided by CMHCs, by
26.2 percent. Therefore, we believe that the CY 2016 rates will be
viewed positively by CMHCs across the country.
With respect to the continued use of four PHP APC per diem payment
rates, we refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 71991 through 71994) where we implemented this policy.
Because the cost of providing PHP services differs significantly by
site of service, we implemented differing PHP payment rates for
hospital-based PHPs and CMHCs. The resulting rates reflect the cost of
what providers expend to maintain such programs based on data provided
by these types of providers, which we believe is an improvement over
the two-tiered methodology calculated using only hospital-based data.
With respect to rates based on geometric mean per diem costs, we
refer readers to the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68406 through 68412) where we established the geometric mean
rather than the median as the measure upon which to
[[Page 70462]]
base the relative payment weights that underpin the OPPS APCs,
including the four PHP APCs. We believe that the use of geometric mean
costs represents an improvement to our cost estimation process compared
to the median. The geometric mean compared to the median allows
inclusion of some extreme but not aberrant observations in developing
the relative payment weights and captures a wider range of service
costs, which we believe leads to more accurate relative payment
weights. In addition to better incorporating those cost values that
surround the median and, therefore, describing a broader range of cost
patterns, basing the relative payment weight on geometric mean costs
also may promote better stability in the payment system by making OPPS
payments more reflective of the range of costs associated with
providing services. Further, applying the geometric mean to the PHP
APCs helps ensure that the relativity of the OPPS payment weights is
properly aligned.
Comment: One commenter suggested that CMS consider paying PHPs
using a quality-based payment system, and that CMS use value-based
purchasing.
Response: We responded to a similar public comment in the CY 2015
OPPS/ASC final rule with comment period (79 FR 66906) and refer readers
to a summary of that comment and our response. Sections 1833(t)(2) and
1833(t)(9) of the Act set forth the requirements for establishing and
adjusting OPPS rates, which include PHP rates. Section 1833(t)(17) of
the Act authorizes the Hospital OQR Program, which applies a payment
reduction to subsection (d) hospitals that fail to meet program
requirements. In the CY 2015 OPPS/ASC proposed rule (79 FR 41040), we
considered future inclusion of, and requested comments on, the
following quality measures addressing PHP issues that would apply in
the hospital outpatient setting: (1) 30-Day Readmissions; (2) Group
Therapy; and (3) No Individual Therapy. We refer readers to the CY 2015
OPPS/ASC final rule with comment period (79 FR 66957 through 66959) for
a more detailed discussion of PHP measures considered for inclusion in
the Hospital OQR Program in future years. The Hospital OQR Program does
not apply to CMHCs. Further, currently, there is no statutory language
explicitly authorizing a value-based purchasing program for PHPs.
After consideration of the public comments we received, we are
finalizing our proposals to update the four PHP APC per diem costs and
payment rates based on geometric mean cost levels calculated using the
most recent claims and cost data for each provider type. However, for
hospital-based PHP APCs, we are making an equitable adjustment to the
actual geometric mean per diem costs by increasing the Level 2 per diem
costs and decreasing the Level 1 per diem costs by the same factor, to
result in a percentage difference equal to the average percent
difference between hospital-based PHP Level 1 and Level 2 services from
CY 2013 through CY 2015. For CY 2016 and subsequent years, we also are
finalizing the proposed trimming methodologies. Specifically, we are
excluding any CMHC when the CMHC's costs per day are more than 2 standard deviations from the geometric mean cost per day (Level
1 and Level 2), and excluding hospital-based PHP service days when a
CCR>5 is used to calculate costs for at least one of their component
services (Level 1 and Level 2). We plan to review the trims annually,
and would propose any changes to the trimming methodologies in future
rulemaking as needed.
The CMHC PHP Level 1 geometric mean per diem costs are $98.88, and
the CMHC PHP Level 2 geometric mean per diem costs are $149.64, after
applying the 2 standard deviation trim to CMHCs. The
equitably adjusted hospital-based PHP Level 1 per diem costs are
$191.91, and the equitably adjusted hospital-based PHP Level 2 per diem
costs are $222.54, after applying the CCR>5 trim to affected service
days.
Table 54 below displays the final CY 2016 PHP APC geometric mean
per diem costs for CMHC PHP services, and Table 55 below displays the
final PHP APC equitably adjusted geometric mean per diem costs for
hospital-based PHP services.
