83_FR_20252
Page Range | 20164-20643 | |
FR Document | 2018-08705 |
[Federal Register Volume 83, Number 88 (Monday, May 7, 2018)] [Proposed Rules] [Pages 20164-20643] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-08705] [[Page 20163]] Vol. 83 Monday, No. 88 May 7, 2018 Part II Book 2 of 2 Books Pages 20163-20706 Department of Health and Human Services ----------------------------------------------------------------------- Centers for Medicare & Medicaid Services ----------------------------------------------------------------------- 42 CFR Parts 412, 413, 424, et al. Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long[dash]Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2019 Rates; Proposed Quality Reporting Requirements for Specific Providers; Proposed Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims; Proposed Rule Federal Register / Vol. 83 , No. 88 / Monday, May 7, 2018 / Proposed Rules [[Page 20164]] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 412, 413, 424, and 495 [CMS-1694-P] RIN 0938-AT27 Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long[dash]Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2019 Rates; Proposed Quality Reporting Requirements for Specific Providers; Proposed Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2019. Some of these proposed changes implement certain statutory provisions contained in the 21st Century Cures Act and the Bipartisan Budget Act of 2018, and other legislation. We also are proposing to make changes relating to Medicare graduate medical education (GME) affiliation agreements for new urban teaching hospitals. In addition, we are proposing to provide the market basket update that would apply to the rate[dash]of[dash]increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits for FY 2019. We are proposing to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2019. In addition, we are proposing to establish new requirements or revise existing requirements for quality reporting by specific Medicare providers (acute care hospitals, PPS[dash]exempt cancer hospitals, and LTCHs). We also are proposing to establish new requirements or revise existing requirements for eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) participating in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (now referred to as the Promoting Interoperability Programs). In addition, we are proposing changes to the requirements that apply to States operating Medicaid Promoting Interoperability Prrograms. We are proposing to update policies for the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program. We also are proposing to make changes relating to the required supporting documentation for an acceptable Medicare cost report submission and the supporting information for physician certification and recertification of claims. DATES: Comment Period: To be assured consideration, comments must be received at one of the addresses provided in the ADDRESSES section, no later than 5 p.m. on June 25, 2018. ADDRESSES: In commenting, please refer to file code CMS-1694-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the ``Submit a comment'' instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1694-P, P.O. Box 8011, 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 to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1694-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487, and Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, Sole Community Hospitals, Medicare Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare[dash]Dependent Small Rural Hospital (MDH) Program, and Low-Volume Hospital Payment Adjustment Issues. Michele Hudson, (410) 786-4487, Mark Luxton, (410) 786-4530, and Emily Lipkin, (410) 786-3633, Long[dash]Term Care Hospital Prospective Payment System and MS-LTC-DRG Relative Weights Issues. Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues. Jeris Smith, (410) 786-0110, Frontier Community Health Integration Project Demonstration Issues. Cindy Tourison, (410) 786-1093, Hospital Readmissions Reduction Program--Readmission Measures for Hospitals Issues. James Poyer, (410) 786-2261, Hospital Readmissions Reduction Program--Administration Issues. Elizabeth Bainger, (410) 786-0529, Hospital-Acquired Condition Reduction Program Issues. Joseph Clift, (410) 786-4165, Hospital-Acquired Condition Reduction Program--Measures Issues. Grace Snyder, (410) 786-0700 and James Poyer, (410) 786-2261, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing--Program Administration, Validation, and Reconsideration Issues. Reena Duseja, (410) 786-1999 and Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality Reporting--Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues; and Readmission Measures for Hospitals Issues. Kim Spalding Bush, (410) 786-3232, Hospital Value-Based Purchasing Efficiency Measures Issues. Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality Reporting--Hospital Consumer Assessment of Healthcare Providers and Systems Measures Issues. Joel Andress, (410) 786-5237 and Caitlin Cromer, (410) 786-3106, PPS-Exempt Cancer Hospital Quality Reporting Issues. Mary Pratt, (410) 786-6867, Long-Term Care Hospital Quality Data Reporting Issues. [[Page 20165]] Elizabeth Holland, (410) 786-1309, Promoting Interoperability Programs Clinical Quality Measure Related Issues. Kathleen Johnson, (410) 786-3295 and Steven Johnson (410) 786-3332, Promoting Interoperability Programs Nonclinical Quality Measure Related Issues. Kellie Shannon, (410) 786-0416, Acceptable Medicare Cost Report Submissions Issues. Thomas Kessler, (410) 786-1991, Physician Certification and Recertification of Claims. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments. Electronic Access This Federal Register document is 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. Tables Available Only Through the Internet on the CMS Website In the past, a majority of the tables referred to throughout this preamble and in the Addendum to the proposed rule and the final rule were published in the Federal Register as part of the annual proposed and final rules. However, beginning in FY 2012, the majority of the IPPS tables and LTCH PPS tables are no longer published in the Federal Register. Instead, these tables generally will be available only through the Internet. The IPPS tables for this proposed rule are available through the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the screen titled, ``FY 2019 IPPS Proposed Rule Home Page'' or ``Acute Inpatient--Files for Download''. The LTCH PPS tables for this FY 2019 proposed rule are available through the Internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation Number CMS-1694-P. For further details on the contents of the tables referenced in this proposed rule, we refer readers to section VI. of the Addendum to this proposed rule. Readers who experience any problems accessing any of the tables that are posted on the CMS websites identified above should contact Michael Treitel at (410) 786-4552. Table of Contents I. Executive Summary and Background A. Executive Summary B. Background Summary C. Summary of Provisions of Recent Legislation Proposed To Be Implemented in This Proposed Rule D. Summary of Provisions of This Proposed Rule II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications and Relative Weights A. Background B. MS-DRG Reclassifications C. Adoption of the MS-DRGs in FY 2008 D. Proposed FY 2019 MS-DRG Documentation and Coding Adjustment E. Refinement of the MS-DRG Relative Weight Calculation F. Proposed Changes to Specific MS-DRG Classifications G. Recalibration of the Proposed FY 2019 MS-DRG Relative Weights H. Proposed Add-On Payments for New Services and Technologies for FY 2019 III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals A. Background B. Worksheet S-3 Wage Data for the Proposed FY 2019 Wage Index C. Verification of Worksheet S-3 Wage Data D. Method for Computing the Proposed FY 2019 Unadjusted Wage Index E. Proposed Occupational Mix Adjustment to the FY 2019 Wage Index F. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2019 Occupational Mix Adjusted Wage Index G. Proposed Application of the Rural, Imputed, and Frontier Floors H. Proposed FY 2019 Wage Index Tables I. Proposed Revisions to the Wage Index Based on Hospital Redesignations and Reclassifications J. Proposed Out-Migration Adjustment Based on Commuting Patterns of Hospital Employees K. Reclassification From Urban to Rural Under Section 1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103 and Proposed Change to Lock-In Date L. Process for Requests for Wage Index Data Corrections M. Proposed Labor-Related Share for the Proposed FY 2019 Wage Index N. Request for Public Comments on Wage Index Disparities IV. Other Decisions and Proposed Changes to the IPPS for Operating System A. Proposed Changes to MS-DRGs Subject to Postacute Care Transfer Policy and MS-DRG Special Payment Policies (Sec. 412.4) B. Proposed Changes in the Inpatient Hospital Updates for FY 2019 (Sec. 412.64(d)) C. Rural Referral Centers (RRCs) Proposed Annual Updates to Case-Mix Index and Discharge Criteria (Sec. 412.96) D. Proposed Payment Adjustment for Low-Volume Hospitals (Sec. 412.101) E. Indirect Medical Education (IME) Payment Adjustment Factor (Sec. 412.105) F. Proposed Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs) for FY 2019 (Sec. 412.106) G. Sole Community Hospitals (SCHs) and Medicare-Dependent, Small Rural Hospitals (MDHs) (Sec. Sec. 412.90, 412.92, and 412.108) H. Hospital Readmissions Reduction Program: Proposed Updates and Changes (Sec. Sec. 412.150 Through 412.154) I. Hospital Value-Based Purchasing (VBP) Program: Proposed Policy Changes J. Hospital-Acquired Condition (HAC) Reduction Program K. Payments for Indirect and Direct Graduate Medical Education Costs (Sec. Sec. 412.105 and 413.75 Through 413.83) L. Rural Community Hospital Demonstration Program M. Proposed Revision of Hospital Inpatient Admission Orders Documentation Requirements Under Medicare Part A V. Proposed Changes to the IPPS for Capital-Related Costs A. Overview B. Additional Provisions C. Proposed Annual Update for FY 2019 VI. Proposed Changes for Hospitals Excluded From the IPPS A. Proposed Rate-of-Increase in Payments to Excluded Hospitals for FY 2019 B. Proposed Changes to Regulations Governing Satellite Facilities C. Proposed Changes to Regulations Governing Excluded Units of Hospitals D. Critical Access Hospitals (CAHs) VII. Proposed Changes to the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2019 A. Background of the LTCH PPS B. Proposed Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2019 C. Proposed Modifications to the Application of the Site Neutral Payment Rate (Sec. 412.522) D. Proposed Changes to the LTCH PPS Payment Rates and Other Proposed Changes to the LTCH PPS for FY 2019 E. Proposed Elimination of the ``25-Percent Threshold Policy'' Adjustment (Sec. 412.538) VIII. Quality Data Reporting Requirements for Specific Providers and Suppliers A. Hospital Inpatient Quality Reporting (IQR) Program B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP) D. Proposed Changes to the Medicare and Medicaid EHR Incentive Programs (Now Referred to as the Medicare and Medicaid Promoting Interoperability Programs) [[Page 20166]] IX. Proposed Revisions of the Supporting Documentation Required for Submission of an Acceptable Medicare Cost Report X. Requirements for Hospitals To Make Public a List of Their Standard Charges via the Internet XI. Proposed Revisions Regarding Physician Certification and Recertification of Claims XII. Request for Information on Promoting Interoperability and Electronic Healthcare Information Exchange Through Possible Revisions to the CMS Patient Health and Safety Requirements for Hospitals and Other Medicare- and Medicaid-Participating Providers and Suppliers XIII. MedPAC Recommendations XIV. Other Required Information A. Publicly Available Data B. Collection of Information Requirements C. Response to Public Comments Regulation Text Addendum--Proposed Schedule of Proposed Standardized Amounts, Update Factors, Rate[dash]of[dash]Increase Percentages Effective With Cost Reporting Periods Beginning on or After October 1, 2018, and Payment Rates for LTCHs Effective for Discharges Occurring on or After October 1, 2018 I. Summary and Background II. Proposed Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for Acute Care Hospitals for FY 2019 A. Calculation of the Adjusted Standardized Amount B. Proposed Adjustments for Area Wage Levels and Cost-of-Living C. Calculation of the Prospective Payment Rates III. Proposed Changes to Payment Rates for Acute Care Hospital Inpatient Capital[dash]Related Costs for FY 2019 A. Determination of Federal Hospital Inpatient Capital[dash]Related Prospective Payment Rate Update for FY 2019 B. Calculation of the Inpatient Capital[dash]Related Prospective Payments for FY 2019 C. Capital Input Price Index IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate[dash]of[dash]Increase Percentages for FY 2019 V. Proposed Changes to the Payment Rates for the LTCH PPS for FY 2019 A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2019 B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS for FY 2019 C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs Located in Alaska and Hawaii D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases E. Proposed Update to the IPPS Comparable/Equivalent Amounts To Reflect the Statutory Changes to the IPPS DSH Payment Adjustment Methodology F. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments for FY 2019 VI. Tables Referenced in This Proposed Rule Generally Available Only Through the Internet on the CMS Website Appendix A--Economic Analyses I. Regulatory Impact Analysis A. Statement of Need B. Overall Impact C. Objectives of the IPPS and the LTCH PPS D. Limitations of Our Analysis E. Hospitals Included in and Excluded From the IPPS F. Effects on Hospitals and Hospital Units Excluded From the IPPS G. Quantitative Effects of the Proposed Policy Changes Under the IPPS for Operating Costs H. Effects of Other Proposed Policy Changes I. Effects of Proposed Changes in the Capital IPPS J. Effects of Proposed Payment Rate Changes and Policy Changes Under the LTCH PPS K. Effects of Proposed Requirements for Hospital Inpatient Quality Reporting (IQR) Program L. Effects of Proposed Requirements for the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program M. Effects of Proposed Requirements for the Long-Term Care Hospital Quality Reporting Program (LTCH QRP) N. Effects of Proposed Requirements Regarding the Promoting Interoperability Programs O. Alternatives Considered P. Reducing Regulation and Controlling Regulatory Costs Q. Overall Conclusion R. Regulatory Review Costs II. Accounting Statements and Tables A. Acute Care Hospitals B. LTCHs III. Regulatory Flexibility Act (RFA) Analysis IV. Impact on Small Rural Hospitals V. Unfunded Mandate Reform Act (UMRA) Analysis VI. Executive Order 13175 VII. Executive Order 12866 Appendix B--Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services I. Background II. Inpatient Hospital Update for FY 2019 A. Proposed FY 2019 Inpatient Hospital Update B. Proposed Update for SCHs and MDHs for FY 2019 C. Proposed FY 2019 Puerto Rico Hospital Update D. Proposed Update for Hospitals Excluded From the IPPS for FY 2019 E. Proposed Update for LTCHs for FY 2019 III. Secretary's Recommendation IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments in Traditional Medicare I. Executive Summary and Background A. Executive Summary 1. Purpose and Legal Authority This proposed rule would make payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital[dash]related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it would make payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long[dash]term care hospital prospective payment system (LTCH PPS). This proposed rule also would make policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs. We are proposing to establish new requirements and revise existing requirements for quality reporting by specific providers (acute care hospitals, PPS[dash]exempt cancer hospitals, and LTCHs) that are participating in Medicare. We also are proposing to establish new requirements and revise existing requirements for eligible professionals (EPs), eligible hospitals, and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs. We are proposing to update policies for the Hospital Value[dash]Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program. We also are proposing to make changes relating to the supporting documentation required for an acceptable Medicare cost report submission and the supporting information for physician certification and recertification of claims. Under various statutory authorities, we are proposing to make changes to the Medicare IPPS, to the LTCH PPS, and to other related payment methodologies and programs for FY 2019 and subsequent fiscal years. These statutory authorities include, but are not limited to, the following:Section 1886(d) of the Social Security Act (the Act), which sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires that, instead of paying for capital-related costs of inpatient hospital services on a reasonable cost basis, the Secretary use a prospective payment system (PPS). Section 1886(d)(1)(B) of the Act, which specifies that certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; LTCHs; psychiatric hospitals and units; children's hospitals; cancer hospitals; extended neoplastic disease care hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, [[Page 20167]] Guam, the Northern Mariana Islands, and American Samoa). Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Sections 123(a) and (c) of the BBRA (Pub. L. 106[dash]113) and section 307(b)(1) of the BIPA (Pub. L. 106[dash]554) (as codified under section 1886(m)(1) of the Act), which provide for the development and implementation of a prospective payment system for payment for inpatient hospital services of LTCHs described in section 1886(d)(1)(B)(iv) of the Act. Sections 1814(l), 1820, and 1834(g) of the Act, which specify that payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services and that these payments are generally based on 101 percent of reasonable cost. Section 1866(k) of the Act, as added by section 3005 of the Affordable Care Act, which establishes a quality reporting program for hospitals described in section 1886(d)(1)(B)(v) of the Act, referred to as ``PPS-exempt cancer hospitals.'' Section 1886(a)(4) of the Act, which specifies that costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. Section 1886(b)(3)(B)(viii) of the Act, which requires the Secretary to reduce the applicable percentage increase that would otherwise apply to the standardized amount applicable to a subsection (d) hospital for discharges occurring in a fiscal year if the hospital does not submit data on measures in a form and manner, and at a time, specified by the Secretary. Section 1886(o) of the Act, which requires the Secretary to establish a Hospital Value-Based Purchasing (VBP) Program under which value-based incentive payments are made in a fiscal year to hospitals meeting performance standards established for a performance period for such fiscal year. Section 1886(p) of the Act, as added by section 3008 of the Affordable Care Act, which establishes a Hospital-Acquired Condition (HAC) Reduction Program, under which payments to applicable hospitals are adjusted to provide an incentive to reduce hospital- acquired conditions. Section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act and amended by section 10309 of the Affordable Care Act and section 15002 of the 21st Century Cures Act, which establishes the ``Hospital Readmissions Reduction Program.'' Under the program, payments for discharges from an ``applicable hospital'' under section 1886(d) of the Act will be reduced to account for certain excess readmissions. Section 15002 of the 21st Century Cures Act requires the Secretary to compare cohorts of hospitals to each other in determining the extent of excess readmissions. Section 1886(r) of the Act, as added by section 3133 of the Affordable Care Act, which provides for a reduction to disproportionate share hospital (DSH) payments under section 1886(d)(5)(F) of the Act and for a new uncompensated care payment to eligible hospitals. Specifically, section 1886(r) of the Act requires that, for fiscal year 2014 and each subsequent fiscal year, subsection (d) hospitals that would otherwise receive a DSH payment made under section 1886(d)(5)(F) of the Act will receive two separate payments: (1) 25 percent of the amount they previously would have received under section 1886(d)(5)(F) of the Act for DSH (``the empirically justified amount''), and (2) an additional payment for the DSH hospital's proportion of uncompensated care, determined as the product of three factors. These three factors are: (1) 75 percent of the payments that would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1 minus the percent change in the percent of individuals who are uninsured (minus 0.2 percentage point for FY 2018 through FY 2019); and (3) a hospital's uncompensated care amount relative to the uncompensated care amount of all DSH hospitals expressed as a percentage. Section 1886(m)(6) of the Act, as added by section 1206(c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the establishment of site neutral payment rate criteria under the LTCH PPS with implementation beginning in FY 2016, and provides for a 4-year transitional blended payment rate for discharges occurring in LTCH cost reporting periods beginning in FYs 2016 through 2019. Section 51005(b) of the Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B)(ii) by adding new clause (iv), which specifies that the IPPS comparable amount defined in subclause (I) shall be reduced by 4.6 percent for FYs 2018 through 2026. Section 1886(m)(6) of the Act, as amended by section 15009 of the 21st Century Cures Act (Pub. L. 114-255), which provides for a temporary exception to the application of the site neutral payment rate under the LTCH PPS for certain spinal cord specialty hospitals for discharges in cost reporting periods beginning during FYs 2018 and 2019. Section 1886(m)(6) of the Act, as amended by section 15010 of the 21st Century Cures Act (Pub. L. 114-255), which provides for a temporary exception to the application of the site neutral payment rate under the LTCH PPS for certain LTCHs with certain discharges with severe wounds occurring in cost reporting periods beginning during FY 2018. Section 1886(m)(5)(D)(iv) of the Act, as added by section 1206(c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 (Pub. L. 113-67), which provides for the establishment of a functional status quality measure in the LTCH QRP for change in mobility among inpatients requiring ventilator support. Section 1899B of the Act, as added by section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act, Pub. L. 113-185), which provides for the establishment of standardized data reporting for certain post-acute care providers, including LTCHs. 2. Improving Patient Outcomes and Reducing Burden Through Meaningful Measures Regulatory reform and reducing regulatory burden are high priorities for CMS. To reduce the regulatory burden on the healthcare industry, lower health care costs, and enhance patient care, in October 2017, we launched the Meaningful Measures Initiative.\1\ This initiative is one component of our agency-wide Patients Over Paperwork Initiative,\2\ which is aimed at evaluating and streamlining regulations with a goal to reduce unnecessary cost and burden, increase efficiencies, and improve beneficiary experience. The Meaningful Measures Initiative is aimed at identifying the highest priority areas for quality measurement and quality improvement in order to assess the core quality of care issues that are most vital [[Page 20168]] to advancing our work to improve patient outcomes. The Meaningful Measures Initiative represents a new approach to quality measures that will foster operational efficiencies and will reduce costs, including collection and reporting burden while producing quality measurement that is more focused on meaningful outcomes. --------------------------------------------------------------------------- \1\ Meaningful Measures webpage: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html. \2\ Remarks by Administrator Seema Verma at the Health Care Payment Learning and Action Network (LAN) Fall Summit, as prepared for delivery on October 30, 2017. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html. --------------------------------------------------------------------------- The Meaningful Measures framework has the following objectives: Address high-impact measure areas that safeguard public health; Patient-centered and meaningful to patients; Outcome-based where possible; Fulfill each program's statutory requirements; Minimize the level of burden for health care providers (for example, through a preference for EHR-based measures where possible, such as electronic clinical quality measures; \3\ --------------------------------------------------------------------------- \3\ Refer to section VIII.A.9.c.of the preamble of this proposed rule where we are seeking public comment on the potential future development and adoption of eCQMs. --------------------------------------------------------------------------- Significant opportunity for improvement; Address measure needs for population based payment through alternative payment models; and Align across programs and/or with other payers. In order to achieve these objectives, we have identified 19 Meaningful Measures areas and mapped them to six overarching quality priorities as shown in the following table: ------------------------------------------------------------------------ Quality priority Meaningful measure area ------------------------------------------------------------------------ Making Care Safer by Reducing Harm Healthcare-Associated Caused in the Delivery of Care. Infections Preventable Healthcare Harm Strengthen Person and Family Engagement Care is Personalized and as Partners in Their Care. Aligned with Patient's Goals End of Life Care According to Preferences Patient's Experience of Care Patient Reported Functional Outcomes Promote Effective Communication and Medication Management Coordination of Care. Admissions and Readmissions to Hospitals Transfer of Health Information and Interoperability Promote Effective Prevention and Preventive Care Treatment of Chronic Disease. Management of Chronic Conditions Prevention, Treatment, and Management of Mental Health Prevention and Treatment of Opioid and Substance Use Disorders Risk Adjusted Mortality Work with Communities to Promote Best Equity of Care Practices of Healthy Living. Community Engagement Make Care Affordable................... Appropriate Use of Healthcare Patient-focused Episode of Care Risk Adjusted Total Cost of Care ------------------------------------------------------------------------ By including Meaningful Measures in our programs, we believe that we can also address the following cross-cutting measure criteria: Eliminating disparities; Tracking measurable outcomes and impact; Safeguarding public health; Achieving cost savings; Improving access for rural communities; and Reducing burden. We believe that the Meaningful Measures Initiative will improve outcomes for patients, their families, and health care providers while reducing burden and costs for clinicians and providers as well as promoting operational efficiencies. 3. Summary of the Major Provisions Below we provide a summary of the major provisions in this proposed rule. In general, these major provisions are being proposed as part of the annual update to the payment policies and payment rates, consistent with the applicable statutory provisions. A general summary of the proposed changes included in this proposed rule is presented below in section I.D. of this preamble. a. MS-DRG Documentation and Coding Adjustment Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub. L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS-DRG documentation and coding that do not reflect real changes in case-mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110- 90. Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.) Therefore, for FY 2019, we are proposing to make an adjustment of +0.5 percent to the standardized amount. b. Expansion of the Postacute Care Transfer Policy Section 53109 of the Bipartisan Budget Act of 2018 amended section 1886(d)(5)(J)(ii) of the Act to also include discharges to hospice care by a hospice program as a qualified discharge, effective for discharges occurring on or after October 1, 2018. Accordingly, we are proposing to make conforming amendments to Sec. 412.4(c) of the regulation, effective for discharges on or after October 1, 2018, to specify that if a discharge is assigned to one of the MS-DRGs subject to the postacute care transfer policy and the individual is transferred to hospice care by a hospice program, the discharge would be subject to payment as a transfer case. c. DSH Payment Adjustment and Additional Payment for Uncompensated Care Section 3133 of the Affordable Care Act modified the Medicare [[Page 20169]] disproportionate share hospital (DSH) payment methodology beginning in FY 2014. Under section 1886(r) of the Act, which was added by section 3133 of the Affordable Care Act, starting in FY 2014, DSHs receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75 percent of the amount that otherwise would have been paid as Medicare DSH payments, is paid as additional payments after the amount is reduced for changes in the percentage of individuals that are uninsured. Each Medicare DSH will receive an additional payment based on its share of the total amount of uncompensated care for all Medicare DSHs for a given time period. In this proposed rule, we are proposing to update our estimates of the three factors used to determine uncompensated care payments for FY 2019. We are continuing to use uninsured estimates produced by CMS' Office of the Actuary (OACT) as part of the development of the National Health Expenditure Accounts (NHEA) in the calculation of Factor 2. We also are continuing to incorporate data from Worksheet S-10 in the calculation of hospitals' share of the aggregate amount of uncompensated care by combining data on uncompensated care costs from Worksheet S-10 for FYs 2014 and 2015 with proxy data regarding a hospital's share of low-income insured days for FY 2013 to determine Factor 3 for FY 2019. In addition, we are proposing to use only data regarding low-income insured days for FY 2013 to determine the amount of uncompensated care payments for Puerto Rico hospitals, Indian Health Service and Tribal hospitals, and all-inclusive rate providers. For this proposed rule, we also are proposing the following policies: (1) For providers with multiple cost reports beginning in the same fiscal year, to use the longest cost report and annualize Medicaid data and uncompensated care data if a hospital's cost report does not equal 12 months of data; (2) in the rare case where a provider has multiple cost reports beginning in the same fiscal year, but one report also spans the entirety of the following fiscal year such that the hospital has no cost report for that fiscal year, the cost report that spans both fiscal years would be used for the latter fiscal year; and (3) to apply statistical trim methodologies to potentially aberrant cost-to-charge ratios (CCRs) and potentially aberrant uncompensated care costs reported on the Worksheet S-10. d. Proposed Changes to the LTCH PPS In this proposed rule, we set forth proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2019. In addition, we are proposing to eliminate the 25-percent threshold policy, and under this proposal we would apply a one-time permanent adjustment of approximately -0.9 percent to the LTCH PPS standard Federal payment rate to ensure this proposed elimination of the 25-percent threshold policy is budget neutral. e. Reduction of Hospital Payments for Excess Readmissions We are proposing to make changes to policies for the Hospital Readmissions Reduction Program, which is established under section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act, as amended by section 10309 of the Affordable Care Act and further amended by section 15002 of the 21st Century Cures Act. The Hospital Readmissions Reduction Program requires a reduction to a hospital's base operating DRG payment to account for excess readmissions of selected applicable conditions. For FY 2018 and subsequent years, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for acute myocardial infarction (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary disease (COPD), total hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG). In this proposed rule, we are proposing to establish the applicable periods for FY 2019, FY 2020, and FY 2021. We are also proposing to codify the definitions of dual-eligible patients, the proportion of dual-eligibles, and the applicable period for dual- eligibility. f. Hospital Value-Based Purchasing (VBP) Program Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year. As part of agency-wide efforts under the Meaningful Measures Initiative to use a parsimonious set of the most meaningful measures for patients, clinicians, and providers in our quality programs and the Patients Over Paperwork Initiative to reduce costs and burden and program complexity as discussed in section I.A.2. of the preamble of this proposed rule, we are proposing to remove a total of 10 measures from the Hospital VBP Program, all of which would continue to be used in the Hospital IQR Program or the HAC Reduction Program, in order to reduce the costs and complexity of tracking these measures in multiple programs. We also are proposing to adopt measure removal factors for the Hospital VBP Program. Specifically, we are proposing to remove six measures beginning with the FY 2021 program year: (1) Elective Delivery (NQF #0469) (PC-01); (2) National Healthcare Safety Network (NHSN) Catheter- Associated Urinary Tract Infection (CAUTI) Outcome Measure (NQF #0138); (3) National Healthcare Safety Network (NHSN) Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (NQF #0139); (4) American College of Surgeons-Centers for Disease Control and Prevention (ACS-CDC) Harmonized Procedure Specific Surgical Site Infection (SSI) Outcome Measure (NQF #0753); (5) National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus Bacteremia (MRSA) Outcome Measure (NQF #1716); and (6) National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717). We are also proposing to remove four measures from the Hospital VBP Program effective with the effective date of the FY 2019 IPPS/LTCH PPS final rule: (1) Patient Safety and Adverse Events (Composite) (NQF #0531) (PSI 90); (2) Hospital-Level, Risk-Standardized Payment Associated With a 30-Day Episode-of-Care for Acute Myocardial Infarction (NQF #2431) (AMI Payment); (3) Hospital-Level, Risk- Standardized Payment Associated With a 30-Day Episode-of-Care for Heart Failure (NQF #2436) (HF Payment); and (4) Hospital-Level, Risk- Standardized Payment Associated With a 30-Day Episode-of-Care for Pneumonia (PN Payment) (NQF #2579). In addition, we are proposing to rename the Clinical Care domain as the Clinical Outcomes domain beginning with the FY 2020 program year; we are proposing to remove the Safety domain from the Hospital VBP Program, if our proposals to removal all of the measures in this domain are finalized, and to weight the three remaining domains as follows: Clinical Outcomes domain--50 percent; Person and Community Engagement domain--25 percent; and Efficiency and Cost Reduction domain--25 percent. [[Page 20170]] g. Hospital-Acquired Condition (HAC) Reduction Program Section 1886(p) of the Act, as added under section 3008(a) of the Affordable Care Act, establishes an incentive to hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to make an adjustment to payments to applicable hospitals effective for discharges beginning on October 1, 2014. This 1-percent payment reduction applies to a hospital whose ranking in the worst- performing quartile (25 percent) of all applicable hospitals, relative to the national average, of conditions acquired during the applicable period and on all of the hospital's discharges for the specified fiscal year. As part of our agency-wide Patients over Paperwork and Meaningful Measures Initiatives, discussed in section I.A.2. of the preamble of this proposed rule, we are proposing that the measures currently included in the HAC Reduction Program should be retained because the measures address a performance gap in patient safety and reducing harm caused in the delivery of care. In this proposed rule, we are proposing to: (1) Establish administrative policies to collect, validate, and publicly report NHSN healthcare-associated infection (HAI) quality measure data that facilitate a seamless transition, independent of the Hospital IQR Program, beginning with January 1, 2019 infectious events; (2) change the scoring methodology by removing domains and assigning equal weighting to each measure for which a hospital has a measure; and (3) establish the applicable period for FY 2021. In addition, we are seeking stakeholder comment regarding the potential future inclusion of additional measures, including eCQMs. h. Hospital Inpatient Quality Reporting (IQR) Program Under section 1886(b)(3)(B)(viii) of the Act, subsection (d) hospitals are required to report data on measures selected by the Secretary for a fiscal year in order to receive the full annual percentage increase that would otherwise apply to the standardized amount applicable to discharges occurring in that fiscal year. In this proposed rule, we are proposing several changes. As part of agency-wide efforts under the Meaningful Measures Initiative to use a parsimonious set of the most meaningful measures for patients and clinicians in our quality programs and the Patients Over Paperwork initiative to reduce burden, cost, and program complexity as discussed in section I.A.2. of the preamble of this proposed rule, we are proposing to add a new measure removal factor and to remove a total of 39 measures from the Hospital IQR Program. For a full list of measures proposed for removal, we refer readers to section VIII.A.4.b. of the preamble of this proposed rule. Beginning with the CY 2018 reporting period/FY 2020 payment determination and subsequent years, we are proposing to remove 17 claims-based measures and two structural measures. Beginning with the CY 2019 reporting period/FY 2021 payment determination and subsequent years, we are proposing to remove eight chart-abstracted measures and two claims-based measures. Beginning with the CY 2020 reporting period/FY 2022 payment determination and subsequent years, we are proposing to remove one chart-abstracted measure, one claims[dash]based measure, and seven eCQMs from the Hospital IQR Program measure set. Beginning with the CY 2021 reporting period/FY 2023 payment determination, we are proposing to remove one claims-based measure. In addition, for the CY 2019 reporting period/FY 2021 payment determination, we are proposing to: (1) Require the same eCQM reporting requirements that were adopted for the CY 2018 reporting period/FY 2020 payment determination (82 FR 38355 through 38361), such that hospitals submit one, self-selected calendar quarter of 2019 discharge data for 4 eCQMs in the Hospital IQR Program measure set; and (2) require that hospitals use the 2015 Edition certification criteria for CEHRT. These proposals are in alignment with proposals or current established policies under the Medicare and Medicaid Promoting Interoperability Programs (previously known as the Medicare and Medicaid EHR Incentive Programs). In addition, we are seeking public comment on two measures for potential future inclusion in the Hospital IQR Program, as well as the potential future development and adoption of electronic clinical quality measures generally. i. Long-Term Care Hospital Quality Reporting Program (LTCH QRP) The LTCH QRP is authorized by section 1886(m)(5) of the Act and applies to all hospitals certified by Medicare as long-term care hospitals (LTCHs). Under the LTCH QRP, the Secretary reduces by 2 percentage points the annual update to the LTCH PPS standard Federal rate for discharges for an LTCH during a fiscal year if the LTCH fails to submit data in accordance with the LTCH QRP requirements specified for that fiscal year. As part of agency-wide efforts under the Meaningful Measures Initiative to use a parsimonious set of the most meaningful measures for patients and clinicians in our quality programs and the Patients Over Paperwork Initiative to reduce cost and burden and program complexity as discussed in section I.A.2. of the preamble of this proposed rule, we are proposing to remove three measures from the LTCH QRP. We also are proposing to adopt a new measure removal factor and are proposing to codify the measure removal factors in our regulations. In addition, we are proposing to update our regulations to change methods by which an LTCH is notified of noncompliance with the requirements of the LTCH QRP for a program year; and how CMS will notify an LTCH of a reconsideration decision. 4. Summary of Costs and Benefits Adjustment for MS-DRG Documentation and Coding Changes. Section 414 of the MACRA replaced the single positive adjustment we intended to make in FY 2018 once the recoupment required by section 631 of the ATRA was complete with a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act.) For FY 2019, we are proposing to make an adjustment of +0.5 percent to the standardized amount consistent with the MACRA. Expansion of the Postacute Care Transfer Policy. Section 53109 of the Bipartisan Budget Act of 2018 amended section 1886(d)(5)(J)(ii) of the Act to also include discharges to hospice care by a hospice program as a qualified discharge, effective for discharges occurring on or after October 1, 2018. Accordingly, we are proposing to make conforming amendments to Sec. 412.4(c) of the regulation to specify that, effective for discharges on or after October 1, 2018, if a discharge is assigned to one of the MS-DRGs subject to the postacute care transfer policy and the individual is transferred to hospice care by a hospice program, the discharge would be subject to payment as a transfer case. We estimate that this statutory expansion to the postacute care transfer policy will reduce Medicare payments under the IPPS by approximately $240 million in FY 2019. Proposed Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. Under section 1886(r) of the Act (as added by section 3133 of the Affordable Care Act), DSH payments to hospitals under section [[Page 20171]] 1886(d)(5)(F) of the Act are reduced and an additional payment for uncompensated care is made to eligible hospitals beginning in FY 2014. Hospitals that receive Medicare DSH payments receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remainder, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, is the basis for determining the additional payments for uncompensated care after the amount is reduced for changes in the percentage of individuals that are uninsured and additional statutory adjustments. Each hospital that receives Medicare DSH payments will receive an additional payment for uncompensated care based on its share of the total uncompensated care amount reported by Medicare DSHs. The reduction to Medicare DSH payments is not budget neutral. For FY 2019, we are proposing to update our estimates of the three factors used to determine uncompensated care payments. We are continuing to use uninsured estimates produced by OACT as part of the development of the NHEA in the calculation of Factor 2. We also are continuing to incorporate data from Worksheet S-10 in the calculation of hospitals' share of the aggregate amount of uncompensated care by combining data on uncompensated care costs from Worksheet S-10 for FY 2014 and FY 2015 with proxy data regarding a hospital's share of low- income insured days for FY 2013 to determine Factor 3 for FY 2019. To determine the amount of uncompensated care for Puerto Rico hospitals, Indian Health Service and Tribal hospitals, and all-inclusive rate providers, we are proposing to use only the data regarding low-income insured days for FY 2013. In addition, in this proposed rule, we are proposing the following policies: (1) For providers with multiple cost reports beginning in the same fiscal year, to use the longest cost report and annualize Medicaid data and uncompensated care data if a hospital's cost report does not equal 12 months of data; (2) in the rare case where a provider has multiple cost reports beginning in the same fiscal year, but one report also spans the entirety of the following fiscal year such that the hospital has no cost report for that fiscal year, the cost report that spans both fiscal years would be used for the latter fiscal year; and (3) to apply statistical trim methodologies to potentially aberrant CCRs and potentially aberrant uncompensated care costs. We are projecting that proposed estimated Medicare DSH payments, and additional payments for uncompensated care made for FY 2019, would increase payments overall by approximately 1.3 percent as compared to the estimate of overall payments, including Medicare DSH payments and uncompensated care payments that will be distributed in FY 2018. The additional payments have redistributive effects based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are estimated to receive Medicare DSH payments, and the calculated payment amount is not directly tied to a hospital's number of discharges. Proposed Update to the LTCH PPS Payment Rates and Other Payment Policies. Based on the best available data for the 409 LTCHs in our database, we estimate that the proposed changes to the payment rates and factors that we are presenting in the preamble and Addendum of this proposed rule, which reflects the continuation of the transition of the statutory application of the site neutral payment rate, the update to the LTCH PPS standard Federal payment rate for FY 2019, and the proposed one-time permanent adjustment of approximately- 0.9 percent to the LTCH PPS standard Federal payment rate to ensure this proposed elimination of the 25[dash]percent threshold policy is budget neutral would result in an estimated decrease in payments in FY 2019 of approximately $5 million. Proposed Changes to the Hospital Readmissions Reduction Program. For FY 2019 and subsequent years, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for acute myocardial infarction (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary disease (COPD), total hip arthroplasty/ total knee arthroplasty (THA/TKA), and coronary artery bypass graft (CABG). Overall, in this proposed rule, we estimate that 2,610 hospitals would have their base operating DRG payments reduced by their determined proposed proxy FY 2019 hospital-specific readmission adjustment. As a result, we estimate that the Hospital Readmissions Reduction Program would save approximately $566 million in FY 2019. Value-Based Incentive Payments under the Hospital VBP Program. We estimate that there will be no net financial impact to the Hospital VBP Program for the FY 2019 program year in the aggregate because, by law, the amount available for value[dash]based incentive payments under the program in a given year must be equal to the total amount of base operating MS-DRG payment amount reductions for that year, as estimated by the Secretary. The estimated amount of base operating MS-DRG payment amount reductions for the FY 2019 program year and, therefore, the estimated amount available for value-based incentive payments for FY 2019 discharges is approximately $1.9 billion. Proposed Changes to the HAC Reduction Program. A hospital's Total HAC score and its ranking in comparison to other hospitals in any given year depend on several different factors. Any significant impact due to the proposed HAC Reduction Program changes for FY 2019, including which hospitals would receive the adjustment, would depend on actual experience. The proposed removal of NHSN HAI measures from the Hospital IQR Program and the subsequent cessation of its validation processes for NHSN HAI measures and proposed creation of a validation process for the HAC Reduction program represent no net change in reporting burden across CMS hospital quality programs. However, if our proposal to remove HAI chart-abstracted measures from the Hospital IQR Program is finalized, we anticipate a total burden shift of 43,200 hours and approximately $1.6 million as a result of no longer needing to validate those HAI measures under the Hospital IQR Program and beginning the validation process under the HAC Reduction Program. Proposed Changes to the Hospital Inpatient Quality Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that our proposed requirements for the Hospital IQR Program would result in the following changes to costs and burdens related to information collection for this program compared to previously adopted requirements: (1) A total collection of information burden reduction of 1,046,071 hours and a total cost reduction of approximately $38.3 million for the CY 2019 reporting period/FY 2021 payment determination, due to the proposed removal of ED-1, IMM-2, and VTE-6 measures; and (2) a total collection of information burden reduction of 901,200 hours and a total cost reduction of $33 million for the CY 2020 reporting period/ FY 2022 payment determination, due to: (a) The proposed removal of ED- 2, and (b) validation of the NHSN HAI measures no longer being conducted under the Hospital IQR Program once the HAC Reduction Program begins validating these measures, as proposed in the preamble [[Page 20172]] of this proposed rule for the HAC Reduction Program. Further, we anticipate that the proposed removal of 39 measures would result in a reduction in costs unrelated to information collection. For example, it may be costly for health care providers to track the confidential feedback, preview reports, and publicly reported information on a measure where we use the measure in more than one program. Also, when measures are in multiple programs, maintaining the specifications for those measures, as well as the tools we need to collect, validate, analyze, and publicly report the measure data may result in costs to CMS. In addition, beneficiaries may find it confusing to see public reporting on the same measure in different programs. We anticipate that our proposals will reduce the above- described costs. Proposed Changes Related to the LTCH QRP. In this proposed rule, we are proposing to remove three measures from the LTCH QRP, two measures beginning with the FY 2020 LTCH QRP and one measure beginning with the FY 2021 LTCH QRP. We also are proposing a new quality measure removal factor for the LTCH QRP. We estimate that the impact of these proposed changes is a reduction in costs of approximately $1,148 per LTCH annually or approximately $482,469 for all LTCHs annually. B. Background Summary 1. Acute Care Hospital Inpatient Prospective Payment System (IPPS) Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to use a prospective payment system (PPS) to pay for the capital[dash]related costs of inpatient hospital services for these ``subsection (d) hospitals.'' Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis[dash]related groups (DRGs). The base payment rate is comprised of a standardized amount that is divided into a labor-related share and a nonlabor-related share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located. If the hospital is located in Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of- living adjustment factor. This base payment rate is multiplied by the DRG relative weight. If the hospital treats a high percentage of certain low-income patients, it receives a percentage add-on payment applied to the DRG- adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment varies based on the outcome of the statutory calculations. The Affordable Care Act revised the Medicare DSH payment methodology and provides for a new additional Medicare payment that considers the amount of uncompensated care beginning on October 1, 2013. If the hospital is training residents in an approved residency program(s), it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds. Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add[dash]on payment, it would be inadequately paid under the regular DRG payment. The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments. Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital[dash]specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. SCHs are the sole source of care in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of hospital inpatient services reasonably available to Medicare beneficiaries. In addition, certain rural hospitals previously designated by the Secretary as essential access community hospitals are considered SCHs. Under current law, the Medicare-dependent, small rural hospital (MDH) program is effective through FY 2022. Through and including FY 2006, an MDH received the higher of the Federal rate or the Federal rate plus 50 percent of the amount by which the Federal rate was exceeded by the higher of its FY 1982 or FY 1987 hospital[dash]specific rate. For discharges occurring on or after October 1, 2007, but before October 1, 2022, an MDH receives the higher of the Federal rate or the Federal rate plus 75 percent of the amount by which the Federal rate is exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital- specific rate. MDHs are a major source of care for Medicare beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is located in a rural area (or, as amended by the Bipartisan Budget Act of 2018, a hospital located in a State with no rural area that meets certain statutory criteria), has not more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent of its inpatient days or discharges in its cost reporting year beginning in FY 1987 or in two of its three most recently settled Medicare cost reporting years). Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services in accordance with a prospective payment system established by the Secretary. The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. In addition, hospitals may receive outlier payments for those cases that have unusually high costs. The existing regulations governing payments to hospitals under the IPPS are located in 42 CFR part 412, subparts A through M. [[Page 20173]] 2. Hospitals and Hospital Units Excluded From the IPPS Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Inpatient rehabilitation facility (IRF) hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; cancer hospitals; extended neoplastic disease care hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa). Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for IRF hospitals and units, LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are included along with the IPPS annual update in this document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, cancer hospitals, hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs continue to be paid solely under a reasonable cost-based system subject to a rate[dash]of[dash]increase ceiling on inpatient operating costs. Similarly, extended neoplastic disease care hospitals are paid on a reasonable cost basis subject to a rate[dash]of[dash]increase ceiling on inpatient operating costs. The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR parts 412 and 413. 3. Long-Term Care Hospital Prospective Payment System (LTCH PPS) The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) of the Act effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of sections 123 of the BBRA and section 307(b) of the BIPA (as codified under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a LTCH's payment under the PPS was based on an increasing proportion of the LTCH Federal rate with a corresponding decreasing proportion based on reasonable cost principles. Effective for cost reporting periods beginning on or after October 1, 2006 through September 30, 2016, all LTCHs were paid 100 percent of the Federal rate. Section 1206(a) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) established the site neutral payment rate under the LTCH PPS, which made the LTCH PPS a dual rate payment system beginning in FY 2016. Under this statute, based on a rolling effective date that is linked to the date on which a given LTCH's Federal FY 2016 cost reporting period begins, LTCHs are generally paid for discharges at the site neutral payment rate unless the discharge meets the patient criteria for payment at the LTCH PPS standard Federal payment rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR part 412, subpart O. Beginning October 1, 2009, we issue the annual updates to the LTCH PPS in the same documents that update the IPPS (73 FR 26797 through 26798). 4. Critical Access Hospitals (CAHs) Under sections 1814(l), 1820, and 1834(g) of the Act, payments made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v) of the Act and existing regulations under 42 CFR part 413. 5. Payments for Graduate Medical Education (GME) Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR part 413. C. Summary of Provisions of Recent Legislation Proposed To Be Implemented in This Proposed Rule 1. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) introduced new payment rules in the LTCH PPS. Under section 1206 of this law, discharges in cost reporting periods beginning on or after October 1, 2015 under the LTCH PPS will receive payment under a site neutral rate unless the discharge meets certain patient[dash]specific criteria. In this proposed rule, we are continuing to update certain policies that implemented provisions under section 1206 of the Pathway for SGR Reform Act. 2. Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185) The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185), enacted on October 6, 2014, made a number of changes that affect the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). In this proposed rule, we are proposing to continue to implement portions of section 1899B of the Act, as added by section 2(a) of the IMPACT Act, which, in part, requires LTCHs, among other postacute care providers, to report standardized patient assessment data, data on quality measures, and data on resource use and other measures. 3. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10) Section 414 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive adjustment to the standardized amount of Medicare payments to acute care hospitals for FYs 2018 through 2023. These adjustments follow the recoupment adjustment to the standardized amounts under section 1886(d) of the Act based upon the Secretary's estimates for discharges occurring from FYs 2014 through 2017 to fully offset $11 billion, in accordance with section 631 of the ATRA. The FY 2018 adjustment was subsequently adjusted to 0.4588 percent by section 15005 of the 21st Century Cures Act. 4. The 21st Century Cures Act (Pub. L. 114-255) The 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016, contained the following provision affecting payments under the Hospital Readmissions Reduction Program, [[Page 20174]] which we are proposing to continue to implement in this proposed rule: Section 15002, which amended section 1886(q)(3) of the Act by adding subparagraphs (D) and (E), which requires the Secretary to develop a methodology for calculating the excess readmissions adjustment factor for the Hospital Readmissions Reduction Program based on cohorts defined by the percentage of dual-eligible patients (that is, patients who are eligible for both Medicare and full-benefit Medicaid coverage) cared for by a hospital. In this proposed rule, we are proposing to continue to implement changes to the payment adjustment factor to assess penalties based on a hospital's performance relative to other hospitals treating a similar proportion of dual- eligible patients. 5. The Bipartisan Budget Act of 2018 (Pub. L. 115-123) The Bipartisan Budget Act of 2018 (Pub. L. 115-123), enacted on February 9, 2018, contains provisions affecting payments under the IPPS and the LTCH PPS, which we are proposing to implement or continue to implement in this proposed rule: Section 50204 amended section 1886(d)(12) of the Act to provide for certain temporary changes to the low-volume hospital payment adjustment policy for FYs 2018 through 2022. For FY 2018, this provision extends the qualifying criteria and payment adjustment formula that applied for FYs 2011 through 2017. For FYs 2019 through 2022, this provision modifies the discharge criterion and payment adjustment formula. In FY 2023 and subsequent fiscal years, the qualifying criteria and payment adjustment revert to the requirements that were in effect for FYs 2005 through 2010. Section 50205 extends the MDH program through FY 2022. It also provides for an eligible hospital that is located in a State with no rural area to qualify for MDH status under an expanded definition if the hospital satisfies any of the statutory criteria at section 1886(d)(8)(E)(ii)(I), (II) (as of January 1, 2018), or (III) of the Act to be reclassified as rural. Section 51005(a) modified section 1886(m)(6) of the Act by extending the blended payment rate for site neutral payment rate LTCH discharges for cost reporting periods beginning in FY 2016 by an additional 2 years (FYs 2018 and 2019). In addition, section 51005(b) reduces the LTCH IPPS comparable per diem amount used in the site neutral payment rate for FYs 2018 through 2026 by 4.6 percent. In this proposed rule, we are proposing to make conforming changes to the existing regulations. Section 53109 modified section 1886(d)(5)(J) of the Act to require that, beginning in FY 2019, discharges to hospice care will also qualify as a postacute care transfer and be subject to payment adjustments. D. Summary of the Provisions of This Proposed Rule In this proposed rule, we are setting forth proposed payment and policy changes to the Medicare IPPS for FY 2019 operating costs and for capital-related costs of acute care hospitals and certain hospitals and hospital units that are excluded from IPPS. In addition, we are setting forth proposed changes to the payment rates, factors, and other payment and policy-related changes to programs associated with payment rate policies under the LTCH PPS for FY 2019. Below is a general summary of the proposed changes included in this proposed rule. 1. Proposed Changes to MS-DRG Classifications and Recalibrations of Relative Weights In section II. of the preamble of this proposed rule, we include-- Proposed changes to MS-DRG classifications based on our yearly review for FY 2019. Proposed adjustment to the standardized amounts under section 1886(d) of the Act for FY 2019 in accordance with the amendments made to section 7(b)(1)(B) of Public Law 110-90 by section 414 of the MACRA. Proposed recalibration of the MS-DRG relative weights. A discussion of the proposed FY 2019 status of new technologies approved for add-on payments for FY 2018 and a presentation of our evaluation and analysis of the FY 2019 applicants for add[dash]on payments for high-cost new medical services and technologies (including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting). 2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals In section III. of the preamble to this proposed rule, we are proposing to make revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed include, but are not limited to, the following: The proposed FY 2019 wage index update using wage data from cost reporting periods beginning in FY 2015. Proposal regarding other wage-related costs in the wage index. Calculation of the proposed occupational mix adjustment for FY 2019 based on the 2016 Occupational Mix Survey. Analysis and implementation of the proposed FY 2019 occupational mix adjustment to the wage index for acute care hospitals. Proposed application of the rural floor and the frontier State floor and the proposed expiration of the imputed floor. Proposals to codify policies regarding multicampus hospitals. Proposed revisions to the wage index for acute care hospitals based on hospital redesignations and reclassifications under sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act. The proposed adjustment to the wage index for acute care hospitals for FY 2019 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index. Determination of the labor-related share for the proposed FY 2019 wage index. Public comment solicitation on wage index disparities. 3. Other Decisions and Proposed Changes to the IPPS for Operating Costs In section IV. of the preamble of this proposed rule, we discuss proposed changes or clarifications of a number of the provisions of the regulations in 42 CFR parts 412 and 413, including the following: Proposed changes to MS-DRGs subject to the postacute care transfer policy and special payment policy and implementation of the statutory changes to the postacute care transfer policy. Proposed changes to the inpatient hospital update for FY 2019. Proposed changes related to the statutory changes to the low-volume hospital payment adjustment policy. Proposed updated national and regional case-mix values and discharges for purposes of determining RRC status. The statutorily required IME adjustment factor for FY 2019. Proposed changes to the methodologies for determining Medicare DSH payments and the additional payments for uncompensated care. Proposed changes to the effective date of SCH and MDH classification status determinations. Proposed changes related to the extension of the MDH program. Proposed changes to the rules for payment adjustments under the Hospital Readmissions Reduction Program based on hospital readmission [[Page 20175]] measures and the process for hospital review and correction of those rates for FY 2019. Proposed changes to the requirements and provision of value-based incentive payments under the Hospital Value-Based Purchasing Program. Proposed requirements for payment adjustments to hospitals under the HAC Reduction Program for FY 2019. Proposed changes to Medicare GME affiliation agreements for new urban teaching hospitals. Discussion of and proposals relating to the implementation of the Rural Community Hospital Demonstration Program in FY 2019. Proposed revisions of the hospital inpatient admission orders documentation requirements. 4. Proposed FY 2019 Policy Governing the IPPS for Capital-Related Costs In section V. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital[dash]related costs and capital payments to hospitals for FY 2019. 5. Proposed Changes to the Payment Rates for Certain Excluded Hospitals: Rate[dash]of[dash]Increase Percentages In section VI. of the preamble of this proposed rule, we discuss-- Proposed changes to payments to certain excluded hospitals for FY 2019. Proposed changes to the regulations governing satellite facilities. Proposed changes to the regulations governing excluded units of hospitals. Proposed continued implementation of the Frontier Community Health Integration Project (FCHIP) Demonstration. 6. Proposed Changes to the LTCH PPS In section VII. of the preamble of the proposed rule, we set forth-- Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2019. Proposed changes to the blended payment rate for site neutral payment rate cases. Proposed elimination of the 25-percent threshold policy. 7. Proposed Changes Relating to Quality Data Reporting for Specific Providers and Suppliers In section VIII. of the preamble of the proposed rule, we address-- Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program. Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program). Proposed changes to the requirements under the LTCH Quality Reporting Program (LTCH QRP). Proposed changes to requirements pertaining to the clinical quality measurement for eligible hospitals and CAHs participating in the Medicare and Medicaid Promoting Interoperability Programs. 8. Proposed Revision to the Supporting Documentation Requirements for an Acceptable Medicare Cost Report Submission In section IX. of the preamble of this proposed rule, we set forth proposed revisions to the supporting documentation required for an acceptable Medicare cost report submission. 9. Requirements for Hospitals To Make Public List of Standard Charges In section X. of the preamble of this proposed rule, we discuss our efforts to further improve the public accessibility of hospital standard charge information, effective January 1, 2019, in accordance with section 2718(e) of the Public Health Service Act. 10. Proposed Revisions Regarding Physician Certification and Recertification of Claims In section XI. of the preamble of this proposed rule, we set forth proposed revisions to the requirements for supporting information used for physician certification and recertification of claims. 11. Request for Information In section XII. of the preamble of this proposed rule, we include a request for information on possible establishment of CMS patient health and safety requirements for hospitals and other Medicare- and Medicaid- participating providers and suppliers for interoperable electronic health records and systems for electronic health care information exchange. 12. Determining Prospective Payment Operating and Capital Rates and Rate[dash]of[dash]Increase Limits for Acute Care Hospitals In section V. of the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2019 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We are proposing to establish the threshold amounts for outlier cases. In addition, we address the update factors for determining the rate[dash]of[dash]increase limits for cost reporting periods beginning in FY 2019 for certain hospitals excluded from the IPPS. 13. Determining Prospective Payment Rates for LTCHs In section V. of the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2019 LTCH PPS standard Federal payment rate and other factors used to determine LTCH PPS payments under both the LTCH PPS standard Federal payment rate and the site neutral payment rate in FY 2019. We are proposing to establish the adjustments for wage levels, the labor[dash]related share, the cost-of-living adjustment, and high- cost outliers, including the applicable fixed-loss amounts and the LTCH cost-to-charge ratios (CCRs) for both payment rates. 14. Impact Analysis In Appendix A of this proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected acute care hospitals, CAHs, LTCHs, and PCHs. 15. Recommendation of Update Factors for Operating Cost Rates of Payment for Hospital Inpatient Services In Appendix B of this proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the appropriate percentage changes for FY 2019 for the following: A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs of acute care hospitals (and hospital[dash]specific rates applicable to SCHs and MDHs). Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by certain hospitals excluded from the IPPS. The LTCH PPS standard Federal payment rate and the site neutral payment rate for hospital inpatient services provided for LTCH PPS discharges. 16. Discussion of Medicare Payment Advisory Commission Recommendations Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 15 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2018 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under [[Page 20176]] the IPPS. We address these recommendations in Appendix B of this proposed rule. For further information relating specifically to the MedPAC March 2018 report or to obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit MedPAC's website at: http://www.medpac.gov. II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS- DRG) Classifications and Relative Weights A. Background Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as diagnosis-related groups (DRGs)) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, Medicare pays for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs. Section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights at least annually to account for changes in resource consumption. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. B. MS-DRG Reclassifications For general information about the MS-DRG system, including yearly reviews and changes to the MS-DRGs, we refer readers to the previous discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43764 through 43766) and the FYs 2011 through 2018 IPPS/LTCH PPS final rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR 53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through 56872; and 82 FR 38010 through 38085, respectively). C. Adoption of the MS-DRGs in FY 2008 For information on the adoption of the MS-DRGs in FY 2008, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189). D. Proposed FY 2019 MS-DRG Documentation and Coding Adjustment 1. Background on the Prospective MS-DRG Documentation and Coding Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and the Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA) In the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189), we adopted the MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates for acute care hospitals. The adoption of the MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number of MS-DRGs and more fully taking into account patient severity of illness in Medicare payment rates for acute care hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses. In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for additional documentation and coding. In that final rule with comment period, we exercised our authority under section 1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget neutrality by adjusting the national standardized amount, to eliminate the estimated effect of changes in coding or classification that do not reflect real changes in case-mix. Our actuaries estimated that maintaining budget neutrality required an adjustment of -4.8 percentage points to the national standardized amount. We provided for phasing in this -4.8 percentage point adjustment over 3 years. Specifically, we established prospective documentation and coding adjustments of -1.2 percentage points for FY 2008, -1.8 percentage points for FY 2009, and -1.8 percentage points for FY 2010. On September 29, 2007, Congress enacted the TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section 7(a) of Public Law 110-90 reduced the documentation and coding adjustment made as a result of the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to -0.6 percentage point for FY 2008 and -0.9 percentage point for FY 2009. As discussed in prior year rulemakings, and most recently in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we implemented a series of adjustments required under sections 7(b)(1)(A) and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of FY 2008 and FY 2009 claims data. We completed these adjustments in FY 2013, but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 through 53275) that delaying full implementation of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013 resulted in payments in FY 2010 through FY 2012 being overstated, and that these overpayments could not be recovered under Public Law 110-90. In addition, as discussed in prior rulemakings and most recently in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009), section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment or adjustments totaling $11 billion by FY 2017. This adjustment represented the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. 2. Adjustment Made for FY 2018 as Required Under Section 414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-255 As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785), once the recoupment required under section 631 of the ATRA was complete, we had anticipated making a single positive adjustment in FY 2018 to offset the reductions required to recoup the $11 billion under section 631 of the ATRA. However, section 414 of the MACRA (which was enacted on April 16, 2015) replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percentage point positive adjustment for each of FYs 2018 through 2023. In the FY 2017 rulemaking, we indicated that we would address the adjustments for FY 2018 and later fiscal years in future rulemaking. Section 15005 of the 21st Century Cures Act (Pub. L. 114-255), which was enacted on December 13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section 631 of the ATRA and section 414 of the MACRA, to reduce the adjustment for FY 2018 from a 0.5 percentage point to a 0.4588 percentage point. As we discussed in the FY 2018 [[Page 20177]] rulemaking, we believe the directive under section 15005 of Public Law 114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38009) for FY 2018, we implemented the required +0.4588 percentage point adjustment to the standardized amount. This is a permanent adjustment to payment rates. While we did not address future adjustments required under section 414 of the MACRA and section 15005 of Public Law 114-255 at that time, we stated that we expected to propose positive 0.5 percentage point adjustments to the standardized amounts for FYs 2019 through 2023. 3. Proposed Adjustment for FY 2019 Consistent with the requirements of section 414 of the MACRA, we are proposing to implement a positive 0.5 percentage point adjustment to the standardized amount for FY 2019. This would be a permanent adjustment to payment rates. We plan to propose future adjustments required under section 414 of the MACRA for FYs 2020 through 2023 in future rulemaking. E. Refinement of the MS-DRG Relative Weight Calculation 1. Background Beginning in FY 2007, we implemented relative weights for DRGs based on cost report data instead of charge information. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed discussion of our final policy for calculating the cost[dash]based DRG relative weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs. We also refer readers to the FY 2017 IPPS/ LTCH PPS final rule (81 FR 56785 through 56787) for a detailed discussion of the history of changes to the number of cost centers used in calculating the DRG relative weights. Since FY 2014, we calculate the IPPS MS-DRG relative weights using 19 CCRs, which now include distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. 2. Discussion of Policy for FY 2019 Consistent with our established policy, we are calculating the proposed MS-DRG relative weights for FY 2019 using two data sources: The MedPAR file as the claims data source and the HCRIS as the cost report data source. We adjusted the charges from the claims to costs by applying the 19 national average CCRs developed from the cost reports. The description of the calculation of the proposed 19 CCRs and the proposed MS-DRG relative weights for FY 2019 is included in section II.G. of the preamble to this FY 2019 IPPS/LTCH PPS proposed rule. As we did with the FY 2018 IPPS/LTCH PPS final rule, for this proposed rule, we are providing the version of the HCRIS from which we calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the screen titled ``FY 2019 IPPS Proposed Rule Home Page'' or ``Acute Inpatient Files for Download.'' F. Proposed Changes to Specific MS-DRG Classifications 1. Discussion of Changes to Coding System and Basis for Proposed FY 2019 MS-DRG Updates a. Conversion of MS-DRGs to the International Classification of Diseases, 10th Revision (ICD-10) As of October 1, 2015, providers use the International Classification of Diseases, 10th Revision (ICD-10) coding system to report diagnoses and procedures for Medicare hospital inpatient services under the MS-DRG system instead of the ICD-9-CM coding system, which was used through September 30, 2015. The ICD-10 coding system includes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding and the International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and Reporting. For a detailed discussion of the conversion of the MS-DRGs to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56787 through 56789). b. Basis for Proposed FY 2019 MS-DRG Updates CMS has previously encouraged input from our stakeholders concerning the annual IPPS updates when that input was made available to us by December 7 of the year prior to the next annual proposed rule update. As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), as we work with the public to examine the ICD-10 claims data used for updates to the ICD-10 MS DRGs, we would like to examine areas where the MS-DRGs can be improved, which will require additional time for us to review requests from the public to make specific updates, analyze claims data, and consider any proposed updates. Given the need for more time to carefully evaluate requests and propose updates, we changed the deadline to request updates to the MS-DRGs to November 1 of each year. This will provide an additional 5 weeks for the data analysis and review process. Interested parties had to submit any comments and suggestions for FY 2019 by November 1, 2017, and are encouraged to submit any comments and suggestions for FY 2020 by November 1, 2018 via the CMS MS-DRG Classification Change Request Mailbox located at: [email protected]. The comments that were submitted in a timely manner for FY 2019 are discussed in this section of the preamble of this proposed rule. Following are the changes that we are proposing to the MS-DRGs for FY 2019 in this FY 2019 IPPS/LTCH PPS proposed rule. We are inviting public comments on each of the MS-DRG classification proposed changes, as well as our proposals to maintain certain existing MS-DRG classifications discussed in this proposed rule. In some cases, we are proposing changes to the MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. In other cases, we are proposing to maintain the existing MS-DRG classifications based on our analysis of claims data and consultation with our clinical advisors. For this FY 2019 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data from the September 2017 update of the FY 2017 MedPAR file, which contains hospital bills received through September 30, 2017, for discharges occurring through September 30, 2017. In our discussion of the proposed MS-DRG reclassification changes, we refer to our analysis of claims data from the ``September 2017 update of the FY 2017 MedPAR file.'' As explained in previous rulemaking (76 FR 51487), in deciding whether to propose to make further modifications to the MS-DRGs for particular circumstances brought to our attention, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients represented in the MS-DRG. We evaluate patient care costs using average costs and lengths of stay and rely on the judgment of our clinical advisors to determine whether patients are clinically distinct or similar to other patients represented in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs [[Page 20178]] between the cases we select for review and the remainder of cases in the MS-DRG. We also consider variation in costs within these groups; that is, whether observed average differences are consistent across patients or attributable to cases that are extreme in terms of costs or length of stay, or both. Further, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases. In our examination of the claims data, we apply the following criteria established in FY 2008 (72 FR 47169) to determine if the creation of a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroup within a base MS-DRG is warranted: A reduction in variance of costs of at least 3 percent; At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup; At least 500 cases are in the CC or MCC subgroup; There is at least a 20-percent difference in average costs between subgroups; and There is a $2,000 difference in average costs between subgroups. In order to warrant creation of a CC or MCC subgroup within a base MS-DRG, the subgroup must meet all five of the criteria. 2. Pre-MDC a. Heart Transplant or Implant of Heart Assist System In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38012), we stated our intent to review the ICD-10 logic for Pre-MDC MS-DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively), as well as MS-DRG 215 (Other Heart Assist System Implant) and MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with and without MCC, respectively) where procedures involving heart assist devices are currently assigned. We also encouraged the public to submit any comments on restructuring the MS-DRGs for heart assist system procedures to the CMS MS-DRG Classification Change Request Mailbox located at: [email protected] by November 1, 2017. The logic for Pre-MDC MS-DRGs 001 and 002 is comprised of two lists. The first list includes procedure codes identifying a heart transplant procedure, and the second list includes procedure codes identifying the implantation of a heart assist system. The list of procedure codes identifying the implantation of a heart assist system includes the following three codes. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 02HA0QZ................... Insertion of implantable heart assist system into heart, open approach. 02HA3QZ................... Insertion of implantable heart assist system into heart, percutaneous approach. 02HA4QZ................... Insertion of implantable heart assist system into heart, percutaneous endoscopic approach. ------------------------------------------------------------------------ In addition to these three procedure codes, there are also 33 pairs of code combinations or procedure code ``clusters'' that, when reported together, satisfy the logic for assignment to MS-DRGs 001 and 002. The code combinations are represented by two procedure codes and include either one code for the insertion of the device with one code for removal of the device or one code for the revision of the device with one code for the removal of the device. The 33 pairs of code combinations are listed below. ---------------------------------------------------------------------------------------------------------------- Code Code description Code Code description ---------------------------------------------------------------------------------------------------------------- 02HA0RS.................. Insertion of with 02PA0RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, open assist system into approach. heart, open approach. 02HA0RS.................. Insertion of with 02PA3RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous approach. heart, open approach. 02HA0RS.................. Insertion of with 02PA4RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous endoscopic heart, open approach. approach. 02HA0RZ.................. Insertion of short-term with 02PA0RZ................. Removal of short-term external heart assist external heart assist system into heart, open system from heart, open approach. approach. 02HA0RZ.................. Insertion of short-term with 02PA3RZ................. Removal of short-term external heart assist external heart assist system into heart, open system from heart, approach. percutaneous approach. 02HA0RZ.................. Insertion of short-term with 02PA4RZ................. Removal of short-term external heart assist external heart assist system into heart, open system from heart, approach. percutaneous endoscopic approach. 02HA3RS.................. Insertion of with 02PA0RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, open assist system into approach. heart, percutaneous approach. 02HA3RS.................. Insertion of with 02PA3RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous approach. heart, percutaneous approach. 02HA3RS.................. Insertion of with 02PA4RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous endoscopic heart, percutaneous approach. approach. 02HA4RS.................. Insertion of with 02PA0RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, open assist system into approach. heart, percutaneous endoscopic approach. [[Page 20179]] 02HA4RS.................. Insertion of with 02PA3RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous approach. heart, percutaneous endoscopic approach. 02HA4RS.................. Insertion of with 02PA4RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous endoscopic heart, percutaneous approach. endoscopic approach. 02HA4RZ.................. Insertion of short-term with 02PA0RZ................. Removal of short-term external heart assist external heart assist system into heart, system from heart, open percutaneous endoscopic approach. approach. 02HA4RZ.................. Insertion of short-term with 02PA3RZ................. Removal of short-term external heart assist external heart assist system into heart, system from heart, percutaneous endoscopic percutaneous approach. approach. 02HA4RZ.................. Insertion of short-term with 02PA4RZ................. Removal of short-term external heart assist external heart assist system into heart, system from heart, percutaneous endoscopic percutaneous endoscopic approach. approach. 02WA0QZ.................. Revision of implantable with 02PA0RZ................. Removal of short-term heart assist system in external heart assist heart, open approach. system from heart, open approach. 02WA0QZ.................. Revision of implantable with 02PA3RZ................. Removal of short-term heart assist system in external heart assist heart, open approach. system from heart, percutaneous approach. 02WA0QZ.................. Revision of implantable with 02PA4RZ................. Removal of short-term heart assist system in external heart assist heart, open approach. system from heart, percutaneous endoscopic approach. 02WA0RZ.................. Revision of short-term with 02PA0RZ................. Removal of short-term external heart assist external heart assist system in heart, open system from heart, open approach. approach. 02WA0RZ.................. Revision of short-term with 02PA3RZ................. Removal of short-term external heart assist external heart assist system in heart, open system from heart, approach. percutaneous approach. 02WA0RZ.................. Revision of short-term with 02PA4RZ................. Removal of short-term external heart assist external heart assist system in heart, open system from heart, approach. percutaneous endoscopic approach. 02WA3QZ.................. Revision of implantable with 02PA0RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, open approach. approach. 02WA3QZ.................. Revision of implantable with 02PA3RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, approach. percutaneous approach. 02WA3QZ.................. Revision of implantable with 02PA4RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, approach. percutaneous endoscopic approach. 02WA3RZ.................. Revision of short-term with 02PA0RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, open percutaneous approach. approach. 02WA3RZ.................. Revision of short-term with 02PA3RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, percutaneous approach. percutaneous approach. 02WA3RZ.................. Revision of short-term with 02PA4RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, percutaneous approach. percutaneous endoscopic approach. 02WA4QZ.................. Revision of implantable with 02PA0RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, open endoscopic approach. approach. 02WA4QZ.................. Revision of implantable with 02PA3RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, endoscopic approach. percutaneous approach. 02WA4QZ.................. Revision of implantable with 02PA4RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, endoscopic approach. percutaneous endoscopic approach. 02WA4RZ.................. Revision of short-term with 02PA0RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, open percutaneous endoscopic approach. approach. 02WA4RZ.................. Revision of short-term with 02PA3RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, percutaneous endoscopic percutaneous approach. approach. 