Table 54--CY 2016 PHP APC Geometric Mean per Diem Costs for CMHC PHP
Services
------------------------------------------------------------------------
PHP APC
geometric
Renumbered CY 2016 APC Group title mean per diem
costs
------------------------------------------------------------------------
5851....................... Level 1 Partial $98.88
Hospitalization (3
services) for CMHCs.
5852....................... Level 2 Partial 149.64
Hospitalization (4 or more
services) for CMHCs.
------------------------------------------------------------------------
Table 55--CY 2016 PHP APC Equitably Adjusted Geometric Mean per Diem
Costs for Hospital-Based PHP Services
------------------------------------------------------------------------
PHP APC
equitably
adjusted
Renumbered CY 2016 APC Group title geometric
mean per diem
costs
------------------------------------------------------------------------
5861....................... Level 1 Partial $191.91
Hospitalization (3
services) for hospital-
based PHPs.
5862....................... Level 2 Partial 222.54
Hospitalization (4 or more
services) for hospital-
based PHPs.
------------------------------------------------------------------------
2. PHP Ratesetting Process
While PHP services are part of the OPPS, PHP ratesetting has some
unique aspects. To foster understanding and transparency, as we did in
the CY 2016 OPPS/ASC proposed rule (80 FR 39295 through 39299), we are
providing the following detailed explanation of the PHP APC ratesetting
process. The OPPS ratesetting process includes various steps as part of
its data development process, such as CCR determination and calculation
of geometric mean per diem costs, identification of allowable charges,
development of the APC relative payment weights, calculation of the APC
payment rates, and establishment of outlier thresholds. We refer
readers to section II. of the proposed rule and this final rule with
[[Page 70463]]
comment period and encourage readers to review these discussions to
increase their overall understanding of the entire OPPS ratesetting
process. We also refer readers to the OPPS Claims Accounting narrative,
which is a supporting document to the CY 2016 OPPS/ASC proposed rule
and this final rule with comment period, available on the CMS Web site
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html;
click on the link to the CY 2016 OPPS/ASC proposed rule or the final
rule with comment period to find the Claims Accounting narrative. We
encourage CMHCs and hospital-based PHPs to review their accounting and
billing processes to ensure that they are following these procedures,
which should result in greater accuracy in setting the PHP payment
rates.
We limit our discussion here primarily to the data development
process and calculation of PHP APC geometric mean per diem costs used
for PHP ratesetting. Our discussions focus on five major phases in
modeling the data, which result in the development of PHP APC geometric
mean per diem costs, and on the importance of correct coding and
reasonable charges for PHP services, and include: (a) Development of
PHP claims; (b) determination of CCRs for CMHCs and hospital-based
PHPs; (c) identification of PHP allowable charges; (d) determination of
PHP APC per diem costs; (e) development of service days and cost
modeling; and (f) issues regarding correct coding and reasonable
charges.
a. Development of PHP Claims
We use outpatient claims from the national claims history file for
the most recent available calendar year that were processed through
December 31 of that year (that is, the calendar year that is 2 years
before the calendar year at issue) to calculate the geometric mean per
diem costs of APCs that underpin the relative payment weights for the
calendar year at issue. It is important to note that this is not the
population of claims paid under the OPPS, but all outpatient claims as
explained in further detail in section II.A.2.a. of this final rule
with comment period.
We then exclude the following claims from OPPS ratesetting. These
are claims where:
No payment is made;
There are more than 300 lines; or
Services were furnished in Maryland, Guam, the U.S. Virgin
Islands, American Samoa, or the Northern Mariana Islands (these
providers are not paid under the OPPS).
From these outpatient claims, we extract all hospital outpatient
PHP claims and all CMHC claims. PHP claims are extracted based on their
specific bill types: 12X or 13X, with condition code 41, for hospital-
based PHPs; and 76X for CMHCs. For example, for the CY 2016 OPPS/ASC
proposed rule, we used data from the CY 2014 hospital outpatient PHP
and CMHC PHP claims from the national claims history file that were
processed through December 31, 2014, to calculate the PHP APC geometric
mean per diem costs that underpin the proposed PHP APC relative payment
weights for CY 2016. For this final rule with comment period, we used
the final CY 2014 SAF outpatient claims as of June 2015, the June 2015
update of HCRIS (for development of hospital and statewide CCRs), and
the July 2015 update of the OPSF (for the development of CMHC CCRs).
As noted in section II.A.2.c. of the CY 2016 OPPS/ASC proposed rule
and this final rule with comment period and in the Claims Accounting
narrative, we exclude hospital-based PHP claims if--
They were submitted by critical access hospitals;
They reported obviously erroneous units (for example, more
than 100,000 units for a single service);
They reported charge amounts equal to the payment
received;
They did not report at least one HCPCS code, because OPPS
APCs are based upon HCPCS codes; or
They only contained flu or pneumonia vaccine services,
which are paid separately outside of OPPS.
At the end of this process, we identified the PHP claims that are
appropriate and available to use to calculate PHP APC geometric mean
per diem costs. These claims include data on dates of service, revenue
codes, HCPCS codes for services provided, charges, and the payments
Medicare made (the PHP APC geometric mean per diem rates).
b. Determination of CCRs for CMHCs and Hospital-Based PHPs
Next, we determine and assess each provider's CCR. This ratio,
along with the charges from the claims, is used to estimate the costs,
which are then used to determine the geometric mean per diem costs.
There are specific policies we follow in determining which CCR to use
in estimating costs, which differ for CMHCs and for hospital-based
PHPs, largely due to differences in the data required for claims and
cost reports for these two types of PHP providers. We encourage PHP
providers to review section II.A.1.c. of the CY 2016 OPPS/ASC proposed
rule and this final rule with comment period rule and section 10.11,
Chapter 4, of the Medicare Claims Processing Manual (internet-only
manual (IOM), Pub. 100-04), which is available on the CMS Web site at:
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf) for more specific discussion of CCRs used in PHP
ratesetting.
(1) Calculation and Assessment of CMHC CCRs
As noted in section VIII.A. of the CY 2016 OPPS/ASC proposed rule
and this final rule with comment period and section 10.11.9, Chapter 4
of the Medicare Claims Processing Manual (Pub. 100-04), the CMHC CCR is
calculated using the provider's most recent full year cost report, Form
CMS 2088-92, and Medicare cost and charges from Worksheet C, Page 2. We
divide costs from line 39.01, Column 3 by charges from line 39.02,
Column 3 to calculate an overall CMHC CCR. The CMHC cost report forms
and cost reporting instructions are available on the CMS Web site at:
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html?DLPage=1&DLSort=0&DLSortDir=ascending.
The most recent CMHC CCRs are posted to the OPSF. We assess those
CMHC CCRs within that file in preparation for use in cost estimation in
the following manner:
We use the most recent CMHC-specific CCR from the OPSF. If
the CCR is not available (for example, the CMHC is a new provider with
less than 12 months data), we use the hospital ancillary CCR associated
with the provider's urban/rural designation and their state location.
The statewide urban and rural hospital CCRs are available on the CMS
Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html.
As described in Section 10.11.9, Chapter 4, of the
Medicare Claims Processing Manual, for any CMHC with a CCR greater than
1, we use the hospital ancillary CCR associated with its urban/rural
designation and its State location.
Once we have a CCR for each CMHC, we calculate the geometric mean
of all CMHC CCRs. As described in the OPPS Claims Accounting narrative,
we apply the existing OPPS 3 standard deviation trim to the
CMHC CCRs; this trim excludes any CMHC with a CCR that is
3 standard deviations from the geometric mean of all CMHC CCRs. At
[[Page 70464]]
the end of this process, we identified a CCR for all CMHCs that have
not been excluded.
(2) Calculation and Assessment of Hospital-Based PHP CCRs
Unlike CMHCs where there is one CCR calculated for each CMHC,
hospital-based PHPs have CCRs for each cost center that is associated
with PHP services. For hospital-based PHPs, we use the provider's most
recent full year hospital cost report, whether tentatively settled or
final settled, to identify CCRs, using the HCRIS file. The CCRs for
hospital-based PHPs are calculated by cost center on hospital cost
report Worksheet C, Part I, Column 9. The overall hospital CCR is
calculated by the MAC, and is posted in the Provider-Specific File. The
hospital cost report form CMS-2552-10 and cost reporting instructions
are in Chapter 40 of the Provider Reimbursement Manual--Part 2, which
is available on the CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html?DLPage=1&DLSort=0&DLSortDir=ascending.