02WA4RZ.................. Revision of short-term with 02PA4RZ................. Removal of short-term external heart assist external heart assist system in heart, system from heart, percutaneous endoscopic percutaneous endoscopic approach. approach. ---------------------------------------------------------------------------------------------------------------- In response to our solicitation for public comments on restructuring the MS-DRGs for heart assist system procedures, commenters recommended that CMS maintain the current logic under the Pre-MDC MS-DRGs 001 and 002. Similar to the discussion in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38011 through 38012) involving MS-DRG 215 (Other Heart Assist System Implant), the commenters provided examples of common clinical scenarios involving a left ventricular assist device (LVAD) and included the procedure codes that were reported under the ICD-9 based MS-DRGs in comparison to the procedure codes reported under the ICD-10 MS-DRGs, which are reflected in the following table. [[Page 20180]] ---------------------------------------------------------------------------------------------------------------- ICD-9-CM procedure Procedure code ICD-9 MS-DRG ICD-10-PCS codes ICD-10 MS-DRG ---------------------------------------------------------------------------------------------------------------- New LVAD inserted................ 37.66 (Insertion of 001 or 002 02WA0QZ (Insertion of 001 or 002 implantable heart implantable heart assist system). assist system into heart, open approach). 02WA3QZ (Insertion of implantable heart assist system into heart, percutaneous approach). 02WA4QZ (Insertion of implantable heart assist system into heart, percutaneous endoscopic approach). LVAD Exchange--existing LVAD is 37.63 (Repair of 215 02PA0QZ (Removal of 001 or 002 removed and replaced with either heart assist implantable heart new LVAD system or new LVAD pump. system). assist system from heart, open approach). 02PA3QZ (Removal of implantable heart assist system from heart, percutaneous approach). 02PA4QZ (Removal of implantable heart assist system from heart, percutaneous endoscopic approach) and. 02WA0QZ (Insertion of implantable heart assist system into heart, open approach). 02WA3QZ (Insertion of implantable heart assist system into heart, percutaneous approach). 02WA4QZ (Insertion of implantable heart assist system into heart, percutaneous endoscopic approach). LVAD revision and repair-- 37.63 (Repair of 215 02WA0QZ (Revision of 215 existing LVAD is adjusted or heart assist implantable heart repaired without removing the system). assist system in heart, existing LVAD device. open approach). 02WA3QZ (Revision of implantable heart assist system in heart, percutaneous approach). 02WA4QZ (Revision of implantable heart assist system in heart, percutaneous endoscopic approach). ---------------------------------------------------------------------------------------------------------------- The commenters noted that, for Pre-MDC MS-DRGs 001 and 002, the procedures involving the insertion of an implantable heart assist system, such as the insertion of a LVAD, and the procedures involving exchange of an LVAD (where an existing LVAD is removed and replaced with either a new LVAD or a new LVAD pump) demonstrate clinical similarities and utilize similar resources. Although the commenters recommended that CMS maintain the current logic under the Pre-MDC MS- DRGs 001 and 002, they also recommended that CMS continue to monitor the data in these MS-DRGs for future consideration of distinctions (for example, different approaches and evolving technologies) that may impact the clinical and resource use of patients undergoing procedures utilizing heart assist devices. The commenters also requested that coding guidance be issued for assignment of the correct ICD-10-PCS procedure codes describing LVAD exchanges to encourage accurate reporting of these procedures. We agree with the commenters that we should continue to monitor the data in Pre-MDC MS-DRGs 001 and 002 for future consideration of distinctions (for example, different approaches and evolving technologies) that may impact the clinical and resource use of patients undergoing procedures utilizing heart assist devices. In response to the request that coding guidance be issued for assignment of the correct ICD-10-PCS procedure codes describing LVAD exchanges to encourage accurate reporting of these procedures, as we noted in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38012), coding advice is issued independently from payment policy. We also noted that, historically, we have not provided coding advice in rulemaking with respect to policy (82 FR 38045). We collaborate with the American Hospital Association (AHA) through the Coding Clinic for ICD-10-CM and ICD-10-PCS to promote proper coding. We recommend that the requestor and other interested parties submit any questions pertaining to correct coding for these technologies to the AHA. In response to the public comments we received on this topic, we are providing the results of our claims analysis from the September 2017 update of the FY 2017 MedPAR file for cases in Pre-MDC MS-DRGs 001 and 002. Our findings are shown in the following table. MS-DRGs for Heart Transplant or Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001--All cases........................................... 1,993 35.6 $185,660 MS-DRG 002--All cases........................................... 179 18.3 99,635 ---------------------------------------------------------------------------------------------------------------- As shown in this table, for MS-DRG 001, there were a total of 1,993 cases with an average length of stay of 35.6 days and average costs of $185,660. For MS-DRG 002, there were a total of 179 cases with an average length of stay of 18.3 days and average costs of $99,635. We then examined claims data in Pre-MDC MS-DRGs 001 and 002 for cases that reported one of the three procedure codes identifying the implantation of a heart assist system such as the LVAD. Our findings are shown in the following table. [[Page 20181]] MS-DRGs for Heart Transplant or Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001--All cases........................................... 1,993 35.6 $185,660 MS-DRG 001--Cases with procedure code 02HA0QZ (Insertion of 1,260 35.5 206,663 implantable heart assist system into heart, open approach)..... MS-DRG 001--Cases with procedure code 02HA3QZ (Insertion of 1 8 33,889 implantable heart assist system into heart, percutaneous approach)...................................................... MS-DRG 001--Cases with procedure code 02HA4QZ (Insertion of 0 0 0 implantable heart assist system into heart, percutaneous endoscopic approach)........................................... MS-DRG 002--All cases........................................... 179 18.3 99,635 MS-DRG 002--Cases with procedure code 02HA0QZ (Insertion of 82 19.9 131,957 implantable heart assist system into heart, open approach)..... MS-DRG 002--Cases with procedure code 02HA3QZ (Insertion of 0 0 0 implantable heart assist system into heart, percutaneous approach)...................................................... MS-DRG 002--Cases with procedure code 02HA4QZ (Insertion of 0 0 0 implantable heart assist system into heart, percutaneous endoscopic approach)........................................... ---------------------------------------------------------------------------------------------------------------- As shown in this table, for MS-DRG 001, there were a total of 1,260 cases reporting procedure code 02HA0QZ (Insertion of implantable heart assist system into heart, open approach) with an average length of stay of 35.5 days and average costs of $206,663. There was one case that reported procedure code 02HA3QZ (Insertion of implantable heart assist system into heart, percutaneous approach) with an average length of stay of 8 days and average costs of $33,889. There were no cases reporting procedure code 02HA4QZ (Insertion of implantable heart assist system into heart, percutaneous endoscopic approach). For MS-DRG 002, there were a total of 82 cases reporting procedure code 02HA0QZ (Insertion of implantable heart assist system into heart, open approach) with an average length of stay of 19.9 days and average costs of $131,957. There were no cases reporting procedure codes 02HA3QZ (Insertion of implantable heart assist system into heart, percutaneous approach) or 02HA4QZ (Insertion of implantable heart assist system into heart, percutaneous endoscopic approach). We also examined the cases in MS-DRGs 001 and 002 that reported one of the possible 33 pairs of code combinations or clusters. Our findings are shown in the following 8 tables. The first table provides the total number of cases reporting a procedure code combination (or cluster) compared to all of the cases in the respective MS-DRG, followed by additional detailed tables showing the number of cases, average length of stay, and average costs for each specific code combination that was reported in the claims data. Heart Transplant or Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG 001 and 002 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001--All cases........................................... 1,993 35.6 $185,660 MS-DRG 001--Cases with a procedure code combination (cluster)... 149 28.4 179,607 MS-DRG 002--All cases........................................... 179 18.3 99,635 MS-DRG 002--Cases with a procedure code combination (cluster)... 6 3.8 57,343 ---------------------------------------------------------------------------------------------------------------- Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG 001 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA0RS (Insertion of 3 20.3 $121,919 biventricular short-term external heart assist system into heart, open approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)........ Cases with a procedure code combination of 02HA0RS (Insertion of 2 12 114,688 biventricular short-term external heart assist system into heart, open approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach) All cases reporting one or more of the above procedure code 5 17 119,027 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- [[Page 20182]] Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA0RZ (Insertion of 30 55.6 $351,995 short-term external heart assist system into heart, open approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)....................... Cases with a procedure code combination of 02HA0RZ (Insertion of 19 29.8 191,163 short-term external heart assist system into heart, open approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach)............... All cases reporting one or more of the above procedure code 49 45.6 289,632 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- MS-DRG 002 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA0RZ (Insertion of 1 4 48,212 short-term external heart assist system into heart, open approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)....................... Cases with a procedure code combination of 02HA0RZ (Insertion of 2 4.5 66,386 short-term external heart assist system into heart, open approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach)............... All cases reporting one or more of the above procedure code 3 4.3 60,328 combinations in MS-DRG 002..................................... All cases reporting one or more of the above procedure code 52 43.3 276,403 combinations across both MS-DRGs 001 and 002................... ---------------------------------------------------------------------------------------------------------------- Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA3RS (Insertion of 3 43.3 $233,330 biventricular short-term external heart assist system into heart, percutaneous approach) with 02PA0RZ (Removal of short- term external heart assist system from heart, open approach)... Cases with a procedure code combination of 02HA3RS (Insertion of 24 14.8 113,955 biventricular short-term external heart assist system into heart, percutaneous approach) with 02PA3RZ (Removal of short- term external heart assist system from heart, percutaneous approach)...................................................... Cases with a procedure code combination of 02HA3RS (Insertion of 1 44 153,284 biventricular short-term external heart assist system into heart, percutaneous approach) with 02PA4RZ (Removal of short- term external heart assist system from heart, percutaneous endoscopic approach)........................................... All cases reporting one or more of the above procedure code 28 18.9 128,150 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- MS-DRG 002 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA3RS (Insertion of 2 4 $30,954 biventricular short-term external heart assist system into heart, percutaneous approach) with 02PA3RZ (Removal of short- term external heart assist system from heart, percutaneous approach)...................................................... All cases reporting one of the above procedure code combinations 2 4 30,954 in MS-DRG 002.................................................. All cases reporting one or more of the above procedure code 30 17.9 121,670 combinations across both MS[dash]DRGs 001 and 002.............. ---------------------------------------------------------------------------------------------------------------- Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG 001 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02HA4RZ (Insertion of 4 17.3 $154,885 short-term external heart assist system into heart, percutaneous endoscopic approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach)......................................... Cases with a procedure code combination of 02HA4RZ (Insertion of 2 15.5 80,852 short-term external heart assist system into heart, open approach) with 02PA4RZ (Removal of short-term external heart assist system from heart, percutaneous endoscopic approach).... All cases reporting one or more of the above procedure code 6 16.7 130,207 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- [[Page 20183]] Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG 001 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02WA0QZ (Revision of 1 105 $516,557 implantable heart assist system in heart, open approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)..................................... ---------------------------------------------------------------------------------------------------------------- Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG 001 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02WA0RZ (Revision of 2 40 $285,818 short-term external heart assist system in heart, open approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)....................... Cases with a procedure code combination of 02WA0RZ (Revision of 1 43 372,673 short-term external heart assist system in heart, open approach) with 02PA03Z (Removal of short-term external heart assist system from heart, percutaneous approach)............... All cases reporting one or more of the above procedure code 3 41 314,770 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- Procedure Code Combinations for Implant of Heart Assist System ---------------------------------------------------------------------------------------------------------------- Number of Average length cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 001 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02WA3RZ (Revision of 2 24 $123,084 short-term external heart assist system in heart, percutaneous approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)....................... Cases with a procedure code combination of 02WA3RZ (Revision of 55 14.7 104,963 short-term external heart assist system in heart, percutaneous approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach)............... All cases reporting one or more of the above procedure code 57 15 105,599 combinations in MS-DRG 001..................................... ---------------------------------------------------------------------------------------------------------------- MS-DRG 002 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02WA3RZ (Revision of 1 2 101,168 short-term external heart assist system in heart, percutaneous approach) with 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach)............... All cases reporting one or more of the above procedure code 58 14.8 105,522 combinations across both MS-DRGs 001 and 002................... ---------------------------------------------------------------------------------------------------------------- MS-DRG 001 ---------------------------------------------------------------------------------------------------------------- Cases with a procedure code combination of 02WA4RZ (Revision of 1 10 112,698 short-term external heart assist system in heart, percutaneous endoscopic approach) with 02PA0RZ (Removal of short-term external heart assist system from heart, open approach)........ ---------------------------------------------------------------------------------------------------------------- We did not find any cases reporting the following procedure code combinations (clusters) in the claims data. ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- 02HA4RS.................. Insertion of with 02PA0RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, open assist system into approach. heart, percutaneous endoscopic approach. 02HA4RS.................. Insertion of with 02PA3RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous approach. heart, percutaneous endoscopic approach. 02HA4RS.................. Insertion of with 02PA4RZ................. Removal of short-term biventricular short- external heart assist term external heart system from heart, assist system into percutaneous endoscopic heart, percutaneous approach. endoscopic approach. 02WA3QZ.................. Revision of implantable with 02PA0RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, open approach. approach. 02WA3QZ.................. Revision of implantable with 02PA3RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, approach. percutaneous approach. [[Page 20184]] 02WA3QZ.................. Revision of implantable with 02PA4RZ................. Removal of short-term heart assist system in external heart assist heart, percutaneous system from heart, approach. percutaneous endoscopic approach. ---------------------------------------------------------------------------------------------------------------- The data show that there are differences in the average length of stay and average costs for cases in Pre-MDC MS-DRGs 001 and 002 according to the type of procedure (insertion, revision, or removal), the type of device (biventricular short-term external heart assist system, short-term external heart assist system or implantable heart assist system), and the approaches that were utilized (open, percutaneous, or percutaneous endoscopic). We agree with the commenters' recommendation to maintain the structure of Pre-MDC MS-DRGs 001 and 002 for FY 2019 and will continue to analyze the claims data. We are inviting public comments on our decision to maintain the current structure of Pre[dash]MDC MS-DRGs 001 and 002 for FY 2019. Commenters also suggested that CMS maintain the current logic for MS-DRG 215 (Other Heart Assist System Implant), but they recommended that CMS continue to monitor the data in MS-DRG 215 for future consideration of distinctions (for example, different approaches and evolving technologies) that may impact the clinical and resource use of procedures utilizing heart assist devices. We also received a request to review claims data for procedures involving extracorporeal membrane oxygenation (ECMO) in combination with the insertion of a percutaneous short-term external heart assist device to determine if the current MS- DRG assignment is appropriate. The logic for MS-DRG 215 is comprised of the procedure codes shown in the following table, for which we examined claims data in the September 2017 update of the FY 2017 MedPAR file in response to the commenters' requests. Our findings are shown in the following table. MS-DRG 215 [Other heart assist system implant] ---------------------------------------------------------------------------------------------------------------- Number of Average length cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- All cases....................................................... 3,428 8.7 $68,965 Cases with procedure code 02HA0RJ (Insertion of short-term 0 0 0 external heart assist system into heart, intraoperative, open approach)...................................................... Cases with procedure code 02HA0RS (Insertion of biventricular 9 10 118,361 short-term external heart assist system into heart, open approach)...................................................... Cases with procedure code 02HA0RZ (Insertion of short-term 66 11.5 99,107 external heart assist system into heart, open approach)........ Cases with procedure code 02HA3RJ (Insertion of short-term 0 0 0 external heart assist system into heart, intraoperative, percutaneous approach)......................................... Cases with procedure code 02HA3RS (Insertion of biventricular 117 7.2 64,302 short-term external heart assist system into heart, percutaneous approach)......................................... Cases with procedure code 02HA3RZ (Insertion of short-term 3,136 8.4 67,670 external heart assist system into heart, percutaneous approach) Cases with procedure code 02HA4RJ (Insertion of short-term 0 0 0 external heart assist system into heart, intraoperative, percutaneous endoscopic approach).............................. Cases with procedure code 02HA4RS (Insertion of biventricular 1 2 43,988 short-term external heart assist system into heart, percutaneous endoscopic approach).............................. Cases with procedure code 02HA4RZ (Insertion of short-term 31 5.3 57,042 external heart assist system into heart, percutaneous endoscopic approach)........................................... Cases with procedure code 02WA0JZ (Revision of synthetic 1 84 366,089 substitute in heart, open approach)............................ Cases with procedure code 02WA0QZ (Revision of implantable heart 56 25.1 123,410 assist system in heart, open approach)......................... Cases with procedure code 02WA0RS (Revision of biventricular 0 0 0 short-term external heart assist system in heart, open approach)...................................................... Cases with procedure code 02WA0RZ (Revision of short-term 8 13.5 99,378 external heart assist system in heart, open approach).......... Cases with procedure code 02WA3QZ (Revision of implantable heart 0 0 0 assist system in heart, percutaneous approach)................. Cases with procedure code 02WA3RS (Revision of biventricular 0 0 0 short-term external heart assist system in heart, percutaneous approach)...................................................... Cases with procedure code 02WA3RZ (Revision of short-term 80 10 71,077 external heart assist system in heart, percutaneous approach).. Cases with procedure code 02WA4QZ (Revision of implantable heart 0 0 0 assist system in heart, percutaneous endoscopic approach)...... Cases with procedure code 02WA4RS (Revision of biventricular 0 0 0 short-term external heart assist system in heart, percutaneous endoscopic approach)........................................... Cases with procedure code 02WA4RZ (Revision of short-term 0 0 0 external heart assist system in heart, percutaneous endoscopic approach)...................................................... ---------------------------------------------------------------------------------------------------------------- As shown in this table, for MS-DRG 215, we found a total of 3,428 cases with an average length of stay of 8.7 days and average costs of $68,965. For procedure codes describing the insertion of a biventricular short-term external heart [[Page 20185]] assist system with open, percutaneous or percutaneous endoscopic approaches, we found a total of 127 cases with an average length of stay ranging from 2 to 10 days and average costs ranging from $43,988 to $118,361. For procedure codes describing the insertion of a short- term external heart assist system with open, percutaneous or percutaneous endoscopic approaches, we found a total of 3,233 cases with an average length of stay ranging from 5.3 days to 11.5 days and average costs ranging from $57,042 to $99,107. For procedure codes describing the revision of a short-term external heart assist system with open or percutaneous approaches, we found a total of 88 cases with an average length of stay ranging from 10 to 13.5 days and average costs ranging from $71,077 to $99,378. We found 1 case reporting procedure code 02WA0JZ (Revision of synthetic substitute in heart, open approach), with an average length of stay of 84 days and average costs of $366,089. Lastly, we found 56 cases reporting procedure code 02WA0QZ (Revision of implantable heart assist system in heart, open approach) with an average length of stay of 25.1 days and average costs of $123,410. As the data show, there is a wide range in the average length of stay and the average costs for cases reporting procedures that involve a biventricular short-term external heart assist system versus a short- term external heart assist system. There is an even greater range in the average length of stay and the average costs when comparing the revision of a short-term external heart assist system to the revision of a synthetic substitute in the heart or to the revision an implantable heart assist system. We agree with the commenters that continued monitoring of the data and further analysis is necessary prior to proposing any modifications to MS-DRG 215. As stated in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38012), we are aware that the AHA published Coding Clinic advice that clarified coding and reporting for certain external heart assist devices due to the technology being approved for new indications. The current claims data do not yet reflect that updated guidance. We also note that there have been recent updates to the descriptions of the codes for heart assist devices in the past year. For example, the qualifier ``intraoperative'' was added effective October 1, 2017 (FY 2018) to the procedure codes describing the insertion of short-term external heart assist system procedures to distinguish between procedures where the device was only used intraoperatively and was removed at the conclusion of the procedure versus procedures where the device was not removed at the conclusion of the procedure and for which that qualifier would not be reported. The current claims data do not yet reflect these new procedure codes, which are displayed in the following table and are assigned to MS-DRG 215. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 02HA0RJ................... Insertion of short-term external heart assist system into heart, intraoperative, open approach. 02HA3RJ................... Insertion of short-term external heart assist system into heart, intraoperative, percutaneous approach. 02HA4RJ................... Insertion of short-term external heart assist system into heart, intraoperative, percutaneous endoscopic approach. ------------------------------------------------------------------------ Our clinical advisors agree that additional claims data are needed for analysis prior to proposing any changes to MS-DRG 215. Therefore, we are proposing not to make any modifications to MS-DRG 215 for FY 2019. We are inviting public comments on our proposal. As stated earlier in this section, we also received a request to review cases reporting the use of ECMO in combination with the insertion of a percutaneous short[dash]term external heart assist device. Under ICD-10-PCS, ECMO is identified with procedure code 5A15223 (Extracorporeal membrane oxygenation, continuous) and the insertion of a percutaneous short-term external heart assist device is identified with procedure code 02HA3RZ (Insertion of short-term external heart assist system into heart, percutaneous approach). According to the commenter, when ECMO procedures are performed percutaneously, they are less invasive and less expensive than traditional ECMO. The commenter also noted that, currently under ICD- 10-PCS, there is not a specific procedure code to identify percutaneous ECMO, and providers are only able to report ICD-10-PCS procedure code 5A15223, which may be inappropriately resulting in a higher paying MS- DRG. Therefore, the commenter submitted a separate request to create a new ICD-10-PCS procedure code specifically for percutaneous ECMO which was discussed at the March 6-7, 2018 ICD-10 Coordination and Maintenance Committee Meeting. We refer readers to section II.F.18. of the preamble of this proposed rule for further information regarding this meeting and the discussion for a new procedure code. The requestor suggested that cases reporting a procedure code for ECMO in combination with the insertion of a percutaneous short-term external heart assist device could be reassigned from Pre-MDC MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedure) to MS-DRG 215. Our analysis involved examining cases in Pre- MDC MS-DRG 003 in the September 2017 update of the FY 2017 MedPAR file for cases reporting ECMO with and without the insertion of a percutaneous short-term external heart assist device. Our findings are shown in the following table. ECMO and Percutaneous Short-Term External Heart Assist Device ---------------------------------------------------------------------------------------------------------------- Number of Average length Pre-MDC MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 003--All cases........................................... 14,383 29.5 $118,218 MS-DRG 003--Cases with procedure code 5A15223 (Extracorporeal 1,786 19 119,340 membrane oxygenation, continuous).............................. MS-DRG 003--Cases with procedure code 5A15223 (Extracorporeal 94 11.4 110,874 membrane oxygenation, continuous) and 02HA3RZ (Insertion of short-term external heart assist system into heart, percutaneous approach)......................................... [[Page 20186]] MS-DRG 003--Cases with procedure code 5A15223 (Extracorporeal 1 1 64,319 membrane oxygenation, continuous) and 02HA4RZ (Insertion of short-term external heart assist system into heart, percutaneous endoscopic approach).............................. ---------------------------------------------------------------------------------------------------------------- As shown in this table, we found a total of 14,383 cases with an average length of stay of 29.5 days and average costs of $118,218 in Pre-MDC MS-DRG 003. We found 1,786 cases reporting procedure code 5A15223 (Extracorporeal membrane oxygenation, continuous) with an average length of stay of 19 days and average costs of $119,340. We found 94 cases reporting procedure code 5A15223 and 02HA3RZ (Insertion of short-term external heart assist system into heart, percutaneous approach) with an average length of stay of 11.4 days and average costs of $110,874. Lastly, we found 1 case reporting procedure code 5A15223 and 02HA4RZ (Insertion of short-term external heart assist system into heart, percutaneous endoscopic approach) with an average length of stay of 1 day and average costs of $64,319. We also reviewed the cases in MS-DRG 215 for procedure codes 02HA3RZ and 02HA4RZ. Our findings are shown in the following table. Percutaneous Short-Term External Heart Assist Device ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 215--All cases........................................... 3,428 8.7 $68,965 MS-DRG 215--Cases with procedure code 02HA3RZ (Insertion of 3,136 8.4 67,670 short-term external heart assist system into heart, percutaneous approach)......................................... MS-DRG 215--Cases with procedure code 02HA4RZ (Insertion of 31 5.3 57,042 short-term external heart assist system into heart, percutaneous endoscopic approach).............................. ---------------------------------------------------------------------------------------------------------------- As shown in this table, we found a total of 3,428 cases with an average length of stay of 8.7 days and average costs of $68,965. We found a total of 3,136 cases reporting procedure code 02HA3RZ with an average length of stay of 8.4 days and average costs of $67,670. We found a total of 31 cases reporting procedure code 02HA4RZ with an average length of stay of 5.3 days and average costs of $57,042. For Pre-MDC MS-DRG 003, while the average length of stay and average costs for cases where procedure code 5A15223 was reported with procedure code 02HA3RZ or procedure code 02HA4RZ are lower than the average length of stay and average costs for cases where procedure code 5A15223 was reported alone, we are unable to determine from the data if those ECMO procedures were performed percutaneously in the absence of a unique code. In addition, the one case reporting procedure code 5A15223 with 02HA4RZ only had a 1 day length of stay and it is unclear from the data what the circumstances of that case may have involved. For example, the patient may have been transferred or may have expired. Therefore, we are proposing to not reassign cases reporting procedure code 5A15223 when reported with procedure code 02HA3RZ or procedure code 02HA4RZ for FY 2019. Our clinical advisors agree that until there is a way to specifically identify percutaneous ECMO in the claims data to enable further analysis, a proposal at this time is not warranted. We are inviting public comments on our proposal. A commenter also suggested that CMS maintain the current logic for MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with and without MCC, respectively), but recommended that CMS continue to monitor the data in these MS-DRGs for future consideration of distinctions (for example, different approaches and evolving technologies) that may impact the clinical and resource use of procedures involving heart assist devices. The logic for heart assist system devices in MS-DRGs 268 and 269 is comprised of the procedure codes shown in the following table, for which we examined claims data in the September 2017 update of the FY 2017 MedPAR file in response to the commenter's request. Our findings are shown in the following table. MS-DRGs for Aortic and Heart Assist Procedures Except Pulsation Balloon ---------------------------------------------------------------------------------------------------------------- Number of Average length cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 268--All cases........................................... 3,798 9.6 $49,122 MS-DRG 268--Cases with procedure code 02PA0QZ (Removal of 16 23.4 79,850 implantable heart assist system from heart, open approach)..... MS-DRG 268--Cases with procedure code 02PA0RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, open approach).......................................... MS-DRG 268--Cases with procedure code 02PA0RZ (Removal of short- 0 0 0 term external heart assist system from heart, open approach)... MS-DRG 268--Cases with procedure code 02PA3QZ (Removal of 28 10.5 31,797 implantable heart assist system from heart, percutaneous approach)...................................................... [[Page 20187]] MS-DRG 268--Cases with procedure code 02PA3RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, percutaneous approach).................................. MS-DRG 268--Cases with procedure code 02PA3RZ (Removal of short- 96 12.4 51,469 term external heart assist system from heart, percutaneous approach)...................................................... MS-DRG 268--Cases with procedure code 02PA4QZ (Removal of 5 7.8 37,592 implantable heart assist system from heart, percutaneous endoscopic approach)........................................... MS-DRG 268--Cases with procedure code 02PA4RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, percutaneous endoscopic approach)....................... MS-DRG 268--Cases with procedure code 02PA4RZ (Removal of short- 0 0 0 term external heart assist system from heart, percutaneous endoscopic approach)........................................... MS-DRG 269--All cases........................................... 16,900 2.4 30,793 MS-DRG 269--Cases with procedure code 02PA0QZ (Removal of 10 8 23,741 implantable heart assist system from heart, open approach)..... MS-DRG 269--Cases with procedure code 02PA0RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, open approach).......................................... MS-DRG 269--Cases with procedure code 02PA0RZ (Removal of short- 0 0 0 term external heart assist system from heart, open approach)... MS-DRG 269--Cases with procedure code 02PA3QZ (Removal of 6 5 19,421 implantable heart assist system from heart, percutaneous approach)...................................................... MS-DRG 269--Cases with procedure code 02PA3RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, percutaneous approach).................................. MS-DRG 269--Cases with procedure code 02PA3RZ (Removal of short- 11 4 25,719 term external heart assist system from heart, percutaneous approach)...................................................... MS-DRG 269--Cases with procedure code 02PA4QZ (Removal of 1 3 14,415 implantable heart assist system from heart, percutaneous endoscopic approach)........................................... MS-DRG 269--Cases with procedure code 02PA4RS (Removal of 0 0 0 biventricular short-term external heart assist system from heart, percutaneous endoscopic approach)....................... MS-DRG 269--Cases with procedure code 02PA4RZ (Removal of short- 0 0 0 term external heart assist system from heart, percutaneous endoscopic approach)........................................... ---------------------------------------------------------------------------------------------------------------- As shown in this table, for MS-DRG 268, there were a total of 3,798 cases, with an average length of stay of 9.6 days and average costs of $49,122. There were 16 cases reporting procedure code 02PA0QZ (Removal of implantable heart assist system from heart, open approach), with an average length of stay of 23.4 days and average costs of $79,850. There were no cases that reported procedure codes 02PA0RS (Removal of biventricular short-term external heart assist system from heart, open approach), 02PA0RZ (Removal of short-term external heart assist system from heart, open approach), 02PA3RS (Removal of biventricular short- term external heart assist system from heart, percutaneous approach), 02PA4RS (Removal of biventricular short-term external heart assist system from heart, percutaneous endoscopic approach) or 02PA4RZ (Removal of short-term external heart assist system from heart, percutaneous endoscopic approach). There were 28 cases reporting procedure code 02PA3QZ (Removal of implantable heart assist system from heart, percutaneous approach), with an average length of stay of 10.5 days and average costs of $31,797. There were 96 cases reporting procedure code 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach), with an average length of stay of 12.4 days and average costs of $51,469. There were 5 cases reporting procedure code 02PA4QZ (Removal of implantable heart assist system from heart, percutaneous endoscopic approach), with an average length of stay of 7.8 days and average costs of $37,592. For MS-DRG 269, there were a total of 16,900 cases, with an average length of stay of 2.4 days and average costs of $30,793. There were 10 cases reporting procedure code 02PA0QZ (Removal of implantable heart assist system from heart, open approach), with an average length of stay of 8 days and average costs of $23,741. There were no cases reporting procedure codes 02PA0RS (Removal of biventricular short-term external heart assist system from heart, open approach), 02PA0RZ (Removal of short-term external heart assist system from heart, open approach), 02PA3RS (Removal of biventricular short-term external heart assist system from heart, percutaneous approach), 02PA4RS (Removal of biventricular short- term external heart assist system from heart, percutaneous endoscopic approach) or 02PA4RZ (Removal of short-term external heart assist system from heart, percutaneous endoscopic approach). There were 6 cases reporting procedure code 02PA3QZ (Removal of implantable heart assist system from heart, percutaneous approach), with an average length of stay of 5 days and average costs of $19,421. There were 11 cases reporting procedure code 02PA3RZ (Removal of short-term external heart assist system from heart, percutaneous approach), with an average length of stay of 4 days and average costs of $25,719. There was 1 case reporting procedure code 02PA4QZ (Removal of implantable heart assist system from heart, percutaneous endoscopic approach), with an average length of stay of 3 days and average costs of $14,415. The data show that there are differences in the average length of stay and average costs for cases in MS-DRGs 268 and 269 according to the type of device (short-term external heart assist system or implantable heart assist system), and the approaches that were utilized (open, percutaneous, or percutaneous endoscopic). We agree with the recommendation to maintain the structure of MS-DRGs 268 and 269 for FY 2019 and will continue to analyze the claims data for possible future updates. As such, we are proposing to not make any changes to the structure of MS-DRGs 268 and 269 [[Page 20188]] for FY 2019. We are inviting public comments on our proposal. b. Brachytherapy We received a request to create a new Pre-MDC MS-DRG for all procedures involving the CivaSheet[reg] technology, an implantable, planar brachytherapy source designed to enable delivery of radiation to the site of the cancer tumor excision or debulking, while protecting neighboring tissue. The requestor stated that physicians have used the CivaSheet[reg] technology for a number of indications, such as colorectal, gynecological, head and neck, soft tissue sarcomas and pancreatic cancer. The requestor noted that potential uses also include nonsmall-cell lung cancer, ocular melanoma, and atypical meningioma. Currently, procedures involving the CivaSheet[reg] technology are reported using ICD-10-PCS Section D--Radiation Therapy codes, with the root operation ``Brachytherapy.'' These codes are non-O.R. codes and group to the MS-DRG to which the principal diagnosis is assigned. In response to this request, we have analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for cases representing patients who received treatment that reported low dose rate (LDR) brachytherapy procedure codes across all MS-DRGs. We refer readers to Table 6P.--ICD-10-CM and ICD-10-PCS Codes for Proposed MS-DRG Changes associated with this proposed rule, which is available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. A detailed list of these procedure codes are shown in Table 6P.1. Our findings are reflected in the following table. Cases Reporting Low Dose Rate (LDR) Brachytherapy Procedure Codes Across All MS-DRGs ---------------------------------------------------------------------------------------------------------------- Number of Average length ICD-10-PCS procedures cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 129 (Major Head and Neck Procedures with CC/MCC or Major 1 7 $10,357 Device)--Cases with procedure code D710BBZ (Low dose rate (LDR) brachytherapy of bone marrow using Palladium[dash]103 (Pd-103)) MS-DRG 724 (Malignancy, Male Reproductive System without CC/ 1 7 32,298 MCC)--Cases with procedure code DV10BBZ (Low dose rate (LDR) brachytherapy of prostate using Palladium[dash]103 (Pd-103))... MS-DRG 129--Cases with procedure code DW11BBZ (Low dose rate 1 3 42,565 (LDR) brachytherapy of head and neck using Palladium[dash]103 (Pd-103))...................................................... MS-DRG 330 (Major Small and Large Bowel Procedures with CC)-- 1 8 74,190 Cases with procedure code DW16BBZ (Low dose rate (LDR) brachytherapy of pelvic region using Palladium[dash]103 (Pd- 103)).......................................................... ---------------------------------------------------------------------------------------------------------------- As shown in the immediately preceding table, we identified 4 cases reporting one of these LDR brachytherapy procedure codes across all MS- DRGs, with an average length of stay of 6.3 days and average costs of $39,853. We believe that creating a new Pre-MDC MS-DRG based on such a small number of cases could lead to distortion in the relative payment weights for the Pre-MDC MS-DRG. Having a larger number of clinically cohesive cases within the Pre-MDC MS-DRG provides greater stability for annual updates to the relative payment weights. Therefore, we are not proposing to create a new Pre-MDC MS-DRG for procedures involving the CivaSheet[reg] technology for FY 2019. We are inviting public comments on our proposal to maintain the current MS[dash]DRG structure for procedures involving the CivaSheet[reg] technology. c. Laryngectomy The logic for case assignment to Pre-MDC MS-DRGs 11, 12, and 13 (Tracheostomy for Face, Mouth and Neck Diagnoses with MCC, with CC, and without CC/MCC, respectively) as displayed in the ICD-10 MS-DRG Version 35 Definitions Manual, which is available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page-Items/FY2018-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending, is comprised of a list of procedure codes for laryngectomies, a list of procedure codes for tracheostomies, and a list of diagnosis codes for conditions involving the face, mouth, and neck. The procedure codes for laryngectomies are listed separately and are reported differently from the procedure codes listed for tracheostomies. The procedure codes listed for tracheostomies must be reported with a diagnosis code involving the face, mouth, or neck as a principal diagnosis to satisfy the logic for assignment to Pre-MDC MS-DRG 11, 12, or 13. Alternatively, any principal diagnosis code reported with a procedure code from the list of procedure codes for laryngectomies will satisfy the logic for assignment to Pre[dash]MDC MS-DRG 11, 12, or 13. To improve the manner in which the logic for assignment is displayed in the ICD-10 MS-DRG Definitions Manual and to clarify how it is applied for grouping purposes, we are proposing to reorder the lists of the diagnosis and procedure codes. The list of principal diagnosis codes for face, mouth, and neck would be sequenced first, followed by the list of the tracheostomy procedure codes and, lastly, the list of laryngectomy procedure codes. We also are proposing to revise the titles of Pre-MDC MS-DRGs 11, 12, and 13 from ``Tracheostomy for Face, Mouth and Neck Diagnoses with MCC, with CC and without CC/MCC, respectively'' to ``Tracheostomy for Face, Mouth and Neck Diagnoses or Laryngectomy with MCC'', ``Tracheostomy for Face, Mouth and Neck Diagnoses or Laryngectomy with CC'', and ``Tracheostomy for Face, Mouth and Neck Diagnoses or Laryngectomy without CC/MCC'', respectively, to reflect that laryngectomy procedures may also be assigned to these MS-DRGs. We are inviting public comments on our proposals. d. Chimeric Antigen Receptor (CAR) T-Cell Therapy Chimeric Antigen Receptor (CAR) T-cell therapy is a cell-based gene therapy in which a patient's own T-cells are genetically engineered in a laboratory and used to assist in the patient's treatment to attack certain cancerous cells. Blood is drawn from the patient and the T- cells are separated. The laboratory then utilizes the CAR process to genetically engineer the T[dash]cells, [[Page 20189]] resulting in the addition of a chimeric antigen receptor that will bind to a certain protein on the patient's cancerous cells. The CAR T[dash]cells are then administered to the patient by infusion. Two CAR T[dash]cell therapy drugs received FDA approval in 2017. KYMRIAHTM (manufactured by Novartis Pharmaceuticals Corporation) was approved for the use in the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse. YESCARTATM (manufactured by Kite Pharma, Inc.) was approved for use in the treatment of adult patients with relapsed or refractory large B-cell lymphoma and who have not responded to or who have relapsed after at least two other kinds of treatment. Procedures involving the CAR T[dash]cell therapy drugs are currently identified with ICD-10-PCS procedure codes XW033C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3) and XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3), which both became effective October 1, 2017. Procedures described by these two ICD-10-PCS procedure codes are designated as non-O.R. procedures that have no impact on MS-DRG assignment. We have received many inquiries from the public regarding payment of CAR T[dash]cell therapy under the IPPS. Suggestions for the MS-DRG assignment for FY 2019 ranged from assigning ICD-10-PCS procedure codes XW033C3 and XW043C3 to an existing MS-DRG to the creation of a new MS- DRG for CAR T[dash]cell therapy. In the context of the recommendation to create a new MS-DRG for FY 2019, we also received suggestions that payment should be established in a way that promotes comparability between the inpatient setting and outpatient setting. As part of our review of these suggestions, we examined the existing MS-DRGs to identify the MS-DRGs that represent cases most clinically similar to those cases in which the CAR T[dash]cell therapy procedures would be reported. The CAR T-cell procedures involve a type of autologous immunotherapy in which the patient's cells are genetically transformed and then returned to that patient after the patient undergoes cell depleting chemotherapy. Our clinical advisors believe that patients receiving treatment utilizing CAR T-cell therapy procedures would have similar clinical characteristics and comorbidities to those seen in cases representing patients receiving treatment for other hematopoietic carcinomas who are treated with autologous bone marrow transplant therapy that are currently assigned to MS-DRG 016 (Autologous Bone Marrow Transplant with CC/MCC). Therefore, after consideration of the inquiries received as to how the IPPS can appropriately group cases reporting the use of CAR T-cell therapy, we are proposing to assign ICD-10-PCS procedure codes XW033C3 and XW043C3 to Pre[dash]MDC MS-DRG 016 for FY 2019. In addition, we are proposing to revise the title of MS-DRG 016 from ``Autologous Bone Marrow Transplant with CC/MCC'' to ``Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.'' However, we note that, as discussed in greater detail in section II.H.5.a. of the preamble of this proposed rule, the manufacturer of KYMRIAHTM and the manufacturer of YESCARTATM submitted applications for new technology add-on payments for FY 2019. We also recognize that many members of the public have noted that the combination of the new technology add-on payment applications, the extremely high[dash]cost of these CAR T-cell therapy drugs, and the potential for volume increases over time present unique challenges with respect to the MS-DRG assignment for procedures involving the utilization of CAR T-cell therapy drugs and cases representing patients receiving treatment involving CAR T-cell therapy. We believe that, in the context of these pending new technology add-on payment applications, there may also be merit in the alternative suggestion we received to create a new MS-DRG for procedures involving the utilization of CAR T-cell therapy drugs and cases representing patients receiving treatment involving CAR T-cell therapy to which we could assign ICD-10-PCS procedure codes XW033C3 and XW043C3, effective for discharges occurring in FY 2019. As noted in section II.H.5.a. of the preamble of this proposed rule, if a new MS-DRG were to be created then consistent with section 1886(d)(5)(K)(ix) of the Act there may no longer be a need for a new technology add-on payment under section 1886(d)(5)(K)(ii)(III) of the Act. We are inviting public comments on our proposed approach of assigning ICD-10-PCS procedure codes XW033C3 and XW043C3 to Pre-MDC MS- DRG 016 for FY 2019. We also are inviting public comments on alternative approaches, including in the context of the pending KYMRIAHTM and YESCARTATM new technology add-on payment applications, and the most appropriate way to establish payment for FY 2019 under any alternative approaches. Such payment alternatives may include using a CCR of 1.0 for charges associated with ICD-10-PCS procedure codes XW033C3 and XW043C3, given that many public inquirers believed that hospitals would be unlikely to set charges different from the costs for KYMRIAHTM and YESCARTATM CAR T-cell therapy drugs, as discussed further in section II.A.4.g.2. of the Addendum of this proposed rule. These payment alternatives, including payment under any potential new MS-DRG, also could take into account an appropriate portion of the average sales price (ASP) for these drugs, including in the context of the pending new technology add-on payment applications. We are inviting comments on how these payment alternatives would affect access to care, as well as how they affect incentives to encourage lower drug prices, which is a high priority for this Administration. In addition, we are considering approaches and authorities to encourage value-based care and lower drug prices. We solicit comments on how the payment methodology alternatives may intersect and affect future participation in any such alternative approaches. As stated in section II.F.1.b. of the preamble of this proposed rule, we described the criteria used to establish new MS-DRGs. In particular, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients in the MS-DRG. We evaluate patient care costs using average costs and lengths of stay and rely on the judgment of our clinical advisors to decide whether patients are clinically distinct or similar to other patients in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs between the cases we select for review and the remainder of cases in the MS-DRG. We also consider whether observed average differences are consistent across patients or attributable to cases that were extreme in terms of costs or length of stay, or both. Further, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases. Based on the principles typically used to establish a new MS-DRG, we are soliciting comments on how the administration of the CAR T-cell [[Page 20190]] therapy drugs and associated services meet the criteria for the creation of a new MS-DRG. Also, section 1886(d)(4)(C)(iii) of the Act specifies that, beginning in FY 1991, the annual DRG reclassification and recalibration of the relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected. Given that a new MS-DRG must be established in a budget neutral manner, we are concerned with the redistributive effects away from core hospital services over time toward specialized hospitals and how that may affect payment for these core services. Therefore, we are soliciting public comments on our concerns with the payment alternatives that we are considering for CAR T-cell therapy drugs and therapies. 3. MDC 1 (Diseases and Disorders of the Nervous System) a. Epilepsy With Neurostimulator In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38015 through 38019), based on a request we received and our review of the claims data, the advice of our clinical advisors, and consideration of public comments, we finalized our proposal to reassign all cases reporting a principal diagnosis of epilepsy and one of the following ICD-10-PCS code combinations, which capture cases involving neurostimulator generators inserted into the skull (including cases involving the use of the RNS(copyright) neurostimulator), to retitled MS-DRG 023 (Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator), even if there is no MCC reported: 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach); 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H03MZ (Insertion of neurostimulator lead into brain, percutaneous approach); and 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H04MZ (Insertion of neurostimulator lead into brain, percutaneous endoscopic approach). The finalized listing of epilepsy diagnosis codes (82 FR 38018 through 38019) contained codes provided by the requestor (82 FR 38016), in addition to diagnosis codes organized in subcategories G40.A- and G40.B- as recommended by a commenter in response to the proposed rule (82 FR 38018) because the diagnosis codes organized in these subcategories also are representative of diagnoses of epilepsy. For FY 2019, we received a request to include two additional diagnosis codes organized in subcategory G40.1- in the listing of epilepsy diagnosis codes for cases assigned to MS-DRG 023 because these diagnosis codes also represent diagnoses of epilepsy. The two additional codes identified by the requestor are: G40.109 (Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with simple partial seizures, not intractable, without status epilepticus); and G40.111 (Localization-related (focal) (partial) symptomatic epilepsy and epileptic syndromes with simple partial seizures, intractable, with status epilepticus). We agree with the requestor that diagnosis codes G40.109 and G40.111 also are representative of epilepsy diagnoses and should be added to the listing of epilepsy diagnosis codes for cases assigned to MS-DRG 023 because they also capture a type of epilepsy. Our clinical advisors reviewed this issue and agree that adding the two additional epilepsy diagnosis codes is appropriate. Therefore, we are proposing to add ICD-10-CM diagnosis codes G40.109 and G40.111 to the listing of epilepsy diagnosis codes for cases assigned to MS-DRG 023, effective October 1, 2018. We are inviting public comments on our proposal. b. Neurological Conditions With Mechanical Ventilation We received two separate, but related requests to create new MS- DRGs for cases that identify patients who have been diagnosed with neurological conditions classified under MDC 1 (Diseases and Disorders of the Nervous System) and who require mechanical ventilation with and without a thrombolytic and in the absence of an O.R. procedure. The requestors suggested that CMS consider when mechanical ventilation is reported with a neurological condition for the ICD-10 MS-DRG GROUPER assignment logic, similar to the current logic for MS-DRGs 207 and 208 (Respiratory System Diagnosis with Ventilator Support >96 Hours and <=96 Hours, respectively) under MDC 4 (Diseases and Disorders of the Respiratory System), which consider respiratory conditions that require mechanical ventilation and are assigned a higher relative weight. The requestors stated that patients with a principal diagnosis of respiratory failure requiring mechanical ventilation are currently assigned to MS-DRG 207 (Respiratory System Diagnoses with Ventilator Support >96 Hours), which has a relative weight of 5.4845, and to MS- DRG 208 (Respiratory System Diagnoses with Ventilator Support <=96 Hours), which has a relative weight of 2.3678. The requestors also stated that patients with a principal diagnosis of ischemic cerebral infarction who received a thrombolytic agent during the hospital stay and did not undergo an O.R. procedure are assigned to MS-DRGs 061, 062, and 063 (Ischemic Stroke, Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent with MCC, with CC, and without CC/MCC, respectively) under MDC 1, while patients with a principal diagnosis of intracranial hemorrhage or ischemic cerebral infarction who did not receive a thrombolytic agent during the hospital stay and did not undergo an O.R. procedure are assigned to MS-DRGs 064, 065 and 66 (Intracranial Hemorrhage or Cerebral Infarction with MCC, with CC or TPA in 24 Hours, and without CC/MCC, respectively) under MDC 1. The requestors provided the current FY 2018 relative weights for these MS-DRGs as shown in the following table. ------------------------------------------------------------------------ Relative MS-DRG MS-DRG title weight ------------------------------------------------------------------------ MS-DRG 061.................. Ischemic Stroke, 2.7979 Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent with MCC. MS-DRG 062.................. Ischemic Stroke, l.9321 Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent with CC. MS-DRG 063.................. Ischemic Stroke, l.6169 Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent without CC/MCC. MS-DRG 064.................. Intracranial Hemorrhage or l.7685 Cerebral Infarction with MCC. MS-DRG 065.................. Intracranial Hemorrhage or 1.0311 Cerebral Infarction with CC or TPA in 24 hours. MS-DRG 066.................. Intracranial Hemorrhage or .7466 Cerebral Infarction with MCC. ------------------------------------------------------------------------ [[Page 20191]] The requestors stated that although the ICD-10-CM Official Guidelines for Coding and Reporting allow sequencing of acute respiratory failure as the principal diagnosis when it is jointly responsible (with an acute neurologic event) for admission, which would result in assignment to MS-DRGs 207 or 208 when the patient requires mechanical ventilation, it would not be appropriate to sequence acute respiratory failure as the principal diagnosis when it is secondary to intracranial hemorrhage or ischemic cerebral infarction. The requestors also stated that reporting for other purposes, such as quality measures, clinical trials, and Joint Commission and State certification or survey cases, is based on the principal diagnosis, and it is important, from a quality of care perspective, that the intracranial hemorrhage or cerebral infarction codes continue to be sequenced as principal diagnosis. The requestors believed that cases of patients who present with cerebral infarction or cerebral hemorrhage and acute respiratory failure are currently in conflict for principal diagnosis sequencing because the cerebral infarction or cerebral hemorrhage code is needed as the principal diagnosis for quality reporting and other purposes. However, acute respiratory failure is needed as the principal diagnosis for purposes of appropriate payment under the MS-DRGs. The requestors stated that by creating new MS-DRGs for neurological conditions with mechanical ventilation, those patients who require mechanical ventilation for airway protection on admission and those patients who develop acute respiratory failure requiring mechanical ventilation after admission can be grouped to MS-DRGs that provide appropriate payment for the mechanical ventilation resources. The requestors suggested two new MS-DRGs, citing as support that new MS- DRGs were created for patients with sepsis requiring mechanical ventilation greater than and less than 96 hours. As discussed earlier in this section, the requests we received were separate, but related requests. The first request was to specifically identify patients presenting with intracranial hemorrhage or cerebral infarction with mechanical ventilation and create two new MS-DRGs as follows: Suggested new MS-DRG XXX (Intracranial Hemorrhage or Cerebral Infarction with Mechanical Ventilation >96 Hours); and Suggested new MS-DRG XXX (Intracranial Hemorrhage or Cerebral Infarction with Mechanical Ventilation <=96 Hours). The second request was to consider any principal diagnosis under the current GROUPER logic for MDC 1 with mechanical ventilation and create two new MS-DRGs as follows: Suggested New MS-DRG XXX (Neurological System Diagnosis with Mechanical Ventilation 96+ Hours); and Suggested New MS-DRG XXX (Neurological System Diagnosis with Mechanical Ventilation <=96 Hours). Both requesters suggested that CMS use the three ICD-10-PCS codes identifying mechanical ventilation to assign cases to the respective suggested new MS-DRGs. The three ICD-10-PCS codes are shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 5A1935Z............................. Respiratory ventilation, less than 96 consecutive hours. 5A1945Z............................. Respiratory ventilation, 24-96 consecutive hours. 5A1955Z............................. Respiratory ventilation, greater than 96 consecutive hours. ------------------------------------------------------------------------ Below we discuss the different aspects of each request in more detail. The first request involved two aspects: (1) Analyzing patients diagnosed with cerebral infarction and required mechanical ventilation who received a thrombolytic (for example, TPA) and did not undergo an O.R. procedure; and (2) analyzing patients diagnosed with intracranial hemorrhage or ischemic cerebral infarction and required mechanical ventilation who did not receive a thrombolytic (for example, TPA) during the current episode of care and did not undergo an O.R. procedure. For the first subset of patients, we analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for MS-DRGs 061, 062, and 063 because cases that are assigned to these MS-DRGs specifically identify patients who were diagnosed with a cerebral infarction and received a thrombolytic. The 90 ICD-10-CM diagnosis codes that specify a cerebral infarction and were included in our analysis are listed in Table 6P.1a associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). The ICD-10-PCS procedure codes displayed in the following table describe use of a thrombolytic agent. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 3E03017............................. Introduction of other thrombolytic into peripheral vein, open approach. 3E03317............................. Introduction of other thrombolytic into peripheral vein, percutaneous approach. 3E04017............................. Introduction of other thrombolytic into central vein, open approach. 3E04317............................. Introduction of other thrombolytic into central vein, percutaneous approach. 3E05017............................. Introduction of other thrombolytic into peripheral artery, open approach. 3E05317............................. Introduction of other thrombolytic into peripheral artery, percutaneous approach. 3E06017............................. Introduction of other thrombolytic into central artery, open approach. 3E06317............................. Introduction of other thrombolytic into central artery, percutaneous approach. 3E08017............................. Introduction of other thrombolytic into heart, open approach. 3E08317............................. Introduction of other thrombolytic into heart, percutaneous approach. ------------------------------------------------------------------------ We examined claims data in MS-DRGs 061, 062, and 063 and identified cases that reported mechanical ventilation of any duration with a principal diagnosis of cerebral infarction where a thrombolytic agent was administered and the patient did not undergo an O.R. procedure. Our [[Page 20192]] findings are shown in the following table. Cerebral Infarction With Thrombolytic and MV ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 061--All cases........................................... 5,192 6.4 $20,097 MS-DRG 061--Cases with principal diagnosis of cerebral 166 12.8 41,691 infarction and mechanical ventilation >96 hours................ MS-DRG 061--Cases with principal diagnosis of cerebral 378 7.5 26,368 infarction and mechanical ventilation =24-96 hours............. MS-DRG 061--Cases with principal diagnosis of cerebral 214 4.9 19,795 infarction and mechanical ventilation <24 hours................ MS-DRG 062--All cases........................................... 9,730 3.9 13,865 MS-DRG 062--Cases with principal diagnosis of cerebral 0 0.0 0 infarction and mechanical ventilation >96 hours................ MS-DRG 062--Cases with principal diagnosis of cerebral 10 5.3 19,817 infarction and mechanical ventilation =24-96 hours............. MS-DRG 062--Cases with principal diagnosis of cerebral 23 3.8 14,026 infarction and mechanical ventilation <24 hours................ MS-DRG 063--All cases........................................... 1,984 2.7 11,771 MS-DRG 063--Cases with principal diagnosis of cerebral 0 0.0 0 infarction and mechanical ventilation >96 hours................ MS-DRG 063--Cases with principal diagnosis of cerebral 3 2.7 14,588 infarction and mechanical ventilation =24-96 hours............. MS-DRG 063--Cases with principal diagnosis of cerebral 5 2.0 11,195 infarction and mechanical ventilation <24 hours................ ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 5,192 cases in MS-DRG 061 with an average length of stay of 6.4 days and average costs of $20,097. There were a total of 758 cases reporting the use of mechanical ventilation in MS-DRG 061 with an average length of stay ranging from 4.9 days to 12.8 days and average costs ranging from $19,795 to $41,691. For MS-DRG 062, there were a total of 9,730 cases with an average length of stay of 3.9 days and average costs of $13,865. There were a total of 33 cases reporting the use of mechanical ventilation in MS-DRG 062 with an average length of stay ranging from 3.8 days to 5.3 days and average costs ranging from $14,026 to $19,817. For MS[dash]DRG 063, there were a total of 1,984 cases with an average length of stay of 2.7 days and average costs of $11,771. There were a total of 8 cases reporting the use of mechanical ventilation in MS-DRG 063 with an average length of stay ranging from 2.0 days to 2.7 days and average costs ranging from $11,195 to $14,588. We then compared the total number of cases in MS-DRGs 061, 062, and 063 specifically reporting mechanical ventilation >96 hours with a principal diagnosis of cerebral infarction where a thrombolytic agent was administered and the patient did not undergo an O.R. procedure against the total number of cases reporting mechanical ventilation <=96 hours with a principal diagnosis of cerebral infarction where a thrombolytic agent was administered and the patient did not undergo an O.R. procedure. Our findings are shown in the following table. Cerebral Infarction With Thrombolytic and MV ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 061--All cases........................................... 5,192 6.4 $20,097 MS-DRG 061--Cases with principal diagnosis of cerebral 166 12.8 41,691 infarction and mechanical ventilation >96 hours................ MS-DRG 061--Cases with principal diagnosis of cerebral 594 6.5 23,780 infarction and mechanical ventilation <=96 hours............... MS-DRG 062--All cases........................................... 9,730 3.9 13,865 MS-DRG 062--Cases with principal diagnosis of cerebral 0 0.0 0 infarction and mechanical ventilation >96 hours................ MS-DRG 062--Cases with principal diagnosis of cerebral 34 4.2 15,558 infarction and mechanical ventilation <=96 hours............... MS-DRG 063--All cases........................................... 1,984 2.7 11,771 MS-DRG 063--Cases with principal diagnosis of cerebral 0 0.0 $0 infarction and mechanical ventilation >96 hours................ MS-DRG 063--Cases with principal diagnosis of cerebral 8 2.3 12,467 infarction and mechanical ventilation <=96 hours............... ---------------------------------------------------------------------------------------------------------------- As shown in this table, the total number of cases reported in MS- DRG 061 was 5,192, with an average length of stay of 6.4 days and average costs of $20,097. There were 166 cases that reported mechanical ventilation >96 [[Page 20193]] hours, with an average length of stay of 12.8 days and average costs of $41,691. There were 594 cases that reported mechanical ventilation <=96 hours, with an average length of stay of 6.5 days and average costs of $23,780. The total number of cases reported in MS-DRG 062 was 9,730, with an average length of stay of 3.9 days and average costs of $13,865. There were no cases identified in MS-DRG 062 where mechanical ventilation >96 hours was reported. However, there were 34 cases that reported mechanical ventilation <=96 hours, with an average length of stay of 4.2 days and average costs of $15,558. The total number of cases reported in MS-DRG 63 was 1,984 with an average length of stay of 2.7 days and average costs of $11,771. There were no cases identified in MS-DRG 063 where mechanical ventilation >96 hours was reported. However, there were 8 cases that reported mechanical ventilation <=96 hours, with an average length of stay of 2.3 days and average costs of $12,467. For the second subset of patients, we examined claims data for MS- DRGs 064, 065, and 066. We identified cases reporting mechanical ventilation of any duration with a principal diagnosis of cerebral infarction or intracranial hemorrhage where a thrombolytic agent was not administered during the current hospital stay and the patient did not undergo an O.R. procedure. The 33 ICD-10-CM diagnosis codes that specify an intracranial hemorrhage and were included in our analysis are listed in Table 6P.1b associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We also used the list of 90 ICD-10-CM diagnosis codes that specify a cerebral infarction listed in Table 6P.1a associated with this proposed rule for our analysis. We note that the GROUPER logic for case assignment to MS-DRG 065 includes that a thrombolytic agent (for example, TPA) was administered within 24 hours of the current hospital stay. The ICD-10-CM diagnosis code that describes this scenario is Z92.82 (Status post administration of tPA (rtPA) in a different facility within the last 24 hours prior to admission to current facility). We did not review the cases reporting that diagnosis code for our analysis. Our findings are shown in the following table. Cerebral Infarction or Intracranial Hemorrhage With MV and Without Thrombolytic ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 064--All cases........................................... 76,513 6.0 $12,574 MS-DRG 064--Cases with principal diagnosis of cerebral 2,153 13.4 38,262 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 064--Cases with principal diagnosis of cerebral 4,843 6.6 18,119 infarction or intracranial hemorrhage and mechanical ventilation =24-96 hours....................................... MS-DRG 064--Cases with principal diagnosis of cerebral 4,001 3.1 8,675 infarction or intracranial hemorrhage and mechanical ventilation <24 hours.......................................... MS-DRG 065--All cases........................................... 106,554 3.7 7,236 MS-DRG 065--Cases with principal diagnosis of cerebral 22 10.2 20,759 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 065--Cases with principal diagnosis of cerebral 127 4.2 12,688 infarction or intracranial hemorrhage and mechanical ventilation =24-96 hours....................................... MS-DRG 065--Cases with principal diagnosis of cerebral 301 2.1 6,145 infarction or intracranial hemorrhage and mechanical ventilation <24 hours.......................................... MS-DRG 066--All cases........................................... 34,689 2.5 5,321 MS-DRG 066--Cases with principal diagnosis of cerebral 1 4.0 3,426 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 066--Cases with principal diagnosis of cerebral 31 3.7 10,364 infarction or intracranial hemorrhage and mechanical ventilation =24-96 hours....................................... MS-DRG 066--Cases with principal diagnosis of cerebral 163 1.4 4,148 infarction or intracranial hemorrhage and mechanical ventilation <24 hours.......................................... ---------------------------------------------------------------------------------------------------------------- The total number of cases reported in MS-DRG 064 was 76,513, with an average length of stay of 6.0 days and average costs of $12,574. There were a total of 10,997 cases reporting the use of mechanical ventilation in MS-DRG 064 with an average length of stay ranging from 3.1 days to 13.4 days and average costs ranging from $8,675 to $38,262. For MS-DRG 065, there were a total of 106,554 cases with an average length of stay of 3.7 days and average costs of $7,236. There were a total of 450 cases reporting the use of mechanical ventilation in MS- DRG 065 with an average length of stay ranging from 2.1 days to 10.2 days and average costs ranging from $6,145 to $20,759. For MS-DRG 066, there were a total of 34,689 cases with an average length of stay of 2.5 days and average costs of $5,321. There were a total of 195 cases reporting the use of mechanical ventilation in MS-DRG 066 with an average length of stay ranging from 1.4 days to 4.0 days and average costs ranging from $3,426 to $10,364. We then compared the total number of cases in MS-DRGs 064, 065, and 066 specifically reporting mechanical ventilation >96 hours with a principal diagnosis of cerebral infarction or intracranial hemorrhage where a thrombolytic agent was not administered and the patient did not undergo an O.R. procedure against the total number of cases reporting mechanical ventilation <=96 hours with a principal diagnosis of cerebral infarction or intracranial hemorrhage where a thrombolytic agent was not administered and the patient did not undergo an O.R. procedure. Our findings are shown in the following table. [[Page 20194]] Cerebral Infarction or Intracranial Hemorrhage With MV and Without Thrombolytic ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 064--All cases........................................... 76,513 6.0 $12,574 MS-DRG 064--Cases with principal diagnosis of cerebral 2,153 13.4 38,262 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 064--Cases with principal diagnosis of cerebral 8,794 4.9 13,704 infarction or intracranial hemorrhage and mechanical ventilation <=96 hours......................................... MS-DRG 065--All cases........................................... 106,554 3.7 7,236 MS-DRG 065--Cases with principal diagnosis of cerebral 22 10.2 20,759 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 065--Cases with principal diagnosis of cerebral 428 2.7 8,086 infarction or intracranial hemorrhage and mechanical ventilation <=96 hours......................................... MS-DRG 066--All cases........................................... 34,689 2.5 5,321 MS-DRG 066--Cases with principal diagnosis of cerebral 1 4.0 3,426 infarction or intracranial hemorrhage and mechanical ventilation >96 hours.......................................... MS-DRG 066--Cases with principal diagnosis of cerebral 194 1.8 5,141 infarction or intracranial hemorrhage and mechanical ventilation <=96 hours......................................... ---------------------------------------------------------------------------------------------------------------- The total number of cases reported in MS-DRG 064 was 76,513, with an average length of stay of 6.0 days and average costs of $12,574. There were 2,153 cases that reported mechanical ventilation >96 hours, with an average length of stay of 13.4 days and average costs of $38,262, and there were 8,794 cases that reported mechanical ventilation <=96 hours, with an average length of stay of 4.9 days and average costs of $13,704. The total number of cases reported in MS-DRG 65 was 106,554, with an average length of stay of 3.7 days and average costs of $7,236. There were 22 cases that reported mechanical ventilation >96 hours, with an average length of stay of 10.2 days and average costs of $20,759, and there were 428 cases that reported mechanical ventilation<=96 hours, with an average length of stay of 2.7 days and average costs of $8,086. The total number of cases reported in MS-DRG 66 was 34,689, with an average length of stay of 2.5 days and average costs of $5,321. There was one case that reported mechanical ventilation >96 hours, with an average length of stay of 4.0 days and average costs of $3,426, and there were 194 cases that reported mechanical ventilation <=96 hours, with an average length of stay of 1.8 days and average costs of $5,141. We also analyzed claims data for MS-DRGs 207 and 208. As shown in the following table, there were a total of 19,471cases found in MS-DRG 207 with an average length of stay of 13.8 days and average costs of $38,124. For MS-DRG 208, there were a total of 55,802 cases found with an average length of stay of 6.7 days and average costs of $17,439. Respiratory System Diagnosis With Ventilator Support ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 207--All cases........................................... 19,471 13.8 $38,124 MS-DRG 208--All cases........................................... 55,802 6.7 17,439 ---------------------------------------------------------------------------------------------------------------- Our analysis of claims data relating to the first request for MS- DRGs 061, 062, 063, 064, 065, and 066 and consultation with our clinical advisors do not support creating new MS-DRGs for cases that identify patients diagnosed with cerebral infarction or intracranial hemorrhage who require mechanical ventilation with or without a thrombolytic and in the absence of an O.R. procedure. For the first subset of patients (in MS-DRGs 061, 062 and 063), our data findings for MS-DRG 061 demonstrate the 166 cases that reported mechanical ventilation >96 hours had a longer average length of stay (12.8 days versus 6.4 days) and higher average costs ($41,691 versus $20,097) compared to all the cases in MS-DRG 061. However, there were no cases that reported mechanical ventilation >96 hours for MS-DRG 062 or MS-DRG 063. For the 594 cases that reported mechanical ventilation <=96 hours in MS[dash]DRG 061, the data show that the average length of stay was consistent with the average length of stay of all of the cases in MS-DRG 061 (6.5 days versus 6.4 days) and the average costs were also consistent with the average costs of all of the cases in MS[dash]DRG 061 ($23,780 versus $20,097). For the 34 cases that reported mechanical ventilation <=96 hours in MS-DRG 062, the data show that the average length of stay was consistent with the average length of stay of all of the cases in MS-DRG 062 (4.2 days versus 3.9 days) and the average costs were also consistent with the average costs of all of the cases in MS DRG 062 ($15,558 versus $13,865). Lastly, for the 8 cases that reported mechanical ventilation <=96 hours in MS-DRG 063, the data show that the average length of stay was consistent with the average length of stay of all of the cases in MS-DRG 063 (2.3 days versus 2.7 days) and the average costs were also consistent with the average costs of all of the cases in MS DRG 063 ($12,467 versus $11,771). For the second subset of patients (in MS-DRGs 064, 065 and 066), the data findings for the 2,153 cases that reported mechanical ventilation >96 hours in MS-DRG 064 showed a longer average length of stay (13.4 days versus 6.0 days) and higher average costs ($38,262 versus $12,574) compared to all of the cases in MS-DRG 064. However, the 2,153 cases represent only 2.8 percent of all the cases in MS-DRG [[Page 20195]] 064. For the 22 cases that reported mechanical ventilation >96 hours in MS-DRG 065, the data showed a longer average length of stay (10.2 days versus 3.7 days) and higher average costs ($20,759 versus $7,236) compared to all of the cases in MS-DRG 065. However, the 22 cases represent only 0.02 percent of all the cases in MS-DRG 065. For the one case that reported mechanical ventilation >96 hours in MS-DRG 066, the data showed a longer average length of stay (4.0 days versus 2.5 days) and lower average costs ($3,426 versus $5,321) compared to all of the cases in MS-DRG 066. For the 8,794 cases that reported mechanical ventilation <=96 hours in MS-DRG 064, the data showed that the average length of stay was shorter than the average length of stay for all of the cases in MS-DRG 064 (4.9 days versus 6.0 days) and the average costs were consistent with the average costs of all of the cases in MS- DRG 064 ($13,704 versus $12,574). For the 428 cases that reported mechanical ventilation <=96 hours in MS-DRG 065, the data showed that the average length of stay was shorter than the average length of stay for all of the cases in MS-DRG 065 (2.7 days versus 3.7 days) and the average costs were consistent with the average costs of all the cases in MS-DRG 065 ($8,086 versus $7,236). For the 194 cases that reported mechanical ventilation <=96 hours in MS-DRG 066, the data showed that the average length of stay was shorter than the average length of stay for all of the cases in MS-DRG 066 (1.8 days versus 2.5 days) and the average costs were less than the average costs of all of the cases in MS-DRG 066 ($5,141 versus $5,321). Based on the analysis described above, the current MS-DRG assignment for the cases in MS-DRGs 061, 062, 063, 064, 065 and 066 that identify patients diagnosed with cerebral infarction or intracranial hemorrhage who require mechanical ventilation with or without a thrombolytic and in the absence of an O.R. procedure appears appropriate. Our clinical advisors also noted that patients requiring mechanical ventilation (in the absence of an O.R. procedure) are known to be more resource intensive and it would not be practical to create new MS-DRGs specifically for this subset of patients diagnosed with an acute neurologic event, given the various indications for which mechanical ventilation may be utilized. If we were to create new MS-DRGs for patients diagnosed with an intracranial hemorrhage or cerebral infarction who require mechanical ventilation, it would not address all of the other patients who also utilize mechanical ventilation resources. It would also necessitate further extensive analysis and evaluation for several other conditions that require mechanical ventilation across each of the 25 MDCs under the ICD-10 MS-DRGs. To evaluate the frequency in which the use of mechanical ventilation is reported for different clinical scenarios, we examined claims data across each of the 25 MDCs to determine the number of cases reporting the use of mechanical ventilation >96 hours. Our findings are shown in the table below. Mechanical Ventilation >96 Hours Across All MDCs ---------------------------------------------------------------------------------------------------------------- Number of Average length MDC cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- All cases with mechanical ventilation >96 hours................. 127,626 18.4 $61,056 MDC 1 (Diseases and Disorders of the Nervous System)--Cases with 13,668 18.3 61,234 mechanical ventilation >96 hours............................... MDC 2 (Disease and Disorders of the Eye)--Cases with mechanical 33 22.7 79,080 ventilation >96 hours.......................................... MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth and 602 20.3 62,625 Throat)--Cases with mechanical ventilation >96 hours........... MDC 4 (Diseases and Disorders of the Respiratory System)--Cases 27,793 16.6 48,869 with mechanical ventilation >96 hours.......................... MDC 5 (Diseases and Disorders of the Circulatory System)--Cases 16,923 20.7 84,565 with mechanical ventilation >96 hours.......................... MDC 6 (Diseases and Disorders of the Digestive System)--Cases 6,401 22.4 73,759 with mechanical ventilation >96 hours.......................... MDC 7 (Diseases and Disorders of the Hepatobiliary System and 1,803 24.5 80,477 Pancreas)--Cases with mechanical ventilation >96 hours......... MDC 8 (Diseases and Disorders of the Musculoskeletal System and 2,780 22.3 83,271 Connective Tissue)--Cases with mechanical ventilation >96 hours MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue 390 22.2 68,288 and Breast)--Cases with mechanical ventilation >96 hours....... MDC 10 (Endocrine, Nutritional and Metabolic Diseases and 1,168 20.9 60,682 Disorders)--Cases with mechanical ventilation >96 hours........ MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)-- 2,325 19.6 57,893 Cases with mechanical ventilation >96 hours.................... MDC 12 (Diseases and Disorders of the Male Reproductive System)-- 54 26.8 95,204 Cases with mechanical ventilation >96 hours.................... MDC 13 (Diseases and Disorders of the Female Reproductive 89 24.6 83,319 System)--Cases with mechanical ventilation >96 hours........... MDC 14 (Pregnancy, Childbirth and the Puerperium)--Cases with 22 17.4 56,981 mechanical ventilation >96 hours............................... MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, 468 20.1 68,658 Immunologic Disorders)--Cases with mechanical ventilation >96 hours.......................................................... MDC 17 (Myeloproliferative Diseases and Disorders, Poorly 538 29.7 99,968 Differentiated Neoplasms)--Cases with mechanical ventilation >96 hours...................................................... MDC 18 (Infectious and Parasitic Diseases, Systemic or 48,176 17.3 55,022 Unspecified Sites)--Cases with mechanical ventilation >96 hours MDC 19 (Mental Diseases and Disorders)--Cases with mechanical 54 29.3 52,749 ventilation >96 hours.......................................... MDC 20 (Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental 312 20.5 47,637 Disorders)--Cases with mechanical ventilation >96 hours........ [[Page 20196]] MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs)--Cases 2,436 18.2 57,712 with mechanical ventilation >96 hours.......................... MDC 22 (Burns)--Cases with mechanical ventilation >96 hours..... 242 34.8 188,704 MDC 23 (Factors Influencing Health Status and Other Contacts 64 17.7 50,821 with Health Services)--Cases with mechanical ventilation >96 hours.......................................................... MDC 24 (Multiple Significant Trauma)--Cases with mechanical 922 17.6 72,358 ventilation >96 hours.......................................... MDC 25 (Human Immunodeficiency Virus Infections)--Cases with 363 19.1 56,688 mechanical ventilation >96 hours............................... ---------------------------------------------------------------------------------------------------------------- As shown in the table, the top 5 MDCs with the largest number of cases reporting mechanical ventilation >96 hours are MDC 18, with 48,176 cases; MDC 4, with 27,793 cases; MDC 5, with 16,923 cases; MDC 1, with 13,668 cases; and MDC 6, with 6,401 cases. We note that the claims data demonstrate that the average length of stay is consistent with what we would expect for cases reporting the use of mechanical ventilation >96 hours across each of the 25 MDCs. The top 5 MDCs with the highest average costs for cases reporting mechanical ventilation >96 hours were MDC 22, with average costs of $188,704; MDC 17, with average costs of $99,968; MDC 12, with average costs of $95,204; MDC 5, with average costs of $84,565; and MDC 13, with average costs of $83,319. We note that the data for MDC 8 demonstrated similar results compared to MDC 13 with average costs of $83,271 for cases reporting mechanical ventilation >96 hours. In summary, the claims data reflect a wide variance with regard to the frequency and average costs for cases reporting the use of mechanical ventilation >96 hours. We also examined claims data across each of the 25 MDCs for the number of cases reporting the use of mechanical ventilation <=96 hours. Our findings are shown in the table below. Mechanical Ventilation <=96 Hours Across All MDCs ---------------------------------------------------------------------------------------------------------------- Number of Average length MDC cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- All cases with mechanical ventilation <=96 hours................ 266,583 8.5 $26,668 MDC 1 (Diseases and Disorders of the Nervous System)--Cases with 29,896 7.4 22,838 mechanical ventilation <=96 hours.............................. MDC 2 (Disease and Disorders of the Eye)--Cases with mechanical 60 8.4 29,708 ventilation <=96 hours......................................... MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth and 1,397 9.8 29,479 Throat)--Cases with mechanical ventilation <=96 hours.......... MDC 4 (Diseases and Disorders of the Respiratory System)--Cases 64,861 7.8 20,929 with mechanical ventilation <=96 hours......................... MDC 5 (Diseases and Disorders of the Circulatory System)--Cases 45,147 8.8 35,818 with mechanical ventilation <=96 hours......................... MDC 6 (Diseases and Disorders of the Digestive System)--Cases 15,629 11.3 33,660 with mechanical ventilation <=96 hours......................... MDC 7 (Diseases and Disorders of the Hepatobiliary System and 4,678 10.5 31,565 Pancreas)--Cases with mechanical ventilation <=96 hours........ MDC 8 (Diseases and Disorders of the Musculoskeletal System and 7,140 10.4 40,183 Connective Tissue)--Cases with mechanical ventilation <=96 hours.......................................................... MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue 1,036 10.7 26,809 and Breast)--Cases with mechanical ventilation <=96 hours...... MDC 10 (Endocrine, Nutritional and Metabolic Diseases and 3,591 9.0 23,863 Disorders)--Cases with mechanical ventilation <=96 hours....... MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)-- 5,506 10.2 27,951 Cases with mechanical ventilation <=96 hours................... MDC 12 (Diseases and Disorders of the Male Reproductive System)-- 168 11.5 35,009 Cases with mechanical ventilation <=96 hours................... MDC 13 (Diseases and Disorders of the Female Reproductive 310 10.8 32,382 System)--Cases with mechanical ventilation <=96 hours.......... MDC 14 (Pregnancy, Childbirth and the Puerperium)--Cases with 55 7.6 21,785 mechanical ventilation <=96 hours.............................. MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs, 1,171 8.7 26,138 Immunologic Disorders)--Cases with mechanical ventilation <=96 hours.......................................................... MDC 17 (Myeloproliferative Diseases and Disorders, Poorly 1,178 15.3 46,335 Differentiated Neoplasms)--Cases with mechanical ventilation <=96 hours..................................................... MDC 18 (Infectious and Parasitic Diseases, Systemic or 69,826 8.5 25,253 Unspecified Sites)--Cases with mechanical ventilation <=96 hours.......................................................... MDC 19 (Mental Diseases and Disorders)--Cases with mechanical 264 10.4 18,805 ventilation <=96 hours......................................... MDC 20 (Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental 918 8.3 19,376 Disorders)--Cases with mechanical ventilation <=96 hours....... MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs)--Cases 10,842 6.5 17,843 with mechanical ventilation <=96 hours......................... [[Page 20197]] MDC 22 (Burns)--Cases with mechanical ventilation <=96 hours.... 353 9.7 45,557 MDC 23 (Factors Influencing Health Status and Other Contacts 307 6.6 16,159 with Health Services)--Cases with mechanical ventilation <=96 hours.......................................................... MDC 24 (Multiple Significant Trauma)--Cases with mechanical 1,709 8.8 36,475 ventilation <=96 hours......................................... MDC 25 (Human Immunodeficiency Virus Infections)--Cases with 541 10.4 29,255 mechanical ventilation <=96 hours.............................. ---------------------------------------------------------------------------------------------------------------- As shown in the table, the top 5 MDCs with the largest number of cases reporting mechanical ventilation <=96 hours are MDC 18, with 69,826 cases; MDC 4, with 64,861 cases; MDC 5, with 45,147 cases; MDC 1, with 29,896 cases; and MDC 6, with 15,629 cases. We note that the claims data demonstrate that the average length of stay is consistent with what we would expect for cases reporting the use of mechanical ventilation <=96 hours across each of the 25 MDCs. The top 5 MDCs with the highest average costs for cases reporting mechanical ventilation <=96 hours are MDC 17, with average costs of $46,335; MDC 22, with average costs of $45,557; MDC 8, with average costs of $40,183; MDC 24, with average costs of $36,475; and MDC 5, with average costs of $35,818. Similar to the cases reporting mechanical ventilation >96 hours, the claims data for cases reporting the use of mechanical ventilation <=96 hours also reflect a wide variance with regard to the frequency and average costs. Depending on the number of cases in each MS-DRG, it may be difficult to detect patterns of complexity and resource intensity. With respect to the requestor's statement that reporting for other purposes, such as quality measures, clinical trials, and Joint Commission and State certification or survey cases, is based on the principal diagnosis, and their belief that patients who present with cerebral infarction or cerebral hemorrhage and acute respiratory failure are currently in conflict for principal diagnosis sequencing because the cerebral infarction or cerebral hemorrhage code is needed as the principal diagnosis for quality reporting and other purposes (however, acute respiratory failure is needed as the principal diagnosis for purposes of appropriate payment under the MS-DRGs), we note that providers are required to assign the principal diagnosis according to the ICD-10-CM Official Guidelines for Coding and Reporting and these assignments are not based on factors such as quality measures or clinical trials indications. Furthermore, we do not base MS-DRG reclassification decisions on those factors. If the cerebral hemorrhage or ischemic cerebral infarction is the reason for admission to the hospital, the cerebral hemorrhage or ischemic cerebral infarction diagnosis code should be assigned as the principal diagnosis. We acknowledge that new MS-DRGs were created for cases of patients with sepsis requiring mechanical ventilation greater than and less than 96 hours. However, those MS-DRGs (MS-DRG 575 (Septicemia with Mechanical Ventilation 96+ Hours Age >17) and MS-DRG 576 (Septicemia without Mechanical Ventilation 96+ Hours Age >17)) were created several years ago, in FY 2007 (71 FR 47938 through 47939) in response to public comments suggesting alternatives for the need to recognize the treatment for that subset of patients with severe sepsis who exhibit a greater degree of severity and resource consumption as septicemia is a systemic condition, and also as a preliminary step in the transition from the CMS DRGs to MS-DRGs. We believe that additional analysis and efforts toward a broader approach to refining the MS-DRGs for cases of patients requiring mechanical ventilation across the MDCs involves carefully examining the potential for instability in the relative weights and disrupting the integrity of the MS-DRG system based on the creation of separate MS[dash]DRGs involving small numbers of cases for various indications in which mechanical ventilation may be required. The second request focused on patients diagnosed with any neurological condition classified under MDC 1 requiring mechanical ventilation in the absence of an O.R. procedure and without having received a thrombolytic agent. Because the first request specifically involved analysis for the acute neurological conditions of cerebral infarction and intracranial hemorrhage under MDC 1 and our findings do not support creating new MS-DRGs for those specific conditions, we did not perform separate claims analysis for other conditions classified under MDC 1. Therefore, we are not proposing to create new MS-DRGs for cases that identify patients diagnosed with neurological conditions classified under MDC 1 who require mechanical ventilation with or without a thrombolytic and in the absence of an O.R. procedure. We are inviting public comments on our proposal. 4. MDC 5 (Diseases and Disorders of the Circulatory System) a. Pacemaker Insertions In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56804 through 56809), we discussed a request to examine the ICD-10-PCS procedure code combinations that describe procedures involving pacemaker insertions to determine if some procedure code combinations were excluded from the Version 33 ICD-10 MS-DRG assignments for MS-DRGs 242, 243, and 244 (Permanent Cardiac Pacemaker Implant with MCC, with CC, and without CC/ MCC, respectively) under MDC 5. We finalized our proposal to modify the Version 34 ICD-10 MS-DRG GROUPER logic so the specified procedure code combinations were no longer required for assignment into those MS-DRGs. As a result, the logic for pacemaker insertion procedures was simplified by separating the procedure codes describing cardiac pacemaker device insertions into one list and separating the procedure codes describing cardiac pacemaker lead insertions into another list. Therefore, when any ICD-10-PCS procedure code describing the insertion of a pacemaker device is reported from that specific logic list with any ICD-10-PCS procedure code describing the insertion of a pacemaker lead from that specific logic list (81 FR 56804 through 56806), the case is assigned to MS-DRGs 242, 243, and 244 under MDC 5. We then discussed our examination of the Version 33 GROUPER logic for MS[dash]DRGs 258 and 259 (Cardiac Pacemaker Device Replacement with and without MCC, respectively) because assignment of cases to these MS- DRGs [[Page 20198]] also included qualifying ICD-10-PCS procedure code combinations involving pacemaker insertions (81 FR 56806 through 56808). Specifically, the logic for Version 33 ICD-10 MS-DRGs 258 and 259 included ICD-10-PCS procedure code combinations describing the removal of pacemaker devices and the insertion of new pacemaker devices. We finalized our proposal to modify the Version 34 ICD-10 MS-DRG GROUPER logic for MS-DRGs 258 and 259 to establish that a case reporting any procedure code from the list of ICD-10-PCS procedure codes describing procedures involving pacemaker device insertions without any other procedure codes describing procedures involving pacemaker leads reported would be assigned to MS-DRGs 258 and 259 (81 FR 56806 through 56807) under MDC 5. In addition, we pointed out that a limited number of ICD-10-PCS procedure codes describing pacemaker insertion are classified as non-operating room (non-O.R.) codes within the MS-DRGs and that the Version 34 ICD-10 MS-DRG GROUPER logic would continue to classify these procedure codes as non-O.R. codes. We noted that a case reporting any one of these non-O.R. procedure codes describing a pacemaker device insertion without any other procedure code involving a pacemaker lead would be assigned to MS-DRGs 258 and 259. Therefore, the listed procedure codes describing a pacemaker device insertion under MS-DRGs 258 and 259 are designated as non-O.R. affecting the MS-DRG. Lastly, we discussed our examination of the Version 33 GROUPER logic for MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC, and without CC/MCC, respectively), and noted that cases assigned to these MS-DRGs also included lists of procedure code combinations describing procedures involving the removal of pacemaker leads and the insertion of new leads, in addition to lists of single procedure codes describing procedures involving the insertion of pacemaker leads, removal of cardiac devices, and revision of cardiac devices (81 FR 56808). We finalized our proposal to modify the ICD-10 MS-DRG GROUPER logic for MS-DRGs 260, 261, and 262 so that cases reporting any one of the listed ICD-10-PCS procedure codes describing procedures involving pacemakers and related procedures and associated devices are assigned to MS DRGs 260, 261, and 262 under MDC 5. Therefore, the GROUPER logic that required a combination of procedure codes be reported for assignment into MS-DRGs 260, 261 and 262 under Version 33 was no longer required effective with discharges occurring on or after October 1, 2016 (FY 2017) under Version 34 of the ICD-10 MS-DRGs. We note that while the discussion in the FY 2017 IPPS/LTCH PPS final rule focused on the MS-DRGs involving pacemaker procedures under MDC 5, similar GROUPER logic exists in Version 33 of the ICD-10 MS-DRGs under MDC 1 (Diseases and Disorders of the Nervous System) in MS-DRGs 040, 041 and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC or Peripheral Neurostimulator and without CC/MCC, respectively) and MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without MCC, respectively) where procedure code combinations involving cardiac pacemaker device insertions or removals and cardiac pacemaker lead insertions or removals are required to be reported together for assignment into those MS-DRGs. We also note that, with the exception of when a principal diagnosis is reported from MDC 1, MDC 5, or MDC 21, the procedure codes describing the insertion, removal, replacement, or revision of pacemaker devices are assigned to a medical MS-DRG in the absence of another O.R. procedure according to the GROUPER logic. We refer the reader to the ICD-10 MS-DRG Definitions Manual Version 33, which is available via the Internet on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2016-IPPS-Final-Rule-Home-Page-Items/FY2016-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending for complete documentation of the GROUPER logic that was in effect at that time for the Version 33 ICD-10 MS-DRGs discussed earlier. For FY 2019, we received a request to assign all procedures involving the insertion of pacemaker devices to surgical MS-DRGs, regardless of the principal diagnosis. The requestor recommended that procedures involving pacemaker insertion be grouped to surgical MS-DRGs within the MDC to which the principal diagnosis is assigned, or that they group to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively). Currently, in Version 35 of the ICD-10 MS-DRGs, procedures involving pacemakers are assigned to MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC, with CC or Peripheral Neurostimulator and without CC/MCC, respectively) under MDC 1 (Diseases and Disorders of the Nervous System), to MS-DRGs 242, 243, and 244 (Permanent Cardiac Pacemaker Implant with MCC, with CC, and without CC/MCC, respectively), MS-DRGs 258 and 259 (Cardiac Pacemaker Device Replacement with MCC and without MCC, respectively), and MS-DRGs 260, 261 and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC, and without CC/ MCC, respectively) under MDC 5 (Diseases and Disorders of the Circulatory System), and to MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively), under MDC 21 (Injuries, Poisoning and Toxic Effects of Drugs), with all other unrelated principal diagnoses resulting in a medical MS-DRG assignment. According to the requestor, the medical MS- DRGs do not provide adequate payment for the pacemaker device, specialized operating suites, time, skills, and other resources involved for pacemaker insertion procedures. Therefore, the requestor recommended that procedures involving pacemaker insertions be grouped to surgical MS-DRGs. We refer readers to the ICD-10 MS-DRG Definitions Manual Version 35, which is available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page-Items/FY2018-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending for complete documentation of the GROUPER logic for the MS-DRGs discussed earlier. The following procedure codes describe procedures involving the insertion of a cardiac rhythm related device which are classified as a type of pacemaker insertion under the ICD-10 MS-DRGs. These four codes are assigned to MS-DRGs 040, 041, and 042, as well as MS-DRGs 907, 908, and 909, and are designated as O.R. procedures. [[Page 20199]] ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0JH60PZ................... Insertion of cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach. 0JH63PZ................... Insertion of cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach. 0JH80PZ................... Insertion of cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach. 0JH83PZ................... Insertion of cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach. ------------------------------------------------------------------------ We examined cases from the September update of the FY 2017 MedPAR claims data for cases involving pacemaker insertion procedures reporting the above ICD-10-PCS codes in MS-DRGs 040, 041 and 042 under MDC 1. Our findings are shown in the following table. Cases Involving Pacemaker Insertion Procedures in MDC 1 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 1 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 040--All cases........................................... 4,462 10.4 $26,877 MS-DRG 040--Cases with procedure code 0JH60PZ (Insertion of 13 14.2 55,624 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 040--Cases with procedure code 0JH63PZ (Insertion of 2 3.5 15,826 cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 040--Cases with procedure code 0JH80PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach)..................................... MS-DRG 040--Cases with procedure code 0JH83PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 041--All cases........................................... 5,648 5.2 16,927 MS-DRG 041--Cases with procedure code 0JH60PZ (Insertion of 12 6.4 22,498 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 041--Cases with procedure code 0JH63PZ (Insertion of 4 5 17,238 cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 041--Cases with procedure code 0JH80PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach)..................................... MS-DRG 041--Cases with procedure code 0JH83PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 042--All cases........................................... 2,154 3.1 13,730 MS-DRG 042--Cases with procedure code 0JH60PZ (Insertion of 5 8 18,183 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 042--Cases with procedure code 0JH83PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 042--Cases with procedure code 0JH80PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach)..................................... MS-DRG 042--Cases with procedure code 0JH83PZ (Insertion of 0 0 0 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach)............................. ---------------------------------------------------------------------------------------------------------------- The following table is a summary of the findings shown above from our review of MS-DRGs 040, 041 and 042 and the total number of cases reporting a pacemaker insertion procedure. MS-DRGs for Cases Involving Pacemaker Insertion Procedures in MDC 1 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 1 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 040, 041, and 042--All cases............................ 12,264 6.7 $19,986 MS-DRGs 040, 041, and 042--Cases with a pacemaker insertion 36 9.1 32,906 procedure...................................................... ---------------------------------------------------------------------------------------------------------------- We found a total of 12,264 cases in MS-DRGs 040, 041, and 042 with an average length of stay of 6.7 days and average costs of $19,986. We found a total of 36 cases in MS-DRGs 040, 041, and 042 reporting procedure codes describing the insertion of a pacemaker device with an average length of stay of 9.1 days and average costs of $32,906. We then examined cases involving pacemaker insertion procedures reporting those same four ICD-10-PCS procedure codes 0JH60PZ, 0JH63PZ, 0JH80PZ and 0JH83PZ in MS-DRGs 907, 908, and 909 under MDC 21. Our findings are shown in the following table. [[Page 20200]] MS-DRGs for Cases Involving Pacemaker Insertion Procedures in MDC 21 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 21 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 907--All cases........................................... 7,405 10.1 $28,997 MS-DRG 907--Cases with procedure code 0JH60PZ (Insertion of 7 11.1 60,141 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 908--All cases........................................... 8,519 5.2 14,282 MS-DRG 908--Cases with procedure code 0JH60PZ (Insertion of 4 3.8 35,678 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 909--All cases........................................... 3,224 3.1 9,688 MS-DRG 909--Cases with procedure code 0JH60PZ (Insertion of 2 2 42,688 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... ---------------------------------------------------------------------------------------------------------------- We note that there were no cases found where procedure codes 0JH63PZ, 0JH80PZ or 0JH83PZ were reported in MS-DRGs 907, 908 and 909 under MDC 21 and, therefore, they are not displayed in the table. The following table is a summary of the findings shown above from our review of MS-DRGs 907, 908, and 909 and the total number of cases reporting a pacemaker insertion procedure. MS-DRGs for Cases Involving Pacemaker Insertion Procedures in MDC 21 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 21 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 907, 908 and 909--All cases............................. 19,148 6.7 $19,199 MS-DRGs 907, 908 and 909--Cases with a pacemaker insertion 13 7.5 49,929 procedure...................................................... ---------------------------------------------------------------------------------------------------------------- We found a total of 19,148 cases in MS-DRGs 907, 908, and 909 with an average length of stay of 6.7 days and average costs of $19,199. We found a total of 13 cases in MS-DRGs 907, 908, and 909 reporting pacemaker insertion procedures with an average length of stay of 7.5 days and average costs of $49,929. We also examined cases involving pacemaker insertion procedures reporting the following procedure codes that are assigned to MS-DRGs 242, 243, and 244 under MDC 5. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0JH604Z................... Insertion of pacemaker, single chamber into chest subcutaneous tissue and fascia, open approach. 0JH605Z................... Insertion of pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, open approach. 0JH606Z................... Insertion of pacemaker, dual chamber into chest subcutaneous tissue and fascia, open approach. 0JH607Z................... Insertion of cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, open approach. 0JH60PZ................... Insertion of cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach. 0JH634Z................... Insertion of pacemaker, single chamber into chest subcutaneous tissue and fascia, percutaneous approach. 0JH635Z................... Insertion of pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, percutaneous approach. 0JH636Z................... Insertion of pacemaker, dual chamber into chest subcutaneous tissue and fascia, percutaneous approach. 0JH637Z................... Insertion of cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, percutaneous approach. 0JH63PZ................... Insertion of cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach. 0JH804Z................... Insertion of pacemaker, single chamber into abdomen subcutaneous tissue and fascia, open approach. 0JH805Z................... Insertion of pacemaker, single chamber rate responsive into abdomen subcutaneous tissue and fascia, open approach. 0JH806Z................... Insertion of pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, open approach. 0JH807Z................... Insertion of cardiac resynchronization pacemaker pulse generator into abdomen subcutaneous tissue and fascia, open approach. 0JH80PZ................... Insertion of cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach. 0JH834Z................... Insertion of pacemaker, single chamber into abdomen subcutaneous tissue and fascia, percutaneous approach. 0JH835Z................... Insertion of pacemaker, single chamber rate responsive into abdomen subcutaneous tissue and fascia, percutaneous approach. 0JH836Z................... Insertion of pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, percutaneous approach. 0JH837Z................... Insertion of cardiac resynchronization pacemaker pulse generator into abdomen subcutaneous tissue and fascia, percutaneous approach. 0JH83PZ................... Insertion of cardiac rhythm related device into abdomen subcutaneous tissue and fascia, percutaneous approach. ------------------------------------------------------------------------ Our data findings are shown in the following table. We note that procedure codes displayed with an asterisk (*) in the table are designated as non-O.R. procedures affecting the MS-DRG. [[Page 20201]] Cases Involving Pacemaker Insertion Procedures in MDC 5 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 5 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 242--All cases........................................... 18,205 6.9 $26,414 MS-DRG 242--Cases with procedure code 0JH604Z* (Insertion of 2,518 7.7 25,004 pacemaker, single chamber into chest subcutaneous tissue and fascia, open approach)......................................... MS-DRG 242--Cases with procedure code 0JH605Z* (Insertion of 306 7.7 24,454 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 242--Cases with procedure code 0JH606Z* (Insertion of 13,323 6.7 25,497 pacemaker, dual chamber into chest subcutaneous tissue and fascia, open approach)......................................... MS-DRG 242--Cases with procedure code 0JH607Z (Insertion of 1,528 8.1 37,060 cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 242--Cases with procedure code 0JH60PZ (Insertion of 5 16.6 59,334 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 242--Cases with procedure code 0JH634Z* (Insertion of 65 8.5 26,789 pacemaker, single chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 242--Cases with procedure code 0JH635Z* (Insertion of 10 7 35,104 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 242--Cases with procedure code 0JH636Z* (Insertion of 313 6.4 23,699 pacemaker, dual chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 242--Cases with procedure code 0JH637Z (Insertion of 82 7.1 35,382 cardiac resynchronization pacemaker pulse generator into chest Subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 242--Cases with procedure code 0JH63PZ (Insertion of 2 12.5 32,405 cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 242--Cases with procedure code 0JH804Z* (Insertion of 25 14.4 43,080 pacemaker, single chamber into abdomen subcutaneous tissue and fascia, open approach)......................................... MS-DRG 242--Cases with procedure code 0JH805Z* (Insertion of 2 4 26,949 pacemaker, single chamber rate responsive into abdomen subcutaneous tissue and fascia, open approach)................. MS-DRG 242--Cases with procedure code 0JH806Z* (Insertion of 50 6.8 25,306 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, open approach)......................................... MS-DRG 242--Cases with procedure code 0JH807Z (Insertion of 5 21.2 67,908 cardiac resynchronization pacemaker pulse generator into abdomen subcutaneous tissue and fascia, open approach)......... MS-DRG 242--Cases with procedure code 0JH836Z (Insertion of 1 5 36,111 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 243--All cases........................................... 24,586 4 18,669 MS-DRG 243--Cases with procedure code 0JH604Z* (Insertion of 2,537 4.7 17,118 pacemaker, single chamber into chest subcutaneous tissue and fascia, open approach)......................................... MS-DRG 243--Cases with procedure code 0JH605Z* (Insertion of 271 4.4 17,268 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 243--Cases with procedure code 0JH606Z* (Insertion of 19,921 3.9 18,306 pacemaker, dual chamber into chest subcutaneous tissue and fascia, open approach)......................................... MS-DRG 243--Cases with procedure code 0JH607Z (Insertion of 1,236 4.4 28,658 cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 243--Cases with procedure code 0JH60PZ (Insertion of 6 4.2 20,994 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 243--Cases with procedure code 0JH634Z* (Insertion of 55 5.2 16,784 pacemaker, single chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 243--Cases with procedure code 0JH635Z* (Insertion of 15 4.1 17,938 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 243--Cases with procedure code 0JH636Z* (Insertion of 431 3.7 16,164 pacemaker, dual chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 243--Cases with procedure code 0JH637Z (Insertion of 58 5 28,926 cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 243--Cases with procedure code 0JH63PZ (Insertion of 3 8.3 23,717 cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 243--Cases with procedure code 0JH804Z* (Insertion of 10 8.2 20,871 pacemaker, single chamber into abdomen subcutaneous tissue and fascia, open approach)......................................... MS-DRG 243--Cases with procedure code 0JH805Z* (Insertion of 1 4 15,739 pacemaker, single chamber rate responsive into abdomen subcutaneous tissue and fascia, open approach)................. MS-DRG 243--Cases with procedure code 0JH806Z* (Insertion of 57 4.4 18,787 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, open approach)......................................... MS-DRG 243--Cases with procedure code 0JH807Z (Insertion of 3 4 19,653 cardiac resynchronization pacemaker pulse generator into abdomen subcutaneous tissue and fascia, open approach)......... MS-DRG 243--Cases with procedure code 0JH80PZ (Insertion of 1 7 16,224 cardiac rhythm related device into abdomen subcutaneous tissue and fascia, open approach)..................................... MS-DRG 243--Cases with procedure code 0JH836Z* (Insertion of 1 2 14,005 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 244--All cases........................................... 15,974 2.7 15,670 MS-DRG 244--Cases with procedure code 0JH604Z* (Insertion of 1,045 3.2 14,541 pacemaker, single chamber into chest subcutaneous tissue and fascia, open approach)......................................... [[Page 20202]] MS-DRG 244--Cases with procedure code 0JH605Z* (Insertion of 127 3 13,208 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 244--Cases with procedure code 0JH606Z* (Insertion of 14,092 2.7 15,596 pacemaker, dual chamber into chest subcutaneous tissue and fascia, open approach)......................................... MS-DRG 244--Cases with procedure code 0JH607Z (Insertion of 303 2.8 26,221 cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, open approach)................. MS-DRG 244--Cases with procedure code 0JH60PZ (Insertion of 2 4.5 9,248 cardiac rhythm related device into chest subcutaneous tissue and fascia, open approach)..................................... MS-DRG 244--Cases with procedure code 0JH634Z* (Insertion of 32 2.8 11,525 pacemaker, single chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 244--Cases with procedure code 0JH635Z* (Insertion of 1 2 30,100 pacemaker, single chamber rate responsive into chest subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 244--Cases with procedure code 0JH636Z* (Insertion of 320 2.6 13,670 pacemaker, dual chamber into chest subcutaneous tissue and fascia, percutaneous approach)................................. MS-DRG 244--Cases with procedure code 0JH637Z (Insertion of 20 2.7 19,218 cardiac resynchronization pacemaker pulse generator into chest subcutaneous tissue and fascia, percutaneous approach)......... MS-DRG 244--Cases with procedure code 0JH63PZ (Insertion of 1 3 12,120 cardiac rhythm related device into chest subcutaneous tissue and fascia, percutaneous approach)............................. MS-DRG 244--Cases with procedure code 0JH805Z* (Insertion of 1 1 21,604 pacemaker, single chamber rate responsive into abdomen subcutaneous tissue and fascia, open approach)................. MS-DRG 244--Cases with procedure code 0JH806Z* (Insertion of 36 3.2 16,492 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, open approach)......................................... MS-DRG 244--Cases with procedure code 0JH836Z* (Insertion of 1 3 12,160 pacemaker, dual chamber into abdomen subcutaneous tissue and fascia, percutaneous approach)................................. ---------------------------------------------------------------------------------------------------------------- The following table is a summary of the findings shown above from our review of MS-DRGs 242, 243, and 244 and the total number of cases reporting a pacemaker insertion procedure. Cases Involving Pacemaker Insertion Procedures in MDC 5 ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG in MDC 5 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 242, 243 and 244--All cases............................. 58,765 4.6 $20,253 MS-DRGs 242, 243, and 244--Cases with a pacemaker insertion * 58,822 4.6 20,270 procedure...................................................... ---------------------------------------------------------------------------------------------------------------- * The figure is not adjusted for cases reporting more than one pacemaker insertion procedure code. The figure represents the frequency in which the number of pacemaker insertion procedures was reported. We found a total of 58,765 cases in MS-DRGs 242, 243, and 244 with an average length of stay of 4.6 days and average costs of $20,253. We found a total of 58,822 cases reporting pacemaker insertion procedures in MS-DRGs 242, 243, and 244 with an average length of stay of 4.6 days and average costs of $20,270. We note that the analysis performed is by procedure code, and because multiple pacemaker insertion procedures may be reported on a single claim, the total number of these pacemaker insertion procedure cases exceeds the total number of all cases found across MS-DRGs 242, 243, and 244 (58,822 procedures versus 58,765 cases). We then analyzed claims for cases reporting a procedure code describing (1) the insertion of a pacemaker device only, (2) the insertion of a pacemaker lead only, and (3) both the insertion of a pacemaker device and a pacemaker lead across all the MDCs except MDC 5 to determine the number of cases currently grouping to medical MS-DRGs and the potential impact of these cases moving into the surgical unrelated MS-DRGs 981, 982 and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC and without CC/MCC, respectively). Our findings are shown in the following table. Pacemaker Insertion Procedures in Medical MS-DRGs ---------------------------------------------------------------------------------------------------------------- Number of Average length All MDCs except MDC 5 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Procedures for insertion of pacemaker device.................... 2,747 9.5 $29,389 Procedures for insertion of pacemaker lead...................... 2,831 9.4 29,240 Procedures for insertion of pacemaker device with insertion of 2,709 9.4 29,297 pacemaker lead................................................. ---------------------------------------------------------------------------------------------------------------- [[Page 20203]] We found a total of 2,747 cases reporting the insertion of a pacemaker device in 177 medical MS-DRGs with an average length of stay of 9.5 days and average costs of $29,389 across all the MDCs except MDC 5. We found a total of 2,831 cases reporting the insertion of a pacemaker lead in 175 medical MS-DRGs with an average length of stay of 9.4 days and average costs of $29,240 across all the MDCs except MDC 5. We found a total of 2,709 cases reporting both the insertion of a pacemaker device and the insertion of a pacemaker lead in 170 medical MS-DRGs with an average length of stay of 9.4 days and average costs of $29,297 across all the MDCs except MDC 5. We also analyzed claims for cases reporting a procedure code describing the insertion of a pacemaker device with a procedure code describing the insertion of a pacemaker lead in all the surgical MS- DRGs across all the MDCs except MDC 5. Our findings are shown in the following table. Pacemaker Insertion Procedures in Medical MS-DRGs ---------------------------------------------------------------------------------------------------------------- Average length All MDCs except MDC 5 Number of cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Procedures for insertion of pacemaker device with insertion 3,667 12.8 $48,856 of pacemaker lead........................................... ---------------------------------------------------------------------------------------------------------------- We found a total of 3,667 cases reporting the insertion of a pacemaker device and the insertion of a pacemaker lead in 194 surgical MS-DRGs with an average length of stay of 12.8 days and average costs of $48,856 across all the MDCs except MDC 5. For cases where the insertion of a pacemaker device, the insertion of a pacemaker lead or the insertion of both a pacemaker device and lead were reported on a claim grouping to a medical MS-DRG, the average length of stay and average costs were generally higher for these cases when compared to the average length of stay and average costs for all the cases in their assigned MS-DRGs. For example, we found 113 cases reporting both the insertion of a pacemaker device and lead in MS-DRG 378 (G.I. Hemorrhage with CC), with an average length of stay of 7.1 days and average costs of $23,711. The average length of stay for all cases in MS-DRG 378 was 3.6 days and the average cost for all cases in MS-DRG 378 was $7,190. The average length of stay for cases reporting both the insertion of a pacemaker device and lead were twice as long as the average length of stay for all the cases in MS-DRG 378 (7.1 days versus 3.6 days). In addition, the average costs for the cases reporting both the insertion of a pacemaker device and lead were approximately $16,500 higher than the average costs of all the cases in MS-DRG 378 ($23,711 versus $7,190). We refer readers to Table 6P.1c associated with this proposed rule (which is available via the internet on the CMS website) for the detailed report of our findings across the other medical MS-DRGs. We note that the average costs and average length of stay for cases reporting the insertion of a pacemaker device, the insertion of a pacemaker lead or the insertion of both a pacemaker device and lead are reflected in Columns D and E, while the average costs and average length of stay for all cases in the respective MS-DRG are reflected in Columns I and J. The claims data results from our analysis of this request showed that if we were to support restructuring the GROUPER logic so that pacemaker insertion procedures that include a combination of the insertion of the pacemaker device with the insertion of the pacemaker lead are designated as an O.R. procedure across all the MDCs, we would expect approximately 2,709 cases to move or ``shift'' from the medical MS-DRGs where they are currently grouping into the surgical unrelated MS-DRGs 981, 982, and 983. Our clinical advisors reviewed the data results and recommended that pacemaker insertion procedures involving a complete pacemaker system (insertion of pacemaker device combined with insertion of pacemaker lead) warrant classification into surgical MS-DRGs because the patients receiving these devices demonstrate greater treatment difficulty and utilization of resources when compared to procedures that involve the insertion of only the pacemaker device or the insertion of only the pacemaker lead. We note that the request we addressed in the FY 2017 IPPS/LTCH PPS proposed rule (81 FR 24981 through 24984) was to determine if some procedure code combinations were excluded from the ICD-10 MS-DRG assignments for MS-DRGs 242, 243, and 244. We proposed and, upon considering public comments received, finalized an alternate approach that we believed to be less complicated. We also stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56806) that we would continue to monitor the MS-DRGs for pacemaker insertion procedures as we receive ICD-10 claims data. Upon further review, we believe that recreating the procedure code combinations for pacemaker insertion procedures would allow for the grouping of these procedures to the surgical MS-DRGs, which we believe is warranted to better recognize the resources and complexity of performing these procedures. Therefore, we are proposing to recreate pairs of procedure code combinations involving both the insertion of a pacemaker device with the insertion of a pacemaker lead to act as procedure code combination pairs or ``clusters'' in the GROUPER logic that are designated as O.R. procedures outside of MDC 5 when reported together. We are inviting public comments on our proposal. We also are proposing to designate all the procedure codes describing the insertion of a pacemaker device or the insertion of a pacemaker lead as non-O.R. procedures when reported as a single, individual stand-alone code based on the recommendation of our clinical advisors as noted earlier in this section and consistent with how these procedures were classified under the Version 33 ICD-10 MS-DRG GROUPER logic. We are inviting public comments on our proposal. We refer readers to Table 6P.1d, Table 6P.1e, and Table 6P.1f associated with this proposed rule (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for (1) a complete list of the proposed procedure code combinations or ``pairs''; (2) a complete list of the procedure codes describing the insertion of a pacemaker device; and (3) a complete list of the procedure codes describing the insertion of a pacemaker lead. We are inviting public comments on our lists of procedure codes that we are proposing to include for restructuring the ICD-10 MS-DRG GROUPER logic for pacemaker insertion procedures. In addition, we are proposing to maintain the current GROUPER logic for MS-DRGs 258 and 259 (Cardiac [[Page 20204]] Pacemaker Device Replacement with MCC and without MCC, respectively) where the listed procedure codes as shown in the ICD-10 MS-DRG Definitions Manual Version 35, which is available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page-Items/FY2018-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending, describing a pacemaker device insertion, continue to be designated as ``non-O.R. affecting the MS-DRG'' because they are reported when a pacemaker device requires replacement and have a corresponding diagnosis from MDC 5. Also, we are proposing to maintain the current GROUPER logic for MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC, and without CC/MCC, respectively) so that cases reporting any one of the listed ICD-10-PCS procedure codes as shown in the ICD-10 MS-DRG Definitions Manual Version 35 describing procedures involving pacemakers and related procedures and associated devices will continue to be assigned to those MS-DRGs under MDC 5 because they are reported when a pacemaker device requires revision and they have a corresponding circulatory system diagnosis. We are inviting public comments on our proposal. We note that, while the requestor did not include the following procedure codes in its request, these codes are also currently designated as O.R. procedure codes and are assigned to MS-DRGs 260, 261, and 262 under MDC 5. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 02PA0MZ................... Removal of cardiac lead from heart, open approach. 02PA3MZ................... Removal of cardiac lead from heart, percutaneous approach. 02PA4MZ................... Removal of cardiac lead from heart, percutaneous endoscopic approach. 02WA0MZ................... Revision of cardiac lead in heart, open approach. 02WA3MZ................... Revision of cardiac lead in heart, percutaneous approach. 02WA4MZ................... Revision of cardiac lead in heart, percutaneous endoscopic approach. 0JPT0PZ................... Removal of cardiac rhythm related device from trunk subcutaneous tissue and fascia, open approach. 0JPT3PZ................... Removal of cardiac rhythm related device from trunk subcutaneous tissue and fascia, percutaneous approach. 0JWT0PZ................... Revision of cardiac rhythm related device in trunk subcutaneous tissue and fascia, open approach. 0JWT3PZ................... Revision of cardiac rhythm related device in trunk subcutaneous tissue and fascia, percutaneous approach. ------------------------------------------------------------------------ We are soliciting public comments on whether these procedure codes describing the removal or revision of a cardiac lead and removal or revision of a cardiac rhythm related (pacemaker) device should also be designated as non-O.R. procedure codes for FY 2019 when reported as a single, individual stand-alone code with a principal diagnosis outside of MDC 5 for consistency in the classification among these devices. We also note that, while the requestor did not include the following procedure codes in its request, the codes in the following table became effective October 1, 2016 (FY 2017) and also describe procedures involving the insertion of a pacemaker. Specifically, the following list includes procedure codes that describe an intracardiac or ``leadless'' pacemaker. These procedure codes are designated as O.R. procedure codes and are currently assigned to MS-DRGs 228 and 229 (Other Cardiothoracic Procedures with MCC and without MCC, respectively) under MDC 5. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 02H40NZ................... Insertion of intracardiac pacemaker into coronary vein, open approach. 02H43NZ................... Insertion of intracardiac pacemaker into coronary vein, percutaneous approach. 02H44NZ................... Insertion of intracardiac pacemaker into coronary vein, percutaneous endoscopic approach. 02H60NZ................... Insertion of intracardiac pacemaker into right atrium, open approach. 02H63NZ................... Insertion of intracardiac pacemaker into right atrium, percutaneous approach. 02H64NZ................... Insertion of intracardiac pacemaker into right atrium, percutaneous endoscopic approach. 02H70NZ................... Insertion of intracardiac pacemaker into left atrium, open approach. 02H73NZ................... Insertion of intracardiac pacemaker into left atrium, percutaneous approach. 02H74NZ................... Insertion of intracardiac pacemaker into left atrium, percutaneous endoscopic approach. 02HK0NZ................... Insertion of intracardiac pacemaker into right ventricle, open approach. 02HK3NZ................... Insertion of intracardiac pacemaker into right ventricle, percutaneous approach. 02HK4NZ................... Insertion of intracardiac pacemaker into right ventricle, percutaneous endoscopic approach. 02HL0NZ................... Insertion of intracardiac pacemaker into left ventricle, open approach. 02HL3NZ................... Insertion of intracardiac pacemaker into left ventricle, percutaneous Approach. 02HL4NZ................... Insertion of intracardiac pacemaker into left ventricle, percutaneous endoscopic approach. 02WA0NZ................... Revision of intracardiac pacemaker in heart, open approach. 02WA3NZ................... Revision of intracardiac pacemaker in heart, percutaneous approach. 02WA4NZ................... Revision of intracardiac pacemaker in heart, percutaneous endoscopic approach. 02WAXNZ................... Revision of intracardiac pacemaker in heart, external approach. 02H40NZ................... Insertion of intracardiac pacemaker into coronary vein, open approach. 02H43NZ................... Insertion of intracardiac pacemaker into coronary vein, percutaneous approach. ------------------------------------------------------------------------ We examined claims data for procedures involving an intracardiac pacemaker reporting any of the above codes across all MS-DRGs. Our findings are shown in the following table. [[Page 20205]] Intracardiac Pacemaker Procedures ---------------------------------------------------------------------------------------------------------------- Average length Across all MS-DRGs Number of cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- Procedures for intracardiac pacemaker........................ 1,190 8.6 $38,576 ---------------------------------------------------------------------------------------------------------------- We found 1,190 cases reporting a procedure involving an intracardiac pacemaker with an average length of stay of 8.6 days and average costs of $38,576. Of these 1,190 cases, we found 1,037 cases in MS-DRGs under MDC 5. We also found that the 153 cases that grouped to MS-DRGs outside of MDC 5 grouped to surgical MS-DRGs; therefore, another O.R. procedure was also reported on the claim. However, we are soliciting public comments on whether these procedure codes describing the insertion and revision of intracardiac pacemakers should also be considered for classification into all surgical unrelated MS-DRGs outside of MDC 5 for FY 2019. b. Drug-Coated Balloons in Endovascular Procedures In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38111), we discontinued new technology add[dash]on payments for the LUTONIX[reg] and IN.PACTTM AdmiralTM drug-coated balloon (DCB) technologies, effective for FY 2018, because the technology no longer met the newness criterion for new technology add-on payments. For FY 2019, we received a request to reassign cases that utilize a drug- coated balloon in the performance of an endovascular procedure involving the treatment of superficial femoral arteries for peripheral arterial disease from the lower severity level MS-DRG 254 (Other Vascular Procedures without CC/MCC) and MS-DRG 253 (Other Vascular Procedures with CC) to the highest severity level MS-DRG 252 (Other Vascular Procedures with MCC). We also received a request to revise the title of MS-DRG 252 to ``Other Vascular Procedures with MCC or Drug- Coated Balloon Implant''. There are currently 36 ICD-10-PCS procedure codes that describe the performance of endovascular procedures involving treatment of the superficial femoral arteries that utilize a drug-coated balloon, which are listed in the following table. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 047K041................... Dilation of right femoral artery with drug- eluting intraluminal device using drug- coated balloon, open approach. 047K0D1................... Dilation of right femoral artery with intraluminal device using drug-coated balloon, open approach. 047K0Z1................... Dilation of right femoral artery using drug- coated balloon, open approach. 047K341................... Dilation of right femoral artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous approach. 047K3D1................... Dilation of right femoral artery with intraluminal device using drug-coated balloon, percutaneous approach. 047K3Z1................... Dilation of right femoral artery using drug- coated balloon, percutaneous approach. 047K441................... Dilation of right femoral artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous endoscopic approach. 047K4D1................... Dilation of right femoral artery with intraluminal device using drug-coated balloon, percutaneous endoscopic approach. 047K4Z1................... Dilation of right femoral artery using drug- coated balloon, percutaneous endoscopic approach. 047L041................... Dilation of left femoral artery with drug- eluting intraluminal device using drug- coated balloon, open approach. 047L0D1................... Dilation of left femoral artery with intraluminal device using drug-coated balloon, open approach. 047L0Z1................... Dilation of left femoral artery using drug- coated balloon, open approach. 047L341................... Dilation of left femoral artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous approach. 047L3D1................... Dilation of left femoral artery with intraluminal device using drug-coated balloon, percutaneous approach. 047L3Z1................... Dilation of left femoral artery using drug- coated balloon, percutaneous approach. 047L441................... Dilation of left femoral artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous endoscopic approach. 047L4D1................... Dilation of left femoral artery with intraluminal device using drug-coated balloon, percutaneous endoscopic approach. 047L4Z1................... Dilation of left femoral artery using drug- coated balloon, percutaneous endoscopic approach. 047M041................... Dilation of right popliteal artery with drug- eluting intraluminal device using drug- coated balloon, open approach. 047M0D1................... Dilation of right popliteal artery with intraluminal device using drug-coated balloon, open approach. 047M0Z1................... Dilation of right popliteal artery using drug-coated balloon, open approach. 047M341................... Dilation of right popliteal artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous approach. 047M3D1................... Dilation of right popliteal artery with intraluminal device using drug-coated balloon, percutaneous approach. 047M3Z1................... Dilation of right popliteal artery using drug-coated balloon, percutaneous approach. 047M441................... Dilation of right popliteal artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous endoscopic approach. 047M4D1................... Dilation of right popliteal artery with intraluminal device using drug-coated balloon, percutaneous endoscopic approach. 047M4Z1................... Dilation of right popliteal artery using drug-coated balloon, percutaneous endoscopic approach. 047N041................... Dilation of left popliteal artery with drug- eluting intraluminal device using drug- coated balloon, open approach. 047N0D1................... Dilation of left popliteal artery with intraluminal device using drug-coated balloon, open approach. 047N0Z1................... Dilation of left popliteal artery using drug- coated balloon, open approach. 047N341................... Dilation of left popliteal artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous approach. 047N3D1................... Dilation of left popliteal artery with intraluminal device using drug-coated balloon, percutaneous approach. 047N3Z1................... Dilation of left popliteal artery using drug- coated balloon, percutaneous approach. 047N441................... Dilation of left popliteal artery with drug- eluting intraluminal device using drug- coated balloon, percutaneous endoscopic approach. 047N4D1................... Dilation of left popliteal artery with intraluminal device using drug-coated balloon, percutaneous endoscopic approach. 047N4Z1................... Dilation of left popliteal artery using drug- coated balloon, percutaneous endoscopic approach. ------------------------------------------------------------------------ [[Page 20206]] The requestor performed its own analysis of claims data and expressed concern that it found that the average costs of cases using a drug-coated balloon in the performance of percutaneous endovascular procedures involving treatment of patients who have been diagnosed with peripheral arterial disease are significantly higher than the average costs of all of the cases in the MS-DRGs where these procedures are currently assigned. The requestor also expressed concern that payments may no longer be adequate because the new technology add-on payments have been discontinued and may affect patient access to these procedures. We first examined claims data from the September 2017 update of the FY 2017 MedPAR file for cases reporting any 1 of the 36 ICD-10-PCS procedure codes listed in the immediately preceding table that describe the use of a drug-coated balloon in the performance of endovascular procedures in MS-DRGs 252, 253, and 254. Our findings are shown in the following table. MS-DRGs for Other Vascular Procedures With Drug[dash]Coated Balloon ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 252--All cases........................................... 33,583 7.6 $23,906 MS-DRG 252--Cases with drug-coated balloon...................... 870 8.8 30,912 MS-DRG 253--All cases........................................... 25,714 5.4 18,986 MS-DRG 253--Cases with drug-coated balloon...................... 1,532 5.4 23,051 MS-DRG 254--All cases........................................... 12,344 2.8 13,287 MS-DRG 254--Cases with drug-coated balloon...................... 488 2.4 17,445 ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 33,583 cases in MS- DRG 252, with an average length of stay of 7.6 days and average costs of $23,906. There were 870 cases in MS-DRG 252 reporting the use of a drug-coated balloon in the performance of an endovascular procedure, with an average length of stay of 8.8 days and average costs of $30,912. The total number of cases in MS-DRG 253 was 25,714, with an average length of stay of 5.4 days and average costs of $18,986. There were 1,532 cases in MS-DRG 253 reporting the use of a DCB in the performance of an endovascular procedure, with an average length of stay of 5.4 days and average costs of $23,051. The total number of cases in MS-DRG 254 was 12,344, with an average length of stay of 2.8 days and average costs of $13,287. There were 488 cases in MS-DRG 254 reporting the use of a DCB in the performance of an endovascular procedure, with an average length of stay of 2.4 days and average costs of $17,445. The results of our data analysis show that there is not a very high volume of cases reporting the use of a drug-coated balloon in the performance of endovascular procedures compared to all of the cases in the assigned MS-DRGs. The data results also show that the average length of stay for cases reporting the use of a drug[dash]coated balloon in the performance of endovascular procedures in MS-DRGs 253 and 254 is lower compared to the average length of stay for all of the cases in the assigned MS-DRGs, while the average length of stay for cases reporting the use of a drug-coated balloon in the performance of endovascular procedures in MS-DRG 252 is slightly higher compared to all of the cases in MS-DRG 252 (8.8 days versus 7.6 days). Lastly, the data results showed that the average costs for cases reporting the use of a drug-coated balloon in the performance of percutaneous endovascular procedures were higher compared to all of the cases in the assigned MS-DRGs. Specifically, for MS-DRG 252, the average costs for cases reporting the use of a DCB in the performance of endovascular procedures were $30,912 versus the average costs of $23,906 for all cases in MS-DRG 252, a difference of $7,006. For MS-DRG 253, the average costs for cases reporting the use of a drug-coated balloon in the performance of endovascular procedures were $23,051 versus the average costs of $18,986 for all cases in MS-DRG 253, a difference of $4,065. For MS-DRG 254, the average costs for cases reporting the use of a drug-coated balloon in the performance of endovascular procedures were $17,445 versus the average costs of $13,287 for all cases in MS- DRG 254, a difference of $4,158. The following table is a summary of the findings discussed above from our review of MS-DRGs 252, 253 and 254 and the total number of cases that used a drug[dash]coated balloon in the performance of the procedure across MS-DRGs 252, 253, and 254. MS-DRGs for Other Vascular Procedures and Cases With Drug-Coated Balloon ---------------------------------------------------------------------------------------------------------------- Number of Average Length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 252, 253, and 254--All cases............................ 71,641 6.0 $20,310 MS-DRGs 252, 253, and 254--Cases with drug-coated balloon....... 2,890 6.0 24,569 ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 71,641 cases across MS-DRGs 252, 253, and 254, with an average length of stay of 6.0 days and average costs of $20,310. There were a total of 2,890 cases across MS-DRGs 252, 253, and 254 reporting the use of a drug-coated balloon in the performance of the procedure, with an average length of stay of 6.0 days and average costs of $24,569. The data analysis showed that cases reporting the use of a drug-coated balloon in the performance of the procedure across MS-DRGs 252, 253 and 254 have similar lengths of stay (6.0 days) compared to the average length of stay for all of the cases in MS-DRGs 252, 253, and 254. The data results also showed that the cases reporting the use of a drug-coated balloon in the performance of the procedure across [[Page 20207]] these MS-DRGs have higher average costs ($24,569 versus $20,310) compared to the average costs for all of the cases across these MS- DRGs. The results of our claims data analysis and the advice from our clinical advisors do not support reassigning cases reporting the use of a drug-coated balloon in the performance of these procedures from the lower severity level MS-DRGs 253 and 254 to the highest severity level MS-DRG 252 at this time. If we were to reassign cases that utilize a drug-coated balloon in the performance of these types of procedures from MS-DRG 254 to MS-DRG 252, the cases would result in overpayment and also would have a shorter length of stay compared to all of the cases in MS-DRG 252. While the cases reporting the use of a drug-coated balloon in the performance of these procedures are higher compared to the average costs for all cases in their assigned MS-DRGs, it is not by a significant amount. We believe that as use of a drug-coated balloon becomes more common, the costs will be reflected in the data. Our clinical advisors also agreed that it would not be clinically appropriate to reassign cases for patients from the lowest severity level (without CC/MCC) MS-DRG to the highest severity level (with MCC) MS-DRG in the absence of additional data to better determine the resource utilization for this subset of patients. Therefore, for these reasons, we are proposing to not reassign cases reporting the use of a drug-coated balloon in the performance of endovascular procedures from MS-DRGs 253 and 254 to MS-DRG 252. We are inviting public comments on our proposal. We note that because 24 of the 36 ICD-10-PCS procedure codes describing the use of a drug-coated balloon in the performance of endovascular procedures also include the use of an intraluminal device, we conducted further analysis to determine the number of cases reporting an intraluminal device with the use of a drug-coated balloon in the performance of the procedure versus the number of cases reporting the use of a drug[dash]coated balloon alone. We analyzed the number of cases across MS-DRGs 252, 253, and 254 reporting: (1) The use of an intraluminal device (stent) with use of a drug-coated balloon in the performance of the procedure; (2) the use of a drug-eluting intraluminal device (stent) with the use of a drug-coated balloon in the performance of the procedure; and (3) the use of a drug-coated balloon only in the performance of the procedure. Our findings are shown in the following table. MS-DRGs for Other Vascular Procedures and Cases With Drug-Coated Balloon ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 252, 253 and 254--All cases............................. 71,641 6.0 $20,310 MS-DRGs 252, 253 and 254--Cases with intraluminal device with 522 6.0 28,418 drug-coated balloon............................................ MS-DRGs 252, 253 and 254--Cases with drug-eluting intraluminal 447 6.0 26,098 device with drug-coated balloon................................ MS-DRGs 252, 253 and 254--Cases with drug-coated balloon only... 2,705 6.1 24,553 ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 71,641 cases across MS-DRGs 252, 253, and 254, with an average length of stay of 6.0 days and average costs of $20,310. There were 522 cases across MS-DRGs 252, 253, and 254 reporting the use of an intraluminal device with use of a drug-coated balloon in the performance of the procedure, with an average length of stay of 6.0 days and average costs of $28,418. There were 447 cases across MS-DRGs 252, 253, and 254 reporting the use of a drug[dash]eluting intraluminal device with use of a drug-coated balloon in the performance of the procedure, with an average length of stay of 6.0 days and average costs of $26,098. Lastly, there were 2,705 cases across MS-DRGs 252, 253, and 254 reporting the use of a drug-coated balloon alone in the performance of the procedure, with an average length of stay of 6.1 days and average costs of $24,553. The data showed that the 2,705 cases in MS-DRGs 252, 253, and 254 reporting the use of a drug-coated balloon alone in the performance of the procedure have lower average costs compared to the 969 cases in MS- DRGs 252, 253, and 254 reporting the use of an intraluminal device (522 cases) or a drug-eluting intraluminal device (447 cases) with a drug- coated balloon in the performance of the procedure ($24,553 versus $28,418 and $26,098, respectively). The data also showed that the cases reporting the use of a drug-coated balloon alone in the performance of the procedure have a comparable average length of stay compared to the cases reporting the use of an intraluminal device or a drug-eluting intraluminal device with a drug-coated balloon in the performance of the procedure (6.1 days versus 6.0 days). In summary, we believe that further analysis of endovascular procedures involving the treatment of superficial femoral arteries for peripheral arterial disease that utilize a drug-coated balloon in the performance of the procedure would be advantageous. As additional claims data become available, we will be able to more fully evaluate the differences in cases where a procedure utilizes a drug-coated balloon alone in the performance of the procedure versus cases where a procedure utilizes an intraluminal device or a drug-eluting intraluminal device in addition to a drug-coated balloon in the performance of the procedure. 5. MDC 6 (Diseases and Disorders of the Digestive System) a. Benign Lipomatous Neoplasm of Kidney We received a request to reassign ICD-10-CM diagnosis code D17.71 (Benign lipomatous neoplasm of kidney) from MDC 06 (Diseases and Disorders of the Digestive System) to MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract). The requestor stated that this diagnosis code is used to describe a kidney neoplasm and believed that because the ICD-10-CM code is specific to the kidney, a more appropriate assignment would be under MDC 11. In FY 2015, under the ICD-9-CM classification, there was not a specific diagnosis code for a benign lipomatous neoplasm of the kidney. The only diagnosis code available was ICD-9-CM diagnosis code 214.3 (Lipoma of intra[dash]abdominal organs), which was assigned to MS-DRGs 393, 394, and 395 (Other Digestive System Diagnoses with MCC, with CC, and without CC/MCC, respectively) under MDC 6. Therefore, when we converted from the ICD-9 based MS[dash]DRGs to the ICD[dash]10 MS[dash]DRGs, there was not a specific code available that identified the kidney from which to [[Page 20208]] replicate. As a result, ICD-10-CM diagnosis code D17.71 was assigned to those same MS-DRGs (MS-DRGs 393, 394, and 395) under MDC 6. While reviewing the MS-DRG classification of ICD-10-CM diagnosis code D17.71, we also reviewed the MS-DRG classification of another diagnosis code organized in subcategory D17.7, ICD-10-CM diagnosis code D17.72 (Benign lipomatous neoplasm of other genitourinary organ). ICD- 10-CM diagnosis code D17.72 is currently assigned under MDC 09 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) to MS-DRGs 606 and 607 (Minor Skin Disorders with and without MCC, respectively). Similar to the replication issue with ICD-10-CM diagnosis code D17.71, with ICD-10-CM diagnosis code D17.72, under the ICD-9-CM classification, there was not a specific diagnosis code to identify a benign lipomatous neoplasm of genitourinary organ. The only diagnosis code available was ICD-9-CM diagnosis code 214.8 (Lipoma of other specified sites), which was assigned to MS-DRGs 606 and 607 under MDC 09. Therefore, when we converted from the ICD-9 based MS[dash]DRGs to the ICD-10 MS[dash]DRGs, there was not a specific code available that identified another genitourinary organ (other than the kidney) from which to replicate. As a result, ICD-10-CM diagnosis code D17.72 was assigned to those same MS-DRGs (MS-DRGs 606 and 607) under MDC 9. We are proposing to reassign ICD-10-CM diagnosis code D17.71 from MS-DRGs 393, 394, and 395 (Other Digestive System Diagnoses with MCC, with CC, and without CC/MCC, respectively) under MDC 06 to MS-DRGs 686, 687, and 688 (Kidney and Urinary Tract Neoplasms with MCC, with CC, and without CC/MCC, respectively) under MDC 11 because this diagnosis code is used to describe a kidney neoplasm. We also are proposing to reassign ICD-10-CM diagnosis code D17.72 from MS-DRGs 606 and 607 under MDC 09 to MS-DRGs 686, 687, and 688 under MDC 11 because this diagnosis code is used to describe other types of neoplasms classified to the genitourinary tract that do not have a specific code identifying the site. Our clinical advisors agree that the conditions described by the ICD-10-CM diagnosis codes provide specific anatomic detail involving the kidney and genitourinary tract and, therefore, if reclassified under this proposed MDC and reassigned to these MS-DRGs, would improve the clinical coherence of the patients assigned to these groups. We are inviting public comments on our proposals. b. Bowel Procedures We received a request to reassign the following 8 ICD-10-PCS procedure codes that describe repositioning of the colon and takedown of end colostomy from MS-DRGs 344, 345, and 346 (Minor Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 329, 330, and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively): ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0DSK0ZZ................... Reposition ascending colon, open approach. 0DKL4ZZ................... Reposition ascending colon, percutaneous endoscopic approach. 0DSL0ZZ................... Reposition transverse colon, open approach. 0DSL4ZZ................... Reposition transverse colon, percutaneous endoscopic approach. 0DSM0ZZ................... Reposition descending colon, open approach. 0DSM4ZZ................... Reposition descending colon, percutaneous endoscopic approach. 0DSN0ZZ................... Reposition sigmoid colon, open approach. 0DSN4ZZ................... Reposition sigmoid colon, percutaneous endoscopic approach. ------------------------------------------------------------------------ The requestor indicated that the resources required for procedures identifying repositioning of specified segments of the large bowel are more closely aligned with other procedures that group to MS-DRGs 329, 330, and 331, such as repositioning of the large intestine (unspecified segment). We analyzed the claims data from the September 2017 update of the FY 2017 Med PAR file for MS-DRGs 344, 345 and 346 for all cases reporting the 8 ICD[dash]10-PCS procedure codes listed in the table above. Our findings are shown in the following table: ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 344--All cases........................................... 1,452 9.5 $20,609 MS-DRG 344--All cases with a specific large bowel reposition 52 9.6 23,409 procedure...................................................... MS-DRG 345--All cases........................................... 2,674 5.6 11,552 MS-DRG 345--All cases with a specific large bowel reposition.... 246 6 14,915 MS-DRG 346--All cases........................................... 990 3.8 8,977 MS-DRG 346--All cases with a specific large bowel reposition 223 4.5 12,279 procedure...................................................... ---------------------------------------------------------------------------------------------------------------- The data showed that the average length of stay and average costs for cases that reported a specific large bowel reposition procedure were generally consistent with the average length of stay and average costs for all of the cases in their assigned MS-DRG. We then examined the claims data in the September 2017 update of the FY 2017 MedPAR file for MS-DRGs 329, 330 and 331. Our findings are shown in the following table. [[Page 20209]] ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 329, 330, and 331--All cases............................ 112,388 8.4 $21,382 MS-DRG 329--All cases........................................... 33,640 13.3 34,015 MS-DRG 330--All cases........................................... 52,644 7.3 17,896 MS-DRG 331--All cases........................................... 26,104 4.1 12,132 ---------------------------------------------------------------------------------------------------------------- As shown in this table, across MS-DRGs 329, 330, and 331, we found a total of 112,388 cases, with an average length of stay of 8.4 days and average costs of $21,382. The results of our analysis indicate that the resources required for cases reporting the specific large bowel repositioning procedures are more aligned with those resources required for all cases assigned to MS-DRGs 344, 345, and 346, with the average costs being lower than the average costs for all cases assigned to MS- DRGs 329, 330, and 331. Our clinical advisors also indicated that the 8 specific bowel repositioning procedures are best aligned with those in MS-DRGs 344, 345, and 346. Therefore, we are proposing to maintain the current assignment of the 8 specific bowel repositioning procedures in MS[dash]DRGs 344, 345, and 346 for FY 2019. We are inviting public comments on this proposal. In conducting our analysis of MS-DRGs 329, 330, and 331, we also examined the subset of cases reporting one of the bowel procedures listed in the following table as the only O.R. procedure. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0DQK0ZZ................... Repair ascending colon, open approach. 0DQK4ZZ................... Repair ascending colon, percutaneous endoscopic approach. 0DQL0ZZ................... Repair transverse colon, open approach. 0DQL4ZZ................... Repair transverse colon, percutaneous endoscopic approach. 0DQM0ZZ................... Repair descending colon, open approach. 0DQM4ZZ................... Repair descending colon, percutaneous endoscopic approach. 0DQN0ZZ................... Repair sigmoid colon, open approach. 0DQN4ZZ................... Repair sigmoid colon, percutaneous endoscopic approach. 0DSB0ZZ................... Reposition ileum, open approach. 0DSB4ZZ................... Reposition ileum, percutaneous endoscopic approach. 0DSE0ZZ................... Reposition large intestine, open approach. 0DSE4ZZ................... Reposition large intestine, percutaneous endoscopic approach. ------------------------------------------------------------------------ This approach can be useful in determining whether resource use is truly associated with a particular procedure or whether the procedure frequently occurs in cases with other procedures with higher than average resource use. As shown in the following table, we identified 398 cases reporting a bowel procedure as the only O.R. procedure, with an average length of stay of 6.3 days and average costs of $13,595 across MS-DRGs 329, 330, and 331, compared to the overall average length of stay of 8.4 days and average costs of $21,382 for all cases in MS-DRGs 329, 330, and 331. ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 329, 330 and 331--All cases............................. 112,388 8.4 $21,382 MS-DRGs 329, 330 and 331--All cases with a bowel procedure as 398 6.3 13,595 only O.R. procedure............................................ MS-DRG 329--All cases........................................... 33,640 13.3 34,015 MS-DRG 329--Cases with a bowel procedure as only O.R. procedure. 86 8.3 19,309 MS-DRG 330--All cases........................................... 52,644 7.3 17,896 MS-DRG 330--Cases with a bowel procedure as only O.R. procedure. 183 6.9 13,617 MS-DRG 331--All cases........................................... 26,104 4.1 12,132 MS-DRG 331--Cases with a bowel procedure as only O.R. procedure. 129 4.3 9,754 ---------------------------------------------------------------------------------------------------------------- The resources required for these cases are more aligned with the resources required for cases assigned to MS-DRGs 344, 345, and 346 than with the resources required for cases assigned to MS-DRGs 329, 330, and 331. Our clinical advisors also agreed that these cases are more clinically aligned with cases in MS-DRGs 344, 345, and 346, as they are minor procedures relative to the major bowel procedures assigned to MS- DRGs 329, 330, and 331. Therefore, we are proposing to reassign the 12 ICD-10-PCS procedure codes listed above from MS-DRGs 329, 330, and 331 to MS-DRGs 344, 345, and 346. We are inviting public comments on this proposal. 6. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue): Spinal Fusion In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38036), we announced our plans to review the ICD-10 logic for the MS-DRGs where procedures involving spinal fusion are currently assigned for FY 2019. After publication of the FY 2018 IPPS/LTCH PPS final rule, we [[Page 20210]] received a comment suggesting that CMS publish findings from this review and discuss possible future actions. The commenter agreed that it is important to be able to fully evaluate the MS-DRGs to which all spinal fusion procedures are currently assigned with additional claims data, particularly considering the 33 clinically invalid codes that were identified through the rulemaking process (82 FR 38034 through 38035) and the 87 codes identified from the upper and lower joint fusion tables in the ICD-10-PCS classification and discussed at the September 12, 2017 ICD-10 Coordination and Maintenance Committee that were proposed to be deleted effective October 1, 2018 (FY 2019). The agenda and handouts from that meeting can be obtained from the CMS website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html. According to the commenter, deleting the 33 procedure codes describing clinically invalid spinal fusion procedures for FY 2018 partially resolves the issue for data used in setting the FY 2020 payment rates. However, the commenter also noted that the problem will not be fully resolved until the FY 2019 claims are available for FY 2021 ratesetting (due to the 87 codes identified at the ICD-10 Coordination and Maintenance Committee meeting for deletion effective October 1, 2018 (FY 2019)). The commenter noted that it analyzed claims data from the FY 2016 MedPAR data set and was surprised to discover a significant number of discharges reporting 1 of the 87 clinically invalid codes that were identified and discussed by the ICD-10 Coordination and Maintenance Committee among the following spinal fusion MS-DRGs. ------------------------------------------------------------------------ MS-DRG Description ------------------------------------------------------------------------ 453....................... Combined Anterior/Posterior Spinal Fusion with MCC. 454....................... Combined Anterior/Posterior Spinal Fusion with CC. 455....................... Combined Anterior/Posterior Spinal Fusion without CC/MCC. 456....................... Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC. 457....................... Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with CC. 458....................... Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions without CC/MCC. 459....................... Spinal Fusion Except Cervical with MCC. 460....................... Spinal Fusion Except Cervical without MCC. 471....................... Cervical Spinal Fusion with MCC. 472....................... Cervical Spinal Fusion with CC. 473....................... Cervical Spinal Fusion without CC/MCC. ------------------------------------------------------------------------ In addition, the commenter noted that it also identified a number of discharges for the 33 clinically invalid codes we identified in the FY 2018 IPPS/LTCH PPS final rule in the same MS-DRGs listed above. According to the commenter, its findings of these invalid spinal fusion procedure codes in the FY 2016 claims data comprise approximately 30 percent of all discharges for spinal fusion procedures. The commenter expressed its appreciation that CMS is making efforts to address coding inaccuracies within the classification and suggested that CMS publish findings from its own review of spinal fusion coding issues in those MS-DRGs where cases reporting spinal fusion procedures are currently assigned and include a discussion of possible future actions in the FY 2019 IPPS/LTCH PPS proposed rule. The commenter believed that such an approach would allow time for stakeholder input on any possible proposals along with time for the invalid codes to be worked out of the datasets. The commenter also noted that publishing CMS' findings will put the agency, as well as the public, in a better position to address any potential payment issues for these services beginning in FY 2021. We thank the commenter for acknowledging the steps we have taken in our efforts to address coding inaccuracies within the classification as we continue to refine the ICD-10 MS-DRGs. We are not proposing any changes to the MS-DRGs involving spinal fusion procedures for FY 2019. However, in response to the commenter's suggestion and findings, we are providing the results from our analysis of the September 2017 update of the FY 2017 MedPAR claims data for the MS-DRGs involving spinal fusion procedures. We note that while the commenter stated that 87 codes were identified from the upper and lower joint fusion tables in the ICD-10- PCS classification and discussed at the September 12, 2017 ICD-10 Coordination and Maintenance Committee meeting to be deleted effective October 1, 2018 (FY 2019), there were 99 spinal fusion codes identified in the meeting materials, as shown in Table 6P.1g associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). As shown in Table 6P.1g associated with this proposed rule, the 99 procedure codes describe spinal fusion procedures that have device value ``Z'' representing No Device for the 6th character in the code. Because a spinal fusion procedure always requires some type of device (for example, instrumentation with bone graft or bone graft alone) to facilitate the fusion of vertebral bones, these codes are considered clinically invalid and were proposed for deletion at the September 12, 2017 ICD-10 Coordination and Maintenance Committee meeting. We received public comments in support of the proposal to delete the 99 codes describing a spinal fusion without a device, in addition to receiving support for the deletion of other procedure codes describing fusion of body sites other than the spine. A total of 213 procedure codes describing fusion of a specific body part with device value ``Z'' No Device are being deleted effective October 1, 2018 (FY 2019) as shown in Table 6D.--Invalid Procedure Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We examined claims data from the September 2017 update of the FY 2017 MedPAR file for cases reporting any of the clinically invalid spinal fusion procedures with device value ``Z'' No Device in MS-DRGs 028 (Spinal Procedures with MCC), 029 (Spinal Procedures with CC or Spinal Neurostimulators), and 030 (Spinal Procedures without CC/MCC) under [[Page 20211]] MDC 1 and MS-DRGs 453, 454, 455, 456, 457, 458, 459, 460, 471, 472, and 473 under MDC 8 (that are listed and shown earlier in this section). Our findings are shown in the following tables. Spinal Fusion Procedures ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 028--All cases........................................... 1,927 11.7 $37,524 MS-DRG 028--Cases with invalid spinal fusion procedures......... 132 13 52,034 MS-DRG 029--All cases........................................... 3,426 5.7 22,525 MS-DRG 029--Cases with invalid spinal fusion procedures......... 171 7.4 33,668 MS-DRG 030--All cases........................................... 1,578 3 15,984 MS-DRG 030--Cases with invalid spinal fusion procedures......... 52 2.6 22,471 MS-DRG 453--All cases........................................... 2,891 9.5 70,005 MS-DRG 453--Cases with invalid spinal fusion procedures......... 823 10.1 84,829 MS-DRG 454--All cases........................................... 12,288 4.7 47,334 MS-DRG 454--Cases with invalid spinal fusion procedures......... 2,473 5.4 59,814 MS-DRG 455--All cases........................................... 12,751 3 37,440 MS-DRG 455--Cases with invalid spinal fusion procedures......... 2,332 3.2 45,888 MS-DRG 456--All cases........................................... 1,439 11.5 66,447 MS-DRG 456--Cases with invalid spinal fusion procedures......... 404 12.5 71,385 MS-DRG 457--All cases........................................... 3,644 6 48,595 MS-DRG 457--Cases with invalid spinal fusion procedures......... 960 6.7 53,298 MS-DRG 458--All cases........................................... 1,368 3.6 37,804 MS-DRG 458--Cases with invalid spinal fusion procedures......... 244 4.1 43,182 MS-DRG 459--All cases........................................... 4,904 7.8 43,862 MS-DRG 459--Cases with invalid spinal fusion procedures......... 726 9 49,387 MS-DRG 460--All cases........................................... 59,459 3.4 29,870 MS-DRG 460--Cases with invalid spinal fusion procedures......... 5,311 3.9 31,936 MS-DRG 471--All cases........................................... 3,568 8.4 36,272 MS-DRG 471--Cases with invalid spinal fusion procedures......... 389 9.9 43,014 MS-DRG 472--All cases........................................... 15,414 3.2 21,836 MS-DRG 472--Cases with invalid spinal fusion procedures......... 1,270 4 25,780 MS-DRG 473--All cases........................................... 18,095 1.8 17,694 MS-DRG 473--Cases with invalid spinal fusion procedures......... 1,185 2.3 19,503 ---------------------------------------------------------------------------------------------------------------- Summary Table for Spinal Fusion Procedures ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 028, 029, 030, 453, 454, 455, 456, 457, 458, 459, 460, 142,752 3.9 $31,788 471, 472, and 473--All cases................................... MS-DRGs 028, 029, 030, 453, 454, 455, 456, 457, 458, 459, 460, 16,472 5.1 42,929 471, 472, and 473--Cases with invalid spinal fusion procedures. ---------------------------------------------------------------------------------------------------------------- As shown in this summary table, we found a total of 142,752 cases in MS-DRGs 028, 029, 030, 453, 454, 455, 456, 457, 458, 459, 460, 471, 472, and 473 with an average length of stay of 3.9 days and average costs of $31,788. We found a total of 16,472 cases reporting a procedure code for an invalid spinal fusion procedure with device value ``Z'' No Device across MS-DRGs 028, 029, and 030 under MDC 1 and MS- DRGs 453, 454, 455, 456, 457, 458, 459, 460, 471, 472, and 473 under MDC 8, with an average length of stay of 5.1 days and average costs of $42,929. The results of the data analysis demonstrate that these invalid spinal fusion procedures represent approximately 12 percent of all discharges across the spinal fusion MS-DRGs. Because these procedure codes describe clinically invalid procedures, we would not expect these codes to be reported on any claims data. It is unclear why providers assigned procedure codes for spinal fusion procedures with the device value ``Z'' No Device. Our analysis did not examine whether these claims were isolated to a specific provider or whether this inaccurate reporting was widespread among a number of providers. With regard to possible future action, we will continue to monitor the claims data for resolution of the coding issues previously identified. Because the procedure codes that we analyzed and presented findings for in this FY 2019 IPPS/LTCH PPS proposed rule are no longer in the classification effective October 1, 2018 (FY 2019), the claims data that we examine for FY 2020 may still contain claims with the invalid codes. As such, we will continue to collaborate with the AHA as one of the four Cooperating Parties through the AHA's Coding Clinic for ICD-10-CM/PCS and provide further education on spinal fusion procedures and the proper reporting of the ICD-10-PCS spinal fusion procedure codes. We agree with the commenter that until these coding inaccuracies are no longer reflected in the claims data, it would be premature to propose any MS-DRG modifications for spinal fusion procedures. Possible MS-DRG modifications may include taking into account the approach that was utilized in performing the spinal fusion procedure (for example, open versus percutaneous). For the reasons described, stated earlier in our discussion, we are proposing to not make any changes to the spinal fusion MS-DRGs for FY 2019. [[Page 20212]] We are inviting public comments on our proposal. 7. MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast): Cellulitis With Methicillin Resistant Staphylococcus Aureus (MSRA) Infection We received a request to reassign ICD-10-CM diagnosis codes reported with a primary diagnosis of cellulitis and a secondary diagnosis code of B95.62 (Methicillin resistant Staphylococcus aureus infection as the cause of diseases classified elsewhere) or A49.02 (Methicillin resistant Staphylococcus aureus infection, unspecified site). Currently, these cases are assigned to MS-DRG 602 (Cellulitis with MCC) and MS-DRG 603 (Cellulitis without MCC) in MDC 9. The requestor believed that cases of cellulitis with MSRA infection should be reassigned to MS-DRG 867 (Other Infectious and Parasitic Diseases Diagnoses with MCC) because MS-DRGs 602 and 603 include cases that do not accurately reflect the severity of illness or risk of mortality for patients diagnosed with cellulitis and MRSA. The requestor acknowledged that the organism is not to be coded before the localized infection, but stated in its request that patients diagnosed with cellulitis and MRSA are entirely different from patients diagnosed only with cellulitis. The requestor stated that there is a genuine threat to life or limb in these cases. The requestor further stated that, with the opioid crisis and the frequency of MRSA infection among this population, cases of cellulitis with MRSA should be identified with a specific combination code and assigned to MS-DRG 867. We analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for all cases assigned to MS-DRGs 602 and 603 and subsets of these cases reporting a primary ICD-10-CM diagnosis of cellulitis and a secondary diagnosis code of B95.62 or A49.02. Our findings are shown in the following table. ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 602--All cases........................................... 26,244 5.8 $10,034 MS-DRG 603--All cases........................................... 104,491 3.9 6,128 MS-DRGs 602 and 603--Cases reported with a primary diagnosis of 5,364 5.3 8,245 cellulitis and a secondary diagnosis of B95.62................. MS-DRGs 602 and 603--Cases reported with a primary diagnosis of 309 5.4 8,832 cellulitis and a secondary diagnosis of A49.02................. ---------------------------------------------------------------------------------------------------------------- As shown in this table, we examined the subsets of cases in MS-DRGs 602 and 603 reported with a primary diagnosis of cellulitis and a secondary diagnosis code B95.62 or A49.02. Both of these subsets of cases had an average length of stay that was comparable to the average length of stay for all cases in MS-DRG 602 and greater than the average length of stay for all cases in MS-DRG 603, and average costs that were lower than the average costs of all cases in MS-DRG 602 and higher than the average costs of all cases in MS-DRG 603. As we have discussed in prior rulemaking (77 FR 53309), it is a fundamental principle of an averaged payment system that half of the procedures in a group will have above average costs. It is expected that there will be higher cost and lower cost subsets, especially when a subset has low numbers. To examine the request to reassign ICD-10-CM diagnosis codes reported with a primary diagnosis of cellulitis and a secondary diagnosis code of B95.62 or A49.02 from MS-DRGs 602 and 603 to MS-DRG 867 (which would typically involve also reassigning those cases to the two other severity level MS-DRGs 868 and 869 (Other Infectious and Parasitic Diseases Diagnoses with CC and Other Infectious and Parasitic Diseases Diagnoses without CC/MCC, respectively)), we then analyzed the data for all cases in MS-DRGs 867, 868 and 869. The results of our analysis are shown in the following table. ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 867-All cases............................................ 2,653 7.5 $14,762 MS-DRG 868-All cases............................................ 2,096 4.4 7,532 MS-DRG 869-All cases............................................ 