We assess the hospital-based PHP CCRs as described in section
II.A.2.a. of the CY 2016 OPPS/ASC proposed rule and this final rule
with comment period and in the OPPS Claims Accounting narrative, by
applying the existing OPPS 3 standard deviation trim to
hospital-based PHP CCRs within each cost center and to the overall
hospital ancillary CCR. To perform this 3 standard
deviation trim, we follow the following process. Each PHP revenue code
is associated with particular cost centers on the cost report. The
revenue-to-cost center crosswalk identifies the primary, secondary (if
any), and tertiary (if any) cost centers that are associated with each
PHP revenue code, and which are the source for the CCRs used in PHP
ratesetting. The PHP portion of that OPPS crosswalk is shown in Table
56 below (Table 52 of the proposed rule). Based on the revenue code, we
first look for a CCR calculated from the primary cost center; if none
exists or the CCR fails the 3 standard deviation trim, we
look for a CCR calculated from the secondary cost center. If there is
no CCR calculated from the secondary cost center or the CCR fails the
3 standard deviation trim, we look for a CCR calculated
from the tertiary cost center. If there is no CCR calculated from the
tertiary cost center or the CCR fails the 3 standard
deviation trim, we look to the hospital's overall ancillary CCR. If the
hospital's overall ancillary CCR fails the 3 standard
deviation trim, we exclude the hospital from ratesetting.
For example, for revenue code 0900, the primary cost center is 3550
``Psychiatric/Psychological Services.'' If the CCR associated with this
cost center passes the 3 standard deviation trim, we retain
that CCR for use in ratesetting. If the CCR associated with primary
cost center 3550 fails the trim, it is deleted, and we then move to
cost center 9000 ``Clinic'' to assess the provider's CCR. If that CCR
passes the 3 standard deviation trim, it is retained for
use in ratesetting. If the CCR fails the 3 standard
deviation trim, it is deleted, and we then would consider the CCR
calculated from the tertiary cost center. However, for revenue code
0900, there is no tertiary cost center. If the primary, secondary (if
any), and tertiary (if any) cost centers' CCRs fail the trim, we assess
the hospital's overall ancillary CCR. If that overall ancillary CCR
passes the 3 standard deviation trim, we retain it for use
in ratesetting. If the overall ancillary CCR fails the 3
standard deviation trim, we exclude the provider from ratesetting. This
process of assessing the CCRs with a 3 standard deviation
trim is repeated for each revenue code's associated cost centers. After
applying this 3 standard deviation trim, we obtain a file
with trimmed CCRs for use in ratesetting.
The revenue-to-cost center crosswalk for all services paid under
the OPPS is available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html. We are providing an excerpt of the PHP portion of
the OPPS crosswalk below.
Table 56--Revenue-to-Cost Center Crosswalk for PHP Allowable Revenue Codes
----------------------------------------------------------------------------------------------------------------
Secondary
Primary cost Primary cost cost center Secondary cost
Revenue code Description center source center name source for center name
for CCR CCR
----------------------------------------------------------------------------------------------------------------
0250......................... Pharmacy....... 7300 Drugs Charged
to Patients.
0430......................... Occupational 6700 Occupational
Therapy. Therapy.
0900, 0914, 0915, 0916, or Psychiatric/ 3550 Psychiatric/... 9000 Clinic.
0918. Psychological Psychological
Treatment: Services.
Individual,
Group, and
Family
Therapy;
Psychological
testing.
0904 *....................... Psychiatric/ 3580 Recreational 3550 Psychiatric/
Psychological Therapy. Psychological
Treatment: Services.
Activity
Therapy.
0942......................... Other 9000 Clinic.........
Therapeutic
Services:
Education/
Training.
----------------------------------------------------------------------------------------------------------------
* Although not listed in this table, revenue code 0904 is the only PHP revenue code with a tertiary cost center
serving as a source for the CCR, which is cost center 9000, ``Clinic.''
c. Identification of PHP Allowable Charges
We use the PHP claims derived under the methodology discussed in
section VIII.B.2.a. of this final rule with comment period to identify
which charges are allowable for PHP ratesetting. Each revenue code line
on the PHP claim must report a HCPCS code and a charge (except for
revenue code 0250, which only requires that the charge be reported).
Allowable charges are those charges for the HCPCS codes which are
associated with PHP allowable revenue codes; PHP allowable revenue
codes are revenue codes allowable for OPPS PHP ratesetting purposes. As
discussed in the CY 2013 OPPS/ASC final rule with comment period (77 FR
68412 to 68418), we updated the PHP allowable revenue codes and PHP
allowable HCPCS codes for CY 2013 and subsequent years. The allowable
revenue and PHP HCPCS codes are included in Section 260, Chapter 4, of
the Medicare Claims Processing Manual (IOM Pub. 100-04), which is
available on the CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf) and are shown in
Table 57 below (Table 53 of the proposed rule, 80 FR 39297):
[[Page 70465]]
Table 57--PHP Allowable Revenue and HCPCS Codes
------------------------------------------------------------------------
Revenue code Description HCPCS code
------------------------------------------------------------------------
0250................... Drugs and Biologicals.. Not required.
043X................... Occupational Therapy... G0129.
0900................... Behavioral Health 90791 or 90792.
Treatment/Services.
0904................... Activity Therapy G0176.
(Partial
Hospitalization).
0914................... Individual 90785, 90832, 90833,
Psychotherapy. 90834, 90836, 90837,
90838, 90845, 90865,
or 90880.
0915................... Group Therapy.......... G0410 or G0411.
0916................... Family Psychotherapy... 90846 or 90847.
0918................... Psychiatric Testing.... 96101, 96102, 96103,
96116, 96118, 96119,
or 96120.
0942................... Education Training..... G0177.
------------------------------------------------------------------------
The HCPCS codes shown in Table 56 above are those which are used in
the four renumbered PHP APCs 5851, 5852, 5861, and 5862 (existing APCs
0172, 0173, 0175, and 0176), and are also shown in Appendix C-a and
Appendix P of the Integrated Outpatient Code Editor (IOCE)
Specifications. As described in section III.D. of this final rule with
comment period, as we proposed, we are finalizing our proposal to
renumber some of the OPPS APCs, and have shown both the renumbered APCs
and the existing APCs for partial hospitalization services above. The
IOCE is available on the CMS Web site at: http://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/OCEQtrReleaseSpecs.html.
d. Determination of PHP APC Per Diem Costs
The PHP CCRs described in section VIII.B.2.b. of this final rule
with comment period are applied to the PHP claim charges described in
section VIII.B.2.c. of this final rule with comment period to determine
the PHP APC geometric mean per diem costs. Costs for each service line
reported on CMHC claims are calculated by multiplying each service line
charge by the CCR associated with the claim's provider. Costs for each
service line reported on the hospital-based PHP claims are calculated
by multiplying the service line charge by the CCR associated with the
provider's service line's revenue code (using the revenue-to-cost
center crosswalk hierarchy described in section VIII.B.2.b. of this
final rule with comment period). For both CMHCs and hospital-based
PHPs, charges are set to zero for services reporting revenue codes,
which are not included in the listing of PHP allowable revenue codes
shown in Table 57 above (Table 53 of the proposed rule (80 FR 39297)).
e. Development of Service Days and Cost Modeling
Only the claims service lines containing PHP allowable HCPCS codes
(shown in Table 57 above; Table 53 of the proposed rule (80 FR 39297))
from the remaining hospital-based PHP and CMHC claims are retained for
PHP cost determination. The costs, payments, and service units for all
service lines occurring on the same service date, by the same provider,
and for the same beneficiary are summed to calculate the PHP APC
geometric mean per diem cost, per diem payment rate, and per diem
service volume for each PHP service day. Any service days with zero per
diem payments are removed.
Because the PHP costs calculated above include the effects of
geographic variation in wages, we use the wage index data to wage
neutralize PHP APC per diem costs prior to the APC geometric mean per
diem cost calculation. This removes the effects of geographic variation
in costs used in the OPPS APC ratesetting process. Service days with no
per diem costs or with no wage index values are removed. PHP service
days with fewer than 3 service units are deleted and not considered for
PHP cost modeling.
As discussed in section VIII.B.1. of the CY 2016 OPPS/ASC proposed
rule and this final rule with comment period, there were several PHP
providers with aberrant data. As such, we proposed and are finalizing a
trimming methodology to exclude CMHCs that have a per diem cost that is
2 standard deviations from the overall CMHC geometric mean
per diem cost, beginning in CY 2016. This trim excluded from the
ratesetting process any CMHCs with extreme costs per day. We also
proposed and are finalizing a trimming methodology to exclude service
days with extreme hospital-based PHP CCR values which were not removed
by the 3 standard deviation trim discussed above, if those
service days have a CCR>5, beginning in CY 2016. Therefore, we excluded
hospital-based PHP service days where the CCR>5.