499 3.3 5,624 ---------------------------------------------------------------------------------------------------------------- We compared the average length of stay and average costs for MS- DRGs 867, 868, and 869 to the average length of stay and average costs for the subsets of cases in MS-DRGs 602 and 603 reported with a primary diagnosis of cellulitis and a secondary diagnosis code of B95.62 or A49.02. We found that the average length of stay for these subsets of cases was shorter and the average costs were lower than those for all cases in MS-DRG 867, but that the average length of stay and average costs were higher than those for all cases in MS-DRG 868 and MS-DRG 869. Our findings from the analysis of claims data do not support reassigning cellulitis cases reported with ICD-10-CM diagnosis code B95.62 or A49.02 from MS-DRGs 602 and 603 to MS-DRGs 867, 868 and 869. Our clinical advisors noted that when a primary diagnosis of cellulitis is accompanied by a secondary diagnosis of B95.62 or A49.02 in MS-DRGs 602 or 603, the combination of these primary and secondary diagnoses is the reason for the hospitalization, and the level of acuity of these subsets of patients is similar to other patients in MS-DRGs 602 and 603. Therefore, these cases are more clinically aligned with all cases in MS-DRGs 602 and 603. For these reasons, we are not proposing to reassign cellulitis cases reported with ICD-10-CM diagnosis code of B95.62 or A49.02 to MS-DRG 867, 868, or 869 for FY 2019. We are inviting public comments on our proposal to maintain the current MS-DRG assignment for ICD-10-CM codes B95.62 and A49.02 when reported as secondary diagnoses with a primary diagnosis of cellulitis. 8. MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders): Acute Intermittent Porphyria We received a request to revise the MS-DRG classification for cases of [[Page 20213]] patients diagnosed with porphyria and reported with ICD-10-CM diagnosis code E80.21 (Acute intermittent (hepatic) porphyria) to recognize the resource requirements in caring for these patients, to ensure appropriate payment for these cases, and to preserve patient access to necessary treatments. Porphyria is defined as a group of rare disorders (``porphyrias'') that interfere with the production of hemoglobin that is needed for red blood cells. While some of these disorders are genetic (inborn) and others are acquired, they all result in the abnormal accumulation of hemoglobin building blocks, called porphyrins, which can be deposited in the tissues where they particularly interfere with the functioning of the nervous system and the skin. Treatment for patients suffering from disorders of porphyrin metabolism consists of an intravenous injection of Panhematin[reg] (hemin for injection). ICD- 10-CM diagnosis code E80.21 is currently assigned to MS-DRG 642 (Inborn and Other Disorders of Metabolism). (We note that this issue has been discussed previously in the FY 2013 IPPS/LTCH PPS proposed and final rules (77 FR 27904 through 27905 and 77 FR 53311 through 53313, respectively) and the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28016 and 79 FR 49901, respectively).) We analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for cases assigned to MS-DRG 642. Our findings are shown in the following table. ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 642--All cases........................................... 1,801 4.3 $9,157 MS-DRG 642--Cases reporting diagnosis code E80.21 as principal 183 5.6 19,244 diagnosis...................................................... MS-DRG 642--Cases not reporting diagnosis code E80.21 as 1,618 4.1 8,016 principal diagnosis............................................ ---------------------------------------------------------------------------------------------------------------- As shown in this table, cases reporting diagnosis code E80.21 as the principal diagnosis in MS-DRG 642 had higher average costs and longer average lengths of stay compared to the average costs and lengths of stay for all other cases in MS-DRG 642. To examine the request to reassign cases with ICD-10-CM diagnosis code E80.21 as the principal diagnosis, we analyzed claims data for all cases in MS-DRGs for endocrine disorders, including MS-DRG 643 (Endocrine Disorders with MCC), MS[dash]DRG 644 (Endocrine Disorders with CC), and MS-DRG 645 (Endocrine Disorders without CC/MCC). The results of our analysis are shown in the following table. ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 643--All cases........................................... 9,337 6.3 $11,268 MS-DRG 644--All cases........................................... 11,306 4.2 7,154 MS-DRG 645--All cases........................................... 4,297 3.2 5,406 ---------------------------------------------------------------------------------------------------------------- The data results showed that the average length of stay for the subset of cases reporting ICD-10-CM diagnosis code E80.21 as the principal diagnosis in MS-DRG 642 is lower than the average length of stay for all cases in MS-DRG 643, but higher than the average length of stay for all cases in MS-DRGs 644 and 645. The average costs for the subset of cases reporting ICD-10-CM diagnosis code E80.21 as the principal diagnosis in MS-DRG 642 are much higher than the average costs for all cases in MS-DRGs 643, 644, and 645. However, after considering these findings in the context of the current MS-DRG structure, we were unable to identify an MS-DRG that would more closely parallel these cases with respect to average costs and length of stay that would also be clinically aligned. Our clinical advisors believe that, in the current MS-DRG structure, the clinical characteristics of patients in these cases are most closely aligned with the clinical characteristics of patients in all cases in MS-DRG 642. Moreover, given the small number of porphyria cases, we do not believe there is justification for creating a new MS-DRG. Basing a new MS-DRG on such a small number of cases could lead to distortions in the relative payment weights for the MS-DRG because several expensive cases could impact the overall relative payment weight. Having larger clinical cohesive groups within an MS-DRG provides greater stability for annual updates to the relative payment weights. In summary, we are not proposing to revise the MS-DRG classification for porphyria cases. We are inviting public comments on our proposal to maintain porphyria cases in MS-DRG 642. 9. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract): Admit for Renal Dialysis We received a request to review the codes assigned to MS-DRG 685 (Admit for Renal Dialysis) to determine if the MS-DRG should be deleted, or if it should remain as a valid MS-DRG. Currently, the ICD- 10-CM diagnosis codes shown in the table below are assigned to MS-DRG 685: ------------------------------------------------------------------------ ICD-10-CM code ICD-CM code title ------------------------------------------------------------------------ Z49.01.................... Encounter for fitting and adjustment of extracorporeal dialysis catheter. Z49.02.................... Encounter for fitting and adjustment of peritoneal dialysis catheter. Z49.31.................... Encounter for adequacy testing for hemodialysis. Z49.32.................... Encounter for adequacy testing for peritoneal dialysis. ------------------------------------------------------------------------ [[Page 20214]] The requestor stated that, under ICD-9-CM, diagnosis code V56.0 (Encounter for extracorporeal dialysis) was reported as the principal diagnosis to identify patients who were admitted for an encounter for dialysis. However, under ICD-10-CM, there is no comparable code in which to replicate such a diagnosis. The requestor noted that, while patients continue to be admitted under inpatient status (under certain circumstances) for dialysis services, there is no existing ICD-10-CM diagnosis code within the classification that specifically identifies a patient being admitted for an encounter for dialysis services. The requestor also noted that three of the four ICD-10-CM diagnosis codes currently assigned to MS-DRG 685 are on the ``Unacceptable Principal Diagnosis'' edit code list in the Medicare Code Editor (MCE). Therefore, these codes are not allowed to be reported as a principal diagnosis for an inpatient admission. We examined claims data from the September 2017 update of the FY 2017 MedPAR file for cases reporting ICD-10-CM diagnosis codes Z49.01, Z49.02, Z49.31, and Z49.32. Our findings are shown in the following table. Admit for Renal Dialysis Encounter ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 685--All cases........................................... 78 4 $8,871 MS-DRG 685--Cases reporting ICD-10-CM diagnosis code Z49.01..... 78 4 8,871 MS-DRG 685--Cases reporting ICD-10-CM diagnosis code Z49.02..... 0 0 0 MS-DRG 685--Cases reporting ICD-10-CM diagnosis code Z49.31..... 0 0 0 MS-DRG 685--Cases reporting ICD-10-CM diagnosis code Z49.32..... 0 0 0 ---------------------------------------------------------------------------------------------------------------- As shown in the table above, for MS-DRG 685, there were a total of 78 cases reporting ICD-10-CM diagnosis code Z49.01, with an average length of stay of 4 days and average costs of $8,871. There were no cases reporting ICD-10-CM diagnosis code Z49.02, Z49.31, or Z49.32. Our clinical advisors reviewed the clinical issues, as well as the claims data for MS-DRG 685. Based on their review of the data analysis, our clinical advisors recommended that MS-DRG 685 be deleted and ICD- 10-CM diagnosis codes Z49.01, Z49.02, Z49.31, and Z49.32 be reassigned. Historically, patients were admitted as inpatients to receive hemodialysis services. However, over time, that practice has shifted to outpatient and ambulatory settings. Because of this change in medical practice, we do not believe that it is appropriate to maintain a vestigial MS-DRG, particularly due to the fact that the transition to ICD-10 has resulted in three out of four codes that map to the MS-DRG being precluded from being used as principal diagnosis codes on the claim. In addition, our clinical advisors believe that reassigning the ICD-10-CM diagnosis codes from MS-DRG 685 to MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC, with CC, and without CC\MCC, respectively) is clinically appropriate because the reassignment will result in an accurate MS-DRG assignment of a specific case or inpatient service and encounter based on acceptable principal diagnosis codes under these MS-DRGs. Therefore, for FY 2019, because there is no existing ICD-10-CM diagnosis code within the classification system that specifically identifies a patient being admitted for an encounter for dialysis services and three of the four ICD-10-CM diagnosis codes, Z49.02, Z49.31, and Z49.32, currently assigned to MS-DRG 685 are on the Unacceptable Principal Diagnosis edit code list in the Medicare Code Editor (MCE), we are proposing to delete MS-DRG 685 and reassign ICD- 10-CM diagnosis codes Z49.01, Z49.02, Z49.31, and Z49.32 from MS-DRG 685 to MS-DRGs 698, 699, and 700. We are inviting public comments on our proposals. 10. MDC 14 (Pregnancy, Childbirth and the Puerperium) In the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19834) and final rule (82 FR 38036 through 38037), we noted that the MS-DRG logic involving a vaginal delivery under MDC 14 is technically complex as a result of the requirements that must be met to satisfy assignment to the affected MS-DRGs. As a result, we solicited public comments on further refinement to the following four MS-DRGs related to vaginal delivery: MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C); MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C); MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis); and MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis). In addition, we sought public comments on further refinements to the conditions defined as a complicating diagnosis in MS-DRG 774 and MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications). We indicated that we would review public comments received in response to the solicitation as we continued to evaluate these MS-DRGs under MDC 14 and, if warranted, we would propose refinements for FY 2019. Commenters were instructed to direct comments for consideration to the CMS MS-DRG Classification Change Request Mailbox located at [email protected] by November 1, 2017. In response to our solicitation for public comments on the MS-DRGs related to vaginal delivery, one commenter recommended that CMS convene a workgroup that would include hospital staff and physicians to systematically review the MDC 14 MS-DRGs and to identify which conditions should appropriately be considered complicating diagnoses. As an interim step, this commenter recommended that CMS consider the following suggestions as a result of its own evaluation of MS-DRGs 767, 774 and 775. For MS-DRG 767, the commenter recommended that the following ICD- 10-CM diagnosis codes and ICD-10-PCS procedure code be removed from the GROUPER logic and provided the rationale for why the commenter suggested removing each code. [[Page 20215]] Suggestions for MS-DRG 767 [Vaginal delivery with sterilization and/or D&C] ------------------------------------------------------------------------ Rationale for removing ICD-10-CM code Code description code from MS-DRG 767 ------------------------------------------------------------------------ O66.41.................. Failed attempted This code indicates vaginal birth after that the attempt at previous cesarean vaginal delivery has delivery. failed. O71.00.................. Rupture of uterus This code indicates before onset of that the uterus has labor, unspecified ruptured before onset trimester. of labor and therefore, a vaginal delivery would not be possible. O82..................... Encounter for cesarean This code indicates delivery without the encounter is for indication. a cesarean delivery. O75.82.................. Onset (spontaneous) of This code indicates labor after 37 weeks this is a cesarean of gestation but delivery. before 39 completed weeks, with delivery by (planned) C- section. ------------------------------------------------------------------------ Suggestions for MS-DRG 767 [Vaginal delivery with sterilization and/or D&C] ------------------------------------------------------------------------ Rationale for removing ICD-10-PCS code Code description code from MS-DRG 767 ------------------------------------------------------------------------ 10A07Z6................. Abortion of products This code indicates of conception, the procedure to be vacuum, via natural an abortion rather or artificial opening. than a vaginal delivery. ------------------------------------------------------------------------ For MS-DRG 774, the commenter recommended that the following ICD- 10-CM diagnosis codes be removed from the GROUPER logic and provided the rationale for why the commenter suggested removing each code. Suggestions for MS-DRG 774 [Vaginal delivery with Complicating Diagnoses] ------------------------------------------------------------------------ Rationale for removing ICD-10-CM code Code description code from MS-DRG 774 ------------------------------------------------------------------------ O66.41.................. Failed attempted This code indicates vaginal birth after that the attempt at previous cesarean vaginal delivery has delivery. failed. O71.00.................. Rupture of uterus This code indicates before onset of that the uterus has labor, unspecified ruptured before onset trimester. of labor and therefore, a vaginal delivery would not be possible. O75.82.................. Onset (spontaneous) of This code indicates labor after 37 weeks this is a planned of gestation but cesarean delivery. before 39 completed weeks, with delivery by (planned) C- section. O82..................... Encounter for cesarean This code indicates delivery without the encounter is for indication. a cesarean delivery. O80..................... Encounter for full- According to the term uncomplicated Official Guidelines delivery. for Coding and Reporting, ``Code O80 should be assigned when a woman is admitted for a full term normal delivery and delivers a single, healthy infant without any complications antepartum, during the delivery, or postpartum during the delivery episode.'' ------------------------------------------------------------------------ For MS-DRG 775, the commenter recommended that the following ICD- 10-CM diagnosis codes and ICD-10-PCS procedure code be removed from the GROUPER logic and provided the rationale for why the commenter suggested removing each code. Suggestions for MS-DRG 775 [Vaginal delivery without complicating diagnoses] ------------------------------------------------------------------------ Rationale for removing ICD-10-CM code Code description code from MS-DRG 775 ------------------------------------------------------------------------ O66.41.................. Failed attempted This code indicates vaginal birth after that the attempt at previous cesarean vaginal delivery has delivery. failed. O69.4XX0................ Labor and delivery According to the complicated by vasa physicians consulted, previa, not vasa previa always applicable or results in C-section. unspecified. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. [[Page 20216]] O69.4XX2................ Labor and delivery According to the complicated by vasa physicians consulted, previa, fetus 2. vasa previa always results in C-section. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. O69.4XX3................ Labor and delivery According to the complicated by vasa physicians consulted, previa, fetus 3. vasa previa always results in C-section. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. O69.4XX4................ Labor and delivery According to the complicated by vasa physicians consulted, previa, fetus 4. vasa previa always results in C-section. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. O69.4XX5................ Labor and delivery According to the complicated by vasa physicians consulted, previa, fetus 5. vasa previa always results in C-section. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. O69.4XX9................ Labor and delivery According to the complicated by vasa physicians consulted, previa, other fetus. vasa previa always results in C-section. Research indicates that when vasa previa is diagnosed, C- section before labor begins can save the baby's life. O71.00.................. Rupture of uterus This code indicates before onset of that the uterus has labor, unspecified ruptured before onset trimester. of labor and therefore, a vaginal delivery would not be possible. O82..................... Encounter for cesarean This code indicates delivery without the encounter is for indication. a cesarean delivery. ------------------------------------------------------------------------ Suggestions for MS-DRG 775 [Vaginal delivery without Complicating Diagnosis] ------------------------------------------------------------------------ Rationale for removing ICD-10-CM code Code description code from MS-DRG 775 ------------------------------------------------------------------------ 10A07Z6................. Abortion of Products This code indicates of Conception, the procedure to be Vacuum, Via Natural an abortion rather or Artificial Opening. than a vaginal delivery. ------------------------------------------------------------------------ Another commenter agreed that the MS-DRG logic for a vaginal delivery under MDC 14 is technically complex and provided examples to illustrate these facts. For instance, the commenter noted that the GROUPER logic code lists appear redundant with several of the same codes listed for different MS-DRGs and that the GROUPER logic code list for a vaginal delivery in MS-DRG 774 is comprised of diagnosis codes while the GROUPER logic code list for a vaginal delivery in MS-DRG 775 is comprised of procedure codes. The commenter also noted that several of the ICD-10-CM diagnosis codes shown in the table below that became effective with discharges on and after October 1, 2016 (FY 2017) or October 1, 2017 (FY 2018) appear to be missing from the GROUPER logic code lists for MS-DRGs 781 and 774. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ O11.4..................... Pre-existing hypertension with pre- eclampsia, complicating childbirth. O11.5..................... Pre-existing hypertension with pre- eclampsia, complicating the puerperium. 012.04.................... Gestational edema, complicating childbirth. 012.05.................... Gestational edema, complicating the puerperium. 012.14.................... Gestational proteinuria, complicating childbirth. 012.15.................... Gestational proteinuria, complicating the puerperium. 012.24.................... Gestational edema with proteinuria, complicating childbirth. 012.25.................... Gestational edema with proteinuria, complicating the puerperium. O13.4..................... Gestational [pregnancy-induced] hypertension without significant proteinuria, complicating childbirth. O13.5..................... Gestational [pregnancy-induced] hypertension without significant proteinuria, complicating the puerperium. O14.04.................... Mild to moderate pre-eclampsia, complicating childbirth. O14.05.................... Mild to moderate pre-eclampsia, complicating the puerperium. O14.14.................... Severe pre-eclampsia, complicating childbirth. O14.15.................... Severe pre-eclampsia, complicating the puerperium. O14.24.................... HELLP syndrome, complicating childbirth. O14.25.................... HELLP syndrome, complicating the puerperium. O14.94.................... Unspecified pre-eclampsia, complicating childbirth. O14.95.................... Unspecified pre-eclampsia, complicating the puerperium. O15.00.................... Eclampsia complicating pregnancy, unspecified trimester. [[Page 20217]] O15.02.................... Eclampsia complicating pregnancy, second trimester. O15.03.................... Eclampsia complicating pregnancy, third trimester. O15.1..................... Eclampsia complicating labor. O15.2..................... Eclampsia complicating puerperium, second trimester. O16.4..................... Unspecified maternal hypertension, complicating childbirth. O16.5..................... Unspecified maternal hypertension, complicating the puerperium. O24.415................... Gestational diabetes mellitus in pregnancy, controlled by oral hypoglycemic drugs. O24.425................... Gestational diabetes mellitus in childbirth, controlled by oral hypoglycemic drugs. O24.435................... Gestational diabetes mellitus in puerperium, controlled by oral hypoglycemic drugs. O44.20.................... Partial placenta previa NOS or without hemorrhage, unspecified trimester. O44.21.................... Partial placenta previa NOS or without hemorrhage, first trimester. O44.22.................... Partial placenta previa NOS or without hemorrhage, second trimester. O44.23.................... Partial placenta previa NOS or without hemorrhage, third trimester. O44.30.................... Partial placenta previa with hemorrhage, unspecified trimester. O44.31.................... Partial placenta previa with hemorrhage, first trimester. O44.32.................... Partial placenta previa with hemorrhage, second trimester. O44.33.................... Partial placenta previa with hemorrhage, third trimester. O44.40.................... Low lying placenta NOS or without hemorrhage, unspecified trimester. O44.41.................... Low lying placenta NOS or without hemorrhage, first trimester. O44.42.................... Low lying placenta NOS or without hemorrhage, second trimester. O44.43.................... Low lying placenta NOS or without hemorrhage, third trimester. O44.50.................... Low lying placenta with hemorrhage, unspecified trimester. O44.51.................... Low lying placenta with hemorrhage, first trimester. O44.52.................... Low lying placenta with hemorrhage, second trimester. O44.53.................... Low lying placenta with hemorrhage, third trimester. O70.20.................... Third degree perineal laceration during delivery, unspecified. O70.21.................... Third degree perineal laceration during delivery, IIIa. O70.22.................... Third degree perineal laceration during delivery, IIIb. O70.23.................... Third degree perineal laceration during delivery, IIIc. O86.11.................... Cervicitis following delivery. O86.12.................... Endometritis following delivery. O86.13.................... Vaginitis following delivery. O86.19.................... Other infection of genital tract following delivery. O86.20.................... Urinary tract infection following delivery, unspecified. O86.21.................... Infection of kidney following delivery. O86.22.................... Infection of bladder following delivery. O86.29.................... Other urinary tract infection following delivery. O86.81.................... Puerperal septic thrombophlebitis. O86.89.................... Other specified puerperal infections. ------------------------------------------------------------------------ Lastly, the commenter stated that the list of ICD-10-PCS procedure codes appears comprehensive, but indicated that inpatient coding is not their expertise. We note that it was not clear which list of procedure codes the commenter was specifically referencing. The commenter did not provide a list of any procedure codes for CMS to review or reference a specific MS-DRG in its comment. Another commenter expressed concern that ICD-10-PCS procedure codes 10D17Z9 (Manual extraction of products of conception, retained, via natural or artificial opening) and 10D18Z9 (Manual extraction of products of conception, retained, via natural or artificial opening endoscopic) are not assigned to the appropriate MS-DRG. ICD-10-PCS procedure codes 10D17Z9 and 10D18Z9 describe the manual removal of a retained placenta and are currently assigned to MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C). According to the commenter, a patient that has a vaginal delivery with manual removal of a retained placenta is not having a sterilization or D&C procedure. The commenter noted that, under ICD-9-CM, a vaginal delivery with manual removal of retained placenta grouped to MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis) or MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis). The commenter suggested CMS review these procedure codes for appropriate MS-DRG assignment under the ICD-10 MS- DRGs. We thank the commenters and appreciate the recommendations and suggestions provided in response to our solicitation for comments on the GROUPER logic for the MS-DRGs involving a vaginal delivery or complicating diagnosis under MDC 14. With regard to the commenter who recommended that we convene a workgroup that would include hospital staff and physicians to systematically review the MDC 14 MS-DRGs and to identify which conditions should appropriately be considered complicating diagnoses, we note that we formed an internal workgroup comprised of clinical advisors that included physicians, coding specialists, and other IPPS policy staff that assisted in our review of the GROUPER logic for a vaginal delivery and complicating diagnoses. We also received clinical input from 3M/Health Information Systems (HIS) staff, which, under contract with CMS, is responsible for updating and maintaining the GROUPER program. We note that our analysis involved other MS-DRGs under MDC 14, in addition to those for which we specifically solicited public comments. As one of the other commenters correctly pointed out, there is redundancy, with several of the same codes listed for different MS-DRGs. Below we provide a summary of our internal analysis with responses to the commenters' recommendations and suggestions incorporated into the applicable sections. We refer readers to the ICD-10 MS-DRG Version 35 Definitions Manual located via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare- Fee- [[Page 20218]] for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page- Items/FY2018-IPPS-Final-Rule-Data- Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending for documentation of the GROUPER logic associated with the MDC 14 MS-DRGs to assist in the review of our discussion that follows. We started our evaluation of the GROUPER logic for the MS-DRGs under MDC 14 by first reviewing the current concepts that exist. For example, there are ``groups'' for cesarean section procedures, vaginal delivery procedures, and abortions. There also are groups where no delivery occurs, and lastly, there are groups for after the delivery occurs, or the ``postpartum'' period. These groups are then further subdivided based on the presence or absence of complicating conditions or the presence of another procedure. We examined how we could simplify some of the older, complex GROUPER logic and remain consistent with the structure of other ICD-10 MS-DRGs. We identified the following MS-DRGs for closer review, in addition to MS-DRG 767, MS-DRG 768, MS-DRG 774, MS-DRG 775 and MS-DRG 781. ------------------------------------------------------------------------ MS-DRG Description ------------------------------------------------------------------------ MS-DRG 765................ Cesarean Section with CC/MCC. MS-DRG 766................ Cesarean Section without CC/MCC. MS-DRG 769................ Postpartum and Post Abortion Diagnoses with O.R. Procedure. MS-DRG 770................ Abortion with D&C, Aspiration Curettage or Hysterotomy. MS-DRG 776................ Postpartum and Post Abortion Diagnoses without O.R. Procedure. MS-DRG 777................ Ectopic Pregnancy. MS-DRG 778................ Threatened Abortion. MS-DRG 779................ Abortion without D&C. MS-DRG 780................ False Labor. MS-DRG 782................ Other Antepartum Diagnoses without Medical Complications. ------------------------------------------------------------------------ The first issue we reviewed was the GROUPER logic for complicating conditions (MS-DRGs 774 and 781). Because one of the main objectives in our transition to the MS-DRGs was to better recognize the severity of illness of a patient, we believed we could structure the vaginal delivery and other MDC 14 MS-DRGs in a similar way. Therefore, we began working with the concept of vaginal delivery ``with MCC, with CC and without CC/MCC'' to replace the older, ``complicating conditions'' logic. Next, we compared the additional GROUPER logic that exists between the vaginal delivery and the cesarean section MS-DRGs (MS-DRGs 765, 766, 767, 774, and 775). Currently, the vaginal delivery MS-DRGs take into account a sterilization procedure; however, the cesarean section MS-DRGs do not. Because a patient can have a sterilization procedure performed along with a cesarean section procedure, we adopted a working concept of ``cesarean section with and without sterilization with MCC, with CC and without CC/MCC'', as well as ``vaginal delivery with and without sterilization with MCC, with CC and without CC/MCC''. We then reviewed the GROUPER logic for the MS-DRGs involving abortion and where no delivery occurs (MS-DRGs 770, 777, 778, 779, 780, and 782). We believed that we could consolidate the groups in which no delivery occurs. Finally, we considered the GROUPER logic for the MS-DRGs related to the postpartum period (MS-DRGs 769 and 776) and determined that the structure of these MS-DRGs did not appear to require modification. After we established those initial working concepts for the MS-DRGs discussed above, we examined the list of the ICD-10-PCS procedure codes that comprise the sterilization procedure GROUPER logic for the vaginal delivery MS-DRG 767. We identified the two manual extraction of placenta codes that the commenter had brought to our attention (ICD-10- PCS codes 10D17Z9 and 10D18Z9). We also identified two additional procedure codes, ICD-10-PCS codes 10D17ZZ (Extraction of products of conception, retained, via natural or artificial opening) and 10D18ZZ (Extraction of products of conception, retained, via natural or artificial opening endoscopic) in the list that are not sterilization procedures. Two of the four procedure codes describe manual extraction (removal) of retained placenta and the other two procedure codes describe dilation and curettage procedures. We then identified four more procedure codes in the list that do not describe sterilization procedures. ICD-10-PCS procedure codes 0UDB7ZX (Extraction of endometrium, via natural or artificial opening, diagnostic), 0UDB7ZZ (Extraction of endometrium, via natural or artificial opening), 0UDB8ZX (Extraction of endometrium, via natural or artificial opening endoscopic, diagnostic), and 0UDB8ZZ (Extraction of endometrium, via natural or artificial opening endoscopic) describe dilation and curettage procedures that can be performed for diagnostic or therapeutic purposes. We believe that these ICD-10-PCS procedure codes would be more appropriately assigned to MDC 13 (Diseases and Disorders of the Female Reproductive System) in MS-DRGs 744 and 745 (D&C, Conization, Laparascopy and Tubal Interruption with and without CC/MCC, respectively) and, therefore, removed them from our working list of sterilization and/or D&C procedures. Because the GROUPER logic for MS- DRG 767 includes both sterilization and/or D&C, we agreed that all the other procedure codes currently included under that logic list of sterilization procedures should remain, with the exception of the two identified by the commenter. Therefore, we agree with the commenter that the manual extraction of retained placenta procedure codes should be reassigned to a more clinically appropriate vaginal delivery MS-DRG because they are not describing sterilization procedures. Our attention then turned to other MDC 14 GROUPER logic code lists starting with the ``CC for C-section'' list under MS-DRGs 765 and 766 (Cesarean Section with and without CC/MCC, respectively). As noted earlier in this section, in conducting our review, we considered how we could utilize the severity level concept (with MCC, with CC, and without CC/MCC) where applicable. Consistent with this approach, we removed the ``CC for C-section'' logic from these MS-DRGs as part of our working concept and efforts to refine MDC 14. We determined it would be less complicated to simply allow the existing ICD-10 MS[dash]DRG CC and MCC code list logic to apply for these MS-DRGs. Next, we reviewed the logic code lists for ``Malpresentation'' and ``Twins'' and concluded that this logic was not necessary for the cesarean section MS-DRGs because these are [[Page 20219]] describing antepartum conditions and it is the procedure of the cesarean section that determines whether or not a patient would be classified to these MS-DRGs. Therefore, those code lists were also removed for purposes of our working concept. With regard to the ``Operating Room Procedure'' code list, we agreed there should be no changes. However, we note that the title to ICD-10-PCS procedure code 10D00Z0 (Extraction of products of conception, classical, open approach) is being revised effective October 1, 2018, to replace the term ``classical'' with ``high'' and ICD-10-PCS procedure code 10D00Z1 (Extraction of products of conception, low cervical, open approach) is being revised to replace the term ``low cervical'' to ``low''. These revisions are also shown in Table 6F--Revised Procedure Code Titles available via the Internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Next, we reviewed the ``Delivery Procedure'' and ``Delivery Outcome'' GROUPER logic code lists for the vaginal delivery MS-DRGs 767, 768, 774, and 775. We identified ICD-10-PCS procedure code 10A0726 (Abortion of products of conception, vacuum, via natural or artificial opening) and ICD-10-PCS procedure code 10S07ZZ (Reposition products of conception, via natural or artificial opening) under the ``Delivery Procedure'' code list as procedure codes that should not be included because ICD-10-PCS procedure code 10A07Z6 describes an abortion procedure and ICD-10-PCS procedure code 10S07ZZ describes repositioning of the fetus and does not indicate a delivery took place. We also note that, as described earlier in this discussion, a commenter recommended that ICD-10-PCS procedure code 10A07Z6 be removed from the GROUPER logic specifically for MS-DRGs 767 and 775. Therefore, we removed these two procedure codes from the logic code list for ``Delivery Procedure'' in MS-DRGs 767, 768, 774, and 775. We agreed with the commenter that ICD-10-PCS procedure code 10A07Z6 would be more appropriately assigned to one of the Abortion MS-DRGs. For the remaining procedures currently included in the ``Delivery Procedure'' code list we considered which procedures would be expected to be performed during the course of a standard, uncomplicated delivery episode versus those that would reasonably be expected to require additional resources outside of the delivery room. The list of procedure codes we reviewed is shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0DQP7ZZ................... Repair rectum, via natural or artificial opening. 0DQQ0ZZ................... Repair anus, open approach. 0DQQ3ZZ................... Repair anus, percutaneous approach. 0DQQ4ZZ................... Repair anus, percutaneous endoscopic approach. 0DQQ7ZZ................... Repair anus, via natural or artificial opening. 0DQQ8ZZ................... Repair anus, via natural or artificial opening endoscopic. 0DQR0ZZ................... Repair anal sphincter, open approach. 0DQR3ZZ................... Repair anal sphincter, percutaneous approach. 0DQR4ZZ................... Repair anal sphincter, percutaneous endoscopic approach. ------------------------------------------------------------------------ While we acknowledge that these procedures may be performed to treat obstetrical lacerations as discussed in prior rulemaking (81 FR 56853), we also believe that these procedures would reasonably be expected to require a separate operative episode and would not be performed immediately at the time of the delivery. Therefore, we removed those procedure codes describing repair of the rectum, anus, and anal sphincter shown in the table above from our working concept list of procedures to consider for a vaginal delivery. Our review of the list of diagnosis codes for the ``Delivery Outcome'' as a secondary diagnosis did not prompt any changes. We agreed that the current list of diagnosis codes continues to appear appropriate for describing the outcome of a delivery. As the purpose of our analysis and this review was to clarify what constitutes a vaginal delivery to satisfy the ICD-10 MS-DRG logic for the vaginal delivery MS-DRGs, we believed it was appropriate to expect that a procedure code describing the vaginal delivery or extraction of ``products of conception'' procedure and a diagnosis code describing the delivery outcome should be reported on every claim in which a vaginal delivery occurs. This is also consistent with Section I.C.15.b.5 of the ICD-10-CM Official Guidelines for Coding and Reporting, which states ``A code from category Z37, Outcome of delivery, should be included on every maternal record when a delivery has occurred. These codes are not to be used on subsequent records or on the newborn record.'' Therefore, we adopted the working concept that, regardless of the principal diagnosis, if there is a procedure code describing the vaginal delivery or extraction of ``products of conception'' procedure and a diagnosis code describing the delivery outcome, this logic would result in assignment to a vaginal delivery MS-DRG. We note that, as a result of this working concept, there would no longer be a need to maintain the ``third condition'' list under MS- DRG 774. In addition, as noted earlier in this discussion, because we were working with the concept of vaginal delivery ``with MCC, with CC, and without CC/MCC'' to replace the older, ``complicating conditions'' logic, there would no longer be a need to maintain the ``second condition'' list of complicating diagnosis under MS-DRG 774. We then reviewed the GROUPER logic code list of ``Or Other O.R. procedures'' (MS-DRG 768) to determine if any changes to these lists were warranted. Similar to our analysis of the procedures listed under the ``Delivery Procedure'' logic code list, our examination of the procedures currently described in the ``Or Other O.R. procedures'' procedure code list also considered which procedures would be expected to be performed during the course of a standard, uncomplicated delivery episode versus those that would reasonably be expected to require additional resources outside of the delivery room. Our analysis of all the procedures resulted in the working concept to allow all O.R. procedures to be applicable for assignment to MS-DRG 768, with the exception of the procedure codes for sterilization and/or D&C and ICD- 10-PCS procedure codes 0KQM0ZZ (Repair perineum muscle, open approach) and 0UJM0ZZ (Inspection of vulva, open approach), [[Page 20220]] which we determined would be reasonably expected to be performed during a standard delivery episode and, therefore, assigned to MS-DRG 774 or MS-DRG 775. We also note that, this working concept for MS-DRG 768 would eliminate vaginal delivery cases with an O.R. procedure grouping to the unrelated MS[dash]DRGs because all O.R. procedures would be included in the GROUPER logic procedure code list for ``Or Other O.R. Procedures''. The next set of MS-DRGs we examined more closely included MS-DRGs 777, 778, 780, 781, and 782. We believed that, because the conditions in these MS-DRGs are all describing antepartum related conditions, we could group the conditions together clinically. Diagnoses described as occurring during pregnancy and diagnoses specifying a trimester or maternal care in the absence of a delivery procedure reported were considered antepartum conditions. We also believed we could better classify these groups of patients based on the presence or absence of a procedure. Therefore, we worked with the concept of ``antepartum diagnoses with and without O.R. procedure''. As noted earlier in the discussion, we adopted a working concept of ``cesarean section with and without sterilization with MCC, with CC, and without CC/MCC.'' This concept is illustrated in the following table and includes our suggested modifications. Suggested Modifications to MS-DRGs for MDC 14 [Pregnancy, childbirth and the puerperium] ------------------------------------------------------------------------ ------------------------------------------------------------------------- DELETE 2 MS-DRGs: MS-DRG 765 (Cesarean Section with CC/MCC). MS-DRG 766 (Cesarean Section without CC/MCC). CREATE 6 MS-DRGs: MS-DRG XXX (Cesarean Section with Sterilization with MCC). MS-DRG XXX (Cesarean Section with Sterilization with CC). MS-DRG XXX (Cesarean Section with Sterilization without CC/MCC). MS-DRG XXX (Cesarean Section without Sterilization with MCC). MS-DRG XXX (Cesarean Section without Sterilization with CC). MS-DRG XXX (Cesarean Section without Sterilization without CC/MCC). ------------------------------------------------------------------------ As shown in the table, we suggest deleting MS-DRGs 765 and 766. We also suggest creating 6 new MS-DRGs that are subdivided by a 3-way severity level split that includes ``with Sterilization'' and ``without Sterilization''. We also adopted a working concept of ``vaginal delivery with and without sterilization with MCC, with CC, and without CC/MCC''. This concept is illustrated in the following table and includes our suggested modifications. Suggested Modifications to MS-DRGs for MDC 14 [Pregnancy, childbirth and the puerperium] ------------------------------------------------------------------------ ------------------------------------------------------------------------- DELETE 3 MS-DRGs: MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C). MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis). MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis). CREATE 6 MS-DRGs: MS-DRG XXX (Vaginal Delivery with Sterilization/D&C with MCC). MS-DRG XXX (Vaginal Delivery with Sterilization/D&C with CC). MS-DRG XXX (Vaginal Delivery with Sterilization/D&C without CC/MCC). MS-DRG XXX (Vaginal Delivery without Sterilization/D&C with MCC). MS-DRG XXX (Vaginal Delivery without Sterilization/D&C with CC). MS-DRG XXX (Vaginal Delivery without Sterilization/D&C without CC/ MCC). ------------------------------------------------------------------------ As shown in the table, we suggest deleting MS-DRGs 767, 774, and 775. We also suggest creating 6 new MS-DRGs that are subdivided by a 3- way severity level split that includes ``with Sterilization/D&C'' and ``without Sterilization/D&C''. In addition, as indicated above, we believed that we could consolidate the groups in which no delivery occurs. We believe that consolidating MS-DRGs where clinically coherent conditions exist is consistent with our approach to MS-DRG reclassification and our continued refinement efforts. This concept is illustrated in the following table and includes our suggested modifications. Suggested Modifications to MS-DRGs for MDC 14 [Pregnancy, childbirth and the puerperium] ------------------------------------------------------------------------ ------------------------------------------------------------------------- DELETE 5 MS-DRGs: MS-DRG 777 (Ectopic Pregnancy). MS-DRG 778 (Threatened Abortion). MS-DRG 780 (False Labor). MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications). MS-DRG 782 (Other Antepartum Diagnoses without Medical Complications). CREATE 6 MS-DRGs: MS-DRG XXX (Other Antepartum Diagnoses with O.R. Procedure with MCC). MS-DRG XXX (Other Antepartum Diagnoses with O.R. Procedure with CC). MS-DRG XXX (Other Antepartum Diagnoses with O.R. Procedure without CC/ MCC). MS-DRG XXX (Other Antepartum Diagnoses without O.R. Procedure with MCC). MS-DRG XXX (Other Antepartum Diagnoses without O.R. Procedure with CC). MS-DRG XXX (Other Antepartum Diagnoses without O.R. Procedure without CC/MCC). ------------------------------------------------------------------------ As shown in the table, we suggest deleting MS-DRGs 777, 778, 780, 781, and 782. We also suggest creating 6 new MS-DRGs that are subdivided by a 3-way severity level split that includes ``with O.R. Procedure'' and ``without O.R. Procedure''. Once we established each of these fundamental concepts from a clinical perspective, we were able to analyze the data to determine if our initial suggested modifications were supported. To analyze our suggested modifications for the cesarean section and vaginal delivery MS-DRGs, we examined the claims data from the September 2017 update of the FY 2017 MedPAR file for MS-DRGs 765, 766, 767, 768, 774, and 775. MS-DRGs for MDC 14 Pregnancy, Childbirth and the Puerperium ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 765 (Cesarean Section with CC/MCC)--All cases............ 3,494 4.6 $8,929 MS-DRG 766 (Cesarean Section without CC/MCC)--All cases......... 1,974 3.1 6,488 MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C)--All 351 3.2 7,886 cases.......................................................... MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except 17 6.2 26,164 Sterilization and/or D&C)--All cases........................... MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis)--All 1,650 3.3 6,046 cases.......................................................... MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis)-- 4,676 2.4 4,769 All cases...................................................... ---------------------------------------------------------------------------------------------------------------- [[Page 20221]] As shown in the table, there were a total of 3,494 cases in MS-DRG 765, with an average length of stay of 4.6 days and average costs of $8,929. For MS-DRG 766, there were a total of 1,974 cases, with an average length of stay of 3.1 days and average costs of $6,488. For MS- DRG 767, there were a total of 351 cases, with an average length of stay of 3.2 days and average costs of $ 7,886. For MS-DRG 768, there were a total of 17 cases, with an average length of stay of 6.2 days and average costs of $26,164. For MS-DRG 774, there were a total of 1,650 cases, with an average length of stay of 3.3 days and average costs of $6,046. Lastly, for MS-DRG 775, there were a total of 4,676 cases, with an average length of stay of 2.4 days and average costs of $4,769. To compare and analyze the impact of our suggested modifications, we ran a simulation using the Version 35 ICD-10 MS-DRG GROUPER. The following table reflects our findings for the suggested Cesarean Section MS-DRGs with a 3-way severity level split. Suggested MS-DRGs for Cesarean Section ---------------------------------------------------------------------------------------------------------------- Number of Average Length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 783 (Cesarean Section with Sterilization with MCC)....... 178 6.4 $12,977 MS-DRG 784 (Cesarean Section with Sterilization with CC)........ 511 4.1 8,042 MS-DRG 785 (Cesarean Section with Sterilization without CC/MCC). 475 3.0 6,259 MS-DRG 786 (Cesarean Section without Sterilization with MCC).... 707 5.9 11,515 MS-DRG 787 (Cesarean Section without Sterilization with CC)..... 1,887 4.2 7,990 MS-DRG 788 (Cesarean Section without Sterilization without CC/ 1,710 3.3 6,663 MCC)........................................................... ---------------------------------------------------------------------------------------------------------------- As shown in the table, there were a total of 178 cases for the cesarean section with sterilization with MCC group, with an average length of stay of 6.4 days and average costs of $12,977. There were a total of 511 cases for the cesarean section with sterilization with CC group, with an average length of stay of 4.1 days and average costs of $8,042. There were a total of 475 cases for the cesarean section with sterilization without CC/MCC group, with an average length of stay of 3.0 days and average costs of $6,259. For the cesarean section without sterilization with MCC group there were a total of 707 cases, with an average length of stay of 5.9 days and average costs of $11,515. There were a total of 1,887 cases for the cesarean section without sterilization with CC group, with an average length of stay of 4.2 days and average costs of $7,990. Lastly, there were a total of 1,710 cases for the cesarean section without sterilization without CC/MCC group, with an average length of stay of 3.3 days and average costs of $6,663. The following table reflects our findings for the suggested Vaginal Delivery MS-DRGs with a 3-way severity level split. Suggested MS-DRGs for Vaginal Delivery ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 796 (Vaginal Delivery with Sterilization/D&C with MCC)... 25 6.7 $11,421 MS-DRG 797 (Vaginal Delivery with Sterilization/D&C with CC).... 63 2.4 6,065 MS-DRG 798 (Vaginal Delivery with Sterilization/D&C without CC/ 126 2.3 6,697 MCC)........................................................... MS-DRG 805 (Vaginal Delivery without Sterilization/D&C with MCC) 406 5.0 9,605 MS-DRG 806 (Vaginal Delivery without Sterilization/D&C with CC). 1,952 2.9 5,506 MS-DRG 807 (Vaginal Delivery without Sterilization/D&C without 4,105 2.3 4,601 CC/MCC)........................................................ ---------------------------------------------------------------------------------------------------------------- As shown in the table, there were a total of 25 cases for the vaginal delivery with sterilization/D&C with MCC group, with an average length of stay of 6.7 days and average costs of $11,421. There were a total of 63 cases for the vaginal delivery with sterilization/D&C with CC group, with an average length of stay of 2.4 days and average costs of $6,065. There were a total of 126 cases for vaginal delivery with sterilization/D&C without CC/MCC group, with an average length of stay of 2.3 days and average costs of $6,697. There were a total of 406 cases for the vaginal delivery without sterilization/D&C with MCC group, with an average length of stay of 5.0 days and average costs of $9,605. There were a total of 1,952 cases for the vaginal delivery without sterilization/D&C with CC group, with an average length of stay of 2.9 days and average costs of $5,506. There were a total of 4,105 cases for the vaginal delivery without sterilization/D&C without CC/MCC group, with an average length of stay of 2.3 days and average costs of $4,601. We then reviewed the claims data from the September 2017 update of the FY 2017 MedPAR file for MS-DRGs 777, 778, 780, 781, and 782. Our findings are shown in the following table. MS-DRGs for MDC 14 Pregnancy, Childbirth and the Puerperium ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 777 (Ectopic Pregnancy)--All cases....................... 72 1.9 $7,149 MS-DRG 778 (Threatened Abortion)--All cases..................... 205 2.7 4,001 [[Page 20222]] MS-DRG 780 (False Labor)--All cases............................. 41 2.1 3,045 MS-DRG 781 (Other Antepartum Diagnoses with Medical 2,333 3.7 5,817 Complications)--All cases...................................... MS-DRG 782 (Other Antepartum Diagnoses without Medical 70 2.1 3,381 Complications)--All cases...................................... ---------------------------------------------------------------------------------------------------------------- As shown in the table, there were a total of 72 cases in MS-DRG 777, with an average length of stay of 1.9 days and average costs of $7,149. For MS-DRG 778, there were a total of 205 cases, with an average length of stay of 2.7 days and average costs of $4,001. For MS- DRG 780, there were a total of 41 cases, with an average length of stay of 2.1 days and average costs of $3,045. For MS-DRG 781, there were a total of 2,333 cases, with an average length of stay of 3.7 days and average costs of $5,817. Lastly, for MS-DRG 782, there were a total of 70 cases, with an average length of stay of 2.1 days and average costs of $3,381. To compare and analyze the impact of deleting those 5 MS-DRGs and creating 6 new MS-DRGs, we ran a simulation using the Version 35 ICD-10 MS-DRG GROUPER. Our findings below represent what we found and would expect under the suggested modifications. The following table reflects the MS-DRGs for the suggested Other Antepartum Diagnoses MS-DRGs with a 3-way severity level split. Suggested MS-DRGs for Other Antepartum Diagnoses ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 817 (Other Antepartum Diagnoses with O.R. Procedure with 60 5.1 $13,117 MCC)........................................................... MS-DRG 818 (Other Antepartum Diagnoses with O.R. Procedure with 66 4.2 10,483 CC)............................................................ MS-DRG 819 (Other Antepartum Diagnoses with O.R. Procedure 44 1.7 5,904 without CC/MCC)................................................ MS-DRG 831 (Other Antepartum Diagnoses without O.R. Procedure 786 4.3 7,248 with MCC)...................................................... MS-DRG 832 (Other Antepartum Diagnoses without O.R. Procedure 910 3.5 4,994 with CC)....................................................... MS-DRG 833 (Other Antepartum Diagnoses without O.R. Procedure 855 2.7 3,843 without CC/MCC)................................................ ---------------------------------------------------------------------------------------------------------------- Our analysis of claims data from the September 2017 update of the FY 2017 MedPAR file recognized that when the criteria to create subgroups were applied for the 3-way severity level splits for the suggested MS-DRGs, those criteria were not met in all instances. For example, the criteria that there are at least 500 cases in the MCC or CC group was not met for the suggested Vaginal Delivery with Sterilization/D&C 3[dash]way severity level split or the suggested Other Antepartum Diagnoses with O.R. Procedure 3[dash]way severity level split. However, as we have noted in prior rulemaking (72 FR 47152), we cannot adopt the same approach to refine the maternity and newborn MS- DRGs because of the extremely low volume of Medicare patients there are in these DRGs. While there is not a high volume of these cases represented in the Medicare data, and while we generally advise that other payers should develop MS-DRGs to address the needs of their patients, we believe that our suggested 3[dash]way severity level splits would address the complexity of the current MDC 14 GROUPER logic for a vaginal delivery and takes into account the new and different clinical concepts that exist under ICD-10 for this subset of patients while also maintaining the existing MS-DRG structure for identifying severity of illness, utilization of resources and complexity of service. However, as an alternative option, we also performed analysis for a 2-way severity level split for the suggested MS-DRGs. Our findings are shown in the following tables. Suggested MS-DRGs for Cesarean Section ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG XXX (Cesarean Section with Sterilization with CC/MCC).... 689 4.7 $9,317 MS-DRG XXX (Cesarean Section with Sterilization without CC/MCC). 475 3.0 6,259 MS-DRG XXX (Cesarean Section without Sterilization with MCC).... 2,594 4.7 8,951 MS-DRG XXX (Cesarean Section without Sterilization without CC/ 1,710 3.3 6,663 MCC)........................................................... ---------------------------------------------------------------------------------------------------------------- Suggested MS-DRGs for Vaginal Delivery ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG XXX (Vaginal Delivery with Sterilization/D&C with CC/MCC) 88 3.6 $7,586 MS-DRG XXX (Vaginal Delivery with Sterilization/D&C without CC/ 126 2.3 6,697 MCC)........................................................... MS-DRG XXX (Vaginal Delivery without Sterilization/D&C with MCC) 2,358 3.2 6,212 [[Page 20223]] MS-DRG XXX (Vaginal Delivery without Sterilization/D&C without 4,105 2.3 4,601 CC/MCC)........................................................ ---------------------------------------------------------------------------------------------------------------- Suggested MS-DRGs for Other Antepartum Diagnoses ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG XXX (Other Antepartum Diagnoses with O.R. Procedure with 126 4.7 $11,737 MCC)........................................................... MS-DRG XXX (Other Antepartum Diagnoses with O.R. Procedure 44 1.7 5,904 without CC/MCC)................................................ MS-DRG XXX (Other Antepartum Diagnoses without O.R. Procedure 1,696 3.9 6,039 with MCC)...................................................... MS-DRG XXX (Other Antepartum Diagnoses without O.R. Procedure 855 2.7 3,843 without CC/MCC)................................................ ---------------------------------------------------------------------------------------------------------------- Similar to the analysis performed for the 3-way severity level split, we acknowledge that when the criteria to create subgroups was applied for the alternative 2[dash]way severity level splits for the suggested MS-DRGs, those criteria were not met in all instances. For example, the suggested Vaginal Delivery with Sterilization/D&C and the Other Antepartum Diagnoses with O.R. Procedure alternative option 2-way severity level splits did not meet the criteria for 500 or more cases in the MCC or CC group. Based on our review, which included support from our clinical advisors, and the analysis of claims data described above, we are proposing the deletion of 10 MS-DRGs and the creation of 18 new MS-DRGs (as shown below). This proposal is based on the approach described above, which involves consolidating specific conditions and concepts into the structure of existing logic and making additional modifications, such as adding severity levels, as part of our refinement efforts for the ICD-10 MS-DRGs. Our proposals are intended to address the vaginal delivery ``complicating diagnosis'' logic and antepartum diagnoses with ``medical complications'' logic with the proposed addition of the existing and familiar severity level concept (with MCC, with CC, and without CC/MCC) to the MDC 14 MS-DRGs to provide the ability to distinguish the varying resource requirements for this subset of patients and allow the opportunity to make more meaningful comparisons with regard to severity across the MS-DRGs. Our proposals, as set forth below, would also simplify the vaginal delivery procedure logic that we identified and commenters acknowledged as technically complex by eliminatng the extensive diagnosis and procedure code lists for several conditions that must be met for assignment to the vaginal delivery MS-DRGs. Our proposals are also intended to respond to issues identified and brought to our attention through public comments for consideration in updating the GROUPER logic code lists in MDC 14. Specifically, we are proposing to delete the following 10 MS-DRGs under MDC 14: MS-DRG 765 (Cesarean Section with CC/MCC); MS-DRG 766 (Cesarean Section without CC/MCC); MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C); MS-DRG 774 (Vaginal Delivery with Complicating Diagnosis); MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis); MS-DRG 777 (Ectopic Pregnancy); MS-DRG 778 (Threatened Abortion); MS-DRG 780 (False Labor); MS-DRG 781 (Other Antepartum Diagnoses with Medical Complications); and MS-DRG 782 (Other Antepartum Diagnoses without Medical Complications). We are proposing to create the following new 18 MS-DRGs under MDC 14: Proposed new MS-DRG 783 (Cesarean Section with Sterilization with MCC); Proposed new MS-DRG 784 (Cesarean Section with Sterilization with CC); Proposed new MS-DRG 785 (Cesarean Section with Sterilization without CC/MCC); Proposed new MS-DRG 786 (Cesarean Section without Sterilization with MCC); Proposed new MS-DRG 787 (Cesarean Section without Sterilization with CC); Proposed new MS-DRG 788 Cesarean Section without Sterilization without CC/MCC); Proposed new MS-DRG 796 (Vaginal Delivery with Sterilization/D&C with MCC); Proposed new MS-DRG 797 (Vaginal Delivery with Sterilization/D&C with CC); Proposed new MS-DRG 798 (Vaginal Delivery with Sterilization/D&C without CC/MCC); Proposed new MS-DRG 805 (Vaginal Delivery without Sterilization/D&C with MCC); Proposed new MS-DRG 806 (Vaginal Delivery without Sterilization/D&C with CC); Proposed new MS-DRG 807 (Vaginal Delivery without Sterilization/D&C without CC/MCC); Proposed new MS-DRG 817 (Other Antepartum Diagnoses with O.R. Procedure with MCC); Proposed new MS-DRG 818 (Other Antepartum Diagnoses with O.R. Procedure with CC); Proposed new MS-DRG 819 (Other Antepartum Diagnoses with O.R. Procedure without CC/MCC); Proposed new MS-DRG 831 (Other Antepartum Diagnoses without O.R. Procedure with MCC); Proposed new MS-DRG 832 (Other Antepartum Diagnoses without O.R. Procedure with CC); and Proposed new MS-DRG 833 (Other Antepartum Diagnoses without O.R. Procedure without CC/MCC). The diagrams below illustrate how the proposed MS-DRG logic for MDC 14 would function. The first diagram (Diagram 1.) begins by asking if there is a principal diagnosis from MDC 14. If no, the GROUPER logic directs the case to the appropriate MDC based on the principal diagnosis reported. Next, the logic asks if there is a cesarean section procedure reported on the claim. If yes, the logic asks if there was a sterilization procedure reported on the claim. If yes, the logic assigns the case to one of the proposed new MS-DRGs 783, 784, or [[Page 20224]] 785. If no, the logic assigns the case to one of the proposed new MS- DRGs 786, 787, or 788. If there was not a cesarean section procedure reported on the claim, the logic asks if there was a vaginal delivery procedure reported on the claim. If yes, the logic asks if there was another O.R. procedure other than sterilization, D&C, delivery procedure or a delivery inclusive O.R. procedure. If yes, the logic assigns the case to existing MS-DRG 768. If no, the logic asks if there was a sterilization and/or D&C reported on the claim. If yes, the logic assigns the case to one of the proposed new MS-DRGs 796, 797, or 798. If no, the logic assigns the case to one of the proposed new MS-DRGs 805, 806, or 807. If there was not a vaginal delivery procedure reported on the claim, the GROUPER logic directs you to the other non- delivery MS-DRGs as shown in Diagram 2. BILLING CODE 4120-01-P [GRAPHIC] [TIFF OMITTED] TP07MY18.000 The logic for Diagram 2. begins by asking if there is a principal diagnosis of abortion reported on the claim. If yes, the logic then asks if there was a D&C, aspiration curettage or hysterotomy procedure reported on the claim. If yes, the logic assigns the case to existing MS-DRG 770. If no, the logic assigns the case to existing MS-DRG 779. If there was not a principal diagnosis of abortion reported on the claim, the logic asks if there was a principal diagnosis of an antepartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to one of the proposed new MS-DRGs 817, 818, or 819. If no, the logic assigns the case to one of the proposed new MS-DRGs 831, 832, or 833. If there was not a principal diagnosis of an [[Page 20225]] antepartum condition reported on the claim, the logic asks if there was a principal diagnosis of a postpartum condition reported on the claim. If yes, the logic then asks if there was an O.R. procedure reported on the claim. If yes, the logic assigns the case to existing MS-DRG 769. If no, the logic assigns the case to existing MS-DRG 776. If there was not a principal diagnosis of a postpartum condition reported on the claim, the logic identifies that there was a principal diagnosis describing childbirth, delivery or an intrapartum condition reported on the claim without any other procedures, and assigns the case to existing MS-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis). To assist in detecting coding and MS-DRG assignment errors for MS- DRG 998 that could result when a provider does not report the procedure code for either a cesarean section or a vaginal delivery along with an outcome of delivery diagnosis code, as discussed in section II.F.13.d., we are proposing to add a new Questionable Obstetric Admission edit under the MCE. We are inviting public comments on this proposed MCE edit and we also are inviting public comments on the need for any additional MCE considerations with regard to the proposed changes for the MDC 14 MS-DRGs. [GRAPHIC] [TIFF OMITTED] TP07MY18.001 BILLING CODE 4120-01-C We refer readers to Tables 6P.1h through 6P.1k for the lists of the diagnosis and procedure codes that we are proposing to assign to the GROUPER logic for the proposed new MS-DRGs and the existing MS-DRGs under MDC [[Page 20226]] 14. We are inviting public comments on our proposed list of diagnosis codes, which also addresses the list of diagnosis codes that a commenter identified as missing from the GROUPER logic. We note that, as a result of our proposed GROUPER logic changes to the vaginal delivery MS-DRGs, which would only take into account the procedure codes for a vaginal delivery and the outcome of delivery secondary diagnosis codes, there is no longer a need to maintain a specific principal diagnosis logic list for those MS-DRGs. Therefore, while we appreciate the detailed suggestions and rationale submitted by the commenter for why specific diagnosis codes should be removed from the vaginal delivery principal diagnosis logic as displayed earlier in this discussion, we are proposing to remove that logic. We are inviting public comments on our proposal. We also are inviting public comments on our proposal to reassign ICD-10-PCS procedure codes 0UDB7ZX, 0UDB7ZZ, 0UDB8ZX, and 0UDB8ZZ that describe dilation and curettage procedures from MS-DRG 767 under MDC 14 to MS-DRGs 744 and 745 under MDC 13. In addition, we are inviting public comments on our proposed list of procedure codes for the proposed revised MDC 14 MS-DRG logic, which would require a procedure code for case assignment. Finally, we are inviting public comments on the proposed deletion of the 10 MS-DRGs and the proposed creation of 18 new MS-DRGs with a 3-way severity level split listed above in this section, as well as on the potential alternative new MS-DRGs using a 2-way severity level split as also presented above. 11. MDC 18 (Infectious and Parasitic Diseases (Systematic or Unspecified Sites): Systemic Inflammatory Response Syndrome (SIRS) of Non-Infectious Origin ICD-10-CM diagnosis codes R65.10 (Systemic Inflammatory Response Syndrome (SIRS) of non-infectious origin without acute organ dysfunction) and R65.11 (Systemic Inflammatory Response Syndrome (SIRS) of non-infectious origin with acute organ dysfunction) are currently assigned to MS-DRGs 870 (Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours), 871 (Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours with MCC), and 872 (Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours without MCC) under MDC 18 (Infectious and Parasitic Diseases, Systemic or Unspecified Sites). Our clinical advisors noted that these diagnosis codes are specifically describing conditions of a non-infectious origin, and recommended that they be reassigned to a more clinically appropriate MS-DRG. We examined claims data from the September 2017 update of the FY 2017 MedPAR file for cases in MS-DRGs 870, 871, and 872. Our findings are shown in the following table. Septicemia or Severe Sepsis With and Without Mechanical Ventilation >96 Hours With and Without MCC ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 870--All cases........................................... 31,658 14.3 $42,981 MS-DRG 871--All cases........................................... 566,531 6.3 13,002 MS-DRG 872--All cases........................................... 150,437 4.3 7,532 ---------------------------------------------------------------------------------------------------------------- As shown in this table, we found a total of 31,658 cases in MS-DRG 870, with an average length of stay of 14.3 days and average costs of $42,981. We found a total of 566,531 cases in MS-DRG 871, with an average length of stay of 6.3 days and average costs of $13,002. Lastly, we found a total of 150,437 cases in MS-DRG 872, with an average length of stay of 4.3 days and average costs of $7,532. We then examined claims data in MS-DRGs 870, 871, or 872 for cases reporting an ICD-10-CM diagnosis code of R65.10 or R65.11. Our findings are shown in the following table. SIRS of Non-Infectious Origin With and Without Acute Organ Dysfunction ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRGs 870, 871 and 872 cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 870, 871, and 872--Cases reporting a principal diagnosis 1,254 3.8 $6,615 code of R65.10................................................. MS-DRGs 870, 871, and 872--Cases reporting a principal diagnosis 138 4.8 9,655 code of R65.11................................................. MS-DRGs 870, 871, and 872--Cases reporting a secondary diagnosis 1,232 5.5 10,670 code of R65.10................................................. MS-DRGs 870, 871, and 872--Cases reporting a secondary diagnosis 117 6.2 12,525 code of R65.11................................................. ---------------------------------------------------------------------------------------------------------------- As shown in this table, we found a total of 1,254 cases reporting a principal diagnosis code of R65.10 in MS-DRGs 870, 871, and 872, with an average length of stay of 3.8 days and average costs of $6,615. We found a total of 138 cases reporting a principal diagnosis code of R65.11 in MS-DRGs 870, 871, and 872, with an average length of stay of 4.8 days and average costs of $9,655. We found a total of 1,232 cases reporting a secondary diagnosis code of R65.10 in MS-DRGs 870, 871, and 872, with an average length of stay of 5.5 days and average costs of $10,670. Lastly, we found a total of 117 cases reporting a secondary diagnosis code of R65.11 in MS-DRGs 870, 871, and 872, with an average length of stay of 6.2 days and average costs of $12,525. The claims data included a total of 1,392 cases in MS-DRGs 870, 871, and 872 that reported a principal diagnosis code of R65.10 or R65.11. We note that these 1,392 cases appear to have been coded inaccurately according to the ICD-10-CM Official Guidelines for Coding and Reporting at Section I.C.18.g., which specifically state: ``The systemic inflammatory response syndrome (SIRS) can develop as a result of certain non[dash]infectious disease processes, such as trauma, malignant neoplasm, or pancreatitis. When SIRS is documented with a non-infectious condition, and no subsequent infection [[Page 20227]] is documented, the code for the underlying condition, such as an injury, should be assigned, followed by code R65.10, Systemic inflammatory response syndrome (SIRS) of non-infectious origin without acute organ dysfunction or code R65.11, Systemic inflammatory response syndrome (SIRS) of non-infectious origin with acute organ dysfunction.'' Therefore, according to the Coding Guidelines, ICD-10-CM diagnosis codes R65.10 and R65.11 should not be reported as the principal diagnosis on an inpatient claim. We have acknowledged in past rulemaking the challenges with coding for SIRS (and sepsis) (71 FR 24037). In addition, we note that there has been confusion with regard to how these codes are displayed in the ICD-10 MS-DRG Definitions Manual under MS-DRGs 870, 871, and 872, which may also impact the reporting of these conditions. For example, in Version 35 of the ICD-10 MS-DRG Definitions Manual (which is available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page-Items/FY2018-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending, the logic for case assignment to MS-DRGs 870, 871, and 872 is comprised of a list of several diagnosis codes, of which ICD-10-CM diagnosis codes R65.10 and R65.11 are included. Because these codes are listed under the heading of ``Principal Diagnosis'', it may appear that these codes are to be reported as a principal diagnosis for assignment to MS-DRGs 870, 871, or 872. However, the Definitions Manual display of the GROUPER logic assignment for each diagnosis code is for grouping purposes only. The GROUPER (and, therefore, documentation in the MS-DRG Definitions Manual) was not designed to account for coding guidelines or coverage policies. Since the inception of the IPPS, the data editing function has been a separate and independent step in the process of determining a DRG assignment. Except for extreme data integrity issues that prevent a DRG from being assigned, such as an invalid principal diagnosis, the DRG assignment GROUPER does not edit for data integrity. Prior to assigning the MS-DRG to a claim, the MACs apply a series of data integrity edits using programs such as the Medicare Code Editor (MCE). The MCE is designed to identify cases that require further review before classification into an MS-DRG. These data integrity edits address issues such as data validity, coding rules, and coverage policies. The separation of the MS-DRG grouping and data editing functions allows the MS-DRG GROUPER to remain stable during a fiscal year even though coding rules and coverage policies may change during the fiscal year. As such, in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38050 through 38051), we finalized our proposal to add ICD-10-CM diagnosis codes R65.10 and R65.11 to the Unacceptable Principal Diagnosis edit in the MCE as a result of the Official Guidelines for Coding and Reporting related to SIRS, in efforts to improve coding accuracy for these types of cases. To address the issue of determining a more appropriate MS-DRG assignment for ICD-10-CM diagnosis codes R65.10 and R65.11, we reviewed alternative options under MDC 18. Our clinical advisors determined the most appropriate option is MS-DRG 864 (Fever) because the conditions that are assigned here describe conditions of a non-infectious origin. Therefore, we are proposing to reassign ICD-10-CM diagnosis codes R65.10 and R65.11 to MS-DRG 864 and to revise the title of MS-DRG 864 to ``Fever and Inflammatory Conditions'' to better reflect the diagnoses assigned there. Proposed Revised MS-DRG 864 (Fever and Inflammatory Conditions) ---------------------------------------------------------------------------------------------------------------- Average length MS-DRG Number of cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 864--All cases........................................ 12,144 3.4 $6,232 ---------------------------------------------------------------------------------------------------------------- We are inviting public comments on our proposals. 12. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): Corrosive Burns ICD-10-CM Coding Guidelines include ``Code first'' sequencing instructions for cases reporting a primary diagnosis of toxic effect (ICD-10-CM codes T51 through T65) and a secondary diagnosis of corrosive burn (ICD-10-CM codes T21.40 through T21.79). We received a request to reassign these cases from MS-DRGs 901 (Wound Debridements for Injuries with MCC), 902 (Wound Debridements for Injuries with CC), 903 (Wound Debridements for Injuries without CC/MCC), 904 (Skin Grafts for Injuries with CC/MCC), 905 (Skin Grafts for Injuries without CC/ MCC), 917 (Poisoning and Toxic Effects of Drugs with MCC), and 918 (Poisoning and Toxic Effects of Drugs without MCC) to MS-DRGs 927 (Extensive Burns or Full Thickness Burns with Mechanical Ventilation >96 Hours with Skin Graft), 928 (Full Thickness Burn with Skin Graft or Inhalation Injury with CC/MCC), 929 (Full Thickness Burn with Skin Graft or Inhalation Injury without CC/MCC), 933 (Extensive Burns or Full Thickness Burns with Mechanical Ventilation >96 Hours without Skin Graft), 934 (Full Thickness Burn without Skin Graft or Inhalation Injury), and 935 (Nonextensive Burns). The requestor noted that, for corrosion burns codes T21.40 through T21.79, ICD[dash]10-CM Coding Guidelines instruct to ``Code first (T51 through T65) to identify chemical and intent.'' Because code first notes provide sequencing directive, when patients are admitted with corrosive burns (which can be full thickness and extensive), toxic effect codes T51 through T65 must be sequenced first followed by codes for the corrosive burns. This causes full-thickness and extensive burns to group to MS-DRGs 901 through 905 when excisional debridement and split thickness skin grafts are performed, and to MS-DRGs 917 and 918 when procedures are not performed. This is in contrast to cases reporting a primary diagnosis of corrosive burn, which group to MS[dash]DRGs 927 through 935. The requestor stated that MS-DRGs 456 (Spinal Fusion except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC), 457 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with CC), and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions without CC/MCC) are grouped based on the procedure performed in combination with the principal diagnosis or secondary [[Page 20228]] diagnosis (secondary scoliosis). The requestor stated that when codes for corrosive burns are reported as secondary diagnoses in conjunction with principal diagnoses codes T5l through T65, particularly when skin grafts are performed, they would be more appropriately assigned to MS- DRGs 927 through 935. We analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for all cases assigned to MS-DRGs 901, 902, 903, 904, 905, 917, and 918, and subsets of these cases with primary diagnosis of toxic effect with secondary diagnosis of corrosive burn. We note that we found no cases from this subset in MS[dash]DRGs 903, 907, 908, and 909 and, therefore, did not include the results for these MS[dash]DRGs in the table below. We also analyzed all cases assigned to MS-DRGs 927, 928, 929, 933, 934, and 935 and those cases that reported a primary diagnosis of corrosive burn. Our findings are shown in the following two tables. MDC 21 Injuries, Poisonings and Toxic Effects of Drugs ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- All Cases with primary diagnosis of toxic effect and secondary 55 5.5 $18,077 diagnosis of corrosive burn--Across all MS-DRGs................ MS-DRG 901--All cases........................................... 968 13 31,479 MS-DRG 901--Cases with primary diagnosis of toxic effect and 1 8 12,388 secondary diagnosis of corrosive burn.......................... MS-DRG 902--All cases........................................... 1,775 6.6 14,206 MS-DRG 902--Cases with primary diagnosis of toxic effect and 8 10.3 20,940 secondary diagnosis of corrosive burn.......................... MS-DRG 904--All cases........................................... 905 9.8 23,565 MS-DRG 904--Cases with primary diagnosis of toxic effect and 8 6.4 22,624 secondary diagnosis of corrosive burn.......................... MS-DRG 905--All cases........................................... 263 4.9 13,291 MS-DRG 905--Cases with primary diagnosis of toxic effect and 2 2.5 7,682 secondary diagnosis of corrosive burn.......................... MS-DRG 906--All cases........................................... 458 4.8 13,555 MS-DRG 906--Cases with primary diagnosis of toxic effect and 1 5 7,409 secondary diagnosis of corrosive burn.......................... MS-DRG 917--All cases........................................... 31,730 4.8 10,280 MS-DRG 917--Cases with primary diagnosis of toxic effect and 6 4.8 7,336 secondary diagnosis of corrosive burn.......................... MS-DRG 918--All cases........................................... 19,819 3 5,529 MS-DRG 918--Cases with primary diagnosis of toxic effect and 28 3.5 5,643 secondary diagnosis of corrosive burn.......................... ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 55 cases with a primary diagnosis of toxic effect and a secondary diagnosis of corrosive burn across MS-DRGs 901, 902, 903, 904, 905, 917, and 918. When comparing this subset of codes relative to those of each MS-DRG as a whole, we noted that, in most of these MS-DRGs, the average costs and average length of stay for this subset of cases were roughly equivalent to or lower than the average costs and average length of stay for cases in the MS-DRG as a whole, while in one case, they were higher. As we have noted in prior rulemaking (77 FR 53309) and elsewhere in this rule, it is a fundamental principle of an averaged payment system that half of the procedures in a group will have above average costs. It is expected that there will be higher cost and lower cost subsets, especially when a subset has low numbers. The results of this analysis indicate that these cases are appropriately placed within their current MDC. Our clinical advisors reviewed this request and indicated that patients with a primary diagnosis of toxic effect and a secondary diagnosis of corrosive burn have been exposed to an irritant or corrosive substance and, therefore, are clinically similar to those patients in MDC 21. Furthermore, our clinical advisors do not believe that the size of this subset of cases justifies the significant changes to the GROUPER logic that would be required to address the commenter's request, which would involve rerouting cases when the primary and secondary diagnoses are in different MDCs. MDC 22 Burns ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- All cases with primary diagnosis of corrosive burn--Across all 60 8.5 $19,456 MS-DRGs........................................................ MS-DRG 927--All cases........................................... 159 28.1 128,960 MS-DRG 927--Cases with primary diagnosis of corrosive burn...... 1 41 75,985 MS-DRG 928--All cases........................................... 1,021 15.1 42,868 MS-DRG 928--Cases with primary diagnosis of corrosive burn...... 13 13.2 31,118 MS-DRG 929--All cases........................................... 295 7.9 21,600 MS-DRG 929--Cases with primary diagnosis of corrosive burn...... 4 12.5 18,527 MS-DRG 933--All cases........................................... 121 4.6 21,291 MS-DRG 933--Cases with primary diagnosis of corrosive burn...... 1 7 91,779 MS-DRG 934--All cases........................................... 503 6.1 13,286 [[Page 20229]] MS-DRG 934--Cases with primary diagnosis of corrosive burn...... 11 5.8 13,280 MS-DRG 935--All cases........................................... 1,705 5.2 13,065 MS-DRG 935--Cases with primary diagnosis of corrosive burn...... 29 5 9,822 ---------------------------------------------------------------------------------------------------------------- To address the request of reassigning cases with a primary diagnosis of toxic effect and secondary diagnosis of corrosive burn, we reviewed the data for all cases in MS-DRGs 927, 928, 929, 933, 934, and 935 and those cases reporting a primary diagnosis of corrosive burn. We found a total of 60 cases reporting a primary diagnosis of corrosive burn, with an average length of stay of 8.5 days and average costs of $19,456. Our clinical advisors believe that these cases reporting a primary diagnosis of corrosive burn are appropriately placed in MDC 22 as they are clinically aligned with other patients in this MDC. In summary, the results of our claims data analysis and the advice from our clinical advisors do not support reassigning cases in MS-DRGs 901, 902, 903, 904, 905, 917, and 918 reporting a primary diagnosis of toxic effect and a secondary diagnosis of corrosive burn to MS-DRGs 927, 928, 929, 933, 934 and 935. Therefore, we are not proposing to reassign these cases. We are inviting public comments on our proposal to maintain the current MS[dash]DRG structure for these cases. 13. Proposed Changes to the Medicare Code Editor (MCE) The Medicare Code Editor (MCE) is a software program that detects and reports errors in the coding of Medicare claims data. Patient diagnoses, procedure(s), and demographic information are entered into the Medicare claims processing systems and are subjected to a series of automated screens. The MCE screens are designed to identify cases that require further review before classification into an MS-DRG. As discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38045), we made available the FY 2018 ICD-10 MCE Version 35 manual file. The link to this MCE manual file, along with the link to the mainframe and computer software for the MCE Version 35 (and ICD-10 MS-DRGs) are posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html through the FY 2018 IPPS Final Rule Home Page. For this FY 2019 IPPS/LTCH PPS proposed rule, below we address the MCE requests we received by the November 1, 2017 deadline. We also discuss the proposals we are making based on our internal review and analysis. a. Age Conflict Edit In the MCE, the Age Conflict edit exists to detect inconsistencies between a patient's age and any diagnosis on the patient's record; for example, a 5-year-old patient with benign prostatic hypertrophy or a 78-year-old patient coded with a delivery. In these cases, the diagnosis is clinically and virtually impossible for a patient of the stated age. Therefore, either the diagnosis or the age is presumed to be incorrect. Currently, in the MCE, the following four age diagnosis categories appear under the Age Conflict edit and are listed in the manual and written in the software program: Perinatal/Newborn--Age of 0 years only; a subset of diagnoses which will only occur during the perinatal or newborn period of age 0 (for example, tetanus neonatorum, health examination for newborn under 8 days old). Pediatric--Age is 0-17 years inclusive (for example, Reye's syndrome, routine child health exam). Maternity--Age range is 12-55 years inclusive (for example, diabetes in pregnancy, antepartum pulmonary complication). Adult--Age range is 15-124 years inclusive (for example, senile delirium, mature cataract). (1) Perinatal/Newborn Diagnoses Category Under the ICD-10 MCE, the Perinatal/Newborn Diagnoses category under the Age Conflict edit considers the age of 0 years only; a subset of diagnoses which will only occur during the perinatal or newborn period of age 0 to be inclusive. This includes conditions that have their origin in the fetal or perinatal period (before birth through the first 28 days after birth) even if morbidity occurs later. For that reason, the diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only. In the ICD-10-CM classification, there are 14 diagnosis codes that describe specific suspected conditions that have been evaluated and ruled out during the newborn period and are currently not on the Perinatal/Newborn Diagnoses Category edit code list. We consulted with staff at the Centers for Disease Control's (CDC's) National Center for Health Statistics (NCHS) because NCHS has the lead responsibility for the ICD-10-CM diagnosis codes. The NCHS' staff confirmed that the following diagnosis codes are appropriate to add to the edit code list for the Perinatal/Newborn Diagnoses Category. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Z05.0..................... Observation and evaluation of newborn for suspected cardiac condition ruled out. Z05.1..................... Observation and evaluation of newborn for suspected infectious condition ruled out. Z05.2..................... Observation and evaluation of newborn for suspected neurological condition ruled out. Z05.3..................... Observation and evaluation of newborn for suspected respiratory condition ruled out. Z05.41.................... Observation and evaluation of newborn for suspected genetic condition ruled out. Z05.42.................... Observation and evaluation of newborn for suspected metabolic condition ruled out. Z05.43.................... Observation and evaluation of newborn for suspected immunologic condition ruled out. Z05.5..................... Observation and evaluation of newborn for suspected gastrointestinal condition ruled out. Z05.6..................... Observation and evaluation of newborn for suspected genitourinary condition ruled out. Z05.71.................... Observation and evaluation of newborn for suspected skin and subcutaneous tissue condition ruled out. [[Page 20230]] Z05.72.................... Observation and evaluation of newborn for suspected musculoskeletal condition ruled out. Z05.73.................... Observation and evaluation of newborn for suspected connective tissue condition ruled out. Z05.8..................... Observation and evaluation of newborn for other specified suspected condition ruled out. Z05.9..................... Observation and evaluation of newborn for unspecified suspected condition ruled out. ------------------------------------------------------------------------ Therefore, we are proposing to add the ICD-10-CM diagnosis codes listed in the table above to the Age Conflict edit under the Perinatal/ Newborn Diagnoses Category edit code list. We also are proposing to continue to include the existing diagnosis codes currently listed under the Perinatal/Newborn Diagnoses Category edit code list. We are inviting public comments on our proposals. (2) Pediatric Diagnoses Category Under the ICD-10 MCE, the Pediatric Diagnoses Category for the Age Conflict edit considers the age range of 0 to 17 years inclusive. For that reason, the diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only. As discussed in section II.F.15. of the preamble of this proposed rule, Table 6C.--Invalid Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the diagnoses that are no longer effective as of October 1, 2018. Included in this table is an ICD-10-CM diagnosis code currently listed on the Pediatric Diagnoses Category edit code list, ICD-10-CM diagnosis code Z13.4 (Encounter for screening for certain developmental disorders in childhood). We are proposing to remove this code from the Pediatric Diagnoses Category edit code list. We also are proposing to continue to include the other existing diagnosis codes currently listed under the Pediatric Diagnoses Category edit code list. We are inviting public comments on our proposals. (3) Maternity Diagnoses Under the ICD-10 MCE, the Maternity Diagnoses Category for the Age Conflict edit considers the age range of 12 to 55 years inclusive. For that reason, the diagnosis codes on this Age Conflict edit list would be expected to apply to conditions or disorders specific to that age group only. As discussed in section II.F.15. of the preamble of this proposed rule, Table 6A.--New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnoses codes that have been approved to date, which will be effective with discharges occurring on and after October 1, 2018. The following table lists the new ICD-10-CM diagnosis codes included in Table 6A associated with pregnancy and maternal care that we believe are appropriate to add to the Maternity Diagnoses Category edit code list under the Age Conflict edit. Therefore, we are proposing to add these codes to the Maternity Diagnoses Category edit code list under the Age Conflict edit. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ F53.0..................... Postpartum depression. F53.1..................... Puerperal psychosis. O30.131................... Triplet pregnancy, trichorionic/triamniotic, first trimester. O30.132................... Triplet pregnancy, trichorionic/triamniotic, second trimester. O30.133................... Triplet pregnancy, trichorionic/triamniotic, third trimester. O30.139................... Triplet pregnancy, trichorionic/triamniotic, unspecified trimester. O30.231................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, first trimester. O30.232................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, second trimester. O30.233................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, third trimester. O30.239................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, unspecified trimester. O30.831................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, first trimester. O30.832................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, second trimester. O30.833................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, third trimester. O30.839................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, unspecified trimester. O86.00.................... Infection of obstetric surgical wound, unspecified. O86.01.................... Infection of obstetric surgical wound, superficial incisional site. O86.02.................... Infection of obstetric surgical wound, deep incisional site. O86.03.................... Infection of obstetric surgical wound, organ and space site. O86.04.................... Sepsis following an obstetrical procedure. O86.09.................... Infection of obstetric surgical wound, other surgical site. ------------------------------------------------------------------------ In addition, as discussed in section II.F.15. of the preamble of this proposed rule, Table 6C.--Invalid Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the diagnosis codes that are no longer effective as of October 1, 2018. Included in this table are two ICD-10-CM diagnosis codes currently listed on the Maternity Diagnoses Category edit code list: ICD-10-CM diagnosis codes F53 (Puerperal psychosis) and O86.0 (Infection of obstetric surgical wound). We are proposing to remove these codes from the Maternity Diagnoses Category Edit code list. We also are proposing to continue to include the other existing diagnosis codes currently listed under the Maternity Diagnoses Category edit [[Page 20231]] code list. We are inviting public comments on our proposals. b. Sex Conflict Edit In the MCE, the Sex Conflict edit detects inconsistencies between a patient's sex and any diagnosis or procedure on the patient's record; for example, a male patient with cervical cancer (diagnosis) or a female patient with a prostatectomy (procedure). In both instances, the indicated diagnosis or the procedure conflicts with the stated sex of the patient. Therefore, the patient's diagnosis, procedure, or sex is presumed to be incorrect. (1) Diagnoses for Females Only Edit We received a request to consider the addition of the following ICD-10-CM diagnosis codes to the list for the Diagnoses for Females Only edit. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Z30.015................... Encounter for initial prescription of vaginal ring hormonal contraceptive. Z31.7..................... Encounter for procreative management and counseling for gestational carrier. Z98.891................... History of uterine scar from previous surgery. ------------------------------------------------------------------------ The requestor noted that, currently, ICD-10-CM diagnosis code Z30.44 (Encounter for surveillance of vaginal ring hormonal contraceptive device) is on the Diagnoses for Females Only edit code list and suggested that ICD-10-CM diagnosis code Z30.015, which also describes an encounter involving a vaginal ring hormonal contraceptive, be added to the Diagnoses for Females Only edit code list as well. In addition, the requestor suggested that ICD-10-CM diagnosis codes Z31.7 and Z98.891 be added to the Diagnoses for Females Only edit code list. We reviewed ICD-10-CM diagnosis codes Z30.015, Z31.7, and Z98.891, and we agree with the requestor that it is clinically appropriate to add these three ICD-10-CM diagnosis codes to the Diagnoses for Females Only edit code list because the conditions described by these codes are specific to and consistent with the female sex. In addition, as discussed in section II.F.15. of the preamble of this proposed rule, Table 6A.--New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have been approved to date, which will be effective with discharges occurring on and after October 1, 2018. The following table lists the new diagnosis codes that are associated with conditions consistent with the female sex. We are proposing to add these ICD-10-CM diagnosis codes to the Diagnoses for Females Only edit code list under the Sex Conflict edit. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ F53.0..................... Postpartum depression. F53.1..................... Puerperal psychosis. N35.82.................... Other urethral stricture, female. N35.92.................... Unspecified urethral stricture, female. O30.131................... Triplet pregnancy, trichorionic/triamniotic, first trimester. O30.132................... Triplet pregnancy, trichorionic/triamniotic, second trimester. O30.133................... Triplet pregnancy, trichorionic/triamniotic, third trimester. O30.139................... Triplet pregnancy, trichorionic/triamniotic, unspecified trimester. O30.231................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, first trimester. O30.232................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, second trimester. O30.233................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, third trimester. O30.239................... Quadruplet pregnancy, quadrachorionic/quadra- amniotic, unspecified trimester. O30.831................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, first trimester. O30.832................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, second trimester. O30.833................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, third trimester. O30.839................... Other specified multiple gestation, number of chorions and amnions are both equal to the number of fetuses, unspecified trimester. O86.00.................... Infection of obstetric surgical wound, unspecified. O86.01.................... Infection of obstetric surgical wound, superficial incisional site. O86.02.................... Infection of obstetric surgical wound, deep incisional site. O86.03.................... Infection of obstetric surgical wound, organ and space site. O86.04.................... Sepsis following an obstetrical procedure. O86.09.................... Infection of obstetric surgical wound, other surgical site. Q51.20.................... Other doubling of uterus, unspecified. Q51.21.................... Other complete doubling of uterus. Q51.22.................... Other partial doubling of uterus. Q51.28.................... Other doubling of uterus, other specified. Z13.32.................... Encounter for screening for maternal depression. ------------------------------------------------------------------------ We are inviting public comments on our proposals. In addition, as discussed in section II.F.15. of the preamble of this proposed rule, Table 6C.--Invalid Diagnosis Codes associated with this proposed rule (which is available via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the diagnosis codes that are no longer effective as of October 1, 2018. Included [[Page 20232]] in this table are the following three ICD-10-CM diagnosis codes currently listed on the Diagnoses for Females Only edit code list. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ F53....................... Puerperal psychosis. O86.00.................... Infection of obstetric surgical wound. Q51.20.................... Other doubling of uterus, unspecified. ------------------------------------------------------------------------ Because these three ICD-10-CM diagnosis codes will no longer be effective as of October 1, 2018, we are proposing to remove them from the Diagnoses for Females Only edit code list under the Sex Conflict edit. We are inviting public comments on our proposal. (2) Procedures for Females Only Edit As discussed in section II.F.15. of the preamble of this proposed rule, Table 6B.--New Procedure Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the procedure codes that have been approved to date, which will be effective with discharges occurring on and after October 1, 2018. We are proposing to add the three ICD-10-PCS procedure codes in the following table describing procedures associated with the female sex to the Procedures for Females Only edit code list. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ 0UY90Z0................... Transplantation of uterus, allogeneic, open approach. 0UY90Z1................... Transplantation of uterus, syngeneic, open approach. 0UY90Z2................... Transplantation of uterus, zooplastic, open approach. ------------------------------------------------------------------------ We also are proposing to continue to include the existing procedure codes currently listed under the Procedures for Females Only edit code list. We are inviting public comments on our proposals. (3) Diagnoses for Males Only Edit As discussed in section II.F.15. of the preamble of this proposed rule, Table 6A.--New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have been approved to date, which will be effective with discharges occurring on and after October 1, 2018. The following table lists the new diagnosis codes that are associated with conditions consistent with the male sex. We are proposing to add these ICD-10-CM diagnosis codes to the Diagnoses for Males Only edit code list under the Sex Conflict edit. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ N35.016................... Post-traumatic urethral stricture, male, overlapping sites. N35.116................... Postinfective urethral stricture, not elsewhere classified, male, overlapping sites. N35.811................... Other urethral stricture, male, meatal. N35.812................... Other urethral bulbous stricture, male. N35.813................... Other membranous urethral stricture, male. N35.814................... Other anterior urethral stricture, male, anterior. N35.816................... Other urethral stricture, male, overlapping sites. N35.819................... Other urethral stricture, male, unspecified site. N35.911................... Unspecified urethral stricture, male, meatal. N35.912................... Unspecified bulbous urethral stricture, male. N35.913................... Unspecified membranous urethral stricture, male. N35.914................... Unspecified anterior urethral stricture, male. N35.916................... Unspecified urethral stricture, male, overlapping sites. N35.919................... Unspecified urethral stricture, male, unspecified site. N99.116................... Postprocedural urethral stricture, male, overlapping sites. R93.811................... Abnormal radiologic findings on diagnostic imaging of right testicle. R93.812................... Abnormal radiologic findings on diagnostic imaging of left testicle. R93.813................... Abnormal radiologic findings on diagnostic imaging of testicles, bilateral. R93.819................... Abnormal radiologic findings on diagnostic imaging of unspecified testicle. ------------------------------------------------------------------------ We also are proposing to continue to include the existing diagnosis codes currently listed under the Diagnoses for Males Only edit code list. We are inviting public comments on our proposals. c. Manifestation Code as Principal Diagnosis Edit In the ICD-10-CM classification system, manifestation codes describe the manifestation of an underlying disease, not the disease itself and, therefore, should not be used as a principal diagnosis. As discussed in section II.F.15. of the preamble of this proposed rule, Table 6A.--New Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS [[Page 20233]] website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have been approved to date which will be effective with discharges occurring on and after October 1, 2018. Included in this table are ICD- 10-CM diagnosis codes K82.A1 (Gangrene of gallbladder in cholecystitis) and K82.A2 (Perforation of gallbladder in cholecystitis). We are proposing to add these two ICD-10-CM diagnosis codes to the Manifestation Code as Principal Diagnosis edit code list because the type of cholecystitis would be required to be reported first. We also are proposing to continue to include the existing diagnosis codes currently listed under the Manifestation Code as Principal Diagnosis edit code list. We are inviting public comments on our proposals. d. Questionable Admission Edit In the MCE, some diagnoses are not usually sufficient justification for admission to an acute care hospital. For example, if a patient is assigned ICD-10-CM diagnosis code R03.0 (Elevated blood pressure reading, without diagnosis of hypertension), the patient would have a questionable admission because an elevated blood pressure reading is not normally sufficient justification for admission to a hospital. As discussed in section II.F.10. of the preamble of this proposed rule, we are proposing several modifications to the MS-DRGs under MDC 14 (Pregnancy, Childbirth and the Puerperium). One aspect of these proposed modifications involves the GROUPER logic for the cesarean section and vaginal delivery MS-DRGs. We refer readers to section II.F.10. of the preamble of this proposed rule for a detailed discussion of the proposals regarding these MS-DRG modifications under MDC 14 and the relation to the MCE. If a patient presents to the hospital and either a cesarean section or a vaginal delivery occurs, it is expected that, in addition to the specific type of delivery code, an outcome of delivery code is also assigned and reported on the claim. The outcome of delivery codes are ICD-10-CM diagnosis codes that are to be reported as secondary diagnoses as instructed in Section I.C.15.b.5 of the ICD-10-CM Official Guidelines for Coding and Reporting which states: ``A code from category Z37, Outcome of delivery, should be included on every maternal record when a delivery has occurred. These codes are not to be used on subsequent records or on the newborn record.'' Therefore, to encourage accurate coding and appropriate MS-DRG assignment in alignment with the proposed modifications to the delivery MS-DRGs, we are proposing to create a new ``Questionable Obstetric Admission Edit'' under the Questionable Admission edit to read as follows: ``b. Questionable obstetric admission ICD-10-PCS procedure codes describing a cesarean section or vaginal delivery are considered to be a questionable admission except when reported with a corresponding secondary diagnosis code describing the outcome of delivery. Procedure code list for cesarean section 10D00Z0 Extraction of Products of Conception, High, Open Approach 10D00Z1 Extraction of Products of Conception, Low, Open Approach 10D00Z2 Extraction of Products of Conception, Extraperitoneal, Open Approach Procedure code list for vaginal delivery 10D07Z3 Extraction of Products of Conception, Low Forceps, Via Natural or Artificial Opening 10D07Z4 Extraction of Products of Conception, Mid Forceps, Via Natural or Artificial Opening 10D07Z5 Extraction of Products of Conception, High Forceps, Via Natural or Artificial Opening 10D07Z6 Extraction of Products of Conception, Vacuum, Via Natural or Artificial Opening 10D07Z7 Extraction of Products of Conception, Internal Version, Via Natural or Artificial Opening 10D07Z8 Extraction of Products of Conception, Other, Via Natural or Artificial Opening 10D17Z9 Manual Extraction of Products of Conception, Retained, Via Natural or Artificial Opening 10D18Z9 Manual Extraction of Products of Conception, Retained, Via Natural or Artificial Opening Endoscopic 10E0XZZ Delivery of Products of Conception, External Approach Secondary diagnosis code list for outcome of delivery Z37.0 Single live birth Z37.1 Single stillbirth Z37.2 Twins, both liveborn Z37.3 Twins, one liveborn and one stillborn Z37.4 Twins, both stillborn Z37.50 Multiple births, unspecified, all liveborn Z37.51 Triplets, all liveborn Z37.52 Quadruplets, all liveborn Z37.53 Quintuplets, all liveborn Z37.54 Sextuplets, all liveborn Z37.59 Other multiple births, all liveborn Z37.60 Multiple births, unspecified, some liveborn Z37.61 Triplets, some liveborn Z37.62 Quadruplets, some liveborn Z37.63 Quintuplets, some liveborn Z37.64 Sextuplets, some liveborn Z37.69 Other multiple births, some liveborn Z37.7 Other multiple births, all stillborn Z37.9 Outcome of delivery, unspecified'' We are proposing that the three ICD-10-PCS procedure codes listed in the following table would be used to establish the list of codes for the proposed Questionable Obstetric Admission edit logic for cesarean section. ICD-10-PCS Procedure Codes for Cesarean Section Under the Proposed Questionable Obstetric Admission Edit Code List in the MCE ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ 10D00Z0................... Extraction of products of conception, high, open approach. 10D00Z1................... Extraction of products of conception, low, open approach. 10D00Z2................... Extraction of products of conception, extraperitoneal, open approach. ------------------------------------------------------------------------ We are proposing that the nine ICD-10-PCS procedure codes listed in the following table would be used to establish the list of codes for the proposed new Questionable Obstetric Admission edit logic for vaginal delivery. [[Page 20234]] ICD-10-PCS Procedure Codes for Vaginal Delivery Under the Proposed Questionable Obstetric Admission Edit Code List in the MCE ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ 10D07Z3................... Extraction of products of conception, low forceps, via natural or artificial opening. 10D07Z4................... Extraction of products of conception, mid forceps, via natural or artificial opening. 10D07Z5................... Extraction of products of conception, high forceps, via natural or artificial opening. 10D07Z6................... Extraction of products of conception, vacuum, via natural or artificial opening. 10D07Z7................... Extraction of products of conception, internal version, via natural or artificial opening. 10D07Z8................... Extraction of products of conception, other, via natural or artificial opening. 10D17Z9................... Manual extraction of products of conception, retained, via natural or artificial opening. 10D18Z9................... Manual extraction of products of conception, retained, via natural or artificial opening. 10E0XZZ................... Delivery of products of conception, external approach. ------------------------------------------------------------------------ We are proposing that the 19 ICD-10-CM diagnosis codes listed in the following table would be used to establish the list of secondary diagnosis codes for the proposed new Questionable Obstetric Admission edit logic for outcome of delivery. ICD-10-CM Secondary Diagnosis Codes for Outcome of Delivery Under the Proposed Questionable Obstetric Admission Edit Code List in the MCE ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Z37.0..................... Single live birth. Z37.1..................... Single stillbirth. Z37.2..................... Twins, both liveborn. Z37.3..................... Twins, one liveborn and one stillborn. Z37.4..................... Twins, both stillborn. Z37.50.................... Multiple births, unspecified, all liveborn. Z37.51.................... Triplets, all liveborn. Z37.52.................... Quadruplets, all liveborn. Z37.53.................... Quintuplets, all liveborn. Z37.54.................... Sextuplets, all liveborn. Z37.59.................... Other multiple births, all liveborn. Z37.60.................... Multiple births, unspecified, some liveborn. Z37.61.................... Triplets, some liveborn. Z37.62.................... Quadruplets, some liveborn. Z37.63.................... Quintuplets, some liveborn. Z37.64.................... Sextuplets, some liveborn. Z37.69.................... Other multiple births, some liveborn. Z37.7..................... Other multiple births, all liveborn. Z37.9..................... Outcome of delivery, unspecified. ------------------------------------------------------------------------ We are inviting public comments on our proposal to create this new Questionable Obstetric Admission edit. We also are inviting public comments on the lists of diagnosis and procedure codes that we are proposing to include for this edit. e. Unacceptable Principal Diagnosis Edit In the MCE, there are select codes that describe a circumstance which influences an individual's health status, but does not actually describe a current illness or injury. There also are codes that are not specific manifestations, but may be due to an underlying cause. These codes are considered unacceptable as a principal diagnosis. In limited situations, there are a few codes on the MCE Unacceptable Principal Diagnosis edit code list that are considered ``acceptable'' when a specified secondary diagnosis is also coded and reported on the claim. As discussed in section II.F.9. of the preamble of this proposed rule, ICD-10-CM diagnosis codes Z49.02 (Encounter for fitting and adjustment of peritoneal dialysis catheter), Z49.31 (Encounter for adequacy testing for hemodialysis), and Z49.32 (Encounter for adequacy testing for peritoneal dialysis) are currently on the Unacceptable Principal Diagnosis edit code list. We are proposing to add diagnosis code Z49.01 (Encounter for fitting and adjustment of extracorporeal dialysis catheter) to the Unacceptable Principal Diagnosis edit code list because this is an encounter code that would more likely be performed in an outpatient setting. As discussed in section II.F.15. of the preamble of this proposed rule, Table 6C.--Invalid Diagnosis Codes associated with this proposed rule (which is available via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the diagnosis codes that are no longer effective as of October 1, 2018. As previously noted, included in this table is an ICD-10-CM diagnosis code Z13.4 (Encounter for screening for certain developmental disorders in childhood) which is currently listed on the Unacceptable Principal diagnoses Category edit code list. We are proposing to remove this code from the Unacceptable Principal Diagnoses Category edit code list. We also are proposing to continue to include the other existing diagnosis codes currently listed under the Unacceptable Principal Diagnosis edit code list. We are inviting public comments on our proposals. [[Page 20235]] f. Future Enhancement In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 38054), we noted the importance of ensuring accuracy of the coded data from the reporting, collection, processing, coverage, payment, and analysis aspects. We have engaged a contractor to assist in the review of the limited coverage and noncovered procedure edits in the MCE that may also be present in other claims processing systems that are utilized by our MACs. The MACs must adhere to criteria specified within the National Coverage Determinations (NCDs) and may implement their own edits in addition to what are already incorporated into the MCE, resulting in duplicate edits. The objective of this review is to identify where duplicate edits may exist and to determine what the impact might be if these edits were to be removed from the MCE. We have noted that the purpose of the MCE is to ensure that errors and inconsistencies in the coded data are recognized during Medicare claims processing. We are considering whether the inclusion of coverage edits in the MCE necessarily aligns with that specific goal because the focus of coverage edits is on whether or not a particular service is covered for payment purposes and not whether it was coded correctly. As we continue to evaluate the purpose and function of the MCE with respect to ICD-10, we encourage public input for future discussion. As we discussed in the FY 2018 IPPS/LTCH PPS final rule, we recognize a need to further examine the current list of edits and the definitions of those edits. We continue to encourage public comments on whether there are additional concerns with the current edits, including specific edits or language that should be removed or revised, edits that should be combined, or new edits that should be added to assist in detecting errors or inaccuracies in the coded data. Comments should be directed to the MS-DRG Classification Change Mailbox located at: [email protected] by November 1, 2018 for FY 2020. 14. Proposed Changes to Surgical Hierarchies Some inpatient stays entail multiple surgical procedures, each one of which, occurring by itself, could result in assignment of the case to a different MS-DRG within the MDC to which the principal diagnosis is assigned. Therefore, it is necessary to have a decision rule within the GROUPER by which these cases are assigned to a single MS-DRG. The surgical hierarchy, an ordering of surgical classes from most resource[dash]intensive to least resource[dash]intensive, performs that function. Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource[dash]intensive surgical class. A surgical class can be composed of one or more MS-DRGs. For example, in MDC 11, the surgical class ``kidney transplant'' consists of a single MS-DRG (MS-DRG 652) and the class ``major bladder procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655). Consequently, in many cases, the surgical hierarchy has an impact on more than one MS-DRG. The methodology for determining the most resource-intensive surgical class involves weighting the average resources for each MS-DRG by frequency to determine the weighted average resources for each surgical class. For example, assume surgical class A includes MS-DRGs 001 and 002 and surgical class B includes MS- DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 001 are higher than that of MS-DRG 003, but the average costs of MS- DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weigh the average costs of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG) to determine average resource consumption for the surgical class. The surgical classes would then be ordered from the class with the highest average resource utilization to that with the lowest, with the exception of ``other O.R. procedures'' as discussed in this proposed rule. This methodology may occasionally result in assignment of a case involving multiple procedures to the lower[dash]weighted MS-DRG (in the highest, most resource[dash]intensive surgical class) of the available alternatives. However, given that the logic underlying the surgical hierarchy provides that the GROUPER search for the procedure in the most resource[dash]intensive surgical class, in cases involving multiple procedures, this result is sometimes unavoidable. We note that, notwithstanding the foregoing discussion, there are a few instances when a surgical class with a lower average cost is ordered above a surgical class with a higher average cost. For example, the ``other O.R. procedures'' surgical class is uniformly ordered last in the surgical hierarchy of each MDC in which it occurs, regardless of the fact that the average costs for the MS-DRG or MS-DRGs in that surgical class may be higher than those for other surgical classes in the MDC. The ``other O.R. procedures'' class is a group of procedures that are only infrequently related to the diagnoses in the MDC, but are still occasionally performed on patients with cases assigned to the MDC with these diagnoses. Therefore, assignment to these surgical classes should only occur if no other surgical class more closely related to the diagnoses in the MDC is appropriate. A second example occurs when the difference between the average costs for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy because, as a result of reassigning cases on the basis of the hierarchy change, the average costs are likely to shift such that the higher[dash]ordered surgical class has lower average costs than the class ordered below it. Based on the changes that we are proposing to make in this FY 2019 IPPS/LTCH PPS proposed rule, as discussed in section II.F.10. of the preamble of this proposed rule, we are proposing to revise the surgical hierarchy for MDC 14 (Pregnancy, Childbirth & the Puerperium) as follows: In MDC 14, we are proposing to delete MS-DRGs 765 and 766 (Cesarean Section with and without CC/MCC, respectively) and MS-DRG 767 (Vaginal Delivery with Sterilization and/or D&C) from the surgical hierarchy. We are proposing to sequence proposed new MS-DRGs 783, 784, and 785 (Cesarean Section with Sterilization with MCC, with CC and without CC/MCC, respectively) above proposed new MS-DRGs 786, 787, and 788 (Cesarean Section without Sterilization with MCC, with CC and without CC/MCC, respectively). We are proposing to sequence proposed new MS-DRGs 786, 787, and 788 (Cesarean Section without Sterilization with MCC, with CC and without CC/MCC, respectively) above MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C). We also are proposing to sequence proposed new MS-DRGs 796, 797, and 798 (Vaginal Delivery with Sterilization/D&C with MCC, with CC and without CC/MCC, respectively) below MS-DRG 768 and above MS-DRG 770 (Abortion with D&C, Aspiration Curettage or Hysterotomy). Finally, we are proposing to sequence proposed new MS-DRGs 817, 818, and 819 (Other Antepartum Diagnoses with O.R. procedure with [[Page 20236]] MCC, with CC and without CC/MCC, respectively) below MS-DRG 770 and above MS-DRG 769 (Postpartum and Post Abortion Diagnoses with O.R. Procedure). Our proposals for Appendix D MS-DRG Surgical Hierarchy by MDC and MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 36 are illustrated in the following table. Proposed Surgical Hierarchy: MDC 14 [Pregnancy, childbirth and the puerperium] ------------------------------------------------------------------------ ------------------------------------------------------------------------ Proposed New MS-DRGs 783-785........... Cesarean Section with Sterilization. Proposed New MS-DRGs 786-788........... Cesarean Section without Sterilization. MS-DRG 768............................. Vaginal Delivery with O.R. Procedures. Proposed New MS-DRGs 796-798........... Vaginal Delivery with Sterilization/D&C. MS-DRG 770............................. Abortion with D&C, Aspiration Curettage or Hysterotomy. Proposed New MS-DRGs 817-819........... Other Antepartum Diagnoses with O.R. Procedure. MS-DRG 769............................. Postpartum and Post Abortion Diagnoses with O.R. Procedure. ------------------------------------------------------------------------ We are inviting public comments on our proposals. As with other MS-DRG related issues, we encourage commenters to submit requests to examine ICD-10 claims pertaining to the surgical hierarchy via the CMS MS[dash]DRG Classification Change Request Mailbox located at: [email protected] by November 1, 2018 for FY 2020 consideration. 15. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2019 a. Background of the CC List and the CC Exclusions List Under the IPPS MS-DRG classification system, we have developed a standard list of diagnoses that are considered CCs. Historically, we developed this list using physician panels that classified each diagnosis code based on whether the diagnosis, when present as a secondary condition, would be considered a substantial complication or comorbidity. A substantial complication or comorbidity was defined as a condition that, because of its presence with a specific principal diagnosis, would cause an increase in the length-of-stay by at least 1 day in at least 75 percent of the patients. However, depending on the principal diagnosis of the patient, some diagnoses on the basic list of complications and comorbidities may be excluded if they are closely related to the principal diagnosis. In FY 2008, we evaluated each diagnosis code to determine its impact on resource use and to determine the most appropriate CC subclassification (non-CC, CC, or MCC) assignment. We refer readers to sections II.D.2. and 3. of the preamble of the FY 2008 IPPS final rule with comment period for a discussion of the refinement of CCs in relation to the MS[dash]DRGs we adopted for FY 2008 (72 FR 47152 through 47171). b. Proposed Additions and Deletions to the Diagnosis Code Severity Levels for FY 2019 The following tables identifying the proposed additions and deletions to the MCC severity levels list and the proposed additions and deletions to the CC severity levels list for FY 2019 are available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Table 6I.1--Proposed Additions to the MCC List--FY 2019; Table 6I.2--Proposed Deletions to the MCC List--FY 2019; Table 6J.1--Proposed Additions to the CC List--FY 2019; and Table 6J.2--Proposed Deletions to the CC List--FY 2019. We are inviting public comments on our proposed severity level designations for the diagnosis codes listed in Table 6I.1. and Table 6J.1. We note that, for Table 6I.2. and Table 6J.2., the proposed deletions are a result of code expansions, with the exception of diagnosis codes B20 and J80, which are the result of proposed severity level designation changes. Therefore, the diagnosis codes on these lists will no longer be valid codes, effective FY 2019. We refer readers to the Tables 6I.1, 6I.2, 6J.1, and 6J.2 associated with this proposed rule, which are available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. c. Principal Diagnosis Is Its Own CC or MCC In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38060), we provided the public with notice of our plans to conduct a comprehensive review of the CC and MCC lists for FY 2019. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38056 through 38057), we also finalized our proposal to maintain the existing lists of principal diagnosis codes in Table 6L.-- Principal Diagnosis Is Its Own MCC List and Table 6M.--Principal Diagnosis Is Its Own CC List for FY 2018, without any changes to the existing lists, noting our plans to conduct a comprehensive review of the CC and MCC lists for FY 2019 (82 FR 38060). We stated that having multiple lists for CC and MCC diagnoses when reported as a principal and/or secondary diagnosis may not provide an accurate representation of resource utilization for the MS-DRGs. We also stated that the purpose of the Principal Diagnosis Is Its Own CC or MCC Lists was to ensure consistent MS-DRG assignment between the ICD-9-CM and ICD-10 MS-DRGs. The Principal Diagnosis Is Its Own CC or MCC Lists were developed for the FY 2016 implementation of the ICD- 10 version of the MS-DRGs to facilitate replication of the ICD-9-CM MS- DRGs. As part of our efforts to replicate the ICD-9-CM MS-DRGs, we implemented logic that may have increased the complexity of the MS-DRG assignment hierarchy and altered the format of the ICD-10 MS-DRG Definitions Manual. Two examples of workarounds used to facilitate replication are the proliferation of procedure clusters in the surgical MS-DRGs and the creation of the Principal Diagnosis Is Its Own CC or MCC Lists special logic. The following paragraph was added to the Version 33 ICD-10 MS-DRG Definitions Manual to explain the use of the Principal Diagnosis Is Its Own CC or MCC Lists: ``A few ICD-10-CM diagnosis codes express conditions that are normally coded in ICD-9-CM using two or more ICD-9- CM diagnosis codes. In the interest of ensuring that the ICD-10 MS-DRGs Version 33 places a patient in the same DRG regardless whether the patient record were to be coded in ICD-9-CM or ICD-10-CM/PCS, whenever one of these ICD-10-CM combination codes is used as principal diagnosis, the cluster of ICD-9-CM codes that would be coded on an ICD- 9-CM record is considered. If one of the ICD-9-CM codes in the cluster is a CC [[Page 20237]] or MCC, then the single ICD-10-CM combination code used as a principal diagnosis must also imply the CC or MCC that the ICD-9-CM cluster would have presented. The ICD-10-CM diagnoses for which this implication must be made are listed here.'' Versions 34 and 35 of the ICD-10 MS-DRG Definitions Manual also include this special logic for the MS-DRGs. The Principal Diagnosis Is Its Own CC or MCC Lists were developed in the absence of ICD-10 coded data by mapping the ICD-9-CM diagnosis codes to the new ICD-10-CM combination codes. CMS has historically used clinical judgment combined with data analysis to assign a principal diagnosis describing a complex or severe condition to the appropriate DRG or MS-DRG. The initial ICD-10 version of the MS[dash]DRGs replicated from the ICD-9 version can now be evaluated using clinical judgment combined with ICD-10 coded data because it is no longer necessary to replicate MS-DRG assignment across the ICD-9 and ICD-10 versions of the MS-DRGs for purposes of calculating relative weights. Now that ICD-10 coded data are available, in addition to using the data for calculating relative weights, ICD-10 data can be used to evaluate the effectiveness of the special logic for assigning a severity level to a principal diagnosis, as an indicator of resource utilization. To evaluate the effectiveness of the special logic, we have conducted analysis of the ICD-10 coded data combined with clinical review to determine whether to propose to keep the special logic for assigning a severity level to a principal diagnosis, or to propose to remove the special logic and use other available means of assigning a complex principal diagnosis to the appropriate MS[dash]DRG. Using claims data from the September 2017 update of the FY 2017 MedPAR file, we employed the following method to determine the impact of removing the special logic used in the current Version 35 GROUPER to process claims containing a code on the Principal Diagnosis Is Its Own CC or MCC Lists. Edits and cost estimations used for relative weight calculations were applied, resulting in 9,070,073 IPPS claims analyzed for this special logic impact evaluation. We refer readers to section II.G. of the preamble of this proposed rule for further information regarding the methodology for calculation of the proposed relative weights. First, we identified the number of cases potentially impacted by the special logic. We identified 310,184 cases reporting a principal diagnosis on the Principal Diagnosis Is Its Own CC or MCC lists. Of the 310,184 total cases that reported a principal diagnosis code on the Principal Diagnosis Is Its Own CC or MCC Lists, 204,749 cases also reported a secondary diagnosis code at the same severity level or higher severity level, and therefore the special logic had no impact on MS-DRG assignment. However, of the 310,184 total cases, there were 105,435 cases that did not report a secondary diagnosis code at the same severity level or higher severity level, and therefore the special logic could potentially impact MS-DRG assignment, depending on the specific severity leveling structure of the base DRG. Next, we removed the special logic in the GROUPER that is used for processing claims reporting a principal diagnosis on the Principal Diagnosis Is Its Own CC or MCC Lists, thereby creating a Modified Version 35 GROUPER. Using this Modified Version 35 GROUPER, we reprocessed the 105,435 claims for which the principal diagnosis code was the sole source of a MCC or CC on the case, to obtain data for comparison showing the effect of removing the special logic. After removing the special logic in the Version 35 GROUPER for processing claims containing diagnosis codes on the Principal Diagnosis Is Its Own CC or MCC Lists, and reprocessing the claims using the Modified Version 35 GROUPER software, we found that 18,596 (6 percent) of the 310,184 cases reporting a principal diagnosis on the Principal Diagnosis Is Its Own CC or MCC Lists resulted in a different MS-DRG assignment. Overall, the number of claims impacted by removal of the special logic (18,596) represents 0.2 percent of the 9,070,073 IPPS claims analyzed. Below we provide a summary of the steps that we followed for the analysis performed. Step 1. We analyzed 9,070,073 claims to determine the number of cases impacted by the special logic. With Special Logic--9,070,073 Claims Analyzed ------------------------------------------------------------------------ ------------------------------------------------------------------------ Number of cases reporting a principal diagnosis from the 310,184 Principal Diagnosis Is Its Own CC/MCC lists (special logic)................................................. Number of cases reporting an additional CC/MCC secondary 204,749 diagnosis code at or above the level of the designated severity level of the principal diagnosis.............. Number of cases not reporting an additional CC/MCC 105,435 secondary diagnosis code............................... ------------------------------------------------------------------------ Step 2. We removed special logic from GROUPER and created a modified GROUPER. Step 3. We reprocessed 105,435 claims with modified GROUPER. Without Special Logic--105,435 Claims Analyzed ------------------------------------------------------------------------ ------------------------------------------------------------------------ Number of cases reporting a principal diagnosis from the 310,184 Principal Diagnosis Is Its Own CC/MCC lists............ Number of cases resulting in different MS-DRG assignment 18,596 ------------------------------------------------------------------------ To estimate the overall financial impact of removing the special logic from the GROUPER, we calculated the aggregate change in estimated payment for the MS-DRGs by comparing average costs for each MS-DRG affected by the change, before and after removing the special logic. Before removing the special logic in the Version 35 GROUPER, the cases impacted by the special logic had an estimated average payment of $58 million above the average costs for all the MS-DRGs to which the claim was originally assigned. After removing the special logic in the Version 35 GROUPER, the 18,596 cases impacted by the special logic had an estimated average payment of $39 million below the average costs for the newly assigned MS-DRGs. We performed regression analysis to compare the proportion of variance in the MS-DRGs with and without the special logic. The results of the [[Page 20238]] regression analysis showed a slight decrease in variance when the logic was removed. While the decrease itself was not statistically significant (an R-squared of 36.2603 percent after the special logic was removed, compared with an R-squared of 36.2501 percent in the current version 35 GROUPER), we note that the proportion of variance across the MS-DRGs essentially stayed the same, and certainly did not increase, when the special logic was removed. We further examined the 18,596 claims that were impacted by the special logic in the GROUPER for processing claims containing a code on the Principal Diagnosis Is Its Own CC or MCC Lists. The 18,596 claims were analyzed by the principal diagnosis code and the MS-DRG assigned, resulting in 588 principal diagnosis and MS-DRG combinations or subsets. Of the 588 subsets of cases that utilized the special logic, 556 of the 588 subsets (95 percent) had fewer than 100 cases, 529 of the 588 subsets (90 percent) had fewer than 50 cases, and 489 of the 588 subsets (83 percent) had fewer than 25 cases. We examined the 32 subsets of cases (5 percent of the 588 subsets) that utilized the special logic and had 100 or more cases. Of the 32 subsets of cases, 18 (56 percent) are similar in terms of average costs and length of stay to the MS-DRG assignment that results when the special logic is removed, and 14 of the 32 subsets of cases (44 percent) are similar in terms of average costs and length of stay to the MS-DRG assignment that results when the special logic is utilized. The table below contains examples of four subsets of cases that utilize the special logic, comparing average length of stay and average costs between two MS-DRGs within a base DRG, corresponding to the MS- DRG assigned when the special logic is removed and the MS-DRG assigned when the special logic is utilized. All four subsets of cases involve the principal diagnosis code E11.52 (Type 2 diabetes mellitus with diabetic peripheral angiopathy with gangrene). There are four subsets of cases in this example because the records involving the principal diagnosis code E11.52 are assigned to four different base DRGs, one medical MS-DRG and three surgical MS[dash]DRGs, depending on the procedure code(s) reported on the claim. All subsets of cases contain more than 100 claims. In three of the four subsets, the cases are similar in terms of average length of stay and average costs to the MS- DRG assignment that results when the special logic is removed, and in one of the four subsets, the cases are similar in terms of average length of stay and average costs to the MS-DRG assignment that results when the special logic is utilized. As shown in the following table, using ICD-10-CM diagnosis code E11.52 (Type 2 diabetes mellitus with diabetic peripheral angiopathy with gangrene) as our example, the data findings show four different MS-DRG pairs for which code E11.52 was the principal diagnosis on the claim and where the special logic impacted MS-DRG assignment. For the first MS-DRG pair, we examined MS-DRGs 240 and 241 (Amputation for Circulatory System Disorders Except Upper Limb and Toe with CC and without CC/MCC, respectively). We found 436 cases reporting diagnosis code E11.52 as the principal diagnosis, with an average length of stay of 5.5 days and average costs of $11,769. These 436 cases are assigned to MS-DRG 240 with the special logic utilized, and assigned to MS-DRG 241 with the special logic removed. The total number of cases reported in MS-DRG 240 was 7,675, with an average length of stay of 8.3 days and average costs of $17,876. The total number of cases reported in MS-DRG 241 was 778, with an average length of stay of 5.0 days and average costs of $10,882. The 436 cases are more similar to MS-DRG 241 in terms of length of stay and average cost and less similar to MS-DRG 240. For the second MS-DRG pair, we examined MS-DRGs 256 and 257 (Upper Limb and Toe Amputation for Circulatory System Disorders with CC and without CC/MCC, respectively). We found 193 cases reporting ICD-10-CM diagnosis code E11.52 as the principal diagnosis, with an average length of stay of 4.2 days and average costs of $8,478. These 193 cases are assigned to MS-DRG 256 with the special logic utilized, and assigned to MS-DRG 257 with the special logic removed. The total number of cases reported in MS-DRG 256 was 2,251, with an average length of stay of 6.1 days and average costs of $11,987. The total number of cases reported in MS-DRG 257 was 115, with an average length of stay of 4.6 days and average costs of $7,794. These 193 cases are more similar to MS-DRG 257 in terms of average length of stay and average costs and less similar to MS-DRG 256. For the third MS-DRG pair, we examined MS-DRGs 300 and 301 (Peripheral Vascular Disorders with CC and without CC/MCC, respectively). We found 185 cases reporting ICD-10-CM diagnosis code E11.52 as the principal diagnosis, with an average length of stay of 3.6 days and average costs of $5,981. These 185 cases are assigned to MS-DRG 300 with the special logic utilized, and assigned to MS-DRG 301 with the special logic removed. The total number of cases reported in MS-DRG 300 was 29,327, with an average length of stay of 4.1 days and average costs of $7,272. The total number of cases reported in MS-DRG 301 was 9,611, with an average length of stay of 2.8 days and average costs of $5,263. These 185 cases are more similar to MS-DRG 301 in terms of average length of stay and average costs and less similar to MS-DRG 300. For the fourth MS-DRG pair, we examined MS-DRGs 253 and 254 (Other Vascular Procedures with CC and without CC/MCC, respectively). We found 225 cases reporting diagnosis code E11.52 as the principal diagnosis, with an average length of stay of 5.2 days and average costs of $17,901. These 225 cases are assigned to MS-DRG 253 with the special logic utilized, and assigned to MS-DRG 254 with the special logic removed. The total number of cases reported in MS-DRG 253 was 25,714, with an average length of stay of 5.4 days and average costs of $18,986. The total number of cases reported in MS-DRG 254 was 12,344, with an average length of stay of 2.8 days and average costs of $13,287. Unlike the previous three MS-DRG pairs, these 225 cases are more similar to MS-DRG 253 in terms of average length of stay and average costs and less similar to MS-DRG 254. MS-DRG Pairs for Principal Diagnosis ICD-10-CM Code E11.52 With and Without Special MS-DRG Logic ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRGs 240 and 241--Special logic impacted cases with ICD-10-CM 436 5.5 $11,769 code E11.52 as principal diagnosis............................. MS-DRG 240--All cases........................................... 7,675 8.3 17,876 MS-DRG 241--All cases........................................... 778 5.0 10,882 [[Page 20239]] MS-DRGs 253 and 254--Special logic impacted cases with ICD-10-CM 225 5.2 17,901 E11.52 as principal diagnosis.................................. MS-DRG 253--All cases........................................... 25,714 5.4 18,986 MS-DRG 254--All cases........................................... 12,344 2.8 13,287 MS-DRGs 256 and 257--Special logic impacted cases with ICD-10-CM 193 4.2 8,478 E11.52 as principal diagnosis.................................. MS-DRG 256--All cases........................................... 2,251 6.1 11,987 MS-DRG 257--All cases........................................... 115 4.6 7,794 MS-DRGs 300 and 301--Special logic impacted cases with ICD-10-CM 185 3.6 5,981 E11.52 as principal diagnosis.................................. MS-DRG 300--All cases........................................... 29,327 4.1 7,272 MS-DRG 301--All cases........................................... 9,611 2.8 5,263 ---------------------------------------------------------------------------------------------------------------- Based on our analysis of the data, we believe that there may be more effective indicators of resource utilization than the Principal Diagnosis Is Its Own CC or MCC Lists and the special logic used to assign clinical severity to a principal diagnosis. As stated earlier in this discussion, it is no longer necessary to replicate MS-DRG assignment across the ICD-9 and ICD-10 versions of the MS-DRGs. The available ICD-10 data can now be used to evaluate other indicators of resource utilization. Therefore, as an initial recommendation from the first phase in our comprehensive review of the CC and MCC lists, we are proposing to remove the special logic in the GROUPER for processing claims containing a diagnosis code from the Principal Diagnosis Is Its Own CC or MCC Lists, and we are proposing to delete the tables containing the lists of principal diagnosis codes, Table 6L.--Principal Diagnosis Is Its Own MCC List and Table 6M.--Principal Diagnosis Is Its Own CC List, from the ICD-10 MS-DRG Definitions Manual for FY 2019. We are inviting public comments on our proposals. d. Proposed CC Exclusions List for FY 2019 In the September 1, 1987 final notice (52 FR 33143) concerning changes to the DRG classification system, we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered valid CCs in combination with a particular principal diagnosis. We created the CC Exclusions List for the following reasons: (1) To preclude coding of CCs for closely related conditions; (2) to preclude duplicative or inconsistent coding from being treated as CCs; and (3) to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. In the May 19, 1987 proposed notice (52 FR 18877) and the September 1, 1987 final notice (52 FR 33154), we explained that the excluded secondary diagnoses were established using the following five principles: Chronic and acute manifestations of the same condition should not be considered CCs for one another; Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for the same condition should not be considered CCs for one another; Codes for the same condition that cannot coexist, such as partial/total, unilateral/bilateral, obstructed/unobstructed, and benign/malignant, should not be considered CCs for one another; Codes for the same condition in anatomically proximal sites should not be considered CCs for one another; and Closely related conditions should not be considered CCs for one another. The creation of the CC Exclusions List was a major project involving hundreds of codes. We have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC. We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541 through 50544) for detailed information regarding revisions that were made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs. In this proposed rule, for FY 2019, we are proposing changes to the ICD-10 MS-DRGs Version 36 CC Exclusion List. Therefore, we developed Table 6G.1.--Proposed Secondary Diagnosis Order Additions to the CC Exclusions List--FY 2019; Table 6G.2.--Proposed Principal Diagnosis Order Additions to the CC Exclusions List--FY 2019; Table 6H.1.-- Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List--FY 2019; and Table 6H.2.--Proposed Principal Diagnosis Order Deletions to the CC Exclusions List--FY 2019. For Table 6G.1, each secondary diagnosis code proposed for addition to the CC Exclusion List is shown with an asterisk and the principal diagnoses proposed to exclude the secondary diagnosis code are provided in the indented column immediately following it. For Table 6G.2, each of the principal diagnosis codes for which there is a CC exclusion is shown with an asterisk and the conditions proposed for addition to the CC Exclusion List that will not count as a CC are provided in an indented column immediately following the affected principal diagnosis. For Table 6H.1, each secondary diagnosis code proposed for deletion from the CC Exclusion List is shown with an asterisk followed by the principal diagnosis codes that currently exclude it. For Table 6H.2, each of the principal diagnosis codes is shown with an asterisk and the proposed deletions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. Tables 6G.1., 6G.2., 6H.1., and 6H.2. associated with this proposed rule are available via the Internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. To identify new, revised and deleted diagnosis and procedure codes, for FY 2019, we developed Table 6A.--New Diagnosis Codes, Table 6B.-- New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table 6D.-- Invalid Procedure Codes, Table 6E.--Revised Diagnosis Code Titles, and Table 6F.--Revised Procedure Code Titles for this proposed rule. These tables are not published in the Addendum to the proposed rule but are available via the Internet on the CMS [[Page 20240]] website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in section VI. of the Addendum to this proposed rule. As discussed in section II.F.18. of the preamble of this proposed rule, the code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules. In this FY 2019 IPPS/LTCH PPS proposed rule, we are inviting public comments on the MDC and MS-DRG assignments for the new diagnosis and procedure codes as set forth in Table 6A.--New Diagnosis Codes and Table 6B.--New Procedure Codes. In addition, we are inviting public comments on the proposed severity level designations for the new diagnosis codes as set forth in Table 6A. and the proposed O.R. status for the new procedure codes as set forth in Table 6B. We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html the following tables associated with this proposed rule: Table 6A.--New Diagnosis Codes--FY 2019; Table 6B.--New Procedure Codes--FY 2019; Table 6C.--Invalid Diagnosis Codes--FY 2019; Table 6D.--Invalid Procedure Codes--FY 2019; Table 6E.--Revised Diagnosis Code Titles--FY 2019; Table 6F.--Revised Procedure Code Titles--FY 2019; Table 6G.1.--Proposed Secondary Diagnosis Order Additions to the CC Exclusions List--FY 2019; Table 6G.2.--Proposed Principal Diagnosis Order Additions to the CC Exclusions List--FY 2019; Table 6H.1.--Proposed Secondary Diagnosis Order Deletions to the CC Exclusions List--FY 2019; Table 6H.2.--Proposed Principal Diagnosis Order Deletions to the CC Exclusions List--FY 2019; Table 6I.1.--Proposed Additions to the MCC List--FY 2019; Table 6I.2.--Proposed Deletions to the MCC List--FY 2019; Table 6J.1.--Proposed Additions to the CC List--FY 2019; and Table 6J.2.--Proposed Deletions to the CC List--FY 2019. We note that, as discussed in section II.F.15.c. of the preamble of this proposed rule, we are proposing to delete Table 6L. and Table 6M. from the ICD-10 MS-DRG Definitions Manual for FY 2019. 16. Comprehensive Review of CC List for FY 2019 a. Overview of Comprehensive CC/MCC Analysis In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described our process for establishing three different levels of CC severity into which we would subdivide the diagnosis codes. The categorization of diagnoses as an MCC, CC, or non[dash]CC was accomplished using an iterative approach in which each diagnosis was evaluated to determine the extent to which its presence as a secondary diagnosis resulted in increased hospital resource use. We refer readers to the FY 2008 IPPS/ LTCH PPS final rule (72 FR 47159) for a complete discussion of our approach. Since this comprehensive analysis was completed for FY 2008, we have evaluated diagnosis codes individually when receiving requests to change the severity level of specific diagnosis codes. However, given the transition to ICD-10-CM and the significant changes that have occurred to diagnosis codes since this review, we believe it is necessary to conduct a comprehensive analysis once again. We have begun this analysis and will discuss our findings in future rulemaking. We are currently using the same methodology utilized in FY 2008 and described below to conduct this analysis. For each secondary diagnosis, we measured the impact in resource use for the following three subsets of patients: (1) Patients with no other secondary diagnosis or with all other secondary diagnoses that are non-CCs. (2) Patients with at least one other secondary diagnosis that is a CC but none that is an MCC. (3) Patients with at least one other secondary diagnosis that is an MCC. Numerical resource impact values were assigned for each diagnosis as follows: ------------------------------------------------------------------------ Value Meaning ------------------------------------------------------------------------ 0................................ Significantly below expected value for the non-CC subgroup. 1................................ Approximately equal to expected value for the non-CC subgroup. 2................................ Approximately equal to expected value for the CC subgroup. 3................................ Approximately equal to expected value for the MCC subgroup. 4................................ Significantly above the expected value for the MCC subgroup. ------------------------------------------------------------------------ Each diagnosis for which Medicare data were available was evaluated to determine its impact on resource use and to determine the most appropriate CC subclass (non[dash]CC, CC, or MCC) assignment. In order to make this determination, the average cost for each subset of cases was compared to the expected cost for cases in that subset. The following format was used to evaluate each diagnosis: -------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------- Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3 -------------------------------------------------------------------------------------------------------------------------------------------------------- Count (Cnt) is the number of patients in each subset and C1, C2, and C3 are a measure of the impact on resource use of patients in each of the subsets. The C1, C2, and C3 values are a measure of the ratio of average costs for patients with these conditions to the expected average cost across all cases. The C1 value reflects a patient with no other secondary diagnosis or with all other secondary diagnoses that are non-CCs. The C2 value reflects a patient with at least one other secondary diagnosis that is a CC but none that is a major CC. The C3 value reflects a patient with at least one other secondary diagnosis that is a major CC. A value close to 1.0 in the C1 field would suggest that the code produces the same expected value as a non-CC diagnosis. That is, average costs for the case are similar to the expected average costs for that subset and the diagnosis is not expected to increase resource usage. A higher value in the C1 (or C2 and C3) field suggests more resource usage is associated with the diagnosis and an increased likelihood that it is more like a CC or major CC than a non-CC. Thus, a value close to 2.0 suggests the condition is more like a CC than a non- CC but not as significant in resource usage as an MCC. A value close to 3.0 suggests the condition is expected to consume resources more similar to an MCC than a CC or non-CC. For example, a C1 value of 1.8 for a secondary diagnosis means that for the subset of patients who have the secondary diagnosis and have either no other secondary diagnosis present, or all the other secondary diagnoses present are non[dash]CCs, the impact on resource use of the secondary diagnoses is greater than the expected value for a non[dash]CC by an amount equal to 80 [[Page 20241]] percent of the difference between the expected value of a CC and a non- CC (that is, the impact on resource use of the secondary diagnosis is closer to a CC than a non[dash]CC). These mathematical constructs are used as guides in conjunction with the judgment of our clinical advisors to classify each secondary diagnosis reviewed as an MCC, CC or non-CC. Our clinical panel reviews the resource use impact reports and suggests modifications to the initial CC subclass assignments when clinically appropriate. b. Requested Changes to Severity Levels (1) Human Immunodeficiency Virus [HIV] Disease We received a request that we consider changing the severity level of ICD-10-CM diagnosis code B20 (Human immunodeficiency virus [HIV] disease) from an MCC to a CC. We used the approach outlined above to evaluate this request. The table below contains the data that were evaluated for this request. -------------------------------------------------------------------------------------------------------------------------------------------------------- Proposed ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC CC subclass subclass -------------------------------------------------------------------------------------------------------------------------------------------------------- B20 (Human immunodeficiency virus [HIV] disease)........ 2,918 0.9946 8,938 2.1237 11,479 3.0960 MCC CC -------------------------------------------------------------------------------------------------------------------------------------------------------- While the data did not strongly suggest that the categorization of HIV as an MCC was inaccurate, our clinical advisors indicated that, for many patients with HIV disease, symptoms are well controlled by medications. Our clinical advisors stated that if these patients have an HIV-related complicating disease, that complicating disease would serve as a CC or an MCC. Therefore, they advised us that ICD-10-CM diagnosis code B20 is more similar to a CC than an MCC. Based on the data results and the advice of our clinical advisors, we are proposing to change the severity level of ICD-10-CM diagnosis code B20 from an MCC to a CC. We are inviting public comments on our proposal. (2) Acute Respiratory Distress Syndrome We also received a request to change the severity level for ICD-10- CM diagnosis code J80 (Acute respiratory distress syndrome) from a CC to a MCC. We used the approach outlined above to evaluate this request. The following table contains the data that were evaluated for this request. -------------------------------------------------------------------------------------------------------------------------------------------------------- Proposed ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC CC subclass subclass -------------------------------------------------------------------------------------------------------------------------------------------------------- J80 (Acute respiratory distress syndrome)............... 1,840 1.7704 6,818 2.5596 18,376 3.3428 CC MCC -------------------------------------------------------------------------------------------------------------------------------------------------------- The data suggest that the resources involved in caring for a patient with this condition are 77 percent greater than expected when the patient has either no other secondary diagnosis present, or all the other secondary diagnoses present are non[dash]CCs. The resources are 56 percent greater than expected when reported in conjunction with another secondary diagnosis that is a CC, and 34 percent greater than expected when reported in conjunction with another secondary diagnosis code that is an MCC. Our clinical advisors agree that the resources required to care for a patient with this secondary diagnosis are consistent with those of an MCC. Therefore, we are proposing to change the severity level of ICD-10-CM diagnosis code J80 from a CC to an MCC. We are inviting public comments on our proposal. (3) Encephalopathy We also received a request to change the severity level for ICD-10- CM diagnosis code G93.40 (Encephalopathy, unspecified) from an MCC to a non-CC. The requestor pointed out that the nature of the encephalopathy or its underlying cause should be coded. The requestor also noted that unspecified heart failure is a non-CC. We used the approach outlined earlier to evaluate this request. The following table contains the data that were evaluated for this request. -------------------------------------------------------------------------------------------------------------------------------------------------------- Proposed ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC CC subclass subclass -------------------------------------------------------------------------------------------------------------------------------------------------------- G93.40 (Encephalopathy, unspecified).................... 1.840 16,306 1.8471 80,222 2.4901 139,066 MCC MCC -------------------------------------------------------------------------------------------------------------------------------------------------------- The data suggest that the resources involved in caring for a patient with this condition are 84 percent greater than expected when the patient has either no other secondary diagnosis present, or all the other secondary diagnoses present are non[dash]CCs. The resources are 15 percent lower than expected when reported in conjunction with another secondary diagnosis that is a CC, and 49 percent greater than expected when reported in conjunction with another secondary diagnosis code that is an MCC. We note that the pattern observed in resource use for the condition of unspecified heart failure (ICD-10-CM diagnosis code I50.9) differs from that of unspecified encephalopathy. Our clinical advisors reviewed this request and agree that the resources involved in caring for a patient with this condition are aligned with those of an MCC. Therefore, we are not proposing a change to the severity level for ICD-10-CM diagnosis code G93.40. We are inviting public comments on our proposal. 17. Review of Procedure Codes in MS DRGs 981 Through 983 and 987 Through 989 Each year, we review cases assigned to MS-DRGs 981, 982, and 983 [[Page 20242]] (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 987, 988, and 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to determine whether it would be appropriate to change the procedures assigned among these MS- DRGs. MS-DRGs 981 through 983 and 987 through 989 are reserved for those cases in which none of the O.R. procedures performed are related to the principal diagnosis. These MS-DRGs are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group. a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 Through 989 Into MDCs We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 987 through 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) on the basis of volume, by procedure, to see if it would be appropriate to move procedure codes out of these MS-DRGs into one of the surgical MS-DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in two ways for comparison purposes. We look at a frequency count of each major operative procedure code. We also compare procedures across MDCs by volume of procedure codes within each MDC. We identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical MS-DRGs for the MDC in which the diagnosis falls. Based on the results of our review of the claims data from the September 2017 update of the FY 2017 MedPAR file, we are not proposing to move any procedures from MS-DRGs 981 through 983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC into which the principal diagnosis is assigned. We are inviting public comments on our proposal to maintain the current structure of these MS-DRGs. b. Reassignment of Procedures Among MS-DRGs 981 Through 983 and 987 Through 989 We also review the list of ICD-10-PCS procedures that, when in combination with their principal diagnosis code, result in assignment to MS-DRGs 981 through 983, or 987 through 989, to ascertain whether any of those procedures should be reassigned from one of those two groups of MS-DRGs to the other group of MS-DRGs based on average costs and the length of stay. We look at the data for trends such as shifts in treatment practice or reporting practice that would make the resulting MS-DRG assignment illogical. If we find these shifts, we would propose to move cases to keep the MS-DRGs clinically similar or to provide payment for the cases in a similar manner. Generally, we move only those procedures for which we have an adequate number of discharges to analyze the data. Based on the results of our review of the September 2017 update of the FY 2017 MedPAR file, we are proposing to maintain the current structure of MS-DRGs 981 through 983 and MS-DRGs 987 through 989. We are inviting public comments on our proposal. c. Adding Diagnosis or Procedure Codes to MDCs We received a request recommending that CMS reassign cases for congenital pectus excavatum (congenital depression of the sternum or concave chest) when reported with a procedure describing repositioning of the sternum (the Nuss procedure) from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively). ICD-10-CM diagnosis code Q67.6 (Pectus excavatum) is reported for this congenital condition and is currently assigned to MDC 4 (Diseases and Disorders of the Respiratory System). ICD-10-PCS procedure code 0PS044Z (Reposition sternum with internal fixation device, percutaneous endoscopic approach) may be reported to identify the Nuss procedure and is currently assigned to MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) in MS-DRGs 515, 516, and 517. The requester noted that acquired pectus excavatum (ICD-10-CM diagnosis code M95.4) groups to MS-DRGs 515, 516, and 517 when reported with a ICD-10-PCS procedure code describing repositioning of the sternum and requested that cases involving diagnoses describing congenital pectus excavatum also group to those MS-DRGs when reported with a ICD-10-PCS procedure code describing repositioning of the sternum. Our analysis of this grouping issue confirmed that, when pectus excavatum (ICD-10-CM diagnosis code Q67.6) is reported as a principal diagnosis with a procedure such as the Nuss procedure (ICD-10-PCS procedure code 0PS044Z), these cases group to MS-DRGs 981, 982, and 983. The reason for this grouping is because whenever there is a surgical procedure reported on a claim, which is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as ``unrelated operating room procedures.'' In the example provided, because the ICD-10-CM diagnosis code Q67.6 describing pectus excavatum is classified to MDC 4 and the ICD-10-PCS procedure code 0PS044Z is classified to MDC 8, the GROUPER logic assigns this case to the ``unrelated operating room procedures'' set of MS-DRGs. During our review of ICD-10-CM diagnosis code Q67.6, we also reviewed additional ICD-10-CM diagnosis codes in the Q65 through Q79 code range to determine if there might be other conditions classified to MDC 4 that describe congenital malformations and deformities of the musculoskeletal system. We identified the following six ICD-10-CM diagnosis codes: ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Q67.7..................... Pectus carinatum. Q76.6..................... Other congenital malformations of ribs. Q76.7..................... Congenital malformation of sternum. Q76.8..................... Other congenital malformations of bony thorax. Q76.9..................... Congenital malformation of bony thorax, unspecified. Q77.2..................... Short rib syndrome. ------------------------------------------------------------------------ [[Page 20243]] We are proposing to reassign ICD-10-CM diagnosis code Q67.6, as well as the additional six ICD-10-CM diagnosis codes above describing congenital musculoskeletal conditions, from MDC 4 to MDC 8 where other related congenital conditions that correspond to the musculoskeletal system are classified, as discussed further below. We identified other related ICD-10-CM diagnosis codes that are currently assigned to MDC 8 in categories Q67 (Congenital musculoskeletal deformities of head, face, spine and chest), Q76 (Congenital malformations of spine and bony thorax), and Q77 (Osteochondrodysplasia with defects of growth of tubular bones and spine) that are listed in the following table. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Q67.0..................... Congenital facial asymmetry. Q67.1..................... Congenital compression facies. Q67.2..................... Dolichocephaly. Q67.3..................... Plagiocephaly. Q67.4..................... Other congenital deformities of skull, face and jaw. Q67.5..................... Congenital deformity of spine. Q67.8..................... Other congenital deformities of chest. Q76.1..................... Klippel-Feil syndrome. Q76.2..................... Congenital spondylolisthesis. Q76.3..................... Congenital scoliosis due to congenital bony malformation. Q76.411................... Congenital kyphosis, occipito-atlanto-axial region. Q76.412................... Congenital kyphosis, cervical region. Q76.413................... Congenital kyphosis, cervicothoracic region. Q76.414................... Congenital kyphosis, thoracic region. Q76.415................... Congenital kyphosis, thoracolumbar region. Q76.419................... Congenital kyphosis, unspecified region. Q76.425................... Congenital lordosis, thoracolumbar region. Q76.426................... Congenital lordosis, lumbar region. Q76.427................... Congenital lordosis, lumbosacral region. Q76.428................... Congenital lordosis, sacral and sacrococcygeal region. Q76.429................... Congenital lordosis, unspecified region. Q76.49.................... Other congenital malformations of spine, not associated with scoliosis. Q76.5..................... Cervical rib. Q77.0..................... Achondrogenesis. Q77.1..................... Thanatophoric short stature. Q77.3..................... Chondrodysplasia punctate. Q77.4..................... Achondroplasia. Q77.5..................... Diastrophic dysplasia. Q77.6..................... Chondroectodermal dysplasia. Q77.7..................... Spondyloepiphyseal dysplasia. Q77.8..................... Other osteochondrodysplasia with defects of growth of tubular bones and spine. Q77.9..................... Osteochondrodysplasia with defects of growth of tubular bones and spine, unspecified. ------------------------------------------------------------------------ Next, we analyzed the MS-DRG assignments for the related codes listed above and found that cases with the following conditions are assigned to MS-DRGs 551 and 552 (Medical Back Problems with and without MCC, respectively) under MDC 8. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Q76.2..................... Congenital spondylolisthesis. Q76.411................... Congenital kyphosis, occipito-atlanto-axial region. Q76.412................... Congenital kyphosis, cervical region. Q76.413................... Congenital kyphosis, cervicothoracic region. Q76.414................... Congenital kyphosis, thoracic region. Q76.415................... Congenital kyphosis, thoracolumbar region. Q76.419................... Congenital kyphosis, unspecified region. Q76.49.................... Other congenital malformations of spine, not associated with scoliosis. ------------------------------------------------------------------------ The remaining conditions shown below are assigned to MS-DRGs 564, 565, and 566 (Other Musculoskeletal System and Connective Tissue Diagnoses with MCC, with CC, and without CC/MCC, respectively) under MDC 8. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ Q67.0..................... Congenital facial asymmetry. Q67.1..................... Congenital compression facies. Q67.2..................... Dolichocephaly. Q67.3..................... Plagiocephaly. [[Page 20244]] Q67.4..................... Other congenital deformities of skull, face and jaw. Q67.5..................... Congenital deformity of spine. Q67.8..................... Other congenital deformities of chest. Q76.1..................... Klippel-Feil syndrome. Q76.3..................... Congenital scoliosis due to congenital bony malformation. Q76.425................... Congenital lordosis, thoracolumbar region. Q76.426................... Congenital lordosis, lumbar region. Q76.427................... Congenital lordosis, lumbosacral region. Q76.428................... Congenital lordosis, sacral and sacrococcygeal region. Q76.429................... Congenital lordosis, unspecified region. Q76.5..................... Cervical rib. Q77.0..................... Achondrogenesis. Q77.1..................... Thanatophoric short stature. Q77.3..................... Chondrodysplasia punctate. Q77.4..................... Achondroplasia. Q77.5..................... Diastrophic dysplasia. Q77.6..................... Chondroectodermal dysplasia. Q77.7..................... Spondyloepiphyseal dysplasia. Q77.8..................... Other osteochondrodysplasia with defects of growth of tubular bones and spine. Q77.9..................... Osteochondrodysplasia with defects of growth of tubular bones and spine, unspecified. ------------------------------------------------------------------------ As a result of our review, we are proposing to reassign ICD-10-CM diagnosis code Q67.6, as well as the additional six ICD-10-CM diagnosis codes above describing congenital musculoskeletal conditions, from MDC 4 to MDC 8 in MS-DRGs 564, 565, and 566. Our clinical advisors agree with this proposed reassignment because it is clinically appropriate and consistent with the other related ICD-10-CM diagnosis codes grouped in the Q65 through Q79 range that describe congenital malformations and deformities of the musculoskeletal system that are classified under MDC 8 in MS-DRGs 564, 565, and 566. By reassigning ICD-10-CM diagnosis code Q67.6 and the additional six ICD-10-CM diagnosis codes listed in the table above from MDC 4 to MDC 8, cases reporting these ICD-10-CM diagnosis codes in combination with the respective ICD-10-PCS procedure code will reflect a more appropriate grouping from a clinical perspective because they will now be classified under a surgical musculoskeletal system related MS-DRG and will no longer result in an MS-DRG assignment to the ``unrelated operating room procedures'' surgical class. In summary, we are proposing to reassign ICD-10-CM diagnosis codes Q67.6, Q67.7, Q76.6, Q76.7, Q76.8, Q76.9, and Q77.2 from MDC 4 to MDC 8 in MS-DRGs 564, 565, and 566 (Other Musculoskeletal System and Connective Tissue Diagnoses with MCC, with CC, and without CC/MCC, respectively). We are inviting public comments on our proposals. We also received a request recommending that CMS reassign cases for sternal fracture repair procedures from MS-DRGs 981, 982, and 983 and from MS-DRGs 166, 167 and 168 (Other Respiratory System O.R. Procedures with MCC, with CC and without CC/MCC, respectively) under MDC 4 to MS- DRGs 515, 516, and 517 under MDC 8. The requester noted that clavicle fracture repair procedures with an internal fixation device group to MS-DRGs 515, 516, and 517 when reported with an ICD-10-CM diagnosis code describing a fractured clavicle. However, sternal fracture repair procedures with an internal fixation device group to MS-DRGs 981, 982, and 983 or MS-DRGs 166, 167 and 168 when reported with an ICD-10-CM diagnosis code describing a fracture of the sternum. According to the requestor, because the clavicle and sternum are in the same anatomical region of the body, it would appear that assignment to MS-DRGs 515, 516, and 517 would be more appropriate for sternal fracture repair procedures. The requestor provided the following list of ICD-10-PCS procedure codes in its request for consideration to reassign to MS-DRGs 515, 516 and 517 when reported with an ICD-10-CM diagnosis code for sternal fracture. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0PS000Z................... Reposition sternum with rigid plate internal fixation device, open approach. 0PS004Z................... Reposition sternum with internal fixation device, open approach. 0PS00ZZ................... Reposition sternum, open approach. 0PS030Z................... Reposition sternum with rigid plate internal fixation device, percutaneous approach. 0PS034Z................... Reposition sternum with internal fixation device, percutaneous approach. ------------------------------------------------------------------------ We note that the above five ICD-10-PCS procedure codes that may be reported to describe a sternal fracture repair are already assigned to MS-DRGs 515, 516, and 517 under MDC 8. In addition, ICD-10-PCS procedure codes 0PS000Z and 0PS030Z are assigned to MS-DRGs 166, 167 and 168 under MDC 4. As noted in the previous discussion, whenever there is a surgical procedure reported on a claim, which is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as ``unrelated operating room procedures.'' In the examples provided by the requestor, when the ICD-10-CM diagnosis code describing a sternal fracture is classified under MDC 4 and the ICD-10-PCS procedure code describing a sternal fracture repair procedure is classified under MDC 8, the GROUPER logic assigns these cases to the ``unrelated operating room procedures'' group of MS-DRGs (981, [[Page 20245]] 982, and 983) and when the ICD-10-CM diagnosis code describing a sternal fracture is classified under MDC 4 and the ICD-10-PCS procedure code describing a sternal repair procedure is also classified under MDC 4, the GROUPER logic assigns these cases to MS-DRG 166, 167, or 168. For our review of this grouping issue and the request to have procedures for sternal fracture repairs assigned to MDC 8, we analyzed the ICD-10-CM diagnosis codes describing a sternal fracture currently classified under MDC 4. We identified 10 ICD-10-CM diagnosis codes describing a sternal fracture with an ``initial encounter'' classified under MDC 4 that are listed in the following table. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ S22.20XA.................. Unspecified fracture of sternum, initial encounter for closed fracture. S22.20XB.................. Unspecified fracture of sternum, initial encounter for open fracture. S22.21XA.................. Fracture of manubrium, initial encounter for closed fracture. S22.21XB.................. Fracture of manubrium, initial encounter for open fracture. S22.22XA.................. Fracture of body of sternum, initial encounter for closed fracture. S22.22XB.................. Fracture of body of sternum, initial encounter for open fracture. S22.23XA.................. Sternal manubrial dissociation, initial encounter for closed fracture. S22.23XB.................. Sternal manubrial dissociation, initial encounter for open fracture. S22.24XA.................. Fracture of xiphoid process, initial encounter for closed fracture. S22.24XB.................. Fracture of xiphoid process, initial encounter for open fracture. ------------------------------------------------------------------------ Our analysis of this grouping issue confirmed that when 1 of the 10 ICD-10-CM diagnosis codes describing a sternal fracture listed in the table above from MDC 4 is reported as a principal diagnosis with an ICD-10-PCS procedure code for a sternal repair procedure from MDC 8, these cases group to MS-DRG 981, 982, or 983. We also confirmed that when 1 of the 10 ICD-10-CM diagnosis codes describing a sternal fracture listed in the table above from MDC 4 is reported as a principal diagnosis with an ICD-10-PCS procedure code for a sternal repair procedure from MDC 4, these cases group to MS-DRG 166, 167 or 168. Our clinical advisors agree with the requested reclassification of ICD-10-CM diagnosis codes S22.20XA, S22.20XB, S22.21XA, S22.21XB, S22.22XA, S22.22XB, S22.23XA, S22.23XB, S22.24XA, and S22.24XB describing a sternal fracture with an initial encounter from MDC 4 to MDC 8. They advised that this requested reclassification is clinically appropriate because it is consistent with the other related ICD-10-CM diagnosis codes that describe fractures of the sternum and which are classified under MDC 8. The ICD-10-CM diagnosis codes describing a sternal fracture currently classified under MDC 8 to MS-DRGs 564, 565, and 566 are listed in the following table. ------------------------------------------------------------------------ ICD-10-CM code Code description ------------------------------------------------------------------------ S22.20XD.................. Unspecified fracture of sternum, subsequent encounter for fracture with routine healing. S22.20XG.................. Unspecified fracture of sternum, subsequent encounter for fracture with delayed healing. S22.20XK.................. Unspecified fracture of sternum, subsequent encounter for fracture with nonunion. S22.20XS.................. Unspecified fracture of sternum, sequela. S22.21XD.................. Fracture of manubrium, subsequent encounter for fracture with routine healing. S22.21XG.................. Fracture of manubrium, subsequent encounter for fracture with delayed healing. S22.21XK.................. Fracture of manubrium, subsequent encounter for fracture with nonunion. S22.21XS.................. Fracture of manubrium, sequela. S22.22XD.................. Fracture of body of sternum, subsequent encounter for fracture with routine healing. S22.22XG.................. Fracture of body of sternum, subsequent encounter for fracture with delayed healing. S22.22XK.................. Fracture of body of sternum, subsequent encounter for fracture with nonunion. S22.22XS.................. Fracture of body of sternum, sequela. S22.23XD.................. Sternal manubrial dissociation, subsequent encounter for fracture with routine healing. S22.23XG.................. Sternal manubrial dissociation, subsequent encounter for fracture with delayed healing. S22.23XK.................. Sternal manubrial dissociation, subsequent encounter for fracture with nonunion. S22.23XS.................. Sternal manubrial dissociation, sequela. S22.24XD.................. Fracture of xiphoid process, subsequent encounter for fracture with routine healing. S22.24XG.................. Fracture of xiphoid process, subsequent encounter for fracture with delayed healing. S22.24XK.................. Fracture of xiphoid process, subsequent encounter for fracture with nonunion. S22.24XS.................. Fracture of xiphoid process, sequela. ------------------------------------------------------------------------ By reclassifying the 10 ICD-10-CM diagnosis codes listed in the table earlier in this section describing sternal fracture codes with an ``initial encounter'' from MDC 4 to MDC 8, the cases reporting these ICD-10-CM diagnosis codes in combination with the respective ICD-10-PCS procedure codes will reflect a more appropriate grouping from a clinical perspective and will no longer result in an MS-DRG assignment to the ``unrelated operating room procedures'' surgical class when reported with a surgical procedure classified under MDC 8. Therefore, we are proposing to reassign ICD-10-CM diagnosis codes S22.20XA, S22.20XB, S22.21XA, S22.21XB, S22.22XA, S22.22XB, S22.23XA, S22.23XB, S22.24XA, and S22.24XB from under MDC 4 to MDC 8 to MS-DRGs 564, 565, and 566. We are inviting public comments on our proposals. In addition, we received a request recommending that CMS reassign cases for rib fracture repair procedures from MS-DRGs 981, 982, and 983, and from MS-DRGs 166, 167 and 168 (Other Respiratory System O.R. Procedures [[Page 20246]] with MCC, with CC, and without CC/MCC, respectively) under MDC 4 to MS- DRGs 515, 516, and 517 under MDC 8. The requestor noted that clavicle fracture repair procedures with an internal fixation device group to MS-DRGs 515, 516, and 517 when reported with an ICD-10-CM diagnosis code describing a fractured clavicle. However, rib fracture repair procedures with an internal fixation device group to MS-DRGs 981, 982, and 983 or to MS-DRGs 166, 167 and 168 when reported with an ICD-10-CM diagnosis code describing a rib fracture. According to the requestor, because the clavicle and ribs are in the same anatomical region of the body, it would appear that assignment to MS-DRGs 515, 516, and 517 would be more appropriate for rib fracture repair procedures. The requestor provided the following list of 10 ICD-10-PCS procedure codes in its request for consideration for reassignment to MS-DRGs 515, 516 and 517 when reported with an ICD-10-CM diagnosis code for rib fracture. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0PH104Z................... Insertion of internal fixation device into 1 to 2 ribs, open approach. 0PH134Z................... Insertion of internal fixation device into 1 to 2 ribs, percutaneous approach. 0PH144Z................... Insertion of internal fixation device into 1 to 2 ribs, percutaneous endoscopic approach. 0PH204Z................... Insertion of internal fixation device into 3 or more ribs, open approach. 0PH234Z................... Insertion of internal fixation device into 3 or more ribs, percutaneous approach. 0PH244Z................... Insertion of internal fixation device into 3 or more ribs, percutaneous endoscopic approach. 0PS104Z................... Reposition 1 to 2 ribs with internal fixation device, open approach. 0PS134Z................... Reposition 1 to 2 ribs with internal fixation device, percutaneous approach. 0PS204Z................... Reposition 3 or more ribs with internal fixation, device, open approach. 