PHP service days from CMHCs and from hospital-based PHPs with
exactly 3 service units, or with 4 or more service units (based on
allowable HCPCS codes shown in Table 53 of the proposed rule (80 FR
39297); Table 57 of this final rule with comment period) are assigned
to Level 1 or Level 2 PHP APCs as follows: (We note that we are
finalizing our proposal to renumber some of the OPPS APCs, and are
showing both the renumbered APCs and the existing APCs for partial
hospitalization services below.)
Level 1 Partial Hospitalization, renumbered APC 5851
(existing APC 0172): CMHC service days with exactly 3 service units;
Level 2 Partial Hospitalization, renumbered APC 5852
(existing APC 0173): CMHC service days with 4 or more service units;
Level 1 Partial Hospitalization, renumbered APC 5861
(existing APC 0175): hospital-based PHP service days with exactly 3
service units; and
Level 2 Partial Hospitalization, renumbered APC 5862
(existing APC 0176): hospital-based PHP service days with 4 or more
service units.
PHP service days with costs 3 standard deviations from
the geometric mean costs within each APC are deleted and removed from
modeling. The remaining PHP service days are used to calculate the
geometric mean per diem cost for each PHP APC.
For CY 2016, we also made an equitable adjustment to the hospital-
based PHP geometric mean per diem costs, to remove an inversion in the
per diem costs. The finalized PHP APC geometric mean per diem costs or
PHP APC equitably adjusted per diem costs undergo several more steps,
as noted below, before becoming budget neutral PHP APC per diem payment
rates. The PHP APCs are part of the larger OPPS. As discussed in
section II.A. of the CY 2016 OPPS/ASC proposed rule and this final rule
with comment period, OPPS APC geometric mean per diem costs
[[Page 70466]]
(including PHP APC geometric mean per diem costs) are divided by the
geometric mean per diem costs for renumbered APC 5012 (Level 2
Examinations and Related Services) to calculate each PHP APC's unscaled
relative payment weight. An unscaled relative payment weight is one
that is not yet adjusted for budget neutrality. Budget neutrality is
required under section 1833(t)(9)(B) of the Act, and ensures that the
estimated aggregate weight under the OPPS for a calendar year is
neither greater than nor less than the estimated aggregate weight that
would have been made without the changes. To adjust for budget
neutrality (that is, to scale the weights), we compare the estimated
aggregated weight using the scaled relative payment weights from the
previous calendar year at issue. For example, to adjust for budget
neutrality (that is, to scale the weights) in the CY 2016 OPPS/ASC
proposed rule and this final rule with comment period, we compared the
estimated aggregated weight using the CY 2015 scaled relative payment
weights to the estimated aggregate weight using the CY 2016 unscaled
relative payment weights. We refer readers to the ratesetting
procedures described in Part 2 of the OPPS Claims Accounting narrative
and in section II. of this final rule with comment period for more
information on scaling the weights, and for details on the final steps
of the process that lead to PHP APC per diem payment rates.
f. Issues Regarding Correct Coding and Reasonable Charges
PHP claims with revenue codes other than those listed as allowable
in Table 57 above (Table 53 of the proposed rule (80 FR 39297)), but
which are associated with allowable PHP HCPCS codes, may still be paid,
as described in the OPPS Claims Accounting narrative. The OPPS does not
include charges associated with revenue codes that are not allowable
for ratesetting purposes. In reviewing CY 2013 and CY 2014 claims, we
noticed CMHCs were using correct revenue coding for nearly all claims,
but hospital-based PHPs were occasionally using other revenue codes,
particularly revenue codes 0912 and 0913. Revenue codes 0912 and 0913
are not on the allowable list of PHP revenue codes. As such, the
charges associated with those two revenue codes are not included in
ratesetting, even when revenue code 0912 or 0913 is associated with a
PHP allowable HCPCS code. For the most accurate ratesetting, it is
imperative that providers follow coding guidelines for all revenue
codes and all CPT and Level 2 HCPCS codes in a manner consistent with
their descriptors, instructions, and correct coding principles. We also
refer readers to the coding instructions given in the Claims Processing
Manual. Following the correct coding guidelines will help ensure that
we include all PHP costs in ratesetting.
Finally, it appears that a few PHPs may not be reporting reasonable
charges for their services on their claims. When this occurs with CMHCs
or hospital-based PHPs that provide a high number of services during
the year, the data used for ratesetting may be inappropriately skewed.
Therefore, we remind PHPs of the regulations at 42 CFR 413.53 and
existing CMS guidance related to charges, which is found in Chapter 22
of the Provider Reimbursement Manual, Part 1, which is available on the
CMS Web site at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.html?DLPage=1&DLSort=0&DLSortDir=ascending.
In section 2202.4, we define ``Charges,'' as the regular rates
established by the provider for services rendered to both beneficiaries
and to other paying patients. Charges should be related consistently to
the cost of the services and uniformly applied to all patients whether
inpatient or outpatient. We also state in section 2204, ``Medicare
Charges,'' that the Medicare charge for a specific service must be the
same as the charge made to non-Medicare patients (including Medicaid,
CHAMPUS, private, etc.) must be recorded in the respective income
accounts of the facility, and must be related to the cost of the
service. In section 2203, ``Provider Charge Structure as Basis for
Apportionment,'' we state that each facility should have an established
charge structure which is applied uniformly to each patient as services
are furnished to the patient, and which is reasonably and consistently
related to the cost of providing the services, so that its charges may
be allowable for use in apportioning costs under the program. The
Medicare program cannot dictate to a provider what its charges or
charge structure may be. However, the program may determine whether or
not the charges are allowable for use in apportioning costs under the
program. We received one comment regarding the ratesetting process.
Comment: One commenter supported the CMS recommendation that CMHCs
and hospital-based PHPs review their accounting and billing processes
to ensure that they are following procedures properly, with the goal of
obtaining greater accuracy in setting PHP payment rates. The commenter
committed to working with its members to help ensure correct recording
of costs and claims coding.
Response: We appreciate the commenter's support and commitment.
C. Separate Threshold for Outlier Payments to CMHCs
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), after examining the costs, charges, and
outlier payments for CMHCs, we believed that establishing a separate
OPPS outlier policy for CMHCs would be appropriate. A CMHC-specific
outlier policy would direct OPPS outlier payments towards the genuine
cost of outlier cases, and address situations where charges were being
artificially increased to enhance outlier payments.
We created a separate outlier policy that would be specific to the
estimated costs and OPPS payments provided to CMHCs. We note that, in
the CY 2009 OPPS/ASC final rule with comment period, we established an
outlier reconciliation policy to comprehensively address charging
aberrations related to OPPS outlier payments (73 FR 68594 through
68599). Therefore, beginning in CY 2004, we designated a portion of the
estimated OPPS outlier target amount specifically for CMHCs, consistent
with the percentage of projected payments to CMHCs under the OPPS each
year, excluding outlier payments, and established a separate outlier
threshold for CMHCs.
The separate outlier threshold for CMHCs resulted in $1.8 million
in outlier payments to CMHCs in CY 2004, and $0.5 million in outlier
payments to CMHCs in CY 2005. In contrast, in CY 2003, more than $30
million was paid to CMHCs in outlier payments. We believe that this
difference in outlier payments indicates that the separate outlier
threshold for CMHCs has been successful in keeping outlier payments to
CMHCs in line with the percentage of OPPS payments made to CMHCs.
In the CY 2016 OPPS/ASC proposed rule (80 FR 39299), we proposed to
continue to designate a portion of the estimated 1.0 percent outlier
target amount specifically for CMHCs, consistent with the percentage of
projected payments to CMHCs under the OPPS in CY 2016, excluding
outlier payments. In the CY 2016 OPPS/ASC proposed rule, we stated that
CMHCs are projected to receive 0.04 percent of total OPPS payments in
CY 2016, excluding outlier payments. Therefore, we proposed to
designate 0.49 percent of the estimated 1.0 percent outlier
[[Page 70467]]
target amount for CMHCs, and establish a threshold to achieve that
level of outlier payment. Based on our simulations of CMHC payments for
CY 2016, in the CY 2016 OPPS/ASC proposed rule (80 FR 39299), we
proposed to continue to set the threshold for CY 2016 at 3.40 times the
highest CMHC PHP APC payment rate (that is, renumbered APC 5852 (Level
2 Partial Hospitalization) (existing APC 0173). We continue to believe
that this approach would neutralize the impact of inflated CMHC charges
on outlier payments and better target outlier payments to those truly
exceptionally high-cost cases that might otherwise limit beneficiary
access.