0PS234Z................... Reposition 3 or more ribs with internal fixation device, percutaneous approach. ------------------------------------------------------------------------ We note that the above 10 ICD-10-PCS procedure codes that may be reported to describe a rib fracture repair are already assigned to MS- DRGs 515, 516, and 517 under MDC 8. In addition, 6 of the 10 ICD 10-PCS procedure codes listed above (0PH104Z, 0PH134Z, 0PH144Z, 0PH204Z, 0PH234Z and 0PH244Z) are also assigned to MS-DRGs 166, 167, and 168 under MDC 4. As noted in the previous discussions above, whenever there is a surgical procedure reported on a claim, which is unrelated to the MDC to which the case was assigned based on the principal diagnosis, it results in an MS-DRG assignment to a surgical class referred to as ``unrelated operating room procedures.'' In the examples provided by the requestor, when the ICD-10-CM diagnosis code describing a rib fracture is classified under MDC 4 and the ICD-10-PCS procedure code describing a rib fracture repair procedure is classified under MDC 8, the GROUPER logic assigns these cases to the ``unrelated operating room procedures'' group of MS-DRGs (981, 982, and 983) and when the ICD-10- CM diagnosis code describing a rib fracture is classified under MDC 4 and the ICD-10-PCS procedure code describing a rib repair procedure is also classified under MDC 4, the GROUPER logic assigns these cases to MS-DRG 166, 167, or 168. For our review of this grouping issue and the request to have procedures for rib fracture repairs assigned to MDC 8, we analyzed the ICD-10-CM diagnosis codes describing a rib fracture and found that, while some rib fracture ICD-10-CM diagnosis codes are classified under MDC 8 (which would result in those cases grouping appropriately to MS- DRGs 515, 516, and 517), there are other ICD-10-CM diagnosis codes that are currently classified under MDC 4. We identified the following ICD- 10-CM diagnosis codes describing a rib fracture with an initial encounter classified under MDC 4, as listed in the following table. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ S2231XA................... Fracture of one rib, right side, initial encounter for closed fracture. S2231XB................... Fracture of one rib, right side, initial encounter for open fracture. S2232XA................... Fracture of one rib, left side, initial encounter for closed fracture. S2232XB................... Fracture of one rib, left side, initial encounter for open fracture. S2239XA................... Fracture of one rib, unspecified side, initial encounter for closed fracture. S2239XB................... Fracture of one rib, unspecified side, initial encounter for open fracture. S2241XA................... Multiple fractures of ribs, right side, initial encounter for closed fracture. S2241XB................... Multiple fractures of ribs, right side, initial encounter for open fracture. S2242XA................... Multiple fractures of ribs, left side, initial encounter for closed fracture. S2242XB................... Multiple fractures of ribs, left side, initial encounter for open fracture. S2243XA................... Multiple fractures of ribs, bilateral, initial encounter for closed fracture. S2243XB................... Multiple fractures of ribs, bilateral, initial encounter for open fracture. S2249XA................... Multiple fractures of ribs, unspecified side, initial encounter for closed fracture. S2249XB................... Multiple fractures of ribs, unspecified side, initial encounter for open fracture. S225XXA................... Flail chest, initial encounter for closed fracture. S225XXB................... Flail chest, initial encounter for open fracture. ------------------------------------------------------------------------ Our analysis of this grouping issue confirmed that, when one of the following four ICD-10-PCS procedure codes identified by the requestor (and listed in the table earlier in this section) from MDC 8 (0PS104Z, 0PS134Z, 0PS204Z, or 0PS234Z) is reported to describe a rib fracture repair procedure with a principal diagnosis code for a rib fracture with an initial encounter listed in the table above from MDC 4, these cases group to MS-DRG 981, 982, or 983. During our review of those four repositioning of the rib procedure codes, we also identified the following four ICD-10-PCS procedure codes classified [[Page 20247]] to MDC 8 that describe repositioning of the ribs. ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0PS10ZZ................... Reposition 1 to 2 ribs, open approach. 0PS144Z................... Reposition 1 to 2 ribs with internal fixation device, percutaneous endoscopic approach. 0PS20ZZ................... Reposition 3 or more ribs, open approach. 0PS244Z................... Reposition 3 or more ribs with internal fixation device, percutaneous endoscopic approach. ------------------------------------------------------------------------ We confirmed that when one of the above four procedure codes is reported with a principal diagnosis code for a rib fracture listed in the table above from MDC 4, these cases also group to MS-DRG 981, 982, or 983. Lastly, we confirmed that when one of the six ICD-10-PCS procedure codes describing a rib fracture repair listed in the previous table above from MDC 4 is reported with a principal diagnosis code for a rib fracture with an initial encounter from MDC 4, these cases group to MS- DRG 166, 167, or 168. In response to the request to reassign the procedure codes that describe a rib fracture repair procedure from MS-DRGs 981, 982, and 983 and from MS-DRGs 166, 167, and 168 under MDC 4 to MS-DRGs 515, 516, and 517 under MDC 8, as discussed above, the 10 ICD-10-PCS procedure codes submitted by the requestor that may be reported to describe a rib fracture repair are already assigned to MS-DRGs 515, 516, and 517 under MDC 8 and 6 of those 10 procedure codes (0PH104Z, 0PH134Z, 0PH144Z, 0PH204Z, 0PH234Z, and 0PH244Z) are also assigned to MS-DRGs 166, 167, and 168 under MDC 4. We analyzed claims data from the September 2017 update of the FY 2017 MedPAR file for cases reporting a principal diagnosis of a rib fracture (initial encounter) from the list of diagnosis codes shown in the table above with one of the six ICD-10-PCS procedure codes describing the insertion of an internal fixation device into the rib (0PH104Z, 0PH134Z, 0PH144Z, 0PH204Z, 0PH234Z, and 0PH244Z) in MS-DRGs 166, 167, and 168 under MDC 4. Our findings are shown in the table below. MS-DRGs for Other Respiratory System O.R. Procedures ---------------------------------------------------------------------------------------------------------------- Number of Average length MS-DRG cases of stay Average costs ---------------------------------------------------------------------------------------------------------------- MS-DRG 166--All cases........................................... 22,938 10.2 $24,299 MS-DRG 166--Cases with principal diagnosis of rib fracture(s) 40 11.4 43,094 and insertion of internal fixation device for the rib(s)....... MS-DRG 167--All cases........................................... 10,815 5.7 13,252 MS-DRG 167--Cases with principal diagnosis of rib fracture(s) 10 6.7 30,617 and insertion of internal fixation device for the rib(s)....... MS-DRG 168--All cases........................................... 3,242 3.1 9,708 MS-DRG 168--Cases with principal diagnosis of rib fracture(s) 4 2 21,501 and insertion of internal fixation device for the rib(s)....... ---------------------------------------------------------------------------------------------------------------- As shown in this table, there were a total of 22,938 cases in MS- DRG 166, with an average length of stay of 10.2 days and average costs of $24,299. In MS-DRG 166, we found 40 cases reporting a principal diagnosis of a rib fracture(s) with insertion of an internal fixation device for the rib(s), with an average length of stay of 11.4 days and average costs of $43,094. There were a total of 10,815 cases in MS-DRG 167, with an average length of stay of 5.7 days and average costs of $13,252. In MS-DRG 167, we found 10 cases reporting a principal diagnosis of a rib fracture(s) with insertion of an internal fixation device for the rib(s), with an average length of stay of 6.7 days and average costs of $30,617. There were a total of 3,242 cases in MS-DRG 168, with an average length of stay of 3.1 days and average costs of $9,708. In MS-DRG 168, we found 4 cases reporting a principal diagnosis of a rib fracture(s) with insertion of an internal fixation device for the rib(s), with an average length of stay of 2 days and average costs of $21,501. Overall, for MS-DRGs 166, 167, and 168, there were a total of 54 cases reporting a principal diagnosis of a rib fracture(s) with insertion of an internal fixation device for the rib(s), demonstrating that while rib fractures may require treatment, they are not typically corrected surgically. Our clinical advisors agree with the current assignment of procedure codes to MS-DRGs 166, 167, and 168 that may be reported to describe repair of a rib fracture under MDC 4, as well as the current assignment of procedure codes to MS-DRGs 515, 516, and 517 that may be reported to describe repair of a rib fracture under MDC 8. Our clinical advisors noted that initial, acute rib fractures can cause numerous respiratory related issues requiring various treatments and problems with the healing of a rib fracture are considered musculoskeletal issues. We also note that the procedure codes submitted by the requestor may be reported for other indications and they are not restricted to reporting for repair of a rib fracture. Therefore, assignment of these codes to the MDC 4 MS-DRGs and the MDC 8 MS-DRGs is clinically appropriate. To address the cases reporting procedure codes describing the repositioning of a rib(s) that are grouping to MS-DRGs 981, 982, and 983 when reported with a principal diagnosis of a rib fracture (initial encounter), we are proposing to add the following eight ICD-10-PCS procedure codes currently assigned to MDC 8 into MDC 4, in MS-DRGs 166, 167 and 168. [[Page 20248]] ------------------------------------------------------------------------ ICD-10-PCS code Code description ------------------------------------------------------------------------ 0PS104Z................... Reposition 1 to 2 ribs with internal fixation device, open approach. 0PS10ZZ................... Reposition 1 to 2 ribs, open approach. 0PS134Z................... Reposition 1 to 2 ribs with internal fixation device, percutaneous approach. 0PS144Z................... Reposition 1 to 2 ribs with internal fixation device, percutaneous endoscopic approach. 0PS204Z................... Reposition 3 or more ribs with internal fixation device, open approach. 0PS20ZZ................... Reposition 3 or more ribs, open approach. 0PS234Z................... Reposition 3 or more ribs with internal fixation device, percutaneous approach. 0PS244Z................... Reposition 3 or more ribs with internal fixation device, percutaneous endoscopic approach. ------------------------------------------------------------------------ Our clinical advisors agree with this proposed addition to the classification structure because it is clinically appropriate and consistent with the other related ICD-10-PCS procedure codes that may be reported to describe rib fracture repair procedures with the insertion of an internal fixation device and are classified under MDC 4. By adding the eight ICD-10-PCS procedure codes describing repositioning of the rib(s) that may be reported to describe a rib fracture repair procedure under the classification structure for MDC 4, these cases will no longer result in an MS-DRG assignment to the ``unrelated operating room procedures'' surgical class when reported with a diagnosis code under MDC 4. We are inviting public comments on our proposals. 18. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems In September 1985, the ICD[dash]9[dash]CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee, co-chaired by the National Center for Health Statistics (NCHS), the Centers for Disease Control and Prevention (CDC), and CMS, charged with maintaining and updating the ICD[dash]9[dash]CM system. The final update to ICD-9-CM codes was made on October 1, 2013. Thereafter, the name of the Committee was changed to the ICD-10 Coordination and Maintenance Committee, effective with the March 19-20, 2014 meeting. The ICD-10 Coordination and Maintenance Committee addresses updates to the ICD-10-CM and ICD-10-PCS coding systems. The Committee is jointly responsible for approving coding changes, and developing errata, addenda, and other modifications to the coding systems to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non[dash]Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system. The official list of ICD-9-CM diagnosis and procedure codes by fiscal year can be found on the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/codes.html. The official list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM diagnosis codes included in the Tabular List and Alphabetic Index for Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD- 9-CM procedure codes included in the Tabular List and Alphabetic Index for Procedures. The Committee encourages participation in the previously mentioned process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding field, such as the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), and various physician specialty groups, as well as individual physicians, health information management professionals, and other members of the public, to contribute ideas on coding matters. After considering the opinions expressed at the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies. The Committee presented proposals for coding changes for implementation in FY 2019 at a public meeting held on September 12-13, 2017, and finalized the coding changes after consideration of comments received at the meetings and in writing by November 13, 2017. The Committee held its 2018 meeting on March 6-7, 2018. The deadline for submitting comments on these code proposals is scheduled for April 6, 2018. It was announced at this meeting that any new ICD- 10-CM/PCS codes for which there was consensus of public support and for which complete tabular and indexing changes would be made by May 2018 would be included in the October 1, 2018 update to ICD-10-CM/ICD-10- PCS. As discussed in earlier sections of the preamble of the proposed rule, there are new, revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that are captured in Table 6A.--New Diagnosis Codes, Table 6B.--New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table 6D.--Invalid Procedure Codes, Table 6E.--Revised Diagnosis Code Titles, and Table 6F.--Revised Procedure Code Titles for this proposed rule, which are available via the Internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we make the code titles available for the IPPS proposed rule, they are not subject to comment in the proposed rule. We are inviting public comments on the MDC and MS-DRG assignments for the new diagnosis and procedure codes as set forth in Table 6A--New Diagnosis Codes and Table 6B.--New Procedure Codes. In addition, we are inviting public comments on the proposed severity level designations for the new diagnosis codes as set forth in Table 6A. and the proposed O.R. status for the new procedure codes as set forth in Table 6B. Because of the length of these tables, they are not published in the Addendum to this proposed rule. Rather, they are available via the Internet as discussed in section VI. of the Addendum to this proposed rule. Live Webcast recordings of the discussions of procedure codes at the Committee's September 12-13, 2017 meeting and March 6-7, 2018 meeting can be obtained from the CMS website at: http://cms.hhs.gov/ Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/ icd9ProviderDiagnosticCodes/ [[Page 20249]] 03_meetings.asp. The minutes of the discussions of diagnosis codes at the September 12-13, 2017 meeting and March 6-7, 2018 meeting can be found at: http://www.cdc.gov/nchs/icd/icd10cm_maintenance.html. These websites also provide detailed information about the Committee, including information on requesting a new code, attending a Committee meeting, and timeline requirements and meeting dates. We encourage commenters to address suggestions on coding issues involving diagnosis codes to: Donna Pickett, Co[dash]Chairperson, ICD- 10 Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo Road, Hyattsville, MD 20782. Comments may be sent by E[dash]mail to: [email protected]. Questions and comments concerning the procedure codes should be submitted via E[dash]mail to: [email protected]. In the September 7, 2001 final rule implementing the IPPS new technology add[dash]on payments (66 FR 46906), we indicated we would attempt to include proposals for procedure codes that would describe new technology discussed and approved at the Spring meeting as part of the code revisions effective the following October. Section 503(a) of Public Law 108[dash]173 included a requirement for updating diagnosis and procedure codes twice a year instead of a single update on October 1 of each year. This requirement was included as part of the amendments to the Act relating to recognition of new technology under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act by adding a clause (vii) which states that the Secretary shall provide for the addition of new diagnosis and procedure codes on April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis[dash]related group classification) until the fiscal year that begins after such date. This requirement improves the recognition of new technologies under the IPPS by providing information on these new technologies at an earlier date. Data will be available 6 months earlier than would be possible with updates occurring only once a year on October 1. While section 1886(d)(5)(K)(vii) of the Act states that the addition of new diagnosis and procedure codes on April 1 of each year shall not require the Secretary to adjust the payment, or DRG classification, under section 1886(d) of the Act until the fiscal year that begins after such date, we have to update the DRG software and other systems in order to recognize and accept the new codes. We also publicize the code changes and the need for a mid[dash]year systems update by providers to identify the new codes. Hospitals also have to obtain the new code books and encoder updates, and make other system changes in order to identify and report the new codes. The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance Committee holds its meetings in the spring and fall in order to update the codes and the applicable payment and reporting systems by October 1 of each year. Items are placed on the agenda for the Committee meeting if the request is received at least 2 months prior to the meeting. This requirement allows time for staff to review and research the coding issues and prepare material for discussion at the meeting. It also allows time for the topic to be publicized in meeting announcements in the Federal Register as well as on the CMS website. Final decisions on code title revisions are currently made by March 1 so that these titles can be included in the IPPS proposed rule. A complete addendum describing details of all diagnosis and procedure coding changes, both tabular and index, is published on the CMS and NCHS websites in June of each year. Publishers of coding books and software use this information to modify their products that are used by health care providers. This 5[dash]month time period has proved to be necessary for hospitals and other providers to update their systems. A discussion of this timeline and the need for changes are included in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee Meeting minutes. The public agreed that there was a need to hold the fall meetings earlier, in September or October, in order to meet the new implementation dates. The public provided comment that additional time would be needed to update hospital systems and obtain new code books and coding software. There was considerable concern expressed about the impact this April update would have on providers. In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 108-173, by developing a mechanism for approving, in time for the April update, diagnosis and procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add[dash]on payment process. We also established the following process for making these determinations. Topics considered during the Fall ICD- 10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requester at the Committee's public meeting. The request must identify the reason why a new code is needed in April for purposes of the new technology process. The participants at the meeting and those reviewing the Committee meeting summary report are provided the opportunity to comment on this expedited request. All other topics are considered for the October 1 update. Participants at the Committee meeting are encouraged to comment on all such requests. There were not any requests approved for an expedited April l, 2018 implementation of a code at the September 12-13, 2017 Committee meeting. Therefore, there are not any new codes for implementation on April 1, 2018. ICD-9-CM addendum and code title information is published on the CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and ICD-10-PCS addendum and code title information is published on the CMS website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS also sends copies of all ICD-10-CM and ICD-10-PCS coding changes to its Medicare contractors for use in updating their systems and providing education to providers. Information on ICD-10-CM diagnosis codes, along with the Official ICD-10-CM Coding Guidelines, can also be found on the CDC website at: http://www.cdc.gov/nchs/icd/icd10.htm. Additionally, information on new, revised, and deleted ICD-10-CM/ICD-10-PCS codes is provided to the AHA for publication in the Coding Clinic for ICD-10. AHA also distributes coding update information to publishers and software vendors. The following chart shows the number of ICD-10-CM and ICD-10-PCS codes and code changes since FY 2016 when ICD-10 was implemented. Total Number of Codes and Changes in Total Number of Codes per Fiscal Year ICD-10-CM and ICD-10-PCS Codes ------------------------------------------------------------------------ Fiscal year Number Change ------------------------------------------------------------------------ FY 2016: ICD-10-CM......................................... 69,823 ........ ICD-10-PCS........................................ 71,974 ........ FY 2017: ICD-10-CM......................................... 71,486 +1,663 ICD-10-PCS........................................ 75,789 +3,815 [[Page 20250]] FY 2018: ICD-10-CM......................................... 71,704 +218 ICD-10-PCS........................................ 78,705 +2,916 Proposed FY 2019: ICD-10-CM......................................... 71,902 +198 ICD-10-PCS........................................ 78,533 -172 ------------------------------------------------------------------------ As mentioned previously, the public is provided the opportunity to comment on any requests for new diagnosis or procedure codes discussed at the ICD-10 Coordination and Maintenance Committee meeting. At the September 12-13, 2017 and March 6-7, 2018 Committee meetings, we discussed any requests we had received for new ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that were to be implemented on October 1, 2018. We invited public comments on any code requests discussed at the September 12-13, 2017 and March 6-7, 2018 Committee meetings for implementation as part of the October 1, 2018 update. The deadline for commenting on code proposals discussed at the September 12-13, 2017 Committee meeting was November 13, 2017. The deadline for commenting on code proposals discussed at the March 6-7, 2018 Committee meeting was April 6, 2018. 19. Proposed Replaced Devices Offered Without Cost or With a Credit a. Background In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital's IPPS payment for certain MS-DRGs where the implantation of a device that subsequently failed or was recalled determined the base MS- DRG assignment. At that time, we specified that we will reduce a hospital's IPPS payment for those MS-DRGs where the hospital received a credit for a replaced device equal to 50 percent or more of the cost of the device. In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through 51557), we clarified this policy to state that the policy applies if the hospital received a credit equal to 50 percent or more of the cost of the replacement device and issued instructions to hospitals accordingly. b. Proposed Changes for FY 2019 In this FY 2019 IPPS/LTCH PPS proposed rule, for FY 2019, we are not proposing to add any MS-DRGs to the policy for replaced devices offered without cost or with a credit. We are proposing to continue to include the existing MS-DRGs currently subject to the policy as displayed in the table below. We are soliciting public comments on our proposal to continue to include the existing MS-DRGs currently subject to the policy for replaced devices offered without cost or with credit and to not add any additional MS-DRGs to the policy. ------------------------------------------------------------------------ MDC MS-DRG MS-DRG title ------------------------------------------------------------------------ Pre-MDC.................... 001 Heart Transplant or Implant of Heart Assist System with MCC. Pre-MDC.................... 002 Heart Transplant or Implant of Heart Assist System without MCC. 1.......................... 023 Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator. 1.......................... 024 Craniotomy with Major Device Implant or Acute Complex CNS Principal Diagnosis without MCC. 1.......................... 025 Craniotomy & Endovascular Intracranial Procedures with MCC. 1.......................... 026 Craniotomy & Endovascular Intracranial Procedures with CC. 1.......................... 027 Craniotomy & Endovascular Intracranial Procedures without CC/MCC. 1.......................... 040 Peripheral, Cranial Nerve & Other Nervous System Procedures with MCC. 1.......................... 041 Peripheral, Cranial Nerve & Other Nervous System Procedures with CC or Peripheral Neurostimulator. 1.......................... 042 Peripheral, Cranial Nerve & Other Nervous System Procedures without CC/MCC. 3.......................... 129 Major Head & Neck Procedures with CC/MCC or Major Device. 3.......................... 130 Major Head & Neck Procedures without CC/MCC. 5.......................... 215 Other Heart Assist System Implant. 5.......................... 216 Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization with MCC. 5.......................... 217 Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization with CC. 5.......................... 218 Cardiac Valve & Other Major Cardiothoracic Procedure with Cardiac Catheterization without CC/ MCC. 5.......................... 219 Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization with MCC. 5.......................... 220 Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization with CC. 5.......................... 221 Cardiac Valve & Other Major Cardiothoracic Procedure without Cardiac Catheterization without CC/ MCC. 5.......................... 222 Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/ Heart Failure/Shock with MCC. 5.......................... 223 Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/ Heart Failure/Shock without MCC. 5.......................... 224 Cardiac Defibrillator Implant with Cardiac Catheterization without AMI/Heart Failure/Shock with MCC. 5.......................... 225 Cardiac Defibrillator Implant with Cardiac Catheterization without AMI/Heart Failure/Shock without MCC. 5.......................... 226 Cardiac Defibrillator Implant without Cardiac Catheterization with MCC. 5.......................... 227 Cardiac Defibrillator Implant without Cardiac Catheterization without MCC. 5.......................... 242 Permanent Cardiac Pacemaker Implant with MCC. 5.......................... 243 Permanent Cardiac Pacemaker Implant with CC. 5.......................... 244 Permanent Cardiac Pacemaker Implant without CC/MCC. 5.......................... 245 AICD Generator Procedures. 5.......................... 258 Cardiac Pacemaker Device Replacement with MCC. 5.......................... 259 Cardiac Pacemaker Device Replacement without MCC. 5.......................... 260 Cardiac Pacemaker Revision Except Device Replacement with MCC. 5.......................... 261 Cardiac Pacemaker Revision Except Device Replacement with CC. 5.......................... 262 Cardiac Pacemaker Revision Except Device Replacement without CC/MCC. 5.......................... 265 AICD Lead Procedures. 5.......................... 266 Endovascular Cardiac Valve Replacement with MCC. 5.......................... 267 Endovascular Cardiac Valve Replacement without MCC. 5.......................... 268 Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC. 5.......................... 269 Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC. 5.......................... 270 Other Major Cardiovascular Procedures with MCC. [[Page 20251]] 5.......................... 271 Other Major Cardiovascular Procedures with CC. 5.......................... 272 Other Major Cardiovascular Procedures without CC/MCC. 8.......................... 461 Bilateral or Multiple Major Joint Procedures of Lower Extremity with MCC. 8.......................... 462 Bilateral or Multiple Major Joint Procedures of Lower Extremity without MCC. 8.......................... 466 Revision of Hip or Knee Replacement with MCC. 8.......................... 467 Revision of Hip or Knee Replacement with CC. 8.......................... 468 Revision of Hip or Knee Replacement without CC/ MCC. 8.......................... 469 Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement. 8.......................... 470 Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC. ------------------------------------------------------------------------ 20. Other Policy Changes: Other Operating Room (O.R.) and Non-O.R. Issues In this proposed rule, we are addressing requests that we received regarding changing the designation of specific ICD-10-PCS procedure codes from non-O.R. to O.R. procedures, or changing the designation from O.R. procedure to non-O.R. procedure. In cases where we are proposing to change the designation of procedure codes from non-O.R. to O.R. procedures, we also are proposing one or more MS-DRGs with which these procedures are clinically aligned and to which the procedure code would be assigned. We generally examine the MS-DRG assignment for similar procedures, such as the other approaches for that procedure, to determine the most appropriate MS-DRG assignment for procedures newly designated as O.R. procedures. We are inviting public comments on these proposed MS-DRG assignments. We also note that many MS-DRGs require the presence of any O.R. procedure. As a result, cases with a principal diagnosis associated with a particular MS-DRG would, by default, be grouped to that MS-DRG. Therefore, we do not list these MS-DRGs in our discussion below. Instead, we only discuss MS-DRGs that require explicitly adding the relevant procedures codes to the GROUPER logic in order for those procedure codes to affect the MS-DRG assignment as intended. In addition, cases that contain O.R. procedures will map to MS-DRGs 981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively) when they do not contain a principal diagnosis that corresponds to one of the MDCs to which that procedure is assigned. These procedures need not be assigned to MS-DRGs 981 through 989 in order for this to occur. Therefore, if requestors included some or all of MS-DRGs 981 through 989 in their request or included MS-DRGs that require the presence of any O.R. procedure, we did not specifically address that aspect in summarizing their request or our response to the request in the section below. a. Percutaneous and Percutaneous Endoscopic Excision of Brain and Cerebral Ventricle One requestor identified 22 ICD-10-PCS procedure codes that describe procedures involving transcranial brain and cerebral ventricle excision that the requestor stated would generally require the resources of an operating room. The 22 procedure codes are listed in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 00B03ZX................... Excision of brain, percutaneous approach, diagnostic. 00B13ZX................... Excision of cerebral meninges, percutaneous approach, diagnostic. 00B23ZX................... Excision of dura mater, percutaneous approach, diagnostic. 00B63ZX................... Excision of cerebral ventricle, percutaneous approach, diagnostic. 00B73ZX................... Excision of cerebral hemisphere, percutaneous approach, diagnostic. 00B83ZX................... Excision of basal ganglia, percutaneous approach, diagnostic. 00B93ZX................... Excision of thalamus, percutaneous approach, diagnostic. 00BA3ZX................... Excision of hypothalamus, percutaneous approach, diagnostic. 00BB3ZX................... Excision of pons, percutaneous approach, diagnostic. 00BC3ZX................... Excision of cerebellum, percutaneous approach, diagnostic. 00BD3ZX................... Excision of medulla oblongata, percutaneous approach, diagnostic. 00B04ZX................... Excision of brain, percutaneous endoscopic approach, diagnostic. 00B14ZX................... Excision of cerebral meninges, percutaneous endoscopic approach, diagnostic. 00B24ZX................... Excision of dura mater, percutaneous endoscopic approach, diagnostic. 00B64ZX................... Excision of cerebral ventricle, percutaneous endoscopic approach, diagnostic. 00B74ZX................... Excision of cerebral hemisphere, percutaneous endoscopic approach, diagnostic. 00B84ZX................... Excision of basal ganglia, percutaneous endoscopic approach, diagnostic. 00B94ZX................... Excision of thalamus, percutaneous endoscopic approach, diagnostic. 00BA4ZX................... Excision of hypothalamus, percutaneous endoscopic approach, diagnostic. 00BB4ZX................... Excision of pons, percutaneous endoscopic approach, diagnostic. 00BC4ZX................... Excision of cerebellum, percutaneous endoscopic approach, diagnostic. 00BD4ZX................... Excision of medulla oblongata, percutaneous endoscopic approach, diagnostic. ------------------------------------------------------------------------ The requestor stated that, although percutaneous burr hole biopsies are performed through smaller openings in the skull than open burr hole biopsies, these procedures require drilling or cutting through the skull using sterile technique with anesthesia for pain control. The requestor also noted that similar procedures involving percutaneous drainage of the subdural space are currently classified as O.R. procedures in Version 35 of the ICD-10 [[Page 20252]] MS-DRGs. However, these 22 ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor recommended that the 22 ICD-10-PCS codes be designated as O.R. procedures and assigned to MS-DRGs 25, 26, and 27 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC, and without CC/ MCC, respectively). We agree with the requestor that these procedures typically require the resources of an operating room. Therefore, we are proposing to add these 22 ICD-10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to MS-DRGs 25, 26, and 27 in MDC 1 (Diseases and Disorders of the Nervous System). We are inviting public comments on our proposal. b. Open Extirpation of Subcutaneous Tissue and Fascia One requestor identified 22 ICD-10-PCS procedure codes that describe procedures involving open extirpation of subcutaneous tissue and fascia that the requestor stated would generally require the resources of an operating room. The 22 procedure codes are listed in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0JC00ZZ................... Extirpation of matter from scalp subcutaneous tissue and fascia, open approach. 0JC10ZZ................... Extirpation of matter from face subcutaneous tissue and fascia, open approach. 0JC40ZZ................... Extirpation of matter from right neck subcutaneous tissue and fascia, open approach. 0JC50ZZ................... Extirpation of matter from left neck subcutaneous tissue and fascia, open approach. 0JC60ZZ................... Extirpation of matter from chest subcutaneous tissue and fascia, open approach. 0JC70ZZ................... Extirpation of matter from back subcutaneous tissue and fascia, open approach. 0JC80ZZ................... Extirpation of matter from abdomen subcutaneous tissue and fascia, open approach. 0JC90ZZ................... Extirpation of matter from buttock subcutaneous tissue and fascia, open approach. 0JCB0ZZ................... Extirpation of matter from perineum subcutaneous tissue and fascia, open approach. 0JCC0ZZ................... Extirpation of matter from pelvic region subcutaneous tissue and fascia, open approach. 0JCD0ZZ................... Extirpation of matter from right upper arm subcutaneous tissue and fascia, open approach. 0JCF0ZZ................... Extirpation of matter from left upper arm subcutaneous tissue and fascia, open approach. 0JCG0ZZ................... Extirpation of matter from right lower arm subcutaneous tissue and fascia, open approach. 0JCH0ZZ................... Extirpation of matter from left lower arm subcutaneous tissue and fascia, open approach. 0JCJ0ZZ................... Extirpation of matter from right hand subcutaneous tissue and fascia, open approach. 0JCK0ZZ................... Extirpation of matter from left hand subcutaneous tissue and fascia, open approach. 0JCL0ZZ................... Extirpation of matter from right upper leg subcutaneous tissue and fascia, open approach. 0JCM0ZZ................... Extirpation of matter from left upper leg subcutaneous tissue and fascia, open approach. 0JCN0ZZ................... Extirpation of matter from right lower leg subcutaneous tissue and fascia, open approach. 0JCP0ZZ................... Extirpation of matter from left lower leg subcutaneous tissue and fascia, open approach. 0JCQ0ZZ................... Extirpation of matter from right foot subcutaneous tissue and fascia, open approach. 0JCR0ZZ................... Extirpation of matter from left foot subcutaneous tissue and fascia, open approach. ------------------------------------------------------------------------ The requestor stated that these procedures involve making an open incision deeper than the skin under general anesthesia, and that irrigation and/or excision of devitalized tissue or cavity are often required and are considered inherent to the procedure. The requestor also stated that open drainage of subcutaneous tissue and fascia, open excisional debridement of subcutaneous tissue and fascia, and open nonexcisional debridement/extraction of subcutaneous tissue and fascia are designated as O.R. procedures, and that these 22 procedures should be designated as O.R. procedures for the same reason. In the ICD-10 MS- DRGs Version 35, these 22 ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor recommended that the 22 ICD-10-PCS procedure codes listed in the table be assigned to MS-DRGs 579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, CC, and without CC/MCC, respectively). We disagree with the requestor that these procedures typically require the resources of an operating room. Our clinical advisors indicated that these open extirpation procedures are minor procedures that can be performed outside of an operating room, such as in a radiology suite with CT or MRI guidance. We disagree that these procedures are similar to open drainage procedures. Therefore, we are proposing to maintain the status of these 22 ICD-10-PCS procedure codes as non-O.R. procedures. We are inviting public comments on our proposal. c. Open Scrotum and Breast Procedures One requestor identified 13 ICD-10-PCS procedure codes that describe procedures involving open drainage, open extirpation, and open debridement/excision of the scrotum and breast. The requestor stated that the 13 procedures listed in the following table involve making an open incision deeper than the skin under general anesthesia, and that irrigation and/or excision of devitalized tissue or cavity are often required and are considered inherent to the procedure. The requestor also stated that open drainage of subcutaneous tissue and fascia, open excisional debridement of subcutaneous tissue and fascia, open non[dash]excisional debridement/extraction of subcutaneous tissue and fascia, and open excision of breast are designated as O.R. procedures, and that these 13 procedures should be designated as O.R. procedures for the same reason. In the ICD-10 MS-DRGs Version 35, these 13 ICD-10- PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0V950ZZ................... Drainage of scrotum, open approach. 0VB50ZZ................... Excision of scrotum, open approach. 0VC50ZZ................... Extirpation of matter from scrotum, open approach. [[Page 20253]] 0H9U0ZZ................... Drainage of left breast, open approach. 0H9T0ZZ................... Drainage of right breast, open approach. 0H9V0ZZ................... Drainage of bilateral breast, open approach. 0H9W0ZZ................... Drainage of right nipple, open approach. 0H9X0ZZ................... Drainage of left nipple, open approach. 0HCT0ZZ................... Extirpation of matter from right breast, open approach. 0HCU0ZZ................... Extirpation of matter from left breast, open approach. 0HCV0ZZ................... Extirpation of matter from bilateral breast, open approach. 0HCW0ZZ................... Extirpation of matter from right nipple, open approach. 0HCX0ZZ................... Extirpation of matter from left nipple, open approach. ------------------------------------------------------------------------ The requestor recommended that the 3 ICD-10-PCS scrotal procedure codes be assigned to MS-DRGs 717 and 718 (Other Male Reproductive System O.R. Procedures Except Malignancy with CC/MCC and without CC/ MCC, respectively) and the 10 breast procedure codes be assigned to MS- DRGs 584 and 585 (Breast Biopsy, Local Excision and Other Breast Procedures with CC/MCC and without CC/MCC, respectively). We agree with the requestor that these procedures typically require the resources of an operating room due to the nature of breast and scrotal tissue, as well as with the MS-DRG assignments recommended by the requestor. In addition, we believe that the scrotal codes should also be assigned to MS-DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for Malignancy with CC/MCC and without CC/MCC, respectively). Therefore, we are proposing to add these 13 ICD-10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS- DRG Index as O.R. procedures, assigned to MS-DRGs 715, 716, 717, and 718 in MDC 12 (Diseases and Disorders of the Male Reproductive System) for the scrotal procedure codes and assigned to MS-DRGs 584 and 585 in MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue & Breast) for the breast procedure codes. We are inviting public comments on our proposal. d. Open Parotid Gland and Submaxillary Gland Procedures One requestor identified eight ICD-10-PCS procedure codes that describe procedures involving open drainage and open extirpation of the parotid or submaxillary glands, shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0C980ZZ................... Drainage of right parotid gland, open approach. 0C990ZZ................... Drainage of left parotid gland, open approach. 0C9G0ZZ................... Drainage of right submaxillary gland, open approach. 0C9H0ZZ................... Drainage of left submaxillary gland, open approach. 0CC80ZZ................... Extirpation of matter from right parotid gland, open approach. 0CC90ZZ................... Extirpation of matter from left parotid gland, open approach. 0CCG0ZZ................... Extirpation of matter from right submaxillary gland, open approach. 0CCH0ZZ................... Extirpation of matter from left submaxillary gland, open approach. ------------------------------------------------------------------------ The requestor stated that these procedures involve making an open incision through subcutaneous tissue, fascia, and potentially muscle, to reach and incise the parotid or submaxillary gland under general anesthesia, and that irrigation and/or excision of devitalized tissue or cavity may be required and are considered inherent to the procedure. The requestor also stated that open drainage of subcutaneous tissue and fascia, open excisional debridement of subcutaneous tissue and fascia, and open non[dash]excisional debridement/extraction of subcutaneous tissue and fascia are designated as O.R. procedures, and that these eight procedures should be designated as O.R. procedures for the same reason. In the ICD-10 MS-DRGs Version 35, these eight ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor requested that these procedures be assigned to MS-DRG 139 (Salivary Gland Procedures). We agree with the requestor that these eight procedures typically require the resources of an operating room. Therefore, we are proposing to add these ICD-10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to MS-DRG 139 in MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth and Throat). We are inviting public comments on our proposal. e. Removal and Reinsertion of Spacer; Knee Joint and Hip Joint One requestor identified four sets of ICD-10-PCS procedure code combinations (eight ICD-10-PCS codes) that describe procedures involving open removal and insertion of spacers into the knee or hip joints, shown in the following table. The requestor stated that these are invasive procedures involving removal and reinsertion of devices into major joints and are performed in the operating room under general anesthesia. In the ICD-10 MS-DRGs Version 35, these four ICD-10-PCS procedure code combinations are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor recommended that CMS determine the most appropriate surgical DRGs for these procedures. [[Page 20254]] ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0SPC08Z................... Removal of spacer from right knee joint, open approach. 0SHC08Z................... Insertion of spacer into right knee joint, open approach. 0SPD08Z................... Removal of spacer from left knee joint, open approach. 0SHD08Z................... Insertion of spacer into left knee joint, open approach. 0SP908Z................... Removal of spacer from right hip joint, open approach. 0SH908Z................... Insertion of spacer into right hip joint, open approach. 0SPB08Z................... Removal of spacer from left hip joint, open approach. 0SHB08Z................... Insertion of spacer into left hip joint, open approach. ------------------------------------------------------------------------ We agree with the requestor that these procedures typically require the resources of an operating room. However, our clinical advisors indicated that these codes should be designated as O.R. procedures even when reported as stand-alone procedures. Therefore, for the knee procedures, we are proposing to add these four ICD-10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 488 and 489 (Knee Procedures without Principal diagnosis of Infection with CC/MCC and without CC/ MCC, respectively), both in MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). For the hip procedures, we are proposing to add these four ICD-10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E-- Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to MS-DRGs 480, 481, and 482 (Hip and Femur Procedures Except Major Joint with MCC, with CC, and without CC/MCC, respectively) in MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue). We are inviting public comments on our proposal. f. Endoscopic Dilation of Ureter(s) With Intraluminal Device One requestor identified the following three ICD-10-PCS procedure codes that describe procedures involving endoscopic dilation of ureter(s) with intraluminal device. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0T778DZ................... Dilation of left ureter with intraluminal device, via natural or artificial opening endoscopic. 0T768DZ................... Dilation of right ureter with intraluminal device, via natural or artificial opening endoscopic. 0T788DZ................... Dilation of bilateral ureters with intraluminal device, via natural or artificial opening endoscopic. ------------------------------------------------------------------------ The requestor stated that these procedures involve the use of cystoureteroscopy to view the bladder and ureter and dilation under visualization, which are often followed by placement of a ureteral stent. The requestor also stated that endoscopic extirpation of matter from ureter, endoscopic biopsy of bladder, endoscopic dilation of bladder, endoscopic dilation of renal pelvis, and endoscopic dilation of the ureter without insertion of intraluminal device are all assigned to surgical DRGs, and that these three procedures should be designated as O.R. procedures for the same reason. In the ICD-10 MS-DRGs Version 35, these three ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. The requestor recommended that these procedures be assigned to MS-DRGs 656, 657, and 658 (Kidney and Ureter Procedures for Neoplasm with MCC, with CC, and without CC/ MCC, respectively) and MS-DRGs 659, 660, and 661 (Kidney and Ureter Procedures for Non-Neoplasm with MCC, with CC, and without CC/MCC, respectively). We agree with the requestor that these procedures typically require the resources of an operating room. In addition to the MS-DRGs recommended by the requestor, we believe that these procedure codes should also be assigned to other MS-DRGs, consistent with the assignment of other dilation of ureter procedures: MS-DRG 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively). Therefore, we are proposing to add the three ICD-10-PCS procedure codes identified by the requestor to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E-- Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to MS-DRGs 656, 657, and 658 in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract), MS-DRGs 659, 660, and 661 in MDC 11, MS-DRGs 907, 908, and 909 in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs), and MS-DRGs 957, 958, and 959 in MDC 24 (Multiple Significant Trauma). We are inviting public comments on our proposal. g. Thoracoscopic Procedures of Pericardium and Pleura One requestor identified seven ICD-10-PCS procedure codes that describe procedures involving thoracoscopic drainage of the pericardial cavity or pleural cavity, or extirpation of matter from the pleura, as shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0W9D4ZZ................... Drainage of pericardial cavity, percutaneous endoscopic approach. 0W9D40Z................... Drainage of pericardial cavity with drainage device, percutaneous endoscopic approach. 0W9D4ZX................... Drainage of pericardial cavity, percutaneous endoscopic approach, diagnostic. [[Page 20255]] 0W994ZX................... Drainage of right pleural cavity, percutaneous endoscopic approach, diagnostic. 0W9B4ZX................... Drainage of left pleural cavity, percutaneous endoscopic approach, diagnostic. 0BCP4ZZ................... Extirpation of matter from left pleura, percutaneous endoscopic approach. 0BCN4ZZ................... Extirpation of matter from right pleura, percutaneous endoscopic approach. ------------------------------------------------------------------------ The requestor stated that these procedures involve making an incision through the chest wall and inserting a thoracoscope for visualization of thoracic structures during the procedure. The requestor also stated that some thoracoscopic procedures are assigned to surgical MS-DRGs, while other procedures are assigned to medical MS- DRGs. In the ICD-10 MS-DRGs Version 35, these seven ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that these procedures typically require the resources of an operating room, as well as significant time and skill. During our review, we noted that the following two related procedures using the open approach also were not currently recognized as O.R. procedures: ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0BCP0ZZ................... Extirpation of matter from left pleura, open approach. 0BCN0ZZ................... Extirpation of matter from right pleura, open approach. ------------------------------------------------------------------------ Therefore, to be consistent with the MS-DRGs to which other approaches for procedures involving drainage or extirpation of matter from the pleura are assigned, we are proposing to add these nine ICD- 10-PCS procedure codes to the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures assigned to one of the following MS-DRGs: MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 4 (Diseases and Disorders of the Respiratory System); MS-DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 5 (Diseases and Disorders of the Circulatory System); MS-DRGs 820, 821, and 822 (Lymphoma and Leukemia with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively) in MDC 17 (Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasms); MS-DRGs 826, 827, and 828 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major O.R. Procedure with MCC, with CC, and without CC/MCC, respectively) in MDC 17; MS-DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for Multiple Significant Trauma with MCC, with CC, and without CC/MCC, respectively) in MDC 24 (Multiple Significant Trauma). We are inviting public comments on our proposal. h. Open Insertion of Totally Implantable and Tunneled Vascular Access Devices One requestor identified 20 ICD-10-PCS procedure codes that describe procedures involving open insertion of totally implantable and tunneled vascular access devices. The codes are identified in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0JH60WZ................... Insertion of totally implantable vascular access device into chest subcutaneous tissue and fascia, open approach. 0JH60XZ................... Insertion of tunneled vascular access device into chest subcutaneous tissue and fascia, open approach. 0JH80WZ................... Insertion of totally implantable vascular access device into abdomen subcutaneous tissue and fascia, open approach. 0JH80XZ................... Insertion of tunneled vascular access device into abdomen subcutaneous tissue and fascia, open approach. 0JHD0WZ................... Insertion of totally implantable vascular access device into right upper arm subcutaneous tissue and fascia, open approach. 0JHD0XZ................... Insertion of tunneled vascular access device into right upper arm subcutaneous tissue and fascia, open approach. 0JHF0WZ................... Insertion of totally implantable vascular access device into left upper arm subcutaneous tissue and fascia, open approach. 0JHF0XZ................... Insertion of tunneled vascular access device into left upper arm subcutaneous tissue and fascia, open approach. 0JHG0WZ................... Insertion of totally implantable vascular access device into right lower arm subcutaneous tissue and fascia, open approach. 0JHG0XZ................... Insertion of tunneled vascular access device into right lower arm subcutaneous tissue and fascia, open approach. 0JHH0WZ................... Insertion of totally implantable vascular access device into left lower arm subcutaneous tissue and fascia, open approach. 0JHH0XZ................... Insertion of tunneled vascular access device into left lower arm subcutaneous tissue and fascia, open approach. 0JHL0WZ................... Insertion of totally implantable vascular access device into right upper leg subcutaneous tissue and fascia, open approach. 0JHL0XZ................... Insertion of tunneled vascular access device into right upper leg subcutaneous tissue and fascia, open approach. 0JHM0WZ................... Insertion of totally implantable vascular access device into left upper leg subcutaneous tissue and fascia, open approach. 0JHM0XZ................... Insertion of tunneled vascular access device into left upper leg subcutaneous tissue and fascia, open approach. 0JHN0WZ................... Insertion of totally implantable vascular access device into right lower leg subcutaneous tissue and fascia, open approach. 0JHN0XZ................... Insertion of tunneled vascular access device into right lower leg subcutaneous tissue and fascia, open approach. 0JHP0WZ................... Insertion of totally implantable vascular access device into left lower leg subcutaneous tissue and fascia, open approach. 0JHP0XZ................... Insertion of tunneled vascular access device into left lower leg subcutaneous tissue and fascia, open approach. ------------------------------------------------------------------------ The requestor stated that open procedures to insert totally implantable vascular access devices (VAD) involve implantation of a port by open approach, cutting through subcutaneous tissue/fascia, placing the device, and [[Page 20256]] then closing tissues so that none of the device is exposed. The requestor explained that open procedures to insert tunneled VADs involve insertion of the catheter into central vasculature, and then open incision of subcutaneous tissue and fascia through which the device is tunneled. The requestor also indicated that these procedures require two ICD-10-PCS codes: One for the insertion of the VAD or port within the subcutaneous tissue; and one for percutaneous insertion of the central venous catheter that is connected to the device. The requestor further noted that, in MDC 11, cases with these procedure codes are assigned to surgical MS-DRGs and that insertion of infusion pumps by open approach groups to surgical MS-DRGs. The requestor recommended that these procedures be assigned to surgical MS-DRGs in MDC 09 as well. We examined the O.R. designations for this group of procedures and determined that they currently are designated as non- O.R. procedures for MDC 09 and MDC 11. We agree with the requestor that procedures involving open insertion of totally implantable VAD procedures typically require the resources of an operating room. However, we disagree that the tunneled VAD procedures typically require the resources of an operating room. Therefore, we are proposing to update the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index to designate the 10 ICD-10-PCS procedure codes describing the totally implantable VAD procedures as O.R. procedures, which will continue to be assigned to MS-DRGs 579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast) and MS-DRGs 673, 674, and 675 (Other Kidney and Urinary Tract Procedures, with CC, with MCC, and without CC/MCC, respectively) in MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract). We note that these procedures already affect MS-DRG assignment to these MS-DRGs. However, if the procedure is unrelated to the principal diagnosis, it will be assigned to MS-DRGs 981, 982, and 983 instead of a medical MS[dash]DRG. We are inviting public comments on our proposal. i. Percutaneous Joint Reposition With Internal Fixation Device One requestor identified 20 ICD-10-PCS procedure codes that describe procedures involving percutaneous joint reposition with internal fixation device, shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0SS034Z................... Reposition lumbar vertebral joint with internal fixation device, percutaneous approach. 0SS334Z................... Reposition lumbosacral joint with internal fixation device, percutaneous approach. 0SS534Z................... Reposition sacrococcygeal joint with internal fixation device, percutaneous approach. 0SS634Z................... Reposition coccygeal joint with internal fixation device, percutaneous approach. 0SS734Z................... Reposition right sacroiliac joint with internal fixation device, percutaneous approach. 0SS834Z................... Reposition left sacroiliac joint with internal fixation device, percutaneous approach. 0SS934Z................... Reposition right hip joint with internal fixation device, percutaneous approach. 0SSB34Z................... Reposition left hip joint with internal fixation device, percutaneous approach. 0SSC34Z................... Reposition right knee joint with internal fixation device, percutaneous approach. 0SSD34Z................... Reposition left knee joint with internal fixation device, percutaneous approach. 0SSF34Z................... Reposition right ankle joint with internal fixation device, percutaneous approach. 0SSG34Z................... Reposition left ankle joint with internal fixation device, percutaneous approach. 0SSH34Z................... Reposition right tarsal joint with internal fixation device, percutaneous approach. 0SSJ34Z................... Reposition left tarsal joint with internal fixation device, percutaneous approach. 0SSK34Z................... Reposition right tarsometatarsal joint with internal fixation device, percutaneous approach. 0SSL34Z................... Reposition left tarsometatarsal joint with internal fixation device, percutaneous approach. 0SSM34Z................... Reposition right metatarsal-phalangeal joint with internal fixation device, percutaneous approach. 0SSN34Z................... Reposition left metatarsal-phalangeal joint with internal fixation device, percutaneous approach. 0SSP34Z................... Reposition right toe phalangeal joint with internal fixation device, percutaneous approach. 0SSQ34Z................... Reposition left toe phalangeal joint with internal fixation device, percutaneous approach. ------------------------------------------------------------------------ The requestor stated that reposition of the sacrum, femur, tibia, fibula, and other fractures of bone with internal fixation device by percutaneous approach are assigned to surgical DRGs, and that reposition of sacroiliac, hip, knee, and other joint locations with internal fixation should therefore also be assigned to surgical DRGs. In the ICD-10 MS-DRGs Version 35, these 20 ICD-10-PCS procedure codes are not recognized as O.R. procedures for purposes of MS-DRG assignment. We disagree with the requestor that these procedures typically require the resources of an operating room, as these procedures are not as invasive as the bone reposition procedures referenced by the requestor. Our clinical advisors advised that these procedures are typically performed in a radiology suite. Therefore, we are proposing to maintain the status of these 20 ICD-10-PCS procedure codes as non- O.R. procedures. We are inviting public comments on our proposal. j. Endoscopic Destruction of Intestine One requestor identified four ICD-10-PCS procedure codes that describe procedures involving endoscopic destruction of the intestine, as shown in the following table. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0D5A8ZZ................... Destruction of jejunum, via natural or artificial opening endoscopic. 0D5B8ZZ................... Destruction of ileum, via natural or artificial opening endoscopic. 0D5C8ZZ................... Destruction of ileocecal valve, via natural or artificial opening endoscopic. 0D588ZZ................... Destruction of small intestine, via natural or artificial opening endoscopic. ------------------------------------------------------------------------ [[Page 20257]] The requestor stated that these procedures are rarely performed in the operating room. In the ICD-10 MS-DRGs Version 35, these 20 ICD-10- PCS procedure codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment. We agree with the requestor that these procedures do not typically require the resources of an operating room. Therefore, we are proposing to remove these four procedure codes from the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. We are inviting public comments on our proposal. k. Drainage of Lower Lung Via Natural or Artificial Opening Endoscopic, Diagnostic One requestor identified the following ICD-10-PCS procedure codes that describe procedures involving endoscopic drainage of the lung via natural or artificial opening for diagnostic purposes. ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0B9J8ZX................... Drainage of left lower lung lobe, via natural or artificial opening endoscopic, diagnostic. 0B9F8ZX................... Drainage of right lower lung lobe, via natural or artificial opening endoscopic, diagnostic. ------------------------------------------------------------------------ The requestor stated that these procedures are rarely performed in the operating room. We agree with the requestor that these procedures do not require the resources of an operating room. In addition, while we were reviewing this comment, we identified three additional related codes: ------------------------------------------------------------------------ ICD-10-PCS procedure code Code description ------------------------------------------------------------------------ 0B9D8ZX................... Drainage of right middle lung lobe, via natural or artificial opening endoscopic, diagnostic. 0B9C8ZX................... Drainage of right upper lung lobe, via natural or artificial opening endoscopic, diagnostic. 0B9G8ZX................... Drainage of left upper lung lobe, via natural or artificial opening endoscopic, diagnostic. ------------------------------------------------------------------------ In the ICD-10 MS-DRGs Version 35, these ICD-10-PCS procedure codes are currently recognized as O.R. procedures for purposes of MS-DRG assignment. We are proposing to remove ICD-10-PCS procedure codes 0B9J8ZX, 0B9F8ZX, 0B9D8ZX, 0B9C8ZX, and 0B9G8ZX from the FY 2019 ICD-10 MS-DRGs Version 36 Definitions Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R. procedures. We are inviting public comments on our proposal. G. Recalibration of the Proposed FY 2019 MS-DRG Relative Weights 1. Data Sources for Developing the Proposed Relative Weights In developing the proposed FY 2019 system of weights, we are proposing to use two data sources: Claims data and cost report data. As in previous years, the claims data source is the MedPAR file. This file is based on fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2017 MedPAR data used in this proposed rule include discharges occurring on October 1, 2016, through September 30, 2017, based on bills received by CMS through December 31, 2017, from all hospitals subject to the IPPS and short[dash]term, acute care hospitals in Maryland (which at that time were under a waiver from the IPPS). The FY 2017 MedPAR file used in calculating the proposed relative weights includes data for approximately 9,652,400 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. These discharges are excluded when the MedPAR ``GHO Paid'' indicator field on the claim record is equal to ``1'' or when the MedPAR DRG payment field, which represents the total payment for the claim, is equal to the MedPAR ``Indirect Medical Education (IME)'' payment field, indicating that the claim was an ``IME only'' claim submitted by a teaching hospital on behalf of a beneficiary enrolled in a Medicare Advantage managed care plan. In addition, the December 31, 2017 update of the FY 2017 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called ``claim type.'' Claim type ``60'' indicates that the claim was an inpatient claim paid as fee-for-service. Claim types ``61,'' ``62,'' ``63,'' and ``64'' relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the proposed relative weights for FY 2019 also excludes claims with claim type values not equal to ``60.'' The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the proposed FY 2019 relative weights are based on the ICD[dash]10[dash]CM diagnoses and ICD-10-PCS procedure codes from the FY 2017 MedPAR claims data, grouped through the ICD[dash]10 version of the proposed FY 2019 GROUPER (Version 36). The second data source used in the cost[dash]based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. Specifically, we used cost report data from the December 31, 2017 update of the FY 2016 HCRIS for calculating the proposed FY 2019 cost[dash]based relative weights. 2. Methodology for Calculation of the Proposed Relative Weights As we explain in section II.E.2. of the preamble of this proposed rule, we calculated the proposed FY 2019 relative weights based on 19 CCRs, as we did for FY 2018. The methodology we are proposing to use to calculate the FY 2019 MS-DRG cost[dash]based relative weights based on claims data in the FY 2017 MedPAR file and data from the FY 2016 Medicare cost reports is as follows: To the extent possible, all the claims were regrouped using the proposed FY 2019 MS[dash]DRG classifications discussed in sections II.B. and II.F. of the preamble of this proposed rule. The transplant cases that were used to establish the proposed relative weights for heart and heart[dash]lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare[dash]approved transplant centers that have cases in the FY 2017 MedPAR [[Page 20258]] file. (Medicare coverage for heart, heart[dash]lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.) Organ acquisition costs for kidney, heart, heart[dash]lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis. Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers. Claims with total charges or total lengths of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $30.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, implantable devices charges, supplies and equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood and blood products charges, anesthesia charges, cardiac catheterization charges, CT scan charges, and MRI charges were also deleted. At least 92.5 percent of the providers in the MedPAR file had charges for 14 of the 19 cost centers. All claims of providers that did not have charges greater than zero for at least 14 of the 19 cost centers were deleted. In other words, a provider must have no more than five blank cost centers. If a provider did not have charges greater than zero in more than five cost centers, the claims for the provider were deleted. Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the geometric mean of the log distribution of both the total charges per case and the total charges per day for each MS-DRG. Effective October 1, 2008, because hospital inpatient claims include a POA indicator field for each diagnosis present on the claim, only for purposes of relative weight-setting, the POA indicator field was reset to ``Y'' for ``Yes'' for all claims that otherwise have an ``N'' (No) or a ``U'' (documentation insufficient to determine if the condition was present at the time of inpatient admission) in the POA field. Under current payment policy, the presence of specific HAC codes, as indicated by the POA field values, can generate a lower payment for the claim. Specifically, if the particular condition is present on admission (that is, a ``Y'' indicator is associated with the diagnosis on the claim), it is not a HAC, and the hospital is paid for the higher severity (and, therefore, the higher weighted MS-DRG). If the particular condition is not present on admission (that is, an ``N'' indicator is associated with the diagnosis on the claim) and there are no other complicating conditions, the DRG GROUPER assigns the claim to a lower severity (and, therefore, the lower weighted MS-DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue for the relative weight-setting process. Because cases identified as HACs are likely to be more complex than similar cases that are not identified as HACs, the charges associated with HAC cases are likely to be higher as well. Therefore, if the higher charges of these HAC claims are grouped into lower severity MS-DRGs prior to the relative weight-setting process, the relative weights of these particular MS-DRGs would become artificially inflated, potentially skewing the relative weights. In addition, we want to protect the integrity of the budget neutrality process by ensuring that, in estimating payments, no increase to the standardized amount occurs as a result of lower overall payments in a previous year that stem from using weights and case-mix that are based on lower severity MS-DRG assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost. To avoid these problems, we reset the POA indicator field to ``Y'' only for relative weight-setting purposes for all claims that otherwise have an ``N'' or a ``U'' in the POA field. This resetting ``forced'' the more costly HAC claims into the higher severity MS[dash]DRGs as appropriate, and the relative weights calculated for each MS-DRG more closely reflect the true costs of those cases. In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 and subsequent fiscal years, we finalized a policy to treat hospitals that participate in the Bundled Payments for Care Improvement (BPCI) initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process without regard to hospitals' participation within these bundled payment models (77 FR 53341 through 53343). Specifically, because acute care hospitals participating in the BPCI initiative still receive IPPS payments under section 1886(d) of the Act, we include all applicable data from these subsection (d) hospitals in our IPPS payment modeling and ratesetting calculations as if they were not participating in those models under the BPCI initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule for a complete discussion on our final policy for the treatment of hospitals participating in the BPCI Initiative in our ratesetting process. The participation of hospitals in the BPCI initiative is set to conclude on September 30, 2018. The participation of hospitals in the Bundled Payments for Care Improvement (BPCI) Advanced model is set to start on October 1, 2018. The BPCI Advanced model, tested under the authority of section 3021 of the Affordable Care Act (codified at section 1115A of the Act), is comprised of a single payment and risk track, which bundles payments for multiple services beneficiaries receive during a Clinical Episode. Acute care hospitals may participate in BPCI Advanced in one of two capacities: As a model Participant or as a downstream Episode Initiator. Regardless of the capacity in which they participate in the BPCI Advanced model, participating acute care hospitals will continue to receive IPPS payments under section 1886(d) of the Act. Acute care hospitals that are Participants also assume financial and quality performance accountability for Clinical Episodes in the form of a reconciliation payment. For additional information on the BPCI Advanced model, we refer readers to the BPCI Advanced webpage on the CMS Center for Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/initiatives/bpci-advanced/. For FY 2019, consistent with how we have treated hospitals that participated in the BPCI Initiative, we believe it is appropriate to include all applicable data from the subsection (d) hospitals participating in the BPCI Advanced model in our IPPS payment modeling and ratesetting calculations because, as noted above, these hospitals are still receiving IPPS payments under section 1886(d) of the Act. The charges for each of the proposed 19 cost groups for each claim were standardized to remove the effects of differences in proposed area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable proposed cost[dash]of[dash]living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in proposed geographic [[Page 20259]] adjustment factors, cost[dash]of[dash]living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS-DRG for each of the proposed 19 cost groups so that each MS-DRG had 19 standardized charge totals. Statistical outliers were then removed. These charges were then adjusted to cost by applying the proposed national average CCRs developed from the FY 2016 cost report data. The 19 cost centers that we used in the proposed relative weight calculation are shown in the following table. The table shows the lines on the cost report and the corresponding revenue codes that we used to create the proposed 19 national cost center CCRs. If stakeholders have comments about the groupings in this table, we may consider those comments as we finalize our policy. We are inviting public comments on our proposals related to recalibration of the proposed FY 2019 relative weights and the changes in relative weights from FY 2018. BILLING CODE 4120-01-P [[Page 20260]] [GRAPHIC] [TIFF OMITTED] TP07MY18.002 [[Page 20261]] [GRAPHIC] [TIFF OMITTED] TP07MY18.003 [[Page 20262]] [GRAPHIC] [TIFF OMITTED] TP07MY18.004 [[Page 20263]] [GRAPHIC] [TIFF OMITTED] TP07MY18.005 [[Page 20264]] [GRAPHIC] [TIFF OMITTED] TP07MY18.006 [[Page 20265]] [GRAPHIC] [TIFF OMITTED] TP07MY18.007 [[Page 20266]] [GRAPHIC] [TIFF OMITTED] TP07MY18.008 [[Page 20267]] [GRAPHIC] [TIFF OMITTED] TP07MY18.009 [[Page 20268]] [GRAPHIC] [TIFF OMITTED] TP07MY18.010 [[Page 20269]] [GRAPHIC] [TIFF OMITTED] TP07MY18.011 [[Page 20270]] [GRAPHIC] [TIFF OMITTED] TP07MY18.012 [[Page 20271]] [GRAPHIC] [TIFF OMITTED] TP07MY18.013 [[Page 20272]] [GRAPHIC] [TIFF OMITTED] TP07MY18.014 [[Page 20273]] [GRAPHIC] [TIFF OMITTED] TP07MY18.015 [[Page 20274]] [GRAPHIC] [TIFF OMITTED] TP07MY18.016 BILLING CODE 4120-01-C [[Page 20275]] 3. Development of Proposed National Average CCRs We developed the proposed national average CCRs as follows: Using the FY 2016 cost report data, we removed CAHs, Indian Health Service hospitals, all[dash]inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. We then created CCRs for each provider for each cost center (see prior table for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. We then took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare[dash]specific CCR. The Medicare[dash]specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare[dash]specific costs by applying the hospital[dash]specific departmental CCRs to the Medicare[dash]specific charges for each line item from Worksheet D-3. Once each hospital's Medicare[dash]specific costs were established, we summed the total Medicare[dash]specific costs and divided by the sum of the total Medicare[dash]specific charges to produce national average, charge[dash]weighted CCRs. After we multiplied the total charges for each MS-DRG in each of the proposed 19 cost centers by the corresponding national average CCR, we summed the 19 ``costs'' across each proposed MS-DRG to produce a total standardized cost for the proposed MS-DRG. The average standardized cost for each proposed MS-DRG was then computed as the total standardized cost for the proposed MS-DRG divided by the transfer[dash]adjusted case count for the proposed MS-DRG. We calculated the transfer-adjusted discharges for use in the calculation of the Version 36 MS-DRG relative weights using the statutory expansion of the postacute care transfer policy to include discharges to hospice care by a hospice program discussed in section IV.A.2.b. of the preamble of this proposed rule. For the purposes of calculating the normalization factor, we used the transfer-adjusted discharges with the expanded postacute care transfer policy for Version 35 as well. (When we calculate the normalization factor, we calculate the transfer- adjusted case count for the prior GROUPER version (in this case Version 35) and multiply by the weights of that GROUPER. We then compare that pool to the transfer-adjusted case count using the new GROUPER version.) The average cost for each proposed MS-DRG was then divided by the national average standardized cost per case to determine the proposed relative weight. The proposed FY 2019 cost-based relative weights were then normalized by a proposed adjustment factor of 1.760698 so that the average case weight after recalibration was equal to the average case weight before recalibration. The proposed normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act. The proposed 19 national average CCRs for FY 2019 are as follows: ------------------------------------------------------------------------ Group CCR ------------------------------------------------------------------------ Routine Days................................................... 0.451 Intensive Days................................................. 0.373 Drugs.......................................................... 0.196 Supplies & Equipment........................................... 0.299 Implantable Devices............................................ 0.321 Therapy Services............................................... 0.312 Laboratory..................................................... 0.116 Operating Room................................................. 0.185 Cardiology..................................................... 0.107 Cardiac Catheterization........................................ 0.115 Radiology...................................................... 0.149 MRIs........................................................... 0.076 CT Scans....................................................... 0.037 Emergency Room................................................. 0.165 Blood and Blood Products....................................... 0.306 Other Services................................................. 0.355 Labor & Delivery............................................... 0.363 Inhalation Therapy............................................. 0.163 Anesthesia..................................................... 0.081 ------------------------------------------------------------------------ Since FY 2009, the relative weights have been based on 100 percent cost weights based on our MS-DRG grouping system. When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We are proposing to use that same case threshold in recalibrating the proposed MS-DRG relative weights for FY 2019. Using data from the FY 2017 MedPAR file, there were 7 MS-DRGs that contain fewer than 10 cases. For FY 2019, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low[dash]volume MS-DRGs, we are proposing to compute relative weights for the proposed low-volume MS-DRGs by adjusting their final FY 2018 relative weights by the percentage change in the average weight of the cases in other MS-DRGs. The crosswalk table is shown: ------------------------------------------------------------------------ Low-volume MS-DRG MS-DRG title Crosswalk to MS-DRG ------------------------------------------------------------------------ 789...................... Neonates, Died or Final FY 2018 relative Transferred to weight (adjusted by Another Acute Care percent change in Facility. average weight of the cases in other MS- DRGs). 790...................... Extreme Immaturity Final FY 2018 relative or Respiratory weight (adjusted by Distress Syndrome, percent change in Neonate. average weight of the cases in other MS- DRGs). 791...................... Prematurity with Final FY 2018 relative Major Problems. weight (adjusted by percent change in average weight of the cases in other MS- DRGs). 792...................... Prematurity without Final FY 2018 relative Major Problems. weight (adjusted by percent change in average weight of the cases in other MS- DRGs). 793...................... Full-Term Neonate Final FY 2018 relative with Major weight (adjusted by Problems. percent change in average weight of the cases in other MS- DRGs). 794...................... Neonate with Other Final FY 2018 relative Significant weight (adjusted by Problems. percent change in average weight of the cases in other MS- DRGs). 795...................... Normal Newborn..... Final FY 2018 relative weight (adjusted by percent change in average weight of the cases in other MS- DRGs). ------------------------------------------------------------------------ [[Page 20276]] We are inviting public comments on our proposals. H. Proposed Add-On Payments for New Services and Technologies for FY 2019 1. Background Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as ``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. We note that, beginning with discharges occurring in FY 2008, CMS transitioned from CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these provisions and specify three criteria for a new medical service or technology to receive the additional payment: (1) The medical service or technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. Below we highlight some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria, as well as other information. For a complete discussion on the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574). Under the first criterion, as reflected in Sec. 412.87(b)(2), a specific medical service or technology will be considered ``new'' for purposes of new medical service or technology add-on payments until such time as Medicare data are available to fully reflect the cost of the technology in the MS-DRG weights through recalibration. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a technology receives a new FDA approval or clearance, it may not necessarily be considered ``new'' for purposes of new technology add-on payments if it is ``substantially similar'' to a technology that was approved or cleared by FDA and has been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814). Under the second criterion, Sec. 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to discharges involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges for cases involving the new technology exceed certain threshold amounts. Table 10 that was released with the FY 2018 IPPS/LTCH PPS final rule contains the final thresholds that we used to evaluate applications for new medical service or technology add-on payments for FY 2019. We refer readers to the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page-Items/FY2018-IPPS-Final-Rule-Tables.html to download and view Table 10. As previously stated, Table 10 that is released with each proposed and final rule contains the thresholds that we use to evaluate applications for new medical service and technology add-on payments for the fiscal year that follows the fiscal year that is otherwise the subject of the rulemaking. For example, the thresholds in Table 10 released with the FY 2018 IPPS/LTCH PPS final rule are applicable to FY 2019 new technology applications. Beginning with the thresholds for FY 2020 and future years, we are proposing to provide the thresholds that we previously included in Table 10 as one of our data files posted via the Internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html, which is the same URL where the impact data files associated with the rulemaking for the applicable fiscal year are posted. We believe that this proposed change in the presentation of this information, specifically in the data files rather than in a Table 10, will clarify for the public that the listed thresholds will be used for new technology add- on payment applications for the next fiscal year (in this case, for FY 2020) rather than for the fiscal year that is otherwise the subject of the rulemaking (in this case, for FY 2019), while continuing to furnish the same information on the new technology add[dash]on payment thresholds for applications for the next fiscal year as has been provided in previous fiscal years. Accordingly, we would no longer include Table 10 as one of our IPPS tables, but would instead include the thresholds applicable to the next fiscal year (beginning with FY 2020) in the data files associated with the prior fiscal year (in this case, FY 2019). In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed the issue of whether the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims information that providers submit with applications for new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this issue. Under the third criterion, Sec. 412.87(b)(1) of our existing regulations provides that a new technology is an appropriate candidate for an additional payment when it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. For example, a new technology represents a substantial clinical improvement when it reduces mortality, decreases the number of hospitalizations or physician visits, or reduces recovery time compared to the technologies previously available. (We [[Page 20277]] refer readers to the September 7, 2001 final rule for a more detailed discussion of this criterion (66 FR 46902).) The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Under Sec. 412.88, if the costs of the discharge (determined by applying cost-to- charge ratios (CCRs) as described in Sec. 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology or medical service (if the estimated costs for the case including the new technology or medical service exceed Medicare's payment); or (2) 50 percent of the difference between the full DRG payment and the hospital's estimated cost for the case. Unless the discharge qualifies for an outlier payment, the additional Medicare payment is limited to the full MS-DRG payment plus 50 percent of the estimated costs of the new technology or medical service. Section 503(d)(2) of Public Law 108-173 provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of Public Law 108-173, add-on payments for new medical services or technologies for FY 2005 and later years have not been subjected to budget neutrality. In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulations at Sec. 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We amended Sec. 412.87(c) to specify that all applicants for new technology add-on payments must have FDA approval or clearance for their new medical service or technology by July 1 of the year prior to the beginning of the fiscal year that the application is being considered. The Council on Technology and Innovation (CTI) at CMS oversees the agency's cross-cutting priority on coordinating coverage, coding and payment processes for Medicare with respect to new technologies and procedures, including new drug therapies, as well as promoting the exchange of information on new technologies and medical services between CMS and other entities. The CTI, composed of senior CMS staff and clinicians, was established under section 942(a) of Public Law 108- 173. The Council is co-chaired by the Director of the Center for Clinical Standards and Quality (CCSQ) and the Director of the Center for Medicare (CM), who is also designated as the CTI's Executive Coordinator. The specific processes for coverage, coding, and payment are implemented by CM, CCSQ, and the local Medicare Administrative Contractors (MACs) (in the case of local coverage and payment decisions). The CTI supplements, rather than replaces, these processes by working to assure that all of these activities reflect the agency- wide priority to promote high-quality, innovative care. At the same time, the CTI also works to streamline, accelerate, and improve coordination of these processes to ensure that they remain up to date as new issues arise. To achieve its goals, the CTI works to streamline and create a more transparent coding and payment process, improve the quality of medical decisions, and speed patient access to effective new treatments. It is also dedicated to supporting better decisions by patients and doctors in using Medicare[dash]covered services through the promotion of better evidence development, which is critical for improving the quality of care for Medicare beneficiaries. To improve the understanding of CMS' processes for coverage, coding, and payment and how to access them, the CTI has developed an ``Innovator's Guide'' to these processes. The intent is to consolidate this information, much of which is already available in a variety of CMS documents and in various places on the CMS website, in a user friendly format. This guide was published in 2010 and is available on the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf. As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we invite any product developers or manufacturers of new medical services or technologies to contact the agency early in the process of product development if they have questions or concerns about the evidence that would be needed later in the development process for the agency's coverage decisions for Medicare. The CTI aims to provide useful information on its activities and initiatives to stakeholders, including Medicare beneficiaries, advocates, medical product manufacturers, providers, and health policy experts. Stakeholders with further questions about Medicare's coverage, coding, and payment processes, or who want further guidance about how they can navigate these processes, can contact the CTI at [email protected]. We note that applicants for add-on payments for new medical services or technologies for FY 2020 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement, along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2020, the CMS website also will post the tracking forms completed by each applicant. We note that the burden associated with this information collection requirement is the time and effort required to collect and submit the data in the formal request for add- on payments for new medical services and technologies to CMS. The aforementioned burden is subject to the PRA; it is currently approved under OMB control number 0938-1347, which expires on December 31, 2020. 2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of Public Law 108-173, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. The process for evaluating new medical service and technology applications requires the Secretary to-- [[Page 20278]] Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries; Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending; Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement; and Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS. In order to provide an opportunity for public input regarding add- on payments for new medical services and technologies for FY 2019 prior to publication of this FY 2019 IPPS/LTCH PPS proposed rule, we published a notice in the Federal Register on December 4, 2017 (82 FR 57275), and held a town hall meeting at the CMS Headquarters Office in Baltimore, MD, on February 13, 2018. In the announcement notice for the meeting, we stated that the opinions and presentations provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for each of the FY 2019 new medical service and technology add[dash]on payment applications before the publication of this FY 2019 IPPS/LTCH PPS proposed rule. Approximately 150 individuals registered to attend the town hall meeting in person, while additional individuals listened over an open telephone line. We also live[dash]streamed the town hall meeting and posted the town hall on the CMS YouTube web page at: https://www.youtube.com/watch?v=9niqfxXe4oA&t=217s. We considered each applicant's presentation made at the town hall meeting, as well as written comments submitted on the applications that were received by the due date of February 23, 2018, in our evaluation of the new technology add[dash]on payment applications for FY 2019 in this FY 2019 IPPS/LTCH PPS proposed rule. In response to the published notice and the February 13, 2018 New Technology Town Hall meeting, we received written comments regarding the applications for FY 2019 new technology add[dash]on payments. We note that we do not summarize comments that are unrelated to the ``substantial clinical improvement'' criterion. As explained earlier and in the Federal Register notice announcing the New Technology Town Hall meeting (82 FR 57275 through 57277), the purpose of the meeting was specifically to discuss the substantial clinical improvement criterion in regard to pending new technology add-on payment applications for FY 2019. Therefore, we are not summarizing those written comments in this proposed rule. In section II.H.5. of the preamble of this proposed rule, we are summarizing comments regarding individual applications, or, if applicable, indicating that there were no comments received in response to the New Technology Town Hall meeting notice, at the end of each discussion of the individual applications. Comment: One commenter recommended that the specific criteria that CMS uses in making substantial clinical improvement determinations be codified in the regulations to more explicitly clarify that the new medical service or technology will meet the substantial clinical improvement criterion if it: (a) Results in a reduction of the length of a hospital stay; (b) improves patient quality of life; (c) creates long-term clinical efficiencies in treatment; (d) addresses patient- centered objectives as defined by the Secretary; or (e) meets such other criteria as the Secretary may specify. The commenter stated that criteria similar to these were defined in the September 2001 New Technology Final Rule (66 FR 46913 through 46914). The commenter also recommended that final decisions on new technology add-on payment applications should explicitly discuss how a technology or treatment meets or fails to meet these specific criteria. Response: We appreciate the commenter's recommendation. However, in the September 2001 New Technology Final Rule (66 FR 46913 through 46914), we explained how we evaluate if a new medical service or technology would meet the substantial clinical improvement criterion. Specifically, we stated that we evaluate a request for new technology payments against the following criteria to determine if the new medical service or technology would represent a substantial clinical improvement over existing technologies: The device offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments. The device offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods. There must also be evidence that use of the device to make a diagnosis affects the management of the patient. Use of the device significantly improves clinical outcomes for a patient population as compared to currently available treatments. We typically require the applicant to submit evidence that the technology meets one or more of these standards. Regarding whether the use of the device significantly improves clinical outcomes for a patient population as compared to currently available treatments, we provided examples of improved clinical outcomes. In response to the commenter's recommendation that final decisions on new technology add-on applications explicitly discuss how a technology or treatment meets or fails to meet these specific standards, we believe that we provide this explanation when approving or denying an application for new technology add-on payments in the final rule. Comment: One commenter stated that the United States Food and Drug Administration Modernization Act (FDAMA) of 1997 established a category of medical devices and diagnostics that are eligible for priority FDA review. The commenter explained that, to qualify, products must be designated by the FDA as offering the potential for significant improvements in the diagnosis or treatment of the most serious illnesses, including those that are life-threatening or irreversibly debilitating. The commenter indicated that the processes by which products meeting the statutory standard for priority treatment are considered by the FDA are spelled out in greater detail in FDA's Expedited Access Program (EAP), and in the 21st Century Cures Act. The commenter believed that the criteria for priority FDA review are very similar to the substantial clinical improvement criteria and, therefore, devices used in the inpatient setting determined to be eligible for expedited review and approved by the FDA should automatically be considered as meeting the substantial clinical improvement criterion, without further consideration by CMS. [[Page 20279]] Another commenter stated that CMS historically has noted that a new technology is an appropriate candidate for an additional payment ``when it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.'' The commenter believed that this standard was created for medical devices because they dominated new technology of the time. The commenter recommended that this standard not be applied to regenerative medicine therapies because it believed these criteria are likely outside Congressional intent and inconsistent with some of the congressionally[dash]created FDA approval rules related to expedited approval programs. The commenter explained that the FDA defines congressionally-created ``breakthrough therapy'' and designates a therapy as such if it ``may demonstrate substantial improvement over existing therapies.'' In addition, the commenter stated that the Regenerative Medicine Advanced Therapy (RMAT) designation is granted to products that are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition, and if clinical evidence shows that it has the potential to meet an unmet medical need. Response: The FDA provides a number of different types of approvals and designations for devices, drugs, and other medical products. As required by section 1886(d)(5)(K)(viii) of the Act, CMS provides a mechanism for public input, before the publication of the proposed rule, regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of individuals entitled to benefits under Medicare Part A. We believe that the criteria explained in the September 2001 New Technology Final Rule (66 FR 46914) are consistent with the statutory requirements for evaluating new medical services and technologies and continue to be relevant to determining whether a new medical service or technology represents a substantial clinical improvement over existing technologies. If the technology has a status designated by the FDA that is similar to the standards and conditions required to demonstrate substantial clinical improvement under the new technology add-on payment criterion, or is designated as a breakthrough therapy, the technology should be able to demonstrate with evidence that it meets the new technology add-on payment substantial clinical improvement criterion. Finally, we do take FDA approvals into consideration in our evaluation and determination of approvals and denials of new technology add-on payment applications. Comment: One commenter stated that, for technologies without a special FDA designation, the substantial clinical improvement standard is an inappropriate clinical standard for the family of regenerative therapies because it creates a threshold that is too high and unrealistic to meet. The commenter believed that requiring a vague standard such as ``substantial clinical improvement'' ignores that innovation is achieved incrementally. The commenter asserted that by only approving new technologies that can achieve this standard for new technology add-on payments, CMS' policy is at cross-purposes with promoting innovation because many worthy technologies will not be approved by CMS, which denies the general population the opportunity of having the chance to learn and otherwise benefit from those technologies. The commenter also stated that CMS has questioned how substantial clinical improvement can be measured and achieved via small clinical trials with FDA approval. The commenter stated that it is concerned that this view sets a dangerous precedent by significantly undervaluing new transformative therapies. The commenter added that the FDA often only requires single-arm trials with small numbers of patients for these products because it is often not feasible for product developers to provide data on a large number of patients, especially those working in rare diseases as many regenerative and advanced therapeutic developers are. The commenter stated that, given the transformative nature of the products, this should not be a reason for CMS to deny a new medical service or technology add-on payment. Response: We believe that the September 2001 New Technology Final Rule (66 FR 46914) clearly defines the criteria that CMS uses to evaluate and determine if a new medical service or technology represents a substantial clinical improvement. In addition, we accept different types of data (for example, peer-reviewed articles, study results, or letters from major associations, among others) that demonstrate and support the substantial clinical improvement associated with the new medical service or technology's use. In addition to clinical data, we will consider any evidence that would support the conclusion of a substantial clinical improvement associated with a new medical service or technology. Therefore, we believe that we consider an appropriate range of evidence. Comment: One commenter stated that CMS should consider FDA approval and the associated evidence base leading to such an approval as a standard for meeting the substantial clinical improvement criterion. The commenter believed that additional factors such as improvements in patient quality of life, creation of long-term clinical efficiencies in care, reductions in the use of other healthcare services, or other such criteria should be incorporated into the CMS determination process for whether a new medical service or technology demonstrates or represents a substantial clinical improvement over existing technologies. The commenter believed that, by including these additional factors, CMS would align payment rates such that patients would have access to the highest standard of treatment for all transformative therapies representing a substantial clinical improvement for the patient populations they serve, and it would be recognized as such by the receipt of new technology add-on payments. Response: As stated earlier, one of the standards we use to determine whether a new medical service or technology represents a substantial clinical improvement over existing technologies is to evaluate whether the use of the device, drug, service, or technology significantly improves clinical outcomes for a patient population as compared to currently available treatments, and we provided examples of improved clinical outcomes in the September 2001 New Technology Final Rule (66 FR 46913 through 46914). Comment: One commenter encouraged CMS to ensure appropriate implementation of the substantial clinical improvement criterion under the applicable Medicare statutory provisions and regulations, as applied to radio pharma ceuticals and other nuclear medicine technologies that can lead to significant benefits and advances in the diagnosis and treatment of many diseases. The commenter recommended that CMS apply an appropriately flexible standard for purposes of assessing whether a technology represents a substantial clinical improvement over other existing, available therapies. The commenter asserted that a flexible standard for this purpose must include new products and new formulations of products that increase the safety or efficacy, or both, relative to current treatments. The commenter believed that failing to recognize a technology that enhances the safety and/or efficacy of existing options as both ``new'' and a [[Page 20280]] ``substantial clinical improvement'' over existing options would be a disservice to Medicare beneficiaries and to the mission of the Medicare program. The commenter encouraged CMS to give consideration to the importance of technologies that make radiotherapies safer, as well as those that lead to increased efficacy. The commenter explained that minimizing a patient's exposure to radiation, while also maximizing the effectiveness of the radiotherapy dose results in highly significant clinical improvements for patients, including in specific areas that CMS has expressly identified as relevant to the substantial clinical improvement criterion. Response: As stated earlier, we believe that the criteria explained in the September 2001 New Technology Final Rule (66 FR 46914) are consistent with the statutory requirements for evaluating new medical services and technologies and continue to be relevant to determining whether a new medical service or technology represents a substantial clinical improvement over existing technologies. We believe that it is important to maintain an open dialogue regarding the IPPS new technology add-on payment process, and we appreciate all of the commenters' input and recommendations. 3. ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and Technologies As discussed in the FY 2016 IPPS/LTCH final rule (80 FR 49434), the ICD-10-PCS includes a new section containing the new Section ``X'' codes, which began being used with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD-10-PCS Section ``X'' codes will be handled in the same manner as the decisions for all of the other ICD-10-PCS code changes. That is, proposals to create, delete, or revise Section ``X'' codes under the ICD-10-PCS structure will be referred to the ICD-10 Coordination and Maintenance Committee. In addition, several of the new medical services and technologies that have been, or may be, approved for new technology add-on payments may now, and in the future, be assigned a Section ``X'' code within the structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS website at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html, including guidelines for ICD-10-PCS Section ``X'' codes. We encourage providers to view the material provided on ICD-10-PCS Section ``X'' codes. 4. Proposed FY 2019 Status of Technologies Approved for FY 2018 Add-On Payments a. Defitelio[reg] (Defibrotide) Jazz Pharmaceuticals submitted an application for new technology add-on payments for FY 2017 for defibrotide (Defitelio[reg]), a treatment for patients diagnosed with hepatic veno-occlusive disease (VOD) with evidence of multiorgan dysfunction. VOD, also known as sinusoidal obstruction syndrome (SOS), is a potentially life- threatening complication of hematopoietic stem cell transplantation (HSCT), with an incidence rate of 8 percent to 15 percent. Diagnoses of VOD range in severity from what has been classically defined as a disease limited to the liver (mild) and reversible, to a severe syndrome associated with multi-organ dysfunction or failure and death. Patients treated with HSCT who develop VOD with multi-organ failure face an immediate risk of death, with a mortality rate of more than 80 percent when only supportive care is used. The applicant asserted that Defitelio[reg] improves the survival rate of patients diagnosed with VOD with multi-organ failure by 23 percent. Defitelio[reg] received Orphan Drug Designation for the treatment of VOD in 2003 and for the prevention of VOD in 2007. It has been available to patients as an investigational drug through an expanded access program since 2006. The applicant's New Drug Application (NDA) for Defitelio[reg] received FDA approval on March 30, 2016. The applicant confirmed that Defitelio[reg] was not available on the U.S. market as of the FDA NDA approval date of March 30, 2016. According to the applicant, commercial packaging could not be completed until the label for Defitelio[reg] was finalized with FDA approval, and that commercial shipments of Defitelio[reg] to hospitals and treatment centers began on April 4, 2016. Therefore, we agreed that, based on this information, the newness period for Defitelio[reg] begins on April 4, 2016, the date of its first commercial availability. The applicant received approval to use unique ICD-10-PCS procedure codes to describe the use of Defitelio[reg], with an effective date of October 1, 2016. The approved ICD-10PCS procedure codes are: XW03392 (Introduction of defibrotide sodium anticoagulant into peripheral vein, percutaneous approach); and XW04392 (Introduction of defibrotide sodium anticoagulant into central vein, percutaneous approach). After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for Defitelio[reg] and consideration of the public comments we received in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved Defitelio[reg] for new technology add-on payments for FY 2017 (81 FR 56906). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 25 mg/kg/day for a minimum of 21 days of treatment. The recommended dose is 6.25 mg/kg given as a 2-hour intravenous infusion every 6 hours. Dosing should be based on a patient's baseline body weight, which is assumed to be 70 kg for an average adult patient. All vials contain 200 mg at a cost of $825 per vial. Therefore, we determined that cases involving the use of the Defitelio[reg] technology would incur an average cost per case of $151,800 (70 kg adult x 25 mg/kg/day x 21 days = 36,750 mg per patient/200 mg vial = 184 vials per patient x $825 per vial = $151,800). Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment amount for a case involving the use of Defitelio[reg] is $75,900. Our policy is that a medical service or technology may continue to be considered ``new'' for purposes of new technology add-on payments within 2 or 3 years after the point at which data begin to become available reflecting the inpatient hospital code assigned to the new service or technology. Our practice has been to begin and end new technology add-on payments on the basis of a fiscal year, and we have generally followed a guideline that uses a 6-month window before and after the start of the fiscal year to determine whether to extend the new technology add-on payment for an additional fiscal year. In general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the fiscal year (70 FR 47362). With regard to the newness criterion for Defitelio[reg], we considered the beginning of the newness period to commence on the first day Defitelio[reg] was commercially available (April 4, 2016). Because the 3-year anniversary date of the entry of the Defitelio[reg] onto the U.S. market (April 4, 2019) will occur in the latter half of FY 2019, we are proposing to continue new technology add-on payments for this technology for FY 2019. We are [[Page 20281]] proposing that the maximum payment for a case involving Defitelio[reg] would remain at $75,900 for FY 2019. We are inviting public comments on our proposal to continue new technology add-on payments for Defitelio[reg] for FY 2019. b. EDWARDS INTUITY EliteTM Valve System (INTUITY) and LivaNova Perceval Valve (Perceval) Two manufacturers, Edwards Lifesciences and LivaNova, submitted applications for new technology add-on payments for FY 2018 for the INTUITY EliteTM Valve System (INTUITY) and the Perceval Valve (Perceval), respectively. Both of these technologies are prosthetic aortic valves inserted using surgical aortic valve replacement (AVR). Aortic valvular disease is relatively common, primarily manifested by aortic stenosis. Most aortic stenosis is due to calcification of the valve, either on a normal tri-leaflet valve or on a congenitally bicuspid valve. The resistance to outflow of blood is progressive over time, and as the size of the aortic orifice narrows, the heart must generate increasingly elevated pressures to maintain blood flow. Symptoms such as angina, heart failure, and syncope eventually develop, and portend a very serious prognosis. There is no effective medical therapy for aortic stenosis, so the diseased valve must be replaced or, less commonly, repaired. According to both applicants, the INTUITY valve and the Perceval valve are the first sutureless, rapid deployment aortic valves that can be used for the treatment of patients who are candidates for surgical AVR. Because potential cases representing patients who are eligible for treatment using the INTUITY and the Perceval aortic valve devices would group to the same MS-DRGs, and we believe that these devices are intended to treat the same or similar disease in the same or similar patient population, and are purposed to achieve the same therapeutic outcome using the same or similar mechanism of action, we determined these two devices are substantially similar to each other and that it was appropriate to evaluate both technologies as one application for new technology add-on payments under the IPPS. With respect to the newness criterion, the INTUITY valve received FDA approval on August 12, 2016, and was commercially available on the U.S. market on August 19, 2016. The Perceval valve received FDA approval on January 8, 2016, and was commercially available on the U.S. market on February 29, 2016. In accordance with our policy, we stated in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38120) that we believe it is appropriate to use the earliest market availability date submitted as the beginning of the newness period. Accordingly, for both devices, we stated that the beginning of the newness period is February 29, 2016, when the Perceval valve became commercially available. The ICD-10-PCS code approved to identify procedures involving the use of both devices when surgically implanted is ICD-10-PCS code X2RF032 (Replacement of aortic valve using zooplastic tissue, rapid deployment technique, open approach, new technology group 2). After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for the INTUITY and Perceval valves and consideration of the public comments we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we approved the INTUITY and Perceval valves for new technology add-on payments for FY 2018 (82 FR 38125). We stated that we believed that the use of a weighted-average of the cost of the standard valves based on the projected number of cases involving each technology to determine the maximum new technology add-on payment was most appropriate. To compute the weighted-cost average, we summed the total number of projected cases for each of the applicants, which equaled 2,429 cases (1,750 plus 679). We then divided the number of projected cases for each of the applicants by the total number of cases, which resulted in the following case-weighted percentages: 72 percent for the INTUITY and 28 percent for the Perceval valve. We then multiplied the cost per case for the manufacturer specific valve by the case-weighted percentage (0.72 * $12,500 = $9,005.76 for INTUITY and 0.28 * $11,500 = $3,214.70 for the Perceval valve). This resulted in a case-weighted average cost of $12,220.46 for the valves. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the INTUITY or Perceval valves is $6,110.23 for FY 2018. With regard to the newness criterion for the INTUITY and Perceval valves, we considered the newness period for the INTUITY and Perceval valves to begin February 29, 2016. As discussed previously in this section, in general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the upcoming fiscal year. Because the 3-year anniversary date of the entry of the technology onto the U.S. market (February 29, 2019) will occur in the first half of FY 2019, we are proposing to discontinue new technology add-on payments for the INTUITY and Perceval valves for FY 2019. We are inviting public comments on our proposal to discontinue new technology add-on payments for the INTUITY and Perceval valves. c. GORE[reg] EXCLUDER[reg] Iliac Branch Endoprosthesis (Gore IBE Device) W. L. Gore and Associates, Inc. submitted an application for new technology add-on payments for the GORE[reg] EXCLUDER[reg] Iliac Branch Endoprosthesis (GORE IBE device) for FY 2017. The device consists of two components: The Iliac Branch Component (IBC) and the Internal Iliac Component (IIC). The applicant indicated that each endoprosthesis is pre-mounted on a customized delivery and deployment system allowing for controlled endovascular delivery via bilateral femoral access. According to the applicant, the device is designed to be used in conjunction with the GORE[reg] EXCLUDER[reg] AAA Endoprosthesis for the treatment of patients requiring repair of common iliac or aortoiliac aneurysms. When deployed, the GORE IBE device excludes the common iliac aneurysm from systemic blood flow, while preserving blood flow in the external and internal iliac arteries. With regard to the newness criterion, the applicant received pre- market FDA approval of the GORE IBE device on February 29, 2016. The following procedure codes describe the use of this technology: 04VC0EZ (Restriction of right common iliac artery with branched or fenestrated intraluminal device, one or two arteries, open approach); 04VC3EZ (Restriction of right common iliac artery with branched or fenestrated intraluminal device, one or two arteries, percutaneous approach); 04VC4EZ (Restriction of right common iliac artery with branched or fenestrated intraluminal device, one or two arteries, percutaneous approach); 04VD0EZ (Restriction of left common iliac artery with branched or fenestrated intraluminal device, one or two arteries, open approach); 04VD3EZ (Restriction of left common iliac artery with branched or fenestrated intraluminal device, one or two arteries, percutaneous approach); 04VD4EZ (Restriction of left common iliac artery with branched or fenestrated [[Page 20282]] intraluminal device, one or two arteries, percutaneous endoscopic approach). After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for the GORE IBE device and consideration of the public comments we received in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved the GORE IBE device for new technology add-on payments for FY 2017 (81 FR 56909). With the new technology add-on payment application, the applicant indicated that the total operating cost of the GORE IBE device is $10,500. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the GORE IBE device is $5,250. With regard to the newness criterion for the GORE IBE device, we considered the beginning of the newness period to commence when the GORE IBE device received FDA approval on February 29, 2016. As discussed previously in this section, in general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the upcoming fiscal year. Because the 3-year anniversary date of the entry of the GORE IBE device onto the U.S. market (February 28, 2019) will occur in the first half of FY 2019, we are proposing to discontinue new technology add-on payments for this technology for FY 2019. We are inviting public comments on our proposal to discontinue new technology add-on payments for the GORE IBE device. d. Idarucizumab Boehringer Ingelheim Pharmaceuticals, Inc. submitted an application for new technology add-on payments for FY 2017 for Idarucizumab, a product developed as an antidote to reverse the effects of PRADAXAR (Dabigatran), which is also manufactured by Boehringer Ingelheim Pharmaceuticals, Inc. Dabigatran is an oral direct thrombin inhibitor currently indicated: (1) To reduce the risk of stroke and systemic embolism in patients who have been diagnosed with nonvalvular atrial fibrillation (NVAF); (2) for the treatment of deep venous thrombosis (DVT) and pulmonary embolism (PE) in patients who have been administered a parenteral anticoagulant for 5 to 10 days; (3) to reduce the risk of recurrence of DVT and PE in patients who have been previously treated; and (4) for the prophylaxis of DVT and PE in patients who have undergone hip replacement surgery. Currently, unlike the anticoagulant Warfarin, there is no specific way to reverse the anticoagulant effect of Dabigatran in the event of a major bleeding episode. Idarucizumab is a humanized fragment antigen binding (Fab) molecule, which specifically binds to Dabigatran to deactivate the anticoagulant effect, thereby allowing thrombin to act in blood clot formation. The applicant stated that Idarucizumab represents a new pharmacologic approach to neutralizing the specific anticoagulant effect of Dabigatran in emergency situations. Idarucizumab was approved by the FDA on October 16, 2015. Idarucizumab is indicated for the use in the treatment of patients who have been administered Pradaxa when reversal of the anticoagulant effects of dabigatran is needed for emergency surgery or urgent medical procedures or in life-threatening or uncontrolled bleeding. The applicant was granted approval to use unique ICD-10-PCS procedure codes that became effective October 1, 2016, to describe the use of this technology. The approved ICD-10-PCS procedure codes are: XW03331 (Introduction of Idarucizumab, Dabigatran reversal agent into peripheral vein, percutaneous approach, new technology group 1); and XW04331 (Introduction of Idarucizumab, Dabigatran reversal agent into central vein, percutaneous approach, new technology group 1). After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for Idarucizumab and consideration of the public comments we received in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved Idarucizumab for new technology add-on payments for FY 2017 (81 FR 56897). With the new technology add-on payment application, the applicant indicated that the total operating cost of Idarucizumab is $3,500. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving Idarucizumab is $1,750. With regard to the newness criterion for Idarucizumab, we considered the beginning of the newness period to commence when Idarucizumab was approved by the FDA on October 16, 2015. As discussed previously in this section, in general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the upcoming fiscal year. Because the 3-year anniversary date of the entry of Idarucizumab onto the U.S. market will occur in the first half of FY 2019 (October 15, 2018), we are proposing to discontinue new technology add-on payments for this technology for FY 2019. We are inviting public comments on our proposal to discontinue new technology add-on payments for Idarucizumab. e. Ustekinumab (Stelara[reg]) Janssen Biotech submitted an application for new technology add-on payments for the Stelara[reg] induction therapy for FY 2018. Stelara[reg] received FDA approval as an intravenous (IV) infusion treatment of Crohn's disease (CD) on September 23, 2016, which added a new indication for the use of Stelara[reg] and route of administration for this monoclonal antibody. IV infusion of Stelara[reg] is indicated for the treatment of adult patients (18 years and older) diagnosed with moderately to severely active CD who have: (1) Failed or were intolerant to treatment using immunomodulators or corticosteroids, but never failed a tumor necrosis factor (TNF) blocker; or (2) failed or were intolerant to treatment using one or more TNF blockers. Stelara[reg] for IV infusion has only one purpose, induction therapy. Stelara[reg] must be administered intravenously by a health care professional in either an inpatient hospital setting or an outpatient hospital setting. Stelara[reg] for IV infusion is packaged in single 130 mg vials. Induction therapy consists of a single IV infusion dose using the following weight-based dosing regimen: Patients weighing less than (<)55 kg are administered 260 mg of Stelara[reg] (2 vials); patients weighing more than (>)55 kg, but less than (<)85 kg are administered 390 mg of Stelara[reg] (3 vials); and patients weighing more than (>)85 kg are administered 520 mg of Stelara[reg] (4 vials). An average dose of Stelara[reg] administered through IV infusion is 390 mg (3 vials). Maintenance doses of Stelara[reg] are administered at 90 mg, subcutaneously, at 8-week intervals and may occur in the outpatient hospital setting. CD is an inflammatory bowel disease of unknown etiology, characterized by transmural inflammation of the gastrointestinal (GI) tract. Symptoms of CD may include fatigue, prolonged diarrhea with or without bleeding, abdominal pain, weight loss and fever. CD can affect any part of the GI tract [[Page 20283]] including the mouth, esophagus, stomach, small intestine, and large intestine. Conventional pharmacologic treatments of CD include antibiotics, mesalamines, corticosteroids, immunomodulators, tumor necrosis alpha (TNF[alpha]) inhibitors, and anti-integrin agents. Surgery may be necessary for some patients diagnosed with CD in which conventional therapies have failed. After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for Stelara[reg] and consideration of the public comments we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we approved Stelara[reg] for new technology add-on payments for FY 2018 (82 FR 38129). Cases involving Stelara[reg] that are eligible for new technology add-on payments are identified by ICD-10-PCS procedure code XW033F3 (Introduction of other New Technology therapeutic substance into peripheral vein, percutaneous approach, new technology group 3). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 390 mg (3 vials) at a hospital acquisition cost of $1,600 per vial (for a total of $4,800). Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS- DRG payment for the case. As a result, the maximum new technology add- on payment amount for a case involving the use of Stelara[reg] is $2,400. With regard to the newness criterion for Stelara[reg], we considered the beginning of the newness period to commence when Stelara[reg] received FDA approval as an IV infusion treatment of Crohn's disease (CD) on September 23, 2016. Because the 3-year anniversary date of the entry of Stelara[reg] onto the U.S. market (September 23, 2019) will occur after FY 2019, we are proposing to continue new technology add-on payments for this technology for FY 2019. We are proposing that the maximum payment for a case involving Stelara[reg] would remain at $2,400 for FY 2019. We are inviting public comments on our proposal to continue new technology add-on payments for Stelara[reg] for FY 2019. f. Vistogard\TM\ (Uridine Triacetate) BTG International Inc. submitted an application for new technology add-on payments for the VistogardTM for FY 2017. VistogardTM was developed as an emergency treatment for Fluorouracil toxicity. Chemotherapeutic agent 5-fluorouracil (5-FU) is used to treat specific solid tumors. It acts upon deoxyribonucleic acid (DNA) and ribonucleic acid (RNA) in the body, as uracil is a naturally occurring building block for genetic material. Fluorouracil is a fluorinated pyrimidine. As a chemotherapy agent, Fluorouracil is absorbed by cells and causes the cell to metabolize into byproducts that are toxic and used to destroy cancerous cells. According to the applicant, the byproducts fluorodoxyuridine monophosphate (F-dUMP) and floxuridine triphosphate (FUTP) are believed to do the following: (1) Reduce DNA synthesis; (2) lead to DNA fragmentation; and (3) disrupt RNA synthesis. Fluorouracil is used to treat a variety of solid tumors such as colorectal, head and neck, breast, and ovarian cancer. With different tumor treatments, different dosages, and different dosing schedules, there is a risk for toxicity in these patients. Patients may suffer from fluorouracil toxicity/death if 5-FU is delivered in slight excess or at faster infusion rates than prescribed. The cause of overdose can happen for a variety of reasons including: Pump malfunction, incorrect pump programming or miscalculated doses, and accidental or intentional ingestion. VistogardTM is an antidote to Fluorouracil toxicity and is a prodrug of uridine. Once the drug is metabolized into uridine, it competes with the toxic byproduct FUTP in binding to RNA, thereby reducing the impact FUTP has on cell death. With regard to the newness criterion, VistogardTM received FDA approval on December 11, 2015. However, as discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56910), due to the delay in VistogardTM's commercial availability, we considered the newness period to begin March 2, 2016, instead of December 11, 2015. The applicant noted that the VistogardTM is the first FDA[dash]approved antidote used to reverse fluorouracil toxicity. The applicant submitted a request for a unique ICD-10-PCS procedure code and was granted approval for the following procedure code: XW0DX82 (Introduction of Uridine Triacetate into Mouth and Pharynx, External Approach, new technology group 2). The new code became effective on October 1, 2016. After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for VistogardTM and consideration of the public comments we received in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved VistogardTM for new technology add-on payments for FY 2017 (81 FR 56912). With the new technology add-on payment application, the applicant stated that the total operating cost of VistogardTM is $75,000. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving VistogardTM is $37,500. With regard to the newness criterion for the VistogardTM, we considered the beginning of the newness period to commence upon the entry of VistogardTM onto the U.S. market on March 2, 2016. As discussed previously in this section, in general, we extend new technology add-on payments for an additional year only if the 3-year anniversary date of the product's entry onto the U.S. market occurs in the latter half of the upcoming fiscal year. Because the 3-year anniversary date of the entry of the VistogardTM onto the U.S. market (March 2, 2019) will occur in the first half of FY 2019, we are proposing to discontinue new technology add-on payments for this technology for FY 2019. We are inviting public comments on our proposal to discontinue new technology add-on payments for the VistogardTM. g. Bezlotoxumab (ZINPLAVA\TM\) Merck & Co., Inc. submitted an application for new technology add- on payments for ZINPLAVATM for FY 2018. ZINPLAVATM is indicated to reduce recurrence of Clostridium difficile infection (CDI) in adult patients who are receiving antibacterial drug treatment for a diagnosis of CDI who are at high risk for CDI recurrence. ZINPLAVATM is not indicated for the treatment of the presenting episode of CDI and is not an antibacterial drug. Clostridium difficile (C-diff) is a disease-causing anaerobic, spore forming bacteria that can affect the gastrointestinal (GI) tract. Some people carry the C-diff bacterium in their intestines, but never develop symptoms of an infection. The difference between asymptomatic colonization and pathogenicity is caused primarily by the production of an enterotoxin (Toxin A) and/or a cytotoxin (Toxin B). The presence of either or both toxins can lead to symptomatic CDI, which is defined as the acute onset of diarrhea with a documented infection with toxigenic C-diff, or the presence of either toxin A or B. The GI tract contains millions of bacteria, commonly referred to as ``normal flora'' or ``good [[Page 20284]] bacteria,'' which play a role in protecting the body from infection. Antibiotics can kill these good bacteria and allow the C-diff bacteria to multiply and release toxins that damage the cells lining the intestinal wall, resulting in a CDI. CDI is a leading cause of hospital-associated gastrointestinal illnesses. Persons at increased risk for CDI include people who are treated with current or recent antibiotic use, people who have encountered current or recent hospitalization, people who are older than 65 years, immunocompromised patients, and people who have recently had a diagnosis of CDI. CDI symptoms include, but are not limited to, diarrhea, abdominal pain, and fever. CDI symptoms range in severity from mild (abdominal discomfort, loose stools) to severe (profuse, watery diarrhea, severe pain, and high fevers). Severe CDI can be life[dash]threatening and, in rare cases, can cause bowel rupture, sepsis and organ failure. CDI is responsible for 14,000 deaths per year in the United States. C-diff produces two virulent, pro-inflammatory toxins, Toxin A and Toxin B, which target host colonocytes (that is, large intestine endothelial cells) by binding to endothelial cell surface receptors via combined repetitive oligopeptide (CROP) domains. These toxins cause the release of inflammatory cytokines leading to intestinal fluid secretion and intestinal inflammation. The applicant asserted that ZINPLAVATM targets Toxin B sites within the CROP domain rather than the C-diff organism itself. According to the applicant, by targeting C-diff Toxin B, ZINPLAVATM neutralizes Toxin B, prevents large intestine endothelial cell inflammation, symptoms associated with CDI, and reduces the recurrence of CDI. ZINPLAVATM received FDA approval on October 21, 2016, for reduction of recurrence of CDI in patients receiving antibacterial drug treatment for CDI and who are at high risk of CDI recurrence. ZINPLAVATM became commercially available on February 10, 2017. Therefore, the newness period for ZINPLAVATM began on February 10, 2017. The applicant submitted a request for a unique ICD- 10-PCS procedure code and was granted approval for the following procedure codes: XW033A3 (Introduction of bezlotoxumab monoclonal antibody, into peripheral vein, percutaneous approach, new technology group 3) and XW043A3 (Introduction of bezlotoxumab monoclonal antibody, into central vein, percutaneous approach, new technology group 3). After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for ZINPLAVATM and consideration of the public comments we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we approved ZINPLAVATM for new technology add-on payments for FY 2018 (82 FR 38119). With the new technology add-on payment application, the applicant estimated that the average Medicare beneficiary would require a dosage of 10 mg/kg of ZINPLAVATM administered as an IV infusion over 60 minutes as a single dose. According to the applicant, the WAC for one dose is $3,800. Under Sec. 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment amount for a case involving the use of ZINPLAVATM is $1,900. With regard to the newness criterion for ZINPLAVATM, we considered the beginning of the newness period to commence on February 10, 2017. Because the 3-year anniversary date of the entry of ZINPLAVATM onto the U.S. market (February 10, 2020) will occur after FY 2019, we are proposing to continue new technology add-on payments for this technology for FY 2019. We are proposing that the maximum payment for a case involving ZINPLAVATM would remain at $1,900 for FY 2019. We are inviting public comments on our proposal to continue new technology add-on payments for ZINPLAVATM for FY 2019. 5. FY 2019 Applications for New Technology Add-On Payments We received 15 applications for new technology add-on payments for FY 2019. In accordance with the regulations under Sec. 412.87(c), applicants for new technology add[dash]on payments must have FDA approval or clearance by July 1 of the year prior to the beginning of the fiscal year that the application is being considered. A discussion of the 15 applications is presented below. a. KYMRIAH\TM\ (Tisagenlecleucel) and YESCARTA\TM\ (Axicabtagene Ciloleucel) Two manufacturers, Novartis Pharmaceuticals Corporation and Kite Pharma, Inc. submitted separate applications for new technology add-on payments for FY 2019 for KYMRIAHTM (tisagenlecleucel) and YESCARTATM (axicabtagene ciloleucel), respectively. Both of these technologies are CD-19-directed T[dash]cell immunotherapies used for the purposes of treating patients with aggressive variants of non[dash]Hodgkin lymphoma (NHL). We note that KYMRIAHTM was approved by the FDA on August 30, 2017, for use in the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse, which is a different indication and patient population than the new indication and targeted patient population for which the applicant submitted a request for approval of new technology add-on payments for FY 2019. Specifically, and as summarized in the following table, the new indication for which Novartis Pharmaceuticals Corporation is requesting approval for new technology add-on payments for KYMRIAHTM is as an autologous T-cell immune therapy indicated for use in the treatment of patients with relapsed/refractory (R/R) Diffuse Large B[dash]Cell Lymphoma (DLBCL) not eligible for autologous stem cell transplant (ASCT). As of the time of the development of this proposed rule, Novartis Pharmaceuticals Corporation has been granted a Breakthrough Therapy designation by the FDA, and is awaiting FDA approval for the use of KYMRIAHTM under this new indication. We also note that Kite Pharma, Inc. previously submitted an application for approval for new technology add-on payments for FY 2018 for KTE-C19 for use as an autologous T[dash]cell immune therapy in the treatment of adult patients with R/R aggressive B-cell NHL who are ineligible for ASCT. However, Kite Pharma, Inc. withdrew its application for KTE-C19 prior to publication of the FY 2018 IPPS/LTCH PPS final rule. Kite Pharma, Inc. has resubmitted an application for approval for new technology add-on payments for FY 2019 for KTE-C19 under a new name, YESCARTATM, for the same indication. Kite Pharma, Inc. received FDA approval for this original indication and treatment use of YESCARTATM on October 18, 2017. (We refer readers to the following table for a comparison of the indications and FDA approvals for KYMRIAHTM and YESCARTATM.) [[Page 20285]] Comparison of Indication and FDA Approval for KYMRIAHTM and YESCARTATM ---------------------------------------------------------------------------------------------------------------- Description of indication for which new FY 2019 applicant technology name technology add-on payments are being FDA approval status requested ---------------------------------------------------------------------------------------------------------------- KYMRIAHTM (Novartis Pharmaceuticals KYMRIAHTM: Autologous T-cell immune Breakthrough Therapy Corporation). therapy indicated for use in the designation granted by treatment of patients with relapsed/ FDA; FDA approval refractory (R/R) Diffuse Large B Cell pending. Lymphoma (DLBCL) not eligible for autologous stem cell transplant (ASCT). YESCARTATM (Kite Pharma, Inc.).......... YESCARTATM: Autologous T-cell immune FDA approval received 10/ therapy indicated for use in the 18/2017. treatment of adult patients with R/R large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, primary mediastinal large B-cell, high grade B- cell lymphoma, and DLBCL arising from follicular lymphoma. ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- Technology approved for other FDA approval of other indications Description of other indication indication ---------------------------------------------------------------------------------------------------------------- KYMRIAHTM (Novartis Pharmaceuticals KYMRIAHTM: CD-19[dash]directed T-cell FDA approval received 8/30/ Corporation). immunotherapy indicated for the use in 2017. the treatment of patients up to 25 years of age with B-cell precursor ALL that is refractory or in second or later relapse. YESCARTATM (Kite Pharma, Inc.).......... None...................................... N/A. ---------------------------------------------------------------------------------------------------------------- We note that procedures involving the KYMRIAHTM and YESCARTATM therapies are both reported using the following ICD-10-PCS procedure codes: XW033C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3); and XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3). We further note that, in section II.F.2.d. of the preamble of this proposed rule, we are proposing to assign cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-DRG 016 (Autologous Bone Marrow Transplant with CC/MCC) for FY 2019. We refer readers to section II.F.2.d. of this proposed rule for a complete discussion of the proposed assignment of cases reporting these procedure codes to Pre-MDC MS-DRG 016, which also includes a proposal to revise the title of MS-DRG 016 to reflect the proposed assignments. According to the applicants, patients with NHL represent a heterogeneous group of B-cell malignancies with varying patterns of behavior and response to treatment. B-cell NHL can be classified as either an aggressive, or indolent disease, with aggressive variants including DLBCL; primary mediastinal large B[dash]cell lymphoma (PMBCL); and transformed follicular lymphoma (TFL). Within diagnoses of NHL, DLBCL is the most common subtype of NHL, accounting for approximately 30 percent of patients who have been diagnosed with NHL, and survival without treatment is measured in months.\4\ Despite improved therapies, only 50 to 70 percent of newly diagnosed patients are cured by standard first-line therapy alone. Furthermore, R/R disease continues to carry a poor prognosis because only 50 percent of patients are eligible for autologous stem cell transplantation (ASCT) due to advanced age, poor functional status, comorbidities, inadequate social support for recovery after ASCT, and provider or patient choice.5 6 7 8 Of the roughly 50 percent of patients that are eligible for ASCT, nearly 50 percent fail to respond to prerequisite salvage chemotherapy and cannot undergo ASCT.9 10 11 12 Second-line chemotherapy regimens studied to date include rituximab, ifosfamide, carboplatin and etoposide (R-ICE), and rituximab, dexamethasone, cytarabine, and cisplatin (R-DHAP), followed by consolidative high-dose therapy (HDT)/ASCT. Both regimens offer similar overall response rates (ORR) of 51 percent with 1 in 4 patients achieving long-term complete response (CR) at the expense of increased toxicity.\13\ Second-line treatment with dexamethasone, high- dose cytarabine, and cisplatin (DHAP) is considered a standard chemotherapy regimen, but is associated with substantial treatment- related toxicity.\14\ For patients who experience disease progression during or after primary treatment, the combination of HDT/ASCT remains the only curative option.\15\ According to the applicants, [[Page 20286]] given the modest response to second[dash]line therapy and/or HDT/ASCT, the population of patients with the highest unmet need is those with chemorefractory disease, which include DLBCL, PMBCL, and TFL. These patients are defined as either progressive disease (PD) as best response to chemotherapy, stable disease as best response following greater than or equal to 4 cycles of first-line or 2 cycles of later- line therapy, or relapse within less than or equal to 12 months of ASCT.\16\ Based on these definitions and available data from a multi[dash]center retrospective study (SCHOLAR-1), chemorefractory disease treated with current and historical standards of care has consistently poor outcomes with an ORR of 26 percent and median overall survival (OS) of 6.3 months.\17\ --------------------------------------------------------------------------- \4\ Chaganti, S., et al., ``Guidelines for the management of diffuse large B-cell lymphoma,'' BJH Guideline, 2016. Available at: www.bit.do/bsh-guidelines. \5\ Matasar, M., et al., ``Ofatumumab in combination with ICE or DHAP chemotherapy in relapsed or refractory intermediate grade B- cell lymphoma,'' Blood, 25 July 2013, vol. 122, No 4. \6\ Hitz, F., et al., ``Outcome of patients with chemotherapy refractory and early progressive diffuse large B cell lymphoma after R-CHOP treatment,'' Blood (American Society of Hematology (ASH) annual meeting abstracts, poster session), 2010, pp. 116 (abstract #1751). \7\ Telio, D., et al., ``Salvage chemotherapy and autologous stem cell transplant in primary refractory diffuse large B-cell lymphoma: outcomes and prognostic factors,'' Leukemia & Lymphoma, 2012, vol. 53(5), pp. 836-41. \8\ Moskowitz, C.H., et al., ``Ifosfamide, carboplatin, and etoposide: a highly effective cytoreduction and peripheral-blood progenitor-cell mobilization regimen for transplant-eligible patients with non-Hodgkin's lymphoma,'' Journal of Clinical Oncology, 1999, vol. 17(12), pp. 3776-85. \9\ Crump, M., et al., ``Outcomes in patients with refractory aggressive diffuse large B-cell lymphoma (DLBCL): results from the international scholar-1 study,'' Abstract and poster presented at Pan Pacific Lymphoma Conference (PPLC), July 2016. \10\ Gisselbrecht, C., et al., ``Results from SCHOLAR-1: outcomes in patients with refractory aggressive diffuse large B-cell lymphoma (DLBCL),'' Oral presentation at European Hematology Association conference, July 2016. \11\ Iams, W., Reddy, N., ``Consolidative autologous hematopoietic stem-cell transplantation in first remission for non- Hodgkin lymphoma: current indications and future perspective,'' Ther Adv Hematol, 2014, vol. 5(5), pp. 153-67. \12\ Kantoff, P.W., et al., ``Sipuleucel-T immunotherapy for castration-resistant prostate cancer,'' N Engl J Med, 2010, vol. 363, pp. 411-422. \13\ Rovira, J., Valera, A., Colomo, L., et al., ``Prognosis of patients with diffuse large B cell lymphoma not reaching complete response or relapsing after frontline chemotherapy or immunochemotherapy,'' Ann Hematol, 2015, vol. 94(5), pp. 803-812. \14\ Swerdlow, S.H., Campo, E., Pileri, S.A., et al., ``The 2016 revision of the World Health Organization classification of lymphoid neoplasms,'' Blood, 2016, vol. 127(20), pp. 2375-2390. \15\ Koristka, S., Cartellieri, M., Arndt, C., et al., ``Tregs activated by bispecific antibodies: killers or suppressors?,'' OncoImmunology, 2015, vol. (3):e994441, DOI: 10.4161/ 2162402X.2014.994441. \16\ Crump, M., Neelapu, S.S., Farooq, U., et al., ``Outcomes in refractory diffuse large B-cell lymphoma: results from the international SCHOLAR-1 study,'' Blood, Published online: August 3, 2017, doi: 10.1182/blood-2017-03-69620. \17\ Ibid. --------------------------------------------------------------------------- According to Novartis Pharmaceuticals Corporation, upon FDA approval of the additional indication, KYMRIAHTM will also be used for the treatment of patients with R/R DLBCL who are not eligible for ASCT. Novartis Pharmaceuticals Corporation describes KYMRIAHTM as a CD[dash]19[dash]directed genetically modified autologous T[dash]cell immunotherapy which utilizes peripheral blood T[dash]cells, which have been reprogrammed with a transgene encoding, a chimeric antigen receptor (CAR), to identify and eliminate CD-19- expressing malignant and normal cells. Upon binding to CD-19-expressing cells, the CAR transmits a signal to promote T-cell expansion, activation, target cell elimination, and persistence of KYMRIAHTM cells. The transduced T[dash]cells expand in vivo to engage and eliminate CD-19-expressing cells and may exhibit immunological endurance to help support long-lasting remission. 18 19 20 21 According to the applicant, no other agent currently used in the treatment of patients with R/R DLBCL employs gene modified autologous cells to target and eliminate malignant cells. --------------------------------------------------------------------------- \18\ KYMRIAHTM [prescribing information], East Hanover, NJ: Novartis Pharmaceuticals Corp, 2017. \19\ Kalos, M., Levine, B.L., Porter, D.L., et al., ``T[dash]cells with chimeric antigen receptors have potent antitumor effects and can establish memory in patients with advanced leukemia,'' Sci Transl Med, 2011, vol. 3(95), pp, 95ra73. \20\ FDA Briefing Document. Available at: https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/OncologicDrugsAdvisoryCommittee/UCM566168.pdf. \21\ Wang, X., Riviere, I., ``Clinical manufacturing of CART cells: foundation of a promising therapy,'' Mol Ther Oncolytics, 2016, vol. 3, pp. 16015. --------------------------------------------------------------------------- According to Kite Pharma, Inc., YESCARTATM is indicated for the use in the treatment of adult patients with R/R large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, PMBCL, high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma. YESCARTA is not indicated for the treatment of patients with primary central nervous system lymphoma. The applicant for YESCARTATM described the technology as a CD- 19-directed genetically modified autologous T[dash]cell immunotherapy that binds to CD-19-expressing cancer cells and normal B[dash]cells. These normal B[dash]cells are considered to be non-essential tissue, as they are not required for patient survival. According to the applicant, studies demonstrated that following anti-CD-19 CAR T[dash]cell engagement with CD-19-expressing target cells, the CD-28 and CD-3-zeta co-stimulatory domains activate downstream signaling cascades that lead to T-cell activation, proliferation, acquisition of effector functions and secretion of inflammatory cytokines and chemokines. This sequence of events leads to the elimination of CD-19-expressing tumor cells. Both applicants expressed that their technology is the first treatment of its kind for the targeted adult population. In addition, both applicants asserted that their technology is new and does not use a substantially similar mechanism of action or involve the same treatment indication as any other currently FDA-approved technology. We note that, at the time each applicant submitted its new technology add- on payment application, neither technology had received FDA approval for the indication for which the applicant requested approval for the new technology add-on payment; KYMRIAHTM has been granted Breakthrough Therapy designation for the use in the treatment of patients for the additional indication that is the subject of its new technology add-on application and, as of the time of the development of this proposed rule, is awaiting FDA approval. However, as stated earlier, YESCARTATM received FDA approval for use in the treatment of patients and the indication stated in its application on October 18, 2017, after each applicant submitted its new technology add-on payment application. As noted, according to both applicants, KYMRIAHTM and YESCARTATM are the first CAR T immunotherapies of their kind. Because potential cases representing patients who may be eligible for treatment using KYMRIAHTM and YESCARTATM would group to the same MS-DRGs (because the same ICD-10-CM diagnosis codes and ICD-10-PCS procedures codes are used to report treatment using either KYMRIAHTM or YESCARTATM), and we believe that these technologies are intended to treat the same or similar disease in the same or similar patient population, and are purposed to achieve the same therapeutic outcome using the same or similar mechanism of action, we disagree with the applicants and believe these two technologies are substantially similar to each other and that it is appropriate to evaluate both technologies as one application for new technology add-on payments under the IPPS. For these reasons, and as discussed further below, we would intend to make one determination regarding approval for new technology add-on payments that would apply to both applications, and in accordance with our policy, would use the earliest market availability date submitted as the beginning of the newness period for both KYMRIAHTM and YESCARTATM. We are inviting public comments on whether KYMRIAHTM and YESCARTATM are substantially similar. With respect to the newness criterion, as previously stated, YESCARTATM received FDA approval on October 18, 2017. According to the applicant, prior to FDA approval, YESCARTATM had been available in the U.S. only on an investigational basis under an investigational new drug (IND) application. For the same IND patient population, and until commercial availability, YESCARTATM was available under an Expanded Access Program (EAP) which started on May 17, 2017. The applicant stated that it did not recover any costs associated with the EAP. According to the applicant, the first commercial shipment of YESCARTATM was received by a certified treatment center on November 22, 2017. As previously indicated, KYMRIAHTM is not currently approved by the FDA for use in the treatment of patients with R/R DLBCL that are not eligible for ASCT; the technology has been granted Breakthrough Therapy designation by the FDA. The applicant anticipates receipt of FDA approval to occur in the second quarter of 2018. We believe that, in accordance with our policy, if these technologies are substantially similar to each other, it is appropriate to use the earliest market availability date submitted as the beginning of the newness period for both technologies. Therefore, based on [[Page 20287]] our policy, with regard to both technologies, if the technologies are approved for new technology add-on payments, we believe that the beginning of the newness period would be November 22, 2017. We previously stated that, because we believe these two technologies are substantially similar to each other, we believe it is appropriate to evaluate both technologies as one application for new technology add-on payments under the IPPS. The applicants submitted separate cost and clinical data, and we reviewed and discuss each set of data separately. However, we would intend to make one determination regarding new technology add-on payments that would apply to both applications. We believe that this is consistent with our policy statements in the past regarding substantial similarity. Specifically, we have noted that approval of new technology add-on payments would extend to all technologies that are substantially similar (66 FR 46915), and we believe that continuing our current practice of extending new technology add-on payments without a further application from the manufacturer of the competing product, or a specific finding on cost and clinical improvement if we make a finding of substantial similarity among two products is the better policy because we avoid-- Creating manufacturer-specific codes for substantially similar products; Requiring different manufacturers of substantially similar products to submit separate new technology add-on payment applications; Having to compare the merits of competing technologies on the basis of substantial clinical improvement; and Bestowing an advantage to the first applicant representing a particular new technology to receive approval (70 FR 47351). If substantially similar technologies are submitted for review in different (and subsequent) years, rather than the same year, we would evaluate and make a determination on the first application and apply that same determination to the second application. However, because the technologies have been submitted for review in the same year, and because we believe they are substantially similar to each other, we believe that it is appropriate to consider both sets of cost data and clinical data in making a determination, and we do not believe that it is possible to choose one set of data over another set of data in an objective manner. We are inviting public comments on our proposal to evaluate KYMRIAHTM and YESCARTATM as one application for new technology add-on payments under the IPPS. As stated earlier, we believe that KYMRIAHTM and YESCARTATM are substantially similar to each other for purposes of analyzing these two applications as one application. We also need to determine whether KYMRIAHTM and YESCARTATM are substantially similar to existing technologies prior to their approval by the FDA and their release onto the U.S. market. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With respect to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant for KYMRIAHTM asserted that its unique design, which utilizes features that were not previously included in traditional cytotoxic chemotherapeutic or immunotherapeutic agents, constitutes a new mechanism of action. The deployment mechanism allows for identification and elimination of CD-19-expressing malignant and non-malignant cells, as well as possible immunological endurance to help support long-lasting remission.22 23 24 25 The applicant provided context regarding how KYMRIAHTM's unique design contributes to a new mechanism of action by explaining that peripheral blood T-cells, which have been reprogrammed with a transgene encoding, a CAR, identify and eliminate CD[dash]19-expressing malignant and nonmalignant cells. As explained by the applicant, upon binding to CD-19-expressing cells, the CAR transmits a signal to promote T-cell expansion, activation, target cell elimination, and persistence of KYMRIAHTM cells.26 27 28 According to the applicant, transduced T[dash]cells expand in vivo to engage and eliminate CD-19-expressing cells and may exhibit immunological endurance to help support long-lasting remission.29 30 31 --------------------------------------------------------------------------- \22\ KYMRIAH [prescribing information]. East Hanover, NJ: Novartis Pharmaceuticals Corp; 2017. \23\ Kalos, M., Levine, B.L., Porter, D.L., et al., ``T cells with chimeric antigen receptors have potent antitumor effects and can establish memory in patients with advanced leukemia,'' Sci Transl Med, 2011, vol. 3(95), pp. 95ra73. \24\ FDA Briefing Document. Available at: https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/OncologicDrugsAdvisoryCommittee/UCM566168.pdf. \25\ Maude, S.L., Frey, N., Shaw, P.A., et al., ``Chimeric antigen receptor T cells for sustained remissions in leukemia,'' N Engl J Med, 2014, vol. 371(16), pp. 1507-1517. \26\ KYMRIAHTM [prescribing information], East Hanover, NJ: Novartis Pharmaceuticals Corp, 2017. \27\ Kalos, M., Levine, B.L., Porter, D.L., et al., ``T[dash]cells with chimeric antigen receptors have potent antitumor effects and can establish memory in patients with advanced leukemia,'' Sci Transl Med, 2011, 3(95), pp, 95ra73. \28\ FDA Briefing Document. Available at: https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/OncologicDrugsAdvisoryCommittee/UCM566168.pdf. \29\ Kalos, M., Levine, B.L., Porter, D.L., et al., ``T cells with chimeric antigen receptors have potent antitumor effects and can establish memory in patients with advanced leukemia,'' Sci Transl Med, 2011, vol. 3(95), pp. 95rs73. \30\ FDA Briefing Document. Available at: https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/OncologicDrugsAdvisoryCommittee/UCM566168.pdf. \31\ Maude, S.L., Frey, N., Shaw, P.A., et al., ``Chimeric antigen receptor T[dash]cells for sustained remissions in leukemia,'' N Engl J Med, 2014, vol. 371(16), pp. 1507-1517. --------------------------------------------------------------------------- The applicant for YESCARTATM stated that YESCARTATM is the first engineered autologous cellular immunotherapy comprised of CAR T[dash]cells that recognizes CD-19 express cancer cells and normal B-cells with efficacy in patients with R/R large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, PMBCL, high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma as demonstrated in a multi-centered clinical trial. Therefore, the applicant believed that YESCARTATM's mechanism of action is distinct and unique from any other cancer drug or biologic that is currently approved for use in the treatment of patients who have been diagnosed with aggressive B- cell NHL, namely single-agent or combination chemotherapy regimens. The applicant also pointed out that YESCARTATM is the only available therapy that has been granted FDA approval for the treatment of adult patients with R/R large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, PMBCL, high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma. With respect to the second and third criteria, whether a product is assigned to the same or a different MS-DRG and whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant for KYMRIAHTM indicated that the technology is used in the treatment of the same patient population, and potential cases representing patients that may be eligible for treatment using KYMRIAHTM would be assigned to the same MS-DRGs as cases involving [[Page 20288]] patients with a DLBCL diagnosis. Potential cases representing patients that may be eligible for treatment using KYMRIAHTM map to 437 separate MS-DRGs, with the top 20 MS-DRGs covering approximately 68 percent of all patients who have been diagnosed with DLBCL. For patients with DLBCL and who have received chemotherapy during their hospital stay, the target population mapped to 8 separate MS-DRGs, with the top 2 MS-DRGs covering over 95 percent of this population: MS-DRGs 847 (Chemotherapy without Acute Leukemia as Secondary Diagnosis with CC), and 846 (Chemotherapy without Acute Leukemia as Secondary Diagnosis with MCC). The applicant for YESCARTATM submitted findings that potential cases representing patients that may be eligible for treatment using YESCARTATM span 15 unique MS- DRGs, 8 of which contain more than 10 cases. The most common MS-DRGs were: MS-DRGs 840 (Lymphoma and Non-Acute Leukemia with MCC), 841 (Lymphoma and Non-Acute Leukemia with CC), and 823 (Lymphoma and Non- Acute Leukemia with other O.R. Procedures with MCC). These 3 MS-DRGs accounted for 628 (76 percent) of the 827 cases. While the applicants for KYMRIAHTM and YESCARTATM submitted different findings regarding the most common MS-DRGs to which potential cases representing patients who may be eligible for treatment involving their technology would map, we believe that, under the current MS-DRGs (FY 2018), potential cases representing patients who may be eligible for treatment involving either KYMRIAHTM or YESCARTATM would map to the same MS-DRGs because the same ICD-10-CM diagnosis codes and ICD-10-PCS procedures codes would be used to report cases for patients who may be eligible for treatment involving KYMRIAHTM and YESCARTATM. Furthermore, as noted above, we are proposing that cases reporting these ICD-10-PCS procedure codes would be assigned to MS-DRG 016 for FY 2019. Therefore, under this proposal, for FY 2019, cases involving the utilization of KYMRIAHTM and YESCARTATM would continue to map to the same MS-DRGs. The applicant for YESCARTATM also addressed the concern expressed by CMS in the FY 2018 IPPS/LTCH PPS proposed rule regarding Kite Pharma Inc.'s FY 2018 new technology add-on payment application for the KTE-C19 technology (82 FR 19888). At the time, CMS expressed concern that KTE-C19 may use the same or similar mechanism of action as the Bi-Specific T-Cell engagers (BiTE) technology. The applicant for YESCARTATM explained that YESCARTATM has a unique and distinct mechanism of action that is substantially different from BiTE's or any other drug or biologic currently assigned to any MS-DRG in the FY 2016 MedPAR Hospital Limited Data Set. In providing more detail regarding how YESCARTATM is different from the BiTE technology, the applicant explained that the BiTE technology is not an engineered autologous T[dash]cell immunotherapy derived from a patient's own T[dash]cells. Instead, it is a bi-specific T[dash]cell engager that recognizes CD-19 and CD-3 cancer cells. Unlike engineered T[dash]cell therapy, BiTE does not have the ability to enhance the proliferative and cytolytic capacity of T-cells through ex-vivo engineering. Further, BiTE is approved for the treatment of patients who have been diagnosed with Philadelphia chromosome[dash]negative relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL) and is not approved for patients with relapsed or refractory large B-cell lymphoma, whereas YESCARTATM is indicated for use in the treatment of adult patients with R/R aggressive B-cell NHL who are ineligible for ASCT. The applicant for YESCARTATM also indicated that its mechanism of action is not the same or similar to the mechanism of action used by KYMRIAHTM's currently available FDA[dash]approved CD-19-directed genetically modified autologous T[dash]cell immunotherapy indicated for use in the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse.\32\ The applicant for YESCARTATM stated that the mechanism of action is different from KYMRIAHTM's FDA[dash]approved therapy because the spacer, transmembrane and co- stimulatory domains of YESCARTATM are different from those of KYMRIAHTM. The applicant explained that YESCARTATM is comprised of a CD-28 co[dash]stimulatory domain and KYMRIAHTM has 4-1BB co-stimulatory domain. Further, the applicant stated the manufacturing processes of the two immunotherapies are also different, which may result in cell composition differences leading to possible efficacy and safety differences. --------------------------------------------------------------------------- \32\ Food and Drug Administration. Available at: www.accessdata.fda.gov/scripts/opdlisting/oopd/. --------------------------------------------------------------------------- While the applicant for YESCARTATM stated how its technology is different from KYMRIAHTM, because both technologies are CD-19-directed T[dash]cell immunotherapies used for the purpose of treating patients with aggressive variants of NHL, we believe that YESCARTATM and KYMRIAHTM are substantially similar treatment options. Furthermore, we also are concerned that there may be an age overlap (18 to 25) between the two different patient populations for the currently approved KYMRIAHTM technology and YESCARTATM technology. The currently approved KYMRIAHTM technology is indicated for use in the treatment of patients who are up to 25 years of age and YESCARTATM technology is indicated for use in the treatment of adult patients. As noted earlier, the applicant has asserted that YESCARTATM is not substantially similar to KYMRIAHTM. Under this scenario, if both YESCARTATM and KYMRIAHTM meet all of the new technology add-on payment criteria and are approved for new technology add-on payments for FY 2019, for purposes of making the new technology add[dash]on payment, because procedures utilizing either YESCARTATM or KYMRIAHTM CAR T-cell therapy drugs are reported using the same ICD-10-PCS procedure codes, in order to accurately pay the new technology add[dash]on payment to hospitals that perform procedures utilizing either technology, it may be necessary to use alternative coding mechanisms to make the new technology add[dash]on payments. CMS is inviting comments on alternative coding mechanisms to make the new technology add-on payments, if necessary. We are inviting public comments on whether KYMRIAHTM and YESCARTATM are substantially similar to existing technologies and whether the technologies meet the newness criterion. As we stated above, each applicant submitted separate analysis regarding the cost criterion for each of their products, and both applicants maintained that their product meets the cost criterion. We summarize each analysis below. With regard to the cost criterion, the applicant for KYMRIAHTM searched the FY 2016 MedPAR claims data file to identify potential cases representing patients who may be eligible for treatment using KYMRIAHTM. The applicant identified claims that reported an ICD-10-CM diagnosis code of: C83.30 (DLBCL, unspecified site); C83.31 (DLBCL, lymph nodes of head, face and neck); C83.32 (DLBCL, intrathoracic lymph nodes); C83.33 (DLBCL, intra- abdominal lymph nodes); C83.34 (DLBCL, lymph nodes of axilla and upper limb); C83.35 (DLBCL, lymph nodes of inquinal region and lower [[Page 20289]] limb); C83.36 (DLBCL, intrapelvic lymph nodes); C83.37 (DLBCL, spleen); C83.38 (DLBCL, lymph nodes of multiple sites); or C83.39 (DLBCL, extranodal and solid organ sites). The applicant also identified potential cases where patients received chemotherapy using two encounter codes, Z51.11 (Antineoplastic chemotherapy) and Z51.12 (Antineoplastic immunotherapy), in conjunction with DLBCL diagnosis codes. Applying the parameters above, the applicant for KYMRIAHTM identified a total of 22,589 DLBCL potential cases that mapped to 437 MS-DRGs. The applicant chose the top 20 MS-DRGs which made up a total of 15,451 potential cases at 68 percent of total cases. Of the 22,589 total DLBCL potential cases, the applicant also provided a breakdown of DLBCL potential cases where chemotherapy was used, and DLBCL potential cases where chemotherapy was not used. Of the 6,501 DLBCL potential cases where chemotherapy was used, MS-DRGs 846 and 847 accounted for 6,181 (95 percent) of the 6,501 cases. Of the 16,088 DLBCL potential cases where chemotherapy was not used, the applicant chose the top 20 MS-DRGs which made up a total of 9,333 potential cases at 58 percent of total cases. The applicant believed the distribution of patients that may be eligible for treatment using KYMRIAHTM will include a wide variety of MS-DRGs. As such, the applicant conducted an analysis of three scenarios: Potential DLBCL cases, potential DLBCL cases with chemotherapy, and potential DLBCL cases without chemotherapy. The applicant removed reported historic charges that would be avoided through the use of KYMRIAHTM. Next, the applicant removed 50 percent of the chemotherapy pharmacy charges that would not be required for patients that may be eligible to receive treatment using KYMRIAHTM. The applicant standardized the charges and then applied an inflation factor of 1.09357, which is the 2[dash]year inflation factor in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527), to update the charges from FY 2016 to FY 2018. The applicant did not add charges for KYMRIAHTM to its analysis. However, the applicant provided a cost analysis related to the three categories of claims data it previously researched (that is, potential DLBCL cases, potential DLBCL cases with chemotherapy, and potential DLBCL cases without chemotherapy). The applicant's analysis showed the inflated average case[dash]weighted standardized charge per case for potential DLBCL cases, potential DLBCL cases with chemotherapy, and potential DLBCL cases without chemotherapy was $63,271, $39,723, and $72,781, respectively. The average case-weighted threshold amount for potential DLBCL cases, potential DLBCL cases with chemotherapy, and potential DLBCL cases without chemotherapy was $58,278, $48,190, and $62,355 respectively. While the inflated average case-weighted standardized charge per case ($39,723) is lower than the average case-weighted threshold amount ($48,190) for potential DLBCL cases with chemotherapy, the applicant expects the cost of KYMRIAHTM to be higher than the new technology add-on payment threshold amount for all three cohorts. Therefore, the applicant maintained that it meets the cost criterion. We note that, as discussed earlier, in section II.F.2.d. of the preamble of this proposed rule, we are proposing to assign the ICD-10- PCS procedure codes that describe procedures involving the utilization of these CAR T-cell therapy drugs and cases representing patients receiving treatment involving CAR T-cell therapy procedures to Pre-MDC MS-DRG 016 for FY 2019. Therefore, in addition to the analysis above, we compared the inflated average case[dash]weighted standardized charge per case from all three cohorts above to the average case-weighted threshold amount for MS-DRG 016. The average case-weighted threshold amount for MS-DRG 016 from Table 10 in the FY 2018 IPPS/LTCH PPS final rule is $161,058. Although the inflated average case-weighted standardized charge per case for all three cohorts ($63,271, $39,723, and $72,781) is lower than the average case-weighted threshold amount for MS-DRG 016, similar to above, the applicant expects the cost of KYMRIAHTM to be higher than the new technology add-on payment threshold amount for MS-DRG 016. Therefore, it appears that KYMRIAHTM would meet the cost criterion under this scenario as well. We appreciate the applicant's analysis. However, we note that the applicant did not provide information regarding which specific historic charges were removed in conducting its cost analysis. Nonetheless, we believe that even if historic charges were identified and removed, the applicant would meet the cost criterion because, as indicated, the applicant expects the cost of KYMRIAHTM to be higher than the new technology add-on payment threshold amounts listed earlier. We are inviting public comments on whether KYMRIAHTM meets the cost criterion. With regard to the cost criterion in reference to YESCARTATM, the applicant conducted the following analysis. The applicant examined FY 2016 MedPAR claims data restricted to patients discharged in FY 2016. The applicant included potential cases reporting an ICD-10 diagnosis code of C83.38. Noting that only MS-DRGs 820 (Lymphoma and Leukemia with Major O.R. Procedure with MCC), 821 (Lymphoma and Leukemia with Major O.R. Procedure with CC), 823 and 824 (Lymphoma and Non[dash]Acute Leukemia with Other O.R. Procedure with MCC, with CC, respectively), 825 (Lymphoma and Non Acute Leukemia with Other O.R Procedure without CC/MCC), and 840, 841 and 842 (Lymphoma and Non-Acute Leukemia with MCC, with CC and without CC/MCC, respectively) consisted of 10 or more cases, the applicant limited its analysis to these 8 MS-DRGs. The applicant identified 827 potential cases across these MS-DRGs. The average case-weighted unstandardized charge per case was $126,978. The applicant standardized charges using FY 2016 standardization factors and applied an inflation factor of 1.09357 from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527). The applicant for YESCARTATM did not include the cost of its technology in its analysis. Included in the average case-weighted standardized charge per case were charges for the current treatment components. Therefore, the applicant for YESCARTATM removed 20 percent of radiology charges to account for chemotherapy, and calculated the adjusted average case-weighted standardized charge per case by subtracting these charges from the standardized charge per case. Based on the distribution of potential cases within the eight MS-DRGs, the applicant case-weighted the final inflated average case-weighted standardized charge per case. This resulted in an inflated average case-weighted standardized charge per case of $118,575. Using the FY 2018 IPPS Table 10 thresholds, the average case-weighted threshold amount was $72,858. Even without considering the cost of its technology, the applicant maintained that because the inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount, the technology meets the cost criterion. We note that, as discussed earlier, in section II.F.2.d. of the preamble of this proposed rule, we are proposing to assign the ICD-10- PCS procedure codes that describe procedures involving the utilization of these CAR T-cell therapy [[Page 20290]] drugs and cases representing patients receiving treatment involving CAR T-cell therapy procedures to Pre-MDC MS-DRG 016 for FY 2019. Therefore, in addition to the analysis above, we compared the inflated average case-weighted standardized charge per case ($118,575) to the average case-weighted threshold amount for MS-DRG 016. The average case- weighted threshold amount for MS-DRG 016 from Table 10 in the FY 2018 IPPS/LTCH PPS final rule is $161,058. Although the inflated average case-weighted standardized charge per case is lower than the average case-weighted threshold amount for MS-DRG 016, the applicant expects the cost of YESCARTATM to be higher than the new technology add-on payment threshold amount for MS-DRG 016. Therefore, it appears that YESCARTATM would meet the cost criterion under this scenario as well. We are inviting public comments on whether YESCARTATM technology meets the cost criterion. With regard to substantial clinical improvement for KYMRIAHTM, the applicant asserted that several aspects of the treatment represent a substantial clinical improvement over existing technologies. The applicant believed that KYMRIAHTM allows access for a treatment option for those patients who are unable to receive standard of care treatment. The applicant stated in its application that there are no currently FDA-approved treatment options for patients with R/R DLBCL who are ineligible for or who have failed ASCT. Additionally, the applicant maintained that KYMRIAHTM significantly improves clinical outcomes, including ORR, CR, OS, and durability of response, and allows for a manageable safety profile. The applicant asserted that, when compared to the historical control data (SCHOLAR-1) and the currently available treatment options, it is clear that KYMRIAHTM significantly improves clinical outcomes for patients with R/R DLBCL who are not eligible for ASCT. The applicant conveyed that, given that the patient population has no other available treatment options and an expected very short lifespan without therapy, there are no randomized controlled trials of the use of KYMRIAHTM in patients with R/R DLBCL and, therefore, efficacy assessments must be made in comparison to historical control data. The SCHOLAR-1 study is the most comprehensive evaluation of the outcome of patients with refractory DLBCL. SCHOLAR-1 includes patients from two large randomized controlled trials (Lymphoma Academic Research Organization-CORAL and Canadian Cancer Trials Group LY.12) and two clinical databases (MD Anderson Cancer Center and University of Iowa/ Mayo Clinic Lymphoma Specialized Program of Research Excellence).\33\ --------------------------------------------------------------------------- \33\ Crump, M., Neelapu, S.S., Farooq, U., et al., ``Outcomes in refractory diffuse large B-cell lymphoma: results from the international SCHOLAR-1 study,'' Blood, Published online: August 3, 2017, doi: 10.1182/blood-2017-03-769620. --------------------------------------------------------------------------- The applicant for KYMRIAHTM conveyed that the PARMA study established high-dose chemotherapy and ASCT as the standard treatment for patients with R/R DLBCL.\34\ However, according to the applicant, many patients with R/R DLBCL are ineligible for ASCT because of medical frailty. Patients who are ineligible for ASCT because of medical frailty would also be adversely affected by high-dose chemotherapy regimens.\35\ Lowering the toxicity of chemotherapy regimens becomes the only treatment option, leaving patients with little potential for therapeutic outcomes. According to the applicant, the lack of efficacy of these aforementioned salvage regimens was demonstrated in nine studies evaluating combined chemotherapeutic regimens in patients who were either refractory to first[dash]line or first salvage. Chemotherapy response rates ranged from 0 percent to 23 percent with OS less than 10 months in all studies.\36\ For patients who do not respond to combined therapy regimens, the National Comprehensive Cancer Network (NCCN) offers only clinical trials or palliative care as therapeutic options.\37\ --------------------------------------------------------------------------- \34\ Philip, T., Guglielmi, C., Hagenbeek, A., et al., ``Autologous bone marrow transplantation as compared with salvage chemotherapy in relapses of chemotherapy-sensitive non-Hodgkin's lymphoma,'' N Engl J Med, 1995, vol. 333(23), pp. 1540-1545. \35\ Friedberg, J.W., ``Relapsed/refractory diffuse large B-cell lymphoma,'' Hematology AM Soc Hematol Educ Program, 2011, vol. (1), pp. 498-505. \36\ Crump, M., Neelapu, S.S., Farooq, U., et al., ``Outcomes in refractory diffuse large B-cell lymphoma: results from the international SCHOLAR-1 study,'' Blood, Published online: August 3, 2017, doi: 10.1182/blood-2017-03-769620. \37\ National Comprehensive Cancer Network, NCCN Clinical Practice Guidelines in Oncology (NCCN GuidelinesR), ``B-cell lymphomas: Diffuse large b-cell lymphoma and follicular lymphoma (Version 3.2017),'' May 25, 2017. Available at: https://www.nccn.org/professionals/physician_gls/pdf/b-cell_blocks.pdf. --------------------------------------------------------------------------- According to the applicant for KYMRIAHTM, the immunomodulatory agent Lenalidomide was only able to show an ORR of 30 percent, a CR rate of 8 percent, and a 4.6-month median duration of response.\38\ M[dash]tor inhibitors such as Everolimus and Temserolimus have been studied as single agents, or in combination with Rituximab, as have newer monoclonal antibodies Dacetuzumab, Ofatumomab and Obinutuzumab. However, none induced a CR rate higher than 20 percent or showed a median duration of response longer than 1 year.\39\ --------------------------------------------------------------------------- \38\ Klyuchnikov, E., Bacher, U., Kroll, T., et al., ``Allogeneic hematopoietic cell transplantation for diffuse large B cell lymphoma: who, when and how?,'' Bone Marrow Transplant, 2014, vol. 49(1), pp. 1-7. \39\ Ibid. --------------------------------------------------------------------------- According to the applicant, although controversial, allogeneic stem cell transplantation (allo-SCT) has been proposed for patients who have been diagnosed with R/R disease. It is hypothesized that the malignant cell will be less able to escape the immune targeting of allogenic T- cells--known as the graft-vs-lymphoma effect.\40\ \41\ The use of allo- SCT is limited in patients who are not eligible for ASCT because of the high rate of morbidity and mortality. This medically frail population is generally excluded from participation. The population most impacted by this is the elderly, who are often excluded based on age alone. In seven studies evaluating allo-SCT in patients with R/R DLBCL, the median age at transplant was 43 years old to 52 years old, considerably lower than the median age of patients with DLBCL of 64 years old. Only two studies included any patients over 66 years old. In these studies, allo-SCT provided OS rates ranging from 18 percent to 52 percent at 3 to 5 years, but was accompanied by treatment-related mortality rates ranging from 23 percent to 56 percent.\42\ According to the applicant, this toxicity and efficacy profile of allo-SCT substantially limits its use, especially in patients 65 years old and older. Given the high unmet medical need, the applicant maintained that KYMRIAHTM represents a substantial clinical improvement by offering a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments. --------------------------------------------------------------------------- \40\ Ibid. \41\ Maude, S.L., Teachey, D.T., Porter, D.L., Grupp, S.A., ``CD19-targeted chimeric antigen receptor T-cell therapy for acute lymphoblastic leukemia,'' Blood, 2015, vol. 125(26), pp. 4017-4023. \42\ Klyuchnikov, E., Bacher, U., Kroll, T., et al., ``Allogeneic hematopoietic cell transplantation for diffuse large B cell lymphoma: who, when and how?,'' Bone Marrow Transplant, 2014, vol. 49(1), pp. 1-7. --------------------------------------------------------------------------- To express how KYMRIAHTM has improved clinical outcomes, including ORR, CR rate, OS, and durability of response, the applicant referenced clinical trials in which KYMRIAHTM was tested. Study 1 was a single[dash]arm, open[dash]label, multi[dash]site, global Phase II study to determine the safety and efficacy of tisagenlecleucel in patients [[Page 20291]] with R/R DLBCL (CCTL019C2201/CT02445248/`JULIET' study).\43\ \44\ \45\ Key inclusion criteria included patients who were 18 years old and older, patients with refractory to at least two lines of chemotherapy and either relapsed post ASCT or who were ineligible for ASCT, measurable disease at the time of infusion, and adequate organ and bone marrow function. The study was conducted in three phases. In the screening phase patient eligibility was assessed and patient cells collected for product manufacture. Patients were also able to receive bridging, cytotoxic chemotherapy during this time. In the pre-treatment phase patients underwent a restaging of disease followed by lymphodepleting chemotherapy with fludarabine 25mg/m2 x3 and cyclophosphamide 250mg/m2/d x3 or bendamustine 90mg/m2/d x2 days. The treatment and follow[dash]up phase began 2 to 14 days after lymphodepleting chemotherapy, when the patient received a single infusion of tisagenlecleucel with a target dose of 5x10\8\ CTL019 transduced viable cells. The primary objective was to assess the efficacy of tisagenlecleucel, as measured by the best overall response (BOR), which was defined as CR or partial response (PR). It was assessed on the Chesson 2007 response criteria amended by Novartis Pharmaceutical Corporation as confirmed by an Independent Review Committee (IRC). One hundred forty-seven patients were enrolled, and 99 of them were infused with tisagenlecleucel. Forty-three patients discontinued prior to infusion (9 due to inability to manufacture and 34 due to patient[dash]related issues).\46\ The median age of treated patients was 56 years old with a range of 24 to 75; 20 percent were older than 65 years old. Patients had received 2 to 7 prior lines of therapy, with 60 percent receiving 3 or more therapies, and 51 percent having previously undergone ASCT. A primary analysis was performed on 81 patients infused and followed for more than or at least 3 months. In this primary analysis, the BOR was 53 percent; the study met its primary objective based on statistical analysis (that is, testing whether BOR was greater than 20 percent, a clinically relevant threshold chosen based on the response to chemotherapy in a patient with R/R DLBCL). Forty-three percent (43 percent) of evaluated patients reached a CR, and 14 percent reached a PR. ORR evaluated at 3 months was 38 percent with a distribution of 32 percent CR and 6 percent PR. All patients in CR at 3 months continued to be in CR. ORR was similar across subgroups including 64.7 percent response in patients who were older than 65 years old, 61.1 percent response in patients with Grade III/IV disease at the time of enrollment, 58.3 percent response in patients with Activated B[dash]cell, 52.4 percent response in patients with Germinal Center B[dash]cell subtype, and 60 percent response in patients with double and triple hit lymphoma. Durability of response was assessed based on relapse free survival (RFS), which was estimated at 74 percent at 6 months. --------------------------------------------------------------------------- \43\ Data on file, Oncology clinical trial protocol CCTL019C2201: ``A Phase II, single[dash]arm, multi[dash]center trial to determine the efficacy and safety of CTL019 in adult patients with relapsed or refractory diffuse large Bcell lymphoma (DLBCL),'' Novartis Pharmaceutical Corp, 2015. \44\ Schuster, S.J., Bishop, M.R., Tam, C., et al., ``Global trial of the efficacy and safety of CTL019 in adult patients with relapsed or refractory diffuse large B-cell lymphoma: an interim analysis,'' Presented at: 22nd Congress of the European Hematology Association, June 22-25, 2017, Madrid, Spain. \45\ ClinicalTrials.gov, ``Study of efficacy and safety of CTL019 in adult DLBCL patients (JULIET).'' Available at: https://clinicaltrials.gov/ct2/show/NCT02445248. \46\ Schuster, S.J., Bishop, M.R., Tam, C., et al., ``Global trial of the efficacy and safety of CTL019 in adult patients with relapsed or refractory diffuse large B-cell lymphoma: an interim analysis,'' Presented at: 22nd Congress of the European Hematology Association, June 22-25, 2017, Madrid, Spain. --------------------------------------------------------------------------- The applicant for KYMRIAHTM reported that Study 2 was a supportive Phase IIa single institution study of adults who were diagnosed with advanced CD19+ NHL conducted at the University of Pennsylvania.\47\ \48\ Tisagenlecleucel cells were produced at the University of Pennsylvania using the same genetic construct and a similar manufacturing technique as employed in Study 1. Key inclusion criteria included patients who were at least 18 years old, patients with CD19+ lymphoma with no available curative options, and measurable disease at the time of enrollment. Tisagenlecleucel was delivered in a single infusion 1 to 4 days after restaging and lymphodepleting chemotherapy. The median tisagenlecleucel cell dose was 5.0 x 108 transduced cells. The study enrolled 38 patients; of these, 21 were diagnosed with DLBCL and 13 received treatment involving KYMRIAHTM. Patients ranged in age from 25 to 77 years old, and had a median of 4 prior therapies. Thirty-seven percent had undergone ASCT and 63 percent were diagnosed with Grade III/IV disease. ORR at 3 months was 54 percent. Progression free survival was 43 percent at a median follow[dash]up of 11.7 months. Safety and efficacy results are similar to those of the multi-center study. --------------------------------------------------------------------------- \47\ ClinicalTrials.gov, ``Phase IIa study of redirected autologous T[dash]cells engineered to contain anti-CD19 attached to TCRz and 4-signaling domains in patients with chemotherapy relapsed or refractory CD19+ lymphomas,'' Available at: https://clinicaltrials.gov/ct2/show/NCT02030834. \48\ Schuster, S.J., Svoboda, J., Nasta, S.D., et al., ``Sustained remissions following chimeric antigen receptor modified T-cells directed against CD-19 (CTL019) in patients with relapsed or refractory CD19+ lymphomas,'' Presented at: 57th Annual Meeting of the American Society of Hematology, December 6, 2015, Orlando, FL. --------------------------------------------------------------------------- The applicant for KYMRIAHTM reported that Study 3 was a supportive, patient[dash]level meta-analysis of historical outcomes in patients who were diagnosed with refractory DLBCL (SCHOLAR-1).\49\ This study included a pooled data analysis of two Phase III clinical trials (Lymphoma Academic Research Organization-CORAL and Canadian Cancer Trials Group LY.12) and two observational cohorts (MD Anderson Cancer Center and University of Iowa/Mayo Clinic Lymphoma Specialized Program of Research Excellence). Refractory disease was defined as progressive disease or stable disease as best response to chemotherapy (received more than or at least 4 cycles of first-line therapy or 2 cycles of later[dash]line therapy, respectively) or relapse in less than or at 12 months post-ASCT. Of 861 abstracted records, 636 were included based on these criteria. All patients from each data source who met criteria for diagnosis of refractory DLBCL, including TFL and PMBCL, who went on to receive subsequent therapy were considered for analysis. Patients who were diagnosed with TFL and PMBCL were included because they are histologically similar and clinically treated as large cell lymphoma. Response rates were similar across the 4 datasets, ranging from 20 percent to 31 percent, with a pooled response rate of 26 percent. CR rates ranged from 2 percent to 15 percent, with a pooled CR rate of 7 percent. Subgroup analyses including patients with primary refractory, refractory to second or later[dash]line therapy, and relapse in less than 12 months post-ASCT revealed response rates similar to the pooled analysis, with worst outcomes in the primary refractory group (20 percent). OS from the commencement of therapy was 6.3 months and was similar across subgroup analyses. Achieving a CR after last salvage chemotherapy predicted a longer OS of 14.9 months compared to 4.6 months in nonresponders. Patients who had not undergone ASCT had an OS of 5.1 [[Page 20292]] months with a 2 year OS rate of 11 percent. --------------------------------------------------------------------------- \49\ Crump, M., Neelapu, S.S., Farooq, U., et al., ``Outcomes in refractory diffuse large B-cell lymphoma: results from the international SCHOLAR-1 study,'' Blood, Published online: August 3, 2017, doi: 10.1182/blood-2017-03-769620. --------------------------------------------------------------------------- The applicant asserted that KYMRIAHTM provides a manageable safety profile when treatment is performed by trained medical personnel and, as opposed to ASCT, KYMRIAHTM mitigates the need for high-dose chemotherapy to induce response prior to infusion. Adverse events were most common in the 8 weeks following infusion and were manageable by a trained staff. Cytokine Relapse Syndrome (CRS) occurred in 58 percent of patients with 23 percent having Grade III or IV events as graded on the University of Pennsylvania grading system.\50\ \51\ Median time to onset of CRS was 3 days and median duration was 7 days with a range of 2 to 30 days. Twenty[dash]four percent of the patients required ICU admission. CRS was managed with supportive care in most patients. However, 16 percent required anti-cytokine therapy including tocilizumab (15 percent) and corticosteroids (11 percent). Other adverse events of special interest include infection in 34 percent (20 percent Grade III or IV) of patients, cytopenias not resolved by day 28 in 36 percent (27 percent Grade III or IV) of patients, neurologic events in 21 percent (12 percent Grade III or IV) of patients, febrile neutropenia in 13 percent (13 percent Grade III or IV) of patients, and tumor lysis syndrome 1 percent (1 percent Grade III). No deaths were attributed to tisagenlecleucel including no fatal cases of CRS or neurologic events. No cerebral edema was observed.\52\ Study 2 safety results were consistent to those of Study 1.\53\ --------------------------------------------------------------------------- \50\ ClinicalTrials.gov, ``Phase IIa study of redirected autologous T-cells engineered to contain anti-CD19 attached to TCRz and 4-signaling domains in patients with chemotherapy relapsed or refractory CD19+ lymphomas.'' Available at: https://clinicaltrials.gov/ct2/show/NCT02030834. \51\ Schuster, S.J., Svoboda, J., Nasta, S.D., et al., ``Sustained remissions following chimeric antigen receptor modified T-cells directed against CD-19 (CTL019) in patients with relapsed or refractory CD19+ lymphomas,'' Presented at: 57th Annual Meeting of the American Society of Hematology, December 6, 2015, Orlando, FL. \52\ Schuster, S.J., Bishop, M.R., Tam, C., et al., ``Global trial of the efficacy and safety of CTL019 in adult patients with relapsed or refractory diffuse large B-cell lymphoma: an interim analysis,'' Presented at: 22nd Congress of the European Hematology Association, June 22-25, 2017, Madrid, Spain. \53\ Ibid. --------------------------------------------------------------------------- After reviewing the studies provided by the applicant, we are concerned that the applicant included patients who were diagnosed with TFL and PMBCL in the SCHOLAR-1 data results for their comparison analysis, possibly skewing results. Furthermore, the discontinue rate of the JULIET trial was high. Of 147 patients enrolled for infusion involving KYMRIAHTM, 43 discontinued prior to infusion (9 discontinued due to inability to manufacture, and 34 discontinued due to patient[dash]related issues). Finally, the rate of patients who experienced a diagnosis of CRS was high, 58 percent.\54\ --------------------------------------------------------------------------- \54\ Schuster, S.J., Bishop, M.R., Tam, C., et al., ``Global trial of the efficacy and safety of CTL019 in adult patients with relapsed or refractory diffuse large B-cell lymphoma: an interim analysis,'' Presented at: 22nd Congress of the European Hematology Association, June 22-25, 2017, Madrid, Spain. --------------------------------------------------------------------------- The applicant for YESCARTATM stated that YESCARTATM represents a substantial clinical improvement over existing technologies when used in the treatment of patients with aggressive B-cell NHL. The applicant asserted that YESCARTATM can benefit the patient population with the highest unmet need, patients with R/R disease after failure of first- line or second-line therapy, and patients who have failed or who are ineligible for ASCT. These patients, otherwise, have adverse outcomes as demonstrated by historical control data. Regarding clinical data for YESCARTATM, the applicant stated that historical control data was the only ethical and feasible comparison information for these patients with chemorefractory, aggressive NHL who have no other available treatment options and who are expected to have a very short lifespan without therapy. According to the applicant, based on meta-analysis of outcomes in patients with chemorefractory DLBCL, there are no curative options for patients with aggressive B-cell NHL, regardless of refractory subgroup, line of therapy, and disease stage with their median OS being 6.6 months.\55\ --------------------------------------------------------------------------- \55\ Seshardi, T., et al., ``Salvage therapy for relapsed/ refractory diffuse large B-cell lymphoma,'' Biol Blood Marrow Transplant, 2008 Mar, vol. 14(3), pp. 259-67. --------------------------------------------------------------------------- In the applicant's FY 2018 new technology add-on payment application for the KTE-C19 technology, which was discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19889), the applicant cited ongoing clinical trials. The applicant provided updated data related to these ongoing clinical trials as part of its FY 2019 application for YESCARTATM.\56\ \57\ \58\ The updated analysis of the pivotal Study 1 (ZUMA-1, KTE-C19-101), Phase I and II occurred when patients had been followed for 12 months after infusion of YESCARTATM. Study 1 is a Phase I-II multi[dash]center, open[dash]label study evaluating the safety and efficacy of the use of YESCARTATM in patients with aggressive refractory NHL. The trial consists of two distinct phases designed as Phase I (n=7) and Phase II (n=101). Phase II is a multi-cohort open[dash]label study evaluating the efficacy of YESCARTATM.\59\ The applicant noted that, as of the analysis cutoff date for the interim analysis, the results of Study 1 demonstrated rapid and substantial improvement in objective, or ORR. After 6 and 12 months, the ORR was 82 and 83 percent, respectively. Consistent response rates were observed in both Study 1, Cohort 1 (DLBCL; n=77) and Cohort 2 (PMBCL or TFL; n=24) and across covariates including disease stage, age, IPI scores, CD-19 status, and refractory disease subset. In the updated analysis, results were consistent across age groups. In this analysis, 39 percent of patients younger than 65 years old were in ongoing response, and 50 percent of patients at least 65 years old or older were in ongoing response. Similarly, the survival rate at 12 months was 57 percent among patients younger than 65 years old and 71 percent among patients at least 65 years old or older versus historical control of 26 percent. The applicant further stated that evidence of substantial clinical improvement regarding the efficacy of YESCARTATM for the treatment of patients with chemorefractory, aggressive B-cell NHL is supported by the CR of YESCARTATM in Study 1, Phase II (54 percent) versus the historical control (7 percent).\60\ \61\ \62\ \63\ [[Page 20293]] The applicant noted that CR rates were observed in both Study 1, Cohort 1. The applicant reported that, in the updated analysis, results were in ongoing response (46 percent of patients at least 65 years old or older were in ongoing response). Similarly, the survival rate at 12 months was 57 percent among patients younger than 65 years old and 71 percent among patients at least 65 years old or older.\64\ \65\ \66\ \67\ The applicant also provided the following tables to depict data to support substantial clinical improvement (we refer readers to the two tables below). --------------------------------------------------------------------------- \56\ Locke, F.L., et al., ``Ongoing complete remissions in Phase 1 of ZUMA-1: A phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \57\ Locke, F.L., et al., ``Primary results from ZUMA-1: A pivotal trial of axicabtagene ciloretroleucel (axi-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). \58\ Locke, F.L., et al., ``Phase I results of ZUMA-1: A multicenter study of KTE-C19 anti-CD19 CAR T cell therapy in refractory aggressive lymphoma,'' Mol Ther, vol. 25, No 1, January 2017. \59\ Neelapu, S.S., Locke, F.L., et al., 2016, ``KTE-C19 (anti- CD19 CAR T cells) induces complete remissions in patients with refractory diffuse large B-cell lymphoma (DLBCL): Results from the pivotal Phase II ZUMA-1,'' Abstract presented at American Society of Hematology (ASH) 58th Annual Meeting, December 2016. \60\ Locke, F.L., et al., ``Ongoing complete remissions in Phase I of ZUMA-1: a phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \61\ Locke, F.L., et al., ``Primary results from ZUMA-1: a pivotal trial of axicabtagene ciloretroleucel (axi-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). \62\ Locke, F.L., et al., ``Phase I results of ZUMA-1: A multicenter study of KTE-C19 anti-CD19 CAR T cell therapy in refractory aggressive lymphoma,'' Mol Ther, vol. 25, No 1, January 2017. \63\ Crump, et al., 2017, ``Outcomes in refractory diffuse large B-cell lymphoma: Results from the international SCHOLAR-1 study,'' Blood, vol. 0, 2017, pp. blood-2017-03-769620v1. \64\ Locke, F.L., et al., ``Ongoing complete remissions in Phase I of ZUMA-1: A phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \65\ Locke, F.L., et al., ``Primary results from ZUMA-1: A pivotal trial of axicabtagene ciloretroleucel (axi-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). \66\ Locke, F.L., et al., ``Phase I results of ZUMA-1: A multicenter study of KTE-C19 anti-CD19 CAR T cell therapy in refractory aggressive lymphoma,'' Mol Ther, vol. 25, No 1, January 2017. \67\ Crump, et al., ``Outcomes in refractory diffuse large B- cell lymphoma: Results from the international SCHOLAR-1 study,'' Blood, vol. 0, 2017, pp. blood-2017-03-769620v1. Overall Response Rates Across All YESCARTA\TM\ Studies vs. SCHOLAR-1 ---------------------------------------------------------------------------------------------------------------- Study 1, Phase Scholar-1 % I n=7 Study 1, Phase II n=101 n=529 ---------------------------------------------------------------------------------------------------------------- Overall Response Rate (%)............. 71 83...................................... 26 Month 6 (%)........................... 43 41...................................... .............. Ongoing with >15 Months of follow-up 43 42...................................... .............. (%). Ongoing with >18 Months of follow-up 43 Follow-up ongoing....................... .............. (%). ---------------------------------------------------------------------------------------------------------------- Results for YESCARTA\TM\ Study 1, Phase II: Complete Response ------------------------------------------------------------------------ Study 1, Phase II n=101 ------------------------------------------------------------------------ Complete Response (%) (95 Percent 54 (44,64). Confidence Interval). Duration of Response, median (range in not reached. months). Ongoing Responses, CR (%); Median 8.7 39. months follow-up; median overall survival has not been reached. Ongoing Responses, CR (%); Median 15.3 40. months follow-up; median overall survival has not been reached. ------------------------------------------------------------------------ According to the applicant, the 6-month and 12-month survival rates (95 percent CI) for patients enrolled in the SCHOLAR-1 study were 53 percent (49 percent, 57 percent) and 28 percent (25 percent, 32 percent).\68\ In contrast, the 6-month and 12-month survival rates (95 percent CI) in the Study 1 updated analysis were 79 percent (70 percent, 86 percent) and 60 percent (50 percent, 69 percent).\69\ \70\ \71\ --------------------------------------------------------------------------- \68\ Crump, et al., ``Outcomes in refractory diffuse large B- cell lymphoma: results from the international SCHOLAR-1 study,'' Blood, vol. 0, 2017, pp. blood-2017-03-769620v1. \69\ Locke, F.L., et al., ``Ongoing complete remissions in Phase I of ZUMA-1: a phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \70\ Locke, F.L., et al., ``Primary results from ZUMA-1: a pivotal trial of axicabtagene ciloretroleucel (axi-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). \71\ Locke, F.L., et al., ``Phase I results of ZUMA-1: a multicenter study of KTE-C19 anti-CD19 CAR T cell therapy in refractory aggressive lymphoma,'' Mol Ther, vol. 25, No 1, January 2017. --------------------------------------------------------------------------- The applicant also cited safety results from the pivotal Study 1, Phase II. According to the applicant, the clinical trial protocol stipulated that patients were infused with YESCARTATM in the hospital inpatient setting and were monitored in the inpatient setting for at least 7 days for early identification and treatment involving YESCARTATM-related toxicities, which primarily included CRS diagnoses and neurotoxicities. The applicant noted that the interim analysis showed the length of stay following infusion of YESCARTATM was a median of 15 days. Ninety-three percent of patients experienced CRS diagnoses, 13 percent of whom experienced Grade III or higher (severe, life threatening or fatal) CRS diagnoses. The median time to onset of CRS diagnosis was 2 days (range 1 to 12 days) and the median time to resolution was 8 days. Ninety-eight percent of patients recovered from CRS diagnosis. Neurologic events occurred in 64 percent of patients, 28 percent of whom experienced Grade III or higher (severe or life threatening) events. The median time to onset of neurologic events was 5 days (range 1 to 17 days). The median time to resolution was 17 days. Nearly all patients recovered from neurologic events. The medications most often used to treat these complications included growth factors, blood products, anti-infectives, steroids, tocilizumab, and vasopressors. Two patients died from YESCARTATM-related adverse events (hemophagocytic lymphohistiocytosis and cardiac arrest in the hospital setting as a result of CRS diagnoses). According to the applicant, there were no clinically important differences in adverse event rates across age groups (younger than 65 years old; 65 years old or older), including CRS diagnoses and neurotoxicity.\72\ \73\ --------------------------------------------------------------------------- \72\ Locke, F.L., et al., ``Ongoing complete remissions in Phase I of ZUMA-1: a phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \73\ Locke, F.L., et al., ``Primary results from ZUMA-1: a pivotal trial of axicabtagene ciloretroleucel (axi-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). --------------------------------------------------------------------------- The applicant for YESCARTATM provided information regarding a safety expansion cohort, Study 1 Phase II Safety Expansion Cohort 3 that was created and carried out in 2017. [[Page 20294]] According to the applicant, this Safety Expansion Cohort investigated measures to mitigate the incidence and/or severity of anti-CD-19 CAR T therapy and evaluated an adverse event mitigation strategy by prophylactically using levetiracetam (Keppra), an anticonvulsant, and tocilizumab, an IL-6 receptor inhibitor. Of the 30 patients treated, 2 patients experienced Grade III CRS diagnoses; 1 of the 2 patients recovered. In late April 2017, the other patient also experienced multi-organ failure and a neurologic event that subsequently progressed to a fatal Grade V cerebral edema that was deemed related to YESCARTATM treatment. This case of cerebral edema was observed in a 21 year-old male with refractory, rapidly progressive, symptomatic, stage IVB PMBCL. Analysis of the baseline serum and cerebrospinal fluid (CSF) obtained prior to any study treatment demonstrated high cytokine and chemokine levels. According to the applicant, this suggests a significant preexisting underlying inflammatory process, both systemically and within the central nervous system. Rapidly progressing disease, recent mediastinal XRT (external beam radiation therapy) and/or CMV (cytomegalovirus) reactivation may have contributed to the pre-existing state. There were no prior cases of cerebral edema in the 200 patients who have been treated with YESCARTATM in the ZUMA clinical development program. The single patient event from the Study 1 Phase II Safety Expansion Cohort 3 was the first Grade V cerebral edema event.\74\ \75\ --------------------------------------------------------------------------- \74\ Locke, F.L., et al., ``Ongoing complete remissions in Phase I of ZUMA-1: a phase I-II multicenter study evaluating the safety and efficacy of KTE-C19 (anti-CD19 CAR T cells) in patients with refractory aggressive B-cell non-Hodgkin lymphoma (NHL),'' Oral presentation (abstract 10480) presented at European Society for Medical Oncology (ESMO), October 2016. \75\ Locke, F.L., et al., ``Primary results from ZUMA-1: a pivotal trial of axicabtagene ciloretroleucel (aci-cel; KTE-C19) in patients with refractory aggressive non-Hodgkins lymphoma (NHL),'' Oral presentation, American Association of Cancer Research (AACR). --------------------------------------------------------------------------- After reviewing the information submitted by the applicant as part of its FY 2019 new technology add-on payment application for YESCARTATM, we are concerned that it does not appear to include patient mortality data that was included as part of the applicant's FY2018 new technology add-on payment application for the KTE-C19 technology. In that application, as discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19890), the applicant provided that by an earlier cutoff date for the interim analysis of Study 1, among all KTE-C19 treated patients, 12 patients in Study 1, Phase II, including 10 from Cohort 1, and 2 from Cohort 2, died. Eight of these deaths were due to disease progression. One patient had disease progression after receiving KTE-C19 treatment and subsequently had ASCT. After ASCT, the patient died due to sepsis. Two patients (3 percent) died due to KTE-C19[dash]related adverse events (Grade V hemophagocytic lymphohistiocytosis event and Grade V anoxic brain injury), and one died due to an adverse event deemed unrelated to treatment involving KTE-C19 (Grade V pulmonary embolism), without disease progression. We believe it would be relevant to include this information because it is related to the same treatment that is the subject of the applicant's FY 2019 new technology add-on payment application. We also are concerned that there are few published results showing any survival benefits from the use of this treatment. In addition, we are concerned with the limited number of patients (n=108) that were studied after infusion involving YESCARTATM T-cell immunotherapy. Finally, we are concerned about the data related to the percentage of patients who experience complications or toxicities related to YESCARTATM treatment. According to the applicant, of the patients who participated in YESCARTATM clinical trials, 93 percent developed CRS diagnoses and 64 percent experienced neurological adverse events. We are inviting public comments on whether KYMRIAHTM and YESCARTATM meet the substantial clinical improvement criterion. Finally, we believe that in the context of these pending new technology add-on payment applications, there may also be merit in the suggestions from the public to create a new MS-DRG for the assignment of procedures involving the utilization of CAR T-cell therapy drugs and cases representing patients who receive treatment involving CAR T[dash]cell therapy as an alternative to our proposed MS-DRG assignment to MS-DRG 016 for FY 2019, or the suggestions to allow hospitals to utilize a CCR specific to procedures involving the utilization of KYMRIAHTM and YESCARTATM CAR T-cell therapy drugs for FY 2019 as part of the determination of the cost of a case for purposes of calculating outlier payments for individual FY 2019 cases, new technology add-on payments, if approved, for individual FY 2019 cases, and payments to IPPS-excluded cancer hospitals beginning in FY 2019. If as discussed in section II.F.2.d. of the preamble of this proposed rule a new MS-DRG were to be created, then consistent with section 1886(d)(5)(K)(ix) of the Act there may no longer be a need for a new technology add-on payment under section 1886(d)(5)(K)(ii)(III) of the Act. With respect to an alternative considered for the use of a CCR specific to procedures involving the utilization of KYMRIAHTM and YESCARTATM CAR T[dash]cell therapy drugs for FY 2019 as part of the determination of the cost of a case for purposes of calculating outlier payments for individual FY 2019 cases, new technology add-on payments, if approved, for individual FY 2019 cases, and payments to IPPS-excluded cancer hospitals beginning in FY 2019, we refer readers to the discussion in section II.A.4.g.2. of the Addendum to this proposed rule. We are inviting public comments regarding the most appropriate mechanism to provide payment to hospitals for new technologies such as CAR T[dash]cell therapy drugs, including through the use of new technology add[dash]on payments. We also are inviting public comments on how these payment alternatives would affect access to care, as well as how they affect incentives to encourage lower drug prices, which is a high priority for this Administration. In addition, we are considering alternative approaches and authorities to encourage value-based care and lower drug prices. We solicit comments on how the payment methodology alternatives may intersect and affect future participation in any such alternative approaches. We did not receive any written public comments in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the application of KYMRIAHTM for new technology add-on payments for FY 2019. Below we summarize and respond to a written public comment we received during the open comment period regarding YESCARTATM in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: The applicant commented that the use of YESCARTATM as a treatment option has resulted in unprecedented and consistent treatment for patients with refractory large B[dash]cell lymphoma who previously did not have a curative option. In addition, the applicant summarized the substantial clinical improvement differences between YESCARTATM and the results of KYMRIAHTM's SCHOLAR-1 study. The applicant noted that, for the patients enrolled in the SCHOLAR-1 study, the median overall survival was 6 months and complete remission was [[Page 20295]] 7 percent. Conversely, the applicant conveyed that, for the patients enrolled in YESCARTATM's Study 1, at median 15.4 months follow-up, responses were ongoing in 42 percent of the patients and 40 percent of the patients were in complete remission. Response: We appreciate the applicant's input. We will take these comments into consideration when deciding whether to approve new technology add-on payments for YESCARTATM for FY 2019. We note that the applicant also provided comments that were unrelated to the substantial clinical improvement criterion. As stated earlier, the purpose of the new technology town hall meeting is specifically to discuss the substantial clinical improvement criterion in regard to pending new technology add-on payment applications for FY 2019. Therefore, we are not summarizing these additional comments in this proposed rule. However, the applicant may resubmit its comments in response to proposals presented in this proposed rule. b. VYXEOSTM (Cytarabine and Daunorubicin Liposome for Injection) Jazz Pharmaceuticals, Inc. submitted an application for new technology add-on payments for the VYXEOSTM technology for FY 2019. (We note that Celator Pharmaceuticals, Inc. submitted an application for new technology add[dash]on payments for VYXEOSTM for FY 2018. However, Celator Pharmaceuticals did not receive FDA approval by the July 1, 2017 deadline for applications for FY 2018.) VYXEOSTM was approved by FDA on August 3, 2017, for the treatment of adults with newly diagnosed therapy-related acute myeloid leukemia (t[dash]AML) or AML with myelodysplasia-related changes (AML-MRC). AML is a type of cancer in which the bone marrow makes abnormal myeloblasts (immature bone marrow white blood cells), red blood cells, and platelets. If left untreated, AML progresses rapidly. Normally, the bone marrow makes blood stem cells that develop into mature blood cells over time. Stem cells have the potential to develop into many different cell types in the body. Stem cells can act as an internal repair system, dividing, essentially without limit, to replenish other cells. When a stem cell divides, each new cell has the potential to either remain a stem cell or become a specialized cell, such as a muscle cell, a red blood cell, or a brain cell, among others. A blood stem cell may become a myeloid stem cell or a lymphoid stem cell. Lymphoid stem cells become white blood cells. A myeloid stem cell becomes one of three types of mature blood cells: (1) Red blood cells that carry oxygen and other substances to body tissues; (2) white blood cells that fight infection; or (3) platelets that form blood clots and help to control bleeding. In patients diagnosed with AML, the myeloid stem cells usually become a type of myeloblast. The myeloblasts in patients diagnosed with AML are abnormal and do not become healthy white blood cells. Sometimes in patients diagnosed with AML, too many stem cells become abnormal red blood cells or platelets. These abnormal cells are called leukemia cells or blasts. AML is defined by the World Health Organization (WHO) as greater than 20 percent blasts in the bone marrow or blood. AML can also be diagnosed if the blasts are found to have a chromosome change that occurs only in a specific type of AML diagnosis, even if the blast percentage does not reach 20 percent. Leukemia cells can build up in the bone marrow and blood, resulting in less room for healthy white blood cells, red blood cells, and platelets. When this occurs, infection, anemia, or increased risk for bleeding may result. Leukemia cells can spread outside the blood to other parts of the body, including the central nervous system (CNS), skin, and gums. Treatment of AML diagnoses usually consists of two phases; remission induction and post-remission therapy. Phase one, remission induction, is aimed at eliminating as many myeloblasts as possible. The most common used remission induction regimens for AML diagnoses are the ``7+3'' regimens using an antineoplastic and an anthracycline. Cytarabine and daunorubicin are two commonly used drugs for ``7+3'' remission induction therapy. Cytarabine is continuously administered intravenously over the course of 7 days, while daunorubicin is intermittently administered intravenously for the first 3 days. The ``7+3'' regimen typically achieves a 70 to 80 percent complete remission (CR) rate in most patients under 60 years of age. High rates of CR are not generally seen in older patients for a number of reasons, such as different leukemia biology, much higher incidence of adverse cytogenetic abnormalities, higher rate of multidrug resistant leukemic cells, and comparatively lower patient performance status (the standard criteria for measuring how the disease impacts a patient's daily living abilities). Intensive induction therapy has worse outcomes in this patient population.\76\ The applicant asserted that many older adults diagnosed with AML have a poor performance status \77\ at presentation and multiple medical comorbidities that make the use of intensive induction therapy quite difficult or contraindicated altogether. Moreover, the CR rates of poor-risk patients diagnosed with AML are substantially lower in patients over 60 years of age; owing to a higher proportion of secondary AML, disease developing in the setting of a prior myeloid disorder, or prior cytotoxic chemotherapy. Therefore, less than half of older adults diagnosed with AML achieve CR with combination induction regimens.\78\ --------------------------------------------------------------------------- \76\ Juliusson, G., Lazarevic, V., Horstedt, A.S., Hagberg, O., Hoglund, M., ``Acute myeloid leukemia in the real world: why population-based registries are needed'', Blood, 2012 Apr 26; vol. 119(17), pp. 3890-9. \77\ Stone, R.M., et al., (2004), ``Acute myeloid leukemia. Hematology'', Am Soc Hematol Educ Program, 2004, pp. 98-117. \78\ Appelbaum, F.R., Gundacker, H., Head, D.R., ``Age and acute myeloid leukemia'', Blood 2006, vol. 107, pp. 3481-3485. --------------------------------------------------------------------------- According to the applicant, the combination of cytarabine and an anthracycline, either as ``7+3'' regimens or as part of a different regimen incorporating other cytotoxic agents, may be used as so[dash]called ``salvage'' induction therapy in the treatment of adults diagnosed with AML who experience relapse in an attempt to achieve CR. According to the applicant, while CR rates of success vary widely depending on underlying disease biology and host factors, there is a lower success rate overall in achievement of CR with ``7+3'' regimens compared to VYXEOSTM therapy. According to the applicant, ``7+3'' regimens produce a CR rate of approximately 50 percent in younger adult patients who have relapsed, but were in CR for at least 1 year.\79\ --------------------------------------------------------------------------- \79\ Kantarjian, H., Rayandi, F., O'Brien, S., et al., ``Intensive chemotherapy does not benefit most older patients (age 70 years and older) with acute myeloid leukemia,'' Blood, 2010, vol. 116(22), pp. 4422. --------------------------------------------------------------------------- VYXEOSTM is a nano-scale liposomal formulation containing a fixed combination of cytarabine and daunorubicin in a 5:1 molar ratio. This formulation was developed by the applicant using a proprietary system known as CombiPlex. According to the applicant, CombiPlex addresses several fundamental shortcomings of conventional combination regimens, specifically the conventional ``7+3'' free drug dosing, as well as the challenges inherent in combination drug development, by identifying the most effective synergistic molar ratio of the [[Page 20296]] drugs being combined in vitro, and fixing this ratio in a nano-scale drug delivery complex to maintain the optimized combination after administration and ensuring exposure of this ratio to the tumor. Cytarabine and daunorubicin are co-encapsulated inside the VYXEOSTM liposome at a fixed ratiometrically, optimized 5:1 cytarabine:daunorubicin molar ratio. According to the applicant, encapsulation maintains the synergistic ratios, reduces degradation, and minimizes the impact of drug transporters and the effect of known resistant mechanisms. The applicant stated that the 5:1 molar ratio has been shown, in vitro, to maximize synergistic antitumor activity across multiple leukemic and solid tumor cell lines, including AML, and in animal model studies to be optimally efficacious compared to other cytarabine:daunorubicin ratios. In addition, the applicant stated that in clinical studies, the use of VYXEOSTM has demonstrated consistently more efficacious results than the conventional ``7+3'' free drug dosing. VYXEOSTM is intended for intravenous administration after reconstitution with 19 mL sterile water for injection. VYXEOSTM is administered as a 90[dash]minute intravenous infusion on days 1, 3, and 5 (induction therapy), as compared to the ``7+3'' free drug dosing, which consists of two individual drugs administered on different days, including 7 days of continuous infusion. With regard to the newness criterion, as discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant asserted that VYXEOSTM does not use the same or similar mechanism of action to achieve a therapeutic outcome as any other drug assigned to the same or a different MS-DRG. The applicant stated that no other AML treatment is designed, nor is able, to deliver a fixed, ratiometrically optimized and synergistic drug:drug ratio of 5:1 cytarabine to daunorubicin, and selectively target and accumulate at the site of malignancy, while minimizing unwanted exposure, which the applicant based on the data results of preclinical and clinical studies of the use of VYXEOSTM. The applicant indicated that VYXEOSTM is a nano-scale liposomal formulation of a fixed combination of cytarabine and daunorubicin. Further, the applicant stated that the rationale for the development of VYXEOSTM is based on prolonged delivery of synergistic drug ratios utilizing the applicant's proprietary, ratiometric CombiPlex technology. According to the applicant, conventional ``7+3'' free drug dosing has no delivery complex, and these individual drugs are administered without regard to their ratio dependent interaction. According to the applicant, enzymatic inactivation and imbalanced drug efflux and transporter expression reduce drug levels in the cell. Further, decreased cytotoxicity leads to cell survival, emergence of drug resistant cells, and decreased overall survival. The applicant provided the results of clinical studies to demonstrate that the CombiPlex technology and the ratiometric dosing of VYXEOSTM represent a shift in anticancer agent delivery, whereby the fixed, optimized dosing provides less drug to achieve improved efficacy, while maintaining a favorable risk-benefit profile. The results of this ratiometric dosing approach are in contrast to the typical combination chemotherapy development that establishes the recommended dose of one agent and then adds subsequent drugs to the combination at increasing concentrations until the aggregate effects of toxicity are considered to be limiting (the ``7+3'' drug regimen). According to the applicant, this current approach to combination chemotherapy development assumes that maximum therapeutic activity will be achieved with maximum dose intensity for all drugs in the combination, and ignores the possibility that more subtle concentration-dependent drug interactions could result in frankly synergistic outcomes. The applicant maintained that, while VYXEOSTM contains no novel active agents, its innovative drug delivery mechanism appears to be a superior way to deliver the two active compounds in an effort to optimize their efficacy in killing leukemic blasts. However, we are concerned it is possible that VYXEOSTM may use a similar mechanism of action compared to currently available treatment options because both the current treatment regimen and VYXEOSTM are used in the treatment of AML by intravenous administration of cytarabine and daunorubicin. We are concerned that the mechanism of action of the ratiometrically fixed liposomal formulation of VYXEOSTM is the same or similar to that of the current intravenous administration of cytarabine and daunorubicin. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, we believe that potential cases representing patients who may be eligible for treatment involving VYXEOSTM would be assigned to the same MS[dash]DRGs as cases representing patients who receive treatment for diagnoses of AML. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant asserted that VYXEOSTM is indicated for use in the treatment of patients who have been diagnosed with high-risk AML. The applicant also asserted that VYXEOSTM is the first and only approved fixed combination of cytarabine and daunorubicin and is designed to uniquely control the exposure using a nano-scale drug delivery vehicle leading to statistically significant improvements in survival in patients who have been diagnosed with high-risk AML compared to the conventional ``7+3'' free drug dosing. We believe that VYXEOSTM involves the treatment of the same patient population as other AML treatment therapies. The following unique ICD-10-PCS codes were created to describe the administration of VYXEOSTM: XW033B3 (Introduction of cytarabine and caunorubicin liposome antineoplastic into peripheral vein, percutaneous approach, new technology group 3) and XW043B3 (Introduction of cytarabine and daunorubicin liposome antineoplastic into central vein, percutaneous approach, new technology group 3). We are inviting public comments on whether VYXEOSTM is substantially similar to existing technology, including whether the mechanism of action of VYXEOSTM differs from the mechanism of action of the currently available treatment regimen. We also are inviting public comments on whether VYXEOSTM meets the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis. The applicant used the FY 2016 MedPAR Hospital Limited Data Set (LDS) to assess the MS-DRGs to which cases representing potential patient hospitalizations that may be eligible for treatment involving VYXEOSTM would most likely be assigned. These potential cases representing patients who may be VYXEOSTM candidates were identified if they: (1) Were diagnosed with acute myeloid leukemia (AML); and (2) received chemotherapy during their [[Page 20297]] hospital stay. The cohort was further limited by excluding patients who had received bone marrow transplants. The cohort used in the analysis is referred to in this discussion as the primary cohort. According to the applicant, the primary cohort of cases spans 131 unique MS-DRGs, 16 of which contained more than 10 cases. The most common MS-DRGs are MS-DRG 837, 834, 838, and 839. These 4 MS-DRGs account for 4,457 (81 percent) of the 5,483 potential cases in the cohort. The case-weighted unstandardized charge per case is approximately $185,844. The applicant then removed charges related to other chemotherapy agents because VYXEOSTM would replace the need for the use of current chemotherapy agents. The applicant explained that charges for chemotherapy drugs are grouped with charges for oncology, diagnostic radiology, therapeutic radiology, nuclear medicine, CT scans, and other imaging services in the ``Radiology Charge Amount.'' According to the applicant, removing 100 percent of the ``Radiology Charge Amount'' would understate the cost of care for treatment involving VYXEOSTM for patients who may be eligible because treatment involving VYXEOSTM would be unlikely to replace many of the services captured in the ``Radiology Charge Amount'' category. The applicant found that chemotherapy charges represent less than 20 percent of the charges associated with revenue centers grouped into the ``Radiology Charge Amount'' and removed 20 percent of the radiology charge amount in order to capture the effect of removing chemotherapy pharmacy charges. The applicant noted that regardless of the type of induction chemotherapy, patients being treated for AML have AML-related complications, such as bleeding or infection that require supportive care drug therapy. For this reason, it is expected that eligible patients receiving treatment involving VXYEOSTM will continue to incur other pharmacy and IV therapy charges for AML[dash]related complications. After removing the charges for the prior technology, the applicant standardized the charges. The applicant then applied an inflation factor of 1.09357, the value used in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527) to update the charges from FY 2016 to FY 2018. According to the applicant, for the primary new technology add-on payment cohort, the cost criterion was met without consideration of VYXEOSTM charges. The average case-weighted standardized charge was $170,458, which exceeds the average case[dash]weighted Table 10 MS-DRG threshold amount of $82,561 by $87,897. The applicant provided additional analyses with the inclusion of VYXEOSTM charges under 3-vial, 4-vial, 6-vial, and 10-vial treatment scenarios. According to the applicant, the cost criterion was satisfied in each of these scenarios, with charges in excess of the average case-weighted threshold amount. Finally, the applicant also provided the following sensitivity analyses (that did not include charges for VYXEOSTM) using the methodology above: Sensitivity Analysis 1--limits the cohort to patients who have been diagnosed with AML without remission (C92.00 or C92.50) who received chemotherapy and did not receive bone marrow transplant. Sensitivity Analysis 2--the modified cohort was limited to patients who have been diagnosed with relapsed AML who received chemotherapy and did not receive bone marrow transplant. Sensitivity Analysis 3--the modified cohort was limited to patients who have been diagnosed with AML and who did not receive bone marrow transplant. Sensitivity Analysis 4--the primary cohort was maintained, but 100 percent of the charges for revenue centers grouped into the ``Pharmacy Charge Amount'' were excluded. Sensitivity Analysis 5--identifies patients who have been diagnosed with AML in remission. The applicant noted that, in all of the sensitivity analysis scenarios, the average case[dash]weighted standardized charge per case exceeded the average case-weighted Table 10 MS-DRG threshold amount. Based on all of the analyses above, the applicant maintained that VYXEOSTM meets the cost criterion. We are inviting public comments on whether VYXEOSTM meets the cost criterion. With regard to substantial clinical improvement, according to the applicant, clinical data results have shown that the use of VYXEOSTM represents a substantial clinical improvement for the treatment of AML in newly diagnosed high[dash]risk, older (60 years of age and older) patients, marked by statistically significant improvements in overall survival, event free survival and response rates, and in relapsed patients age 18 to 65 years of age, where a statistically significant improvement in overall survival has been documented for the poor[dash]risk subset of patients as defined by the European Prognostic Index. In both groups of patients, the applicant stated that there was significant improvement in survival for the high[dash]risk patient group. The applicant provided the following specific clinical data results. The applicant stated that clinical data results show that treatment with VYXEOSTM for older patients (60 years of age and older) who have been diagnosed with untreated, high-risk AML will result in superior survival rates, as compared to patients treated with conventional ``7+3'' free drug dosing. The applicant provided a summary of the pivotal Phase III Study 301 in which 309 patients were enrolled, with 153 patients randomized to the VYXEOSTM treatment arm and 156 to the ``7+3'' free drug dosing treatment arm. Among patients who were 60 to 69 years old, there were 96 patients in the VYXEOSTM treatment arm and 102 in the ``7+3'' free drug dosing treatment arm. For patients who were 70 to 75 years old, there were 57 and 54 patients in each treatment arm, respectively. The applicant noted that the data results from the Phase III Study 301 demonstrated that first-line treatment of patients diagnosed with high- risk AML in the VYXEOSTM treatment arm resulted in substantially greater median overall survival of 9.56 months versus 5.95 months in the ``7+3'' free drug dosing treatment arm (hazard ratio of 0.69; p =0.005). The applicant further asserted that high-risk, older patients (60 years old and older) previously untreated for diagnoses of AML will have a lower risk of early death when treated with VYXEOSTM than those treated with the conventional ``7+3'' free drug dosing. The applicant cited Medeiros, et al.,\80\ which reported a large observational study of Medicare beneficiaries and noted the following: The data result of the study showed that 50 to 60 percent of elderly patients diagnosed with AML remain untreated following diagnosis; treated patients were more likely younger, male, and married, and less likely to have secondary diagnoses of AML, poor performance indicators, and poor comorbidity scores compared to untreated patients; and in multivariate survival analyses, treated patients exhibited a significant 33 percent lower risk of death compared to untreated patients. --------------------------------------------------------------------------- \80\ Medeiros, B., et al., ``Big data analysis of treatment patterns and outcomes among elderly acute myeloid leukemia patients in the United States'', Ann Hematol, 2015, vol. 94(7), pp. 1127- 1138. --------------------------------------------------------------------------- Based on data from the Phase III Study 301,\81\ the applicant cited the [[Page 20298]] following results: The rate of 60-day mortality was less in the VYXEOSTM treatment arm (13.7 percent) versus the ``7+3'' free drug dosing treatment arm (21.2 percent); the reduction in early mortality was due to fewer deaths from refractory AML (3.3 percent versus 11.3 percent), with very similar rates of 60-day mortality due to adverse events (10.4 percent versus 9.9 percent); there were fewer deaths in the VYXEOSTM treatment arm versus the ``7+3'' free drug dosing treatment arm during the treatment phase (7.8 percent versus 11.3 percent); and there were fewer deaths in the VYXEOSTM treatment arm during the follow-up phase than in the ``7+3'' free drug dosing treatment arm (59.5 percent versus 71.5 percent). --------------------------------------------------------------------------- \81\ Lancet, J., et al., ``Final results of a Phase III randomized trial of VYXEOS (CPX-351) versus 7+3 in older patients with newly diagnosed, high-risk (secondary) AML''. Abstract and oral presentation at American Society of Clinical Oncology (ASCO), June 2016. --------------------------------------------------------------------------- The applicant asserted that high-risk, older patients (60 years old and older) previously untreated for a diagnosis of AML exhibited statistically significant improvements in response rates after treatment with VYXEOSTM versus treatment with the conventional ``7+3'' free drug chemotherapy dosing, suggesting that the use of VYXEOSTM is a superior pre-transplant induction treatment versus ``7+3'' free drug dosing. Restoration of normal hematopoiesis is the ultimate goal of any therapy for AML diagnoses. The first phase of treatment consists of induction chemotherapy, in which the goal is to ``empty'' the bone marrow of all hematopoietic elements (both benign and malignant), and to allow repopulation of the marrow with normal cells, thereby yielding remission. According to the applicant, post-induction response rates were significantly higher following the use of VYXEOSTM, which elicited a 47.7 percent total response rate and a 37.3 percent rate for CR, whereas the total response and CR rates for the ``7+3'' free drug dosing arm were 33.3 percent and 25.6 percent, respectively. The CR + CRi rates for patients who were 60 to 69 years of age were 50.0 percent in the VYXEOSTM treatment arm and 36.3 percent in the ``7+3'' free drug dosing treatment arm, with an odds ratio of 1.76 (95 percent CI, 1.00-3.10). For patients who were 70 to 75 years old, the rates of CR + CRi were 43.9 percent in the VYXEOSTM treatment arm and 27.8 percent in the ``7+3'' free drug dosing treatment arm. The applicant asserted that VYXEOSTM treatment will enable high[dash]risk, older patients (60 years old and older) to bridge to allogeneic transplant, and VYXEOSTM treated responding patients will have markedly better outcomes following transplant. The applicant stated that diagnoses of secondary AML are considered incurable with standard chemotherapy approaches and, as with other high[dash]risk hematological malignancies, transplantation is a useful treatment alternative. The applicant further stated that autologous HSCT has limited effectiveness and at this time, only allogeneic HSCT with full intensity conditioning has been reported to produce long[dash]term remissions. However, the applicant stated that the clinical study by Medeiros, et al. reported that, while the use of allogeneic HSCT is considered a potential cure for AML, its use is limited in older patients because of significant baseline comorbidities and increased transplant-related morbidity and mortality. Patients in either treatment arm of the Phase III Study 301 responding to induction with a CR or CR+CRi (n=125) were considered for allogeneic hematopoietic cell transplant (HCT) when possible. In total, 91 patients were transplanted: 52 (34 percent) from the VYXEOSTM treatment arm and 39 (25 percent) from the ``7+3'' free drug dosing treatment arm. Patient and AML characteristics were similar according to randomized arm, including percentage of patients in each treatment arm that underwent transplant in CR+CRi status. However, the applicant noted that the VYXEOSTM treatment arm contained a higher percentage of older patients (70 years old or older) who were transplanted (VYXEOSTM, 31 percent; ``7+3'' free drug dosing, 15 percent).\82\ --------------------------------------------------------------------------- \82\ Stone Hematology 2004; Gordon AACR 2016; NCI. Available at: www.cancer.gov. --------------------------------------------------------------------------- According to the applicant, patient outcome following transplant strongly favored patients in the VYXEOSTM treatment arm. The Kaplan-Meier analysis of the 91 transplanted patients landmarked at the time of HCT showed that patients in the VYXEOSTM treatment arm had markedly better overall survival (hazard ratio 0.46; p=0.0046). The time-dependent Adjustment Model (Cox proportional hazard ratio) was used to evaluate the contribution of VYXEOSTM treatment to overall survival rate after adjustment for transplant and showed that VYXEOSTM treatment remained a significant contributor, even after adjusting for transplant. The time-dependent Cox hazard ratio for overall survival rates in the VYXEOSTM treatment arm versus the ``7+3'' free drug dosing treatment arm was 0.51 (95 percent CI, 0.35-0.75; p=.0007). The applicant asserted that VYXEOSTM treatment of previously untreated older patients (60 years old and older) diagnosed with high-risk AML increases the response rate and improves survival compared to conventional ``7+3'' free drug dosing treatment in patients diagnosed with FLT3 mutation. The applicant noted the following: Approximately 20 to 30 percent of AML patients harbor some form of FLT3 mutation, AML patients with a FLT3 mutation have a higher relapse rate and poorer prognosis than the overall population diagnosed with AML, and the most common type of mutation is internal tandem duplication (ITD) mutation localized to a membrane region of the receptor. The applicant cited Gordon, et al., 2016,\83\ which reported on the significant anti-leukemic activity of VYXEOSTM treatment in AML blasts exhibiting high-risk characteristics, including FLT3-ITD, that are typically associated with poor outcomes when treated with conventional ``7+3'' free drug dosing treatment. To determine whether the improved complete remission and overall survival rates of treatment using VYXEOSTM as compared to conventional ``7+3'' free drug dosing treatment are attributable to liposome-mediated altered drug PK or direct cellular interactions with specific AML blast samples, the authors evaluated cytotoxicity in 53 AML patient specimens. Cytotoxicity results were correlated with patient characteristics, as well as VYXEOSTM treatment cellular uptake and molecular phenotype status including FLT3-ITD, which is a predictor of poor patient outcomes to conventional ``7+3'' free drug dosing treatment. The applicant stated that a notable result from this research was the observation that AML blasts exhibiting the FLT3-ITD phenotype exhibited some of the lowest IC 50 (the 50 percent inhibitory concentration) values and, as a group, were five-fold more sensitive to the VYXEOSTM treatment than those with wild type FLT3. In addition, there was evidence that increased sensitivity to VYXEOSTM treatment was associated with increased uptake of the drug-laden liposomes by the patient-derived AML blasts. The applicant noted that Gordon, et al. 2016, concluded taken together, the data are consistent with clinical observations where VYXEOSTM treatment retains significant anti- [[Page 20299]] leukemic activity in AML patients exhibiting high-risk characteristics. The applicant also noted that a subanalysis of Phase III Study 301 identified 22 patients who had been diagnosed with FLT3 mutation in the VYXEOSTM treatment arm and 20 in the ``7+3'' free drug dosing treatment arm, which resulted in the following response rates of FLT3 mutated patients, which were higher with VYXEOSTM treatments (15 of 22, 68.2 percent) versus ``7+3'' free drug dosing treatments (5 of 20, 25.0 percent); and the Kaplan-Meier analysis of the 42 FLT3 mutated patients showed that patients in the VYXEOSTM treatment arm had a trend towards better overall survival rates (hazard ratio 0.57; p=0.093). --------------------------------------------------------------------------- \83\ Gordon, M., Tardi, P., Lawrence, M.D., et al., ``CPX-351 cytotoxicity against fresh AML blasts increased for FLT3-ITD+ cells and correlates with drug uptake and clinical outcomes,'' Abstract 287 and poster presented at AACR (American Association for Cancer Research), April 2016. ---------------------------------------------------------------------------The applicant asserted that younger patients (18 to 65 years old) with poor risk first relapse AML have shown higher response rates with VYXEOSTM treatment versus conventional ``salvage'' chemotherapy. Overall, the applicant stated that the use of VYXEOSTM had an acceptable safety profile in this patient population based on 60-day mortality data. Study 205 \84\ was a randomized study comparing VYXEOSTM treatment against the investigator's choice of first ``salvage'' chemotherapy in patients who had been diagnosed with relapsed AML after a first remission lasting greater than 1 month (VYXEOSTM treatment arm, n=81 and ``7+3'' free drug dosing treatment arm, n=44; 18 to 65 years old). Investigator's choice was almost always based on cytarabine + anthracycline, usually with the addition of one or two new agents. According to the applicant, treatment involving VYXEOSTM demonstrated a higher rate of morphological leukemia clearance among all patients, 43.2 percent versus 40.0 percent, and the advantage was most apparent in poor[dash]risk patients, 78.7 percent versus 44.4 percent, as defined by the European Prognostic Index (EPI). In the subset analysis of this EPI poor[dash]risk patient subset, the applicant stated there was a significant improvement in survival rate (6.6 versus 4.2 months median, hazard ratio=0.55, p=0.02) and improved response rate (39.3 percent versus 27 percent). The applicant also noted the following: the safety profile for the use of VYXEOSTM was qualitatively similar to that of control ``salvage'' therapy, with nearly identical 60-day mortality rates (14.8 percent versus 15.9 percent); among VYXEOSTM treated patients, those with no history of prior HSCT (n=59) had higher response rates (54.2 percent versus 37.8 percent) and lower 60-day mortality (10.2 percent versus 16.2 percent); overall, the use of VYXEOSTM had acceptable safety based on 60-day mortality data, with somewhat higher frequency of neutropenia and thrombocytopenia-related grade III-IV adverse events. Even though these patients are younger (18 to 65 years old) than the population studied in Phase III Study 301 (60 years old and older), Study 205 patients were at a later stage of the disease and almost all had responded to first-line therapy (cytarabine + anthracycline) and had relapsed. The applicant also cited Cortes, et al. 2015,\85\ which reported that patients who have been diagnosed with first relapse AML have limited likelihood of response and short expected survival following ``salvage'' treatment with the results from literature showing that: --------------------------------------------------------------------------- \84\ Cortes, J., et al., ``Significance of prior HSCT on the outcome of salvage therapy with CPX-351 or conventional chemotherapy among first relapse AML patients.'' Abstract and poster presented at ASH 2011. \85\ Cortes, J., et al., (2015), ``Phase II, multicenter, randomized trial of CPX-351 (cytarabine:daunorubicin) liposome injection versus intensive salvage therapy in adults with first relapse AML,'' Cancer, January 2015, pp. 234-42. --------------------------------------------------------------------------- Mitoxantrone, etoposide, and cytarabine induced response in 23 percent of patients, with median overall survival of only 2 months. Modulation of deoxycitidine kinase by fludarabine led to the combination of fludarabine and cytarabine, resulting in a 36 percent CR rate with median remission duration of 39 weeks. First salvage gemtuzumab ozogamicin induced CR+CRp (or CR+CRi) response in 30 percent of patients with CD33+ AML and, for patients with short first CR durations, appeared to be superior to cytarabine-based therapy. The applicant noted that Study 205 results showed the use of VYXEOSTM retained greater anti-leukemic efficacy in patients who have been diagnosed with poor[dash]risk first relapse AML, and produced higher morphological leukemia clearance rates (78.7 percent) compared to conventional ``salvage'' therapy (44 percent). The applicant further noted that, overall, the use of VYXEOSTM had acceptable safety profile in this patient population based on 60- day mortality data. Based on all of the data presented above, the applicant concluded that VYXEOSTM represents a substantial clinical improvement over existing technologies. However, we are concerned that, although there was an improvement in a number of outcomes in Phase III Study 301, specifically overall survival rate, lower risk of early death, improved response rates, better outcomes following transplant, increased response rate and overall survival in patients diagnosed with FLT3 mutation, and higher response rates versus conventional ``salvage'' chemotherapy in younger patients diagnosed with poor[dash]risk first relapse, the improved outcomes may not be statistically significant. Furthermore, we are concerned that the overall improvement in survival from 5.95 months to 9.56 months may not represent a substantial clinical improvement. In addition, the rate of adverse events in both treatment arms of Study 205, given the theoretical benefit of reduced toxicity with the liposomal formulation, was similar for both the VYXEOSTM and ``7+3'' free drug treatment groups. Therefore, we also are concerned that there is a similar rate of adverse events, such as febrile neutropenia (68 percent versus 71 percent), pneumonia (20 percent versus 15 percent), and hypoxia (13 percent versus 15 percent), with the use of VYXEOSTM as compared with the conventional ``7+3'' free drug regimen. We are inviting public comments on whether VYXEOSTM meets the substantial clinical improvement criterion. Below we summarize and respond to a written public comment we received regarding the VYXEOSTM during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: The applicant provided a written comment to provide notification of the addition of VYXEOSTM to the Category 1 Clinical Practice Guidelines in Oncology recommendation by the National Comprehensive Cancer Network. The applicant reported that the resources made available by NCCN are the NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines[reg]). The intent of the guidelines is to assist in the decision-making process of individuals involved in cancer treatment and care. According to the NCCN Guidelines[reg], Category 1 clinical practices are based upon high[dash]level evidence, and there is uniform NCCN consensus that the intervention is appropriate. The February 7, 2018 NCCN Guidelines[reg] for Acute Myeloid Leukemia include a recommendation for cytarabine and daunorubicin for the treatment of adult patients 60 years of age or older who have been newly diagnosed with therapy-related AML (t-AML) or AML with myelodysplasia-related changes [[Page 20300]] (AML-RMC) to be included as a Category 1 clinical practice.\86\ --------------------------------------------------------------------------- \86\ NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines[reg]), Acute Myeloid Leukemia, Version I--2018, February 7, 2018, https://www.nccn.org/professionals/physician_gls/pdf/aml.pdf. --------------------------------------------------------------------------- Response: We appreciate the applicant's submission of additional information. We will take these comments into consideration when deciding whether to approve new technology add-on payments for VYXEOSTM for FY 2019. c. VABOMERETM (Meropenem-Vaborbactam) Melinta Therapeutics, Inc., submitted an application for new technology add-on payments for VABOMERETM for FY 2019. VABOMERETM is indicated for use in the treatment of adult patients who have been diagnosed with complicated urinary tract infections (cUTIs), including pyelonephritis, caused by specific bacteria. VABOMERETM received FDA approval on August 29, 2017. Complicated urinary tract infections (cUTIs) are defined as chills, rigors, or fever (temperature of greater than or equal to 38.0[deg]C); elevated white blood cell count (greater than 10,000/mm\3\), or left shift (greater than 15 percent immature PMNs); nausea or vomiting; dysuria, increased urinary frequency, or urinary urgency; lower abdominal pain or pelvic pain. Acute pyelonephritis is defined as chills, rigors, or fever (temperature of greater than or equal to 38.0[deg]C); elevated white blood cell count (greater than 10,000/ mm\3\), or left shift (greater than 15 percent immature PMNs); nausea or vomiting; dysuria, increased urinary frequency, or urinary urgency; flank pain; costo[dash]vertebral angle tenderness on physical examination. Risk factors for infection with drug-resistant organisms do not, on their own, indicate a cUTI.\87\ The increasing incidence of multidrug-resistant gram-negative bacteria, such as carbapenem- resistant Enterobacteriacea (CRE), has resulted in a critical need for new antimicrobials. --------------------------------------------------------------------------- \87\ Hooton, T. and Kalpana, G., 2018, ``Acute complicated urinary tract infection (including pyelonephritis) in adults,'' In A. Bloom (Ed.), UpToDate. Available at: https://www.uptodate.com/contents/acute-complicated-urinary-tract-infection-including-pyelonephritis-in-adults. --------------------------------------------------------------------------- The applicant reported that it has developed a beta-lactamase combination antibiotic, VABOMERETM, to treat cUTIs, including those caused by certain carbapenem[dash]resistant organisms. By combining the carbapenem class antibiotic meropenem with vaborbactam, VABOMERETM protects meropenem from degradation by certain CRE strains. The applicant stated that meropenem, a carbapenem, is a broad spectrum beta[dash]lactam antibiotic that works by inhibiting cell wall synthesis of both gram-positive and gram-negative bacteria through binding of penicillin-binding proteins (PBP). Carbapenemase producing strains of bacteria have become more resistant to beta-lactam antibiotics, such as meropenem. However, meropenem in combination with vaborbactam, inhibits the carbapenemase activity, thereby allowing the meropenem to bind PBP and kill the bacteria. According to the applicant, vaborbactam, a boronic acid inhibitor, is a first-in class beta-lactamase inhibitor. Vaborbactam blocks the breakdown of carbapenems, such as meropenem, by bacteria containing carbapenemases. Although vaborbactam has no antibacterial properties, it allows for the treatment of resistant infections by increasing bacterial sensitivity to meropenem. New carbapenemase producing strains of bacteria have become more resistant to beta-lactam antibiotics. However, meropenem in combination with vaborbactam, can inhibit the carbapenemase enzyme, thereby allowing the meropenem to bind PBP and kill the bacteria. The applicant stated that the vaborbactem component of VABOMERETM helps to protect the meropenem from degradation by certain beta-lactamases, such as Klebsiella pneumonia carbapenemase (KPC). According to the applicant, VABOMERETM is the first of a novel class of beta[dash]lactamase inhibitors. The applicant asserted that VABOMERETM's use of vaborbactam to restore the efficacy of meropenem is a novel approach to fighting antimicrobial resistance. The applicant stated that VABOMERETM is indicated for use in the treatment of adult patients 18 years old and older who have been diagnosed with cUTIs, including pyelonephritis. The recommended dosage of VABOMERETM is 4 grams (2 grams of meropenem and 2 grams of vaborbactam) administered every 8 hours by intravenous (IV) infusion over 3 hours with an estimated glomerular filtration rate (eGFR) greater than or equal to 50 mL/min/1.73 m\2\. The recommended dosage of VABOMERETM for patients with varying degrees of renal function is included in the prescribing information. The duration of treatment is for up to 14 days. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, VABOMERETM is designed primarily for the treatment of gram-negative bacteria that are resistant to other current antibiotic therapies. The applicant stated that VABOMERETM does not use the same or similar mechanism of action to achieve a therapeutic outcome. The applicant asserted that the vaborbactam component of VABOMERETM is a new class of beta-lactamase inhibitor that protects meropenem from degradation by certain enzymes such as carbapenamases. The applicant indicated that the structure of vaborbactam is distinctly optimized for inhibition of serine carbapenamases and for combination with a carbapenem antibiotic. Beta-lactamase inhibitors are agents that inhibit bacterial enzymes-- enzymes that destroy beta-lactam antibiotics and result in resistance to first[dash]line as well as ``last defense'' antimicrobials used in hospitals. According to the applicant, in order for carbapenems to be effective these enzymes must be inhibited. The applicant stated that the addition of vaborbactam as a potent inhibitor against Class A and C serine beta-lactamases, particularly KPC, represents a new mechanism of action. According to the applicant, VABOMERETM's use of vaborbactam to restore the efficacy of meropenem is a novel approach and that the FDA's approval of VABOMERETM for the treatment of cUTIs represents a significant label expansion because mereopenem alone (without the addition of vaborbactam) is not indicated for the treatment of patients with cUTI infections. Therefore, the applicant maintained that this technology and resistance-fighting mechanism involved in the therapeutic effect achieved by VABOMERETM is distinct from any other existing product. The applicant noted that VABOMERETM was designated as a qualified infectious disease product (QIDP) in January 2014. This designation is given to antibacterial products that treat serious or life[dash]threatening infections under the Generating Antibiotic Incentives Now (GAIN) title of the FDA Safety and Innovation Act. We believe that, although the molecular structure of the vaborbactam component of VABOMERETM is unique, the bactericidal action of VABOMERETM is the same as meropenem alone. In [[Page 20301]] addition, we note that there are other similar beta-lactam/beta- lactamase inhibitor combination therapies currently available as treatment options. We are inviting public comments on whether VABOMERETM's mechanism of action is similar to other existing technologies. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant asserted that patients who may be eligible to receive treatment involving VABOMERETM include hospitalized patients who have been diagnosed with a cUTI. These potential cases can be identified by a variety of ICD-10-CM diagnosis codes. Therefore, potential cases representing patients who have been diagnosed with a cUTI who may be eligible for treatment involving VABOMERETM can be mapped to multiple MS-DRGs. The following are the most commonly used MS-DRGs for patients who have been diagnosed with a cUTI: MS-DRG 690 (Kidney and Urinary Tract Infections without MCC); MS-DRG 853 (Infectious and Parasitic Diseases with O.R. Procedure with MCC); MS-DRG 870 (Septicemia or Sever Sepsis with Mechanical Ventilation 96+ Hours); MS- DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with MCC); and MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours without MCC). Potential cases representing patients who may be eligible for treatment with VABOMERETM would be assigned to the same MS-DRGs as cases representing hospitalized patients who have been diagnosed with a cUTI. With respect to the third criterion, whether the use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant asserted that the use of VABOMERETM would treat a different patient population than existing and currently available treatment options. According to the applicant, VABOMERETM's use of vaborbactam to restore the efficacy of meropenem is a novel approach to fighting the global and national public health crisis of antimicrobial resistance, and as such, the use of VABOMERETM reaches different and expanded patient populations. The applicant further asserted that future patient populations are saved as well because the growth of resistant infections is slowed. The applicant believed that, because of the threat posed by gram-negative bacterial infections and the limited number of available treatments currently on the market or in development, the combination structure and development of VABOMERETM and its potential expanded use is new. While the applicant believes that VABOMERETM treats a different patient population, we note that VABOMERETM is only approved for use in the treatment of adult patients who have been diagnosed with cUTIs. Therefore, it appears that VABOMERETM treats the same population (adult patients with a cUTI) and there are already other treatment options available for diagnoses of cUTIs. We are concerned that VABOMERETM may be substantially similar to existing beta[dash]lactam/beta-lactamase inhibitor combination therapies. As noted above, we are concerned that VABOMERETM may have a similar mechanism of action, treats the same population (patients with a cUTI) and would be assigned to the same MS-DRGs (similar to existing beta[dash]lactam/beta-lactamase inhibitor combination therapies currently available as treatment options). We are inviting public comments on whether VABOMERETM meets the substantial similarity criteria and the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. In order to identify the range of MS-DRGs to which cases representing potential patients who may be eligible for treatment using VABOMERETM may map, the applicant used the Premier Research Database from 2nd Quarter 2015 to 4th Quarter 2016. According to the applicant, Premier is an electronic laboratory, pharmacy, and billing data repository that collects data from over 600 hospitals and captures nearly 20 percent of U.S. hospitalizations. The applicant's list of most common MS-DRGs is based on data regarding CRE from the Premier Research Database. According to the applicant, approximately 175 member hospitals also submit microbiology data, which allowed the applicant to identify specific pathogens such as CRE infections. Using the Premier Research Database, the applicant identified over 350 MS-DRGs containing data for 2,076 cases representing patients who had been hospitalized for CRE infections. The applicant used the top five most common MS- DRGs: MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours with MCC), MS-DRG 853 (Infectious and Parasitic Disease with O.R. Procedure with MCC), MS-DRG 870 (Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours), MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours without MCC), and MS-DRG 690 (Kidney and Urinary Tract Infections without MCC), to which 627 cases representing potential patients who may be eligible for treatment involving VABOMERETM, or approximately 30.2 percent of the total cases identified, mapped. The applicant reported that the resulting 627 cases from the identified top 5 MS-DRGs have an average case-weighted unstandardized charge per case of $74,815. We note that, instead of using actual charges from the Premier Research Database, the applicant computed this amount based on the average case-weighted threshold amounts in Table 10 from the FY 2018 IPPS/LTCH PPS final rule. For the rest of the analysis, the applicant adjusted the average case-weighted threshold amounts (referred to above as the average case[dash]weighted unstandardized charge per case) rather than the actual average case[dash]weighted unstandardized charge per case from the Premier Research Database. According to the applicant, based on the Premier data, $1,999 is the mean antibiotic costs of treating patients hospitalized with CRE infections with current therapies. The applicant explained that it identified 69 different regimens that ranged from 1 to 4 drugs from a study conducted to understand the current management of patients diagnosed with CRE infections. Accordingly, the applicant estimated the removal of charges for a prior technology of $1,999. The applicant then standardized the charges. The applicant applied an inflation factor of 9.357 percent from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527) to inflate the charges. The applicant noted that it does not yet have sufficient charge data from hospitals and will work to supplement its application with the information once it is available. However, for purposes of calculating charges, the applicant used the average charge as the wholesale acquisition cost (WAC) price for a treatment duration of 14 days and added this amount to the average charge per case. Using this estimate, the applicant calculated the final inflated case[dash]weighted standardized charge per case as $91,304, which exceeds the average case[dash]weighted threshold amount of $74,815. Therefore, the applicant asserted that VABOMERETM meets the cost criterion. We are concerned that, as noted earlier, instead of using actual charges from the Premier Research Database, the applicant computed the average case[dash]weighted unstandardized charge per case based on the average case-weighted threshold amounts in Table 10 [[Page 20302]] from the FY 2018 IPPS/LTCH PPS final rule. Because the applicant did not demonstrate that the average case-weighted standardized charge per case for VABOMERETM (using actual charges from the Premier Research Database) would exceed the average case-weighted threshold amounts in Table 10, we are unable to determine if the applicant meets the cost criterion. We are inviting public comments on whether VABOMERETM meets the cost criterion, including with respect to the concern regarding the applicant's analysis. With regard to the substantial clinical improvement criterion, the applicant believed that the results from the VABOMERETM clinical trials clearly establish that VABOMERETM represents a substantial clinical improvement for treatment of deadly, antibiotic resistant infections. Specifically, the applicant asserted that VABOMERETM offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments, and the use of VABOMERETM significantly improves clinical outcomes for a patient population as compared to currently available treatments. The applicant provided the results of the Targeting Antibiotic Non-sensitive Gram-Negative Organisms (TANGO) I and II clinical trials to support its assertion. TANGO[dash]I \88\ was a prospective, randomized, double-blinded trial of VABOMERETM versus piperacillin-tazobactam in patients with cUTIs and acute pyelonephritis (A/P). TANGO[dash]I is also a noninferiority (NI) trial powered to evaluate the efficacy, safety, and tolerability of VABOMERETM compared to piperacillin- tazobactam in the treatment of cUTI, including AP, in adult patients. There were two primary endpoints for this study, one for the FDA, which was cure or improvement and microbiologic outcome of eradication at the end[dash]of[dash]treatment (EOT) (day 5 to 14) in the proportion of patients in the Microbiologic Evaluable Modified Intent-to-Treat (m- MITT) population who achieved overall success (clinical cure or improvement and eradication of baseline pathogen to <104 CFU/mL), and one for the European Medicines Agency (EMA), which was the proportion of patients in the co-primary m-MITT and Microbiologic Evaluable (ME) populations who achieve a microbiologic outcome of eradication (eradication of baseline pathogen to <103 CFU/mL) at the test[dash]of[dash]cure (TOC) visit (day 15 to 23). The trial enrolled 550 adult patients who were randomized 1:1 to receive VABOMERETM as a 3-hour IV infusion every 8 hours, or piperacillin 4g-tazobactam 500mg as a 30 minute IV infusion every 8 hours, for at least 5 days for the treatment of a cUTI. Therapy was set at a minimum of 5 days to fully assess the efficacy and safety of VABOMERETM. After a minimum of 5 days of IV therapy, patients could be switched to oral levofloxacin (500 mg once every 24 hours) to complete a total of 10-day treatment course (IV + oral), if they met pre-specified criteria. Treatment was allowed for up to 14 days, if clinically indicated. --------------------------------------------------------------------------- \88\ Vabomere Prescribing Information, Clinical Studies (August 2017), available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/209776lbl.pdf. --------------------------------------------------------------------------- Patient demographic and baseline characteristics were balanced between treatment groups in the m-MITT population. Approximately 93 percent of patients were Caucasian and 66 percent were females in both treatment groups. The mean age was 54 years old with 32 percent and 42 percent of the patients 65 years old and older in the VABOMERETM and piperacillin/tazobactam treatment groups, respectively. Mean body mass index was approximately 26.5 kg/m\2\ in both treatment groups. Concomitant bacteremia was identified in 12 (6 percent) and 15 (8 percent) of the patients at baseline in the VABOMERETM and piperacillin/tazobactam treatment groups, respectively. The proportion of patients who were diagnosed with diabetes mellitus at baseline was 17 percent and 19 percent in the VABOMERETM and piperacillin/tazobactam treatment groups, respectively. The majority of the patients (approximately 90 percent) were enrolled from Europe, and approximately 2 percent of the patients were enrolled from North America. Overall, in both treatment groups, 59 percent of the patients had pyelonephritis and 40 percent had a cUTI, with 21 percent and 19 percent of the patients having a non[dash]removable and removable source of infection, respectively. Mean duration of IV treatment in both treatment groups was 8 days and mean total treatment duration (IV and oral) was 10 days; patients with baseline bacteremia could receive up to 14 days of therapy (IV and oral). Approximately 10 percent of the patients in each treatment group in the m-MITT population had a levofloxacin-resistant pathogen at baseline and received levofloxacin as the oral switch therapy. According to the applicant, this protocol violation may have impacted the assessment of the outcomes at the TOC visit. These patients were not excluded from the analysis of adverse reactions (headache, phlebitis, nausea, diarrhea, and others) occurring in 1 percent or more of the patients receiving VABOMERETM, as the decision to switch to oral levofloxacin was based on post-randomization factors. Regarding the FDA primary endpoint, the applicant stated the following: Overall success rate at the end of IV treatment (day 5 to 14) was 98.4 percent and 94 percent for the VABOMERETM and piperacillin/tazobactam treatment groups, respectively. The TOC--7 days post IV therapy was 76.5 percent (124 of 162 patients) for the VABOMERETM group and 73.2 percent (112 of 153 patients) for the piperacillin/tazobactam group. Despite being an NI trial, TANGO-I showed a statistically significant difference favoring VABOMERETM in the primary efficacy endpoint over piperacillin/tazobactam (a commonly used agent for gram-negative infections in U.S. hospitals). VABOMERETM demonstrated statistical superiority over piperacillin-tazobactam with overall success of 98.4 percent of patients treated with VABOMERETM in the TANGO-I clinical trial compared to 94.0 percent for patients treated with piperacillin/ tazobactam, with a treatment difference of 4.5 percent and 95 percent CI of (0.7 percent, 9.1 percent). Because the lower limit of the 95 percent CI is also greater than 0 percent, VABOMERETM was statistically superior to piperacillin/tazobactam. Because non-inferiority was demonstrated, then superiority was tested. Further, the applicant asserted that a noninferiority design may have a ``superiority'' hypothesis imbedded within the study design that is appropriately tested using a non[dash]inferiority design and statistical analysis. As such, according to the applicant, superiority trials concerning antibiotics are impractical and even unethical in many cases because one cannot randomize patients to receive inactive therapies. The applicant stated that it would be unethical to leave a patient with a severe infection without any treatment. The EMA endpoint of eradication rates at TOC were higher in the VABOMERETM group compared to the piperacillin/ tazobactam group in both the m-MITT (66.7 percent versus 57.7 percent) and ME (66.3 percent and 60.4 percent) populations; however, it was [[Page 20303]] not a statistically significant improvement. We note that the eradication rates of the EMA endpoint were not statistically significant. We are inviting public comments with respect to our concern as to whether the FDA endpoints demonstrating noninferiority are statistically sufficient data to support that VABOMERETM is a substantial clinical improvement in the treatment of patients with a cUTI. In TANGO-I the applicant offers data comparing VABOMERETM to piperacillin-tazobactam EOT/TOC rates in the setting of cUTIs/AP, but does not offer a comparison to other antibiotic treatments of cUTIs known to be effective against gram- negative uropathogens, specifically other carbapenems.\89\ We also note that the study population is largely European (98 percent), and given the variable geographic distribution of antibiotic resistance we are concerned that the use of piperacillin/tazobactam as the comparator may have skewed the eradication rates in favor of VABOMERETM, or that the favorable results would not be applicable to patients in the United States. We are inviting public comments regarding the lack of a comparison to other antibiotic treatments of cUTIs known to be effective against gram-negative uropathogens, whether the comparator the applicant used in its trial studies may have skewed the eradication rates in favor of VABOMERETM, and if the favorable results would be applicable to patients in the United States to allow for sufficient information in evaluating substantial clinical improvement. --------------------------------------------------------------------------- \89\ Golan, Y., 2015, ``Empiric therapy for hospital-acquired, Gram-negative complicated intra-abdominal infection and complicated urinary tract infections: a systematic literature review of current and emerging treatment options,'' BMC Infectious Diseases, vol. 15, pp. 313. http://doi.org/10.1186/s12879-015-1054-1. --------------------------------------------------------------------------- The applicant asserted that the TANGO[dash]II study \90\ of monotherapy with VABOMERETM compared to best available therapy (BAT) (salvage care of cocktails of toxic/poorly efficacious last resort agents) for the treatment of CRE infections showed important differences in clinical outcomes, including reduced mortality, higher clinical cure at EOT and TOC, benefit in important patient subgroups of HABP/VABP, bacteremia, renal impairment, and immunocompromised and reduced AEs, particularly lower nephrotoxicity in the study group. TANGO[dash]II is a multi[dash]center, randomized, Phase III, open-label trial of patients with infections due to known or suspected CRE, including cUTI, AP, HABP/VABP, bacteremia, or complicated intra-abdominal infection (cIAI). Eligible patients were randomized 2:1 to monotherapy with VABOMERETM or BAT for 7 to 14 days. There were no consensus BAT regimes, it could include (alone or in combination) a carbapenem, aminoglycoside, polymyxin B, colistin, tigecycline