In addition, we proposed to continue to apply the same outlier
payment percentage that applies to hospitals. Therefore, for CY 2016,
we proposed to continue to pay 50 percent of CMHC APC geometric mean
per diem costs over the threshold. In section II.G. of the CY 2016
OPPS/ASC proposed rule, for the hospital outpatient outlier payment
policy, we proposed to set a dollar threshold in addition to an APC
multiplier threshold. Because the PHP APCs are the only APCs for which
CMHCs may receive payment under the OPPS, we would not expect to
redirect outlier payments by imposing a dollar threshold. Therefore, we
did not propose to set a dollar threshold for CMHC outlier payments.
In summary, in the CY 2016 OPPS/ASC proposed rule, we proposed to
establish that if a CMHC's cost for partial hospitalization services,
paid under either renumbered APC 5851 (existing APC 0172) or renumbered
APC 5852 (existing APC 0173), exceeds 3.40 times the payment rate for
renumbered APC 5852, the outlier payment is calculated as 50 percent of
the amount by which the cost exceeds 3.40 times the renumbered APC 5852
payment rate. We invited public comments on these proposals.
We did not receive any public comments on our proposed outlier
policy. Therefore, we are finalizing our proposal for CY 2016 to set a
separate outlier threshold for CMHCs without modification. As discussed
in section II.G. of this final rule with comment period, using more
recent data for this final rule with comment period, we set the target
for hospital outpatient outlier payments at 1.00 percent of total
estimated OPPS payments. We allocated a portion of the 1.00 percent, an
amount equal to 0.36 percent of outlier payments, or 0.0036 percent of
total estimated OPPS payment, to CMHCs for PHP outlier payments. For CY
2016, as proposed, we are setting the CMHC outlier threshold at 3.40
multiplied by renumbered APC 5852 (existing APC 0173) payment rate and
the CY 2016 outlier percentage applicable to costs in excess of the
threshold at 50 percent. In other words, if a CMHC's cost for partial
hospitalization services paid under either renumbered APC 5851
(existing APC 0172) or APC 5852 (existing APC 0173) exceeds 3.40 times
the payment rate for renumbered APC 5852 (existing APC 0173), the
outlier payment will be calculated as 50 percent of the amount by which
the cost exceeds 3.40 times the renumbered APC 5852 (existing APC 0173)
payment rate.
IX. Procedures That Will Be Paid Only as Inpatient Procedures
A. Background
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for a full historical discussion of
our longstanding policies on how we identify procedures that are
typically provided only in an inpatient setting (referred to as the
inpatient only list) and, therefore, will not be paid by Medicare under
the OPPS, and on the criteria that we use to review the inpatient only
list each year to determine whether or not any procedures should be
removed from the list.
B. Changes to the Inpatient Only List
In the CY 2016 OPPS/ASC proposed rule (80 FR 39299 through 39300),
for the CY 2016 OPPS, we proposed to use the same methodology
(described in the November 15, 2004 final rule with comment period (69
FR 65834)) of reviewing the current list of procedures on the inpatient
only list to identify any procedures that may be removed from the list.
The established criteria upon which we make such a determination are as
follows:
1. Most outpatient departments are equipped to provide the services
to the Medicare population.
2. The simplest procedure described by the code may be performed in
most outpatient departments.
3. The procedure is related to codes that we have already removed
from the inpatient only list.
4. A determination is made that the procedure is being performed in
numerous hospitals on an outpatient basis.
5. A determination is made that the procedure can be appropriately
and safely performed in an ASC, and is on the list of approved ASC
procedures or has been proposed by us for addition to the ASC list.
Using this methodology, for the proposed rule, we identified seven
procedures that could potentially be removed from the inpatient only
list for CY 2016. We reviewed the clinical characteristics and related
evidence for these procedures for removal from the inpatient only list
and found them to be appropriate candidates.
In the CY 2016 OPPS/ASC proposed rule, for CY 2016, we proposed to
remove the following procedures from the inpatient only list:
CPT code 0312T (Vagus nerve blocking therapy (morbid
obesity); laparoscopic implantation of neurostimulator electrode array,
anterior and posterior vagal trunks adjacent to esophagogastric
junction (EGJ), with implantation of pulse generator, includes
programming);
CPT code 20936 (Autograft for spine surgery only (includes
harvesting the graft); local (e.g., ribs, spinous process, or laminar
fragments) obtained from the same incision);
CPT code 20937 (Autograft for spine surgery only (includes
harvesting the graft); morselized (through separate skin or fascial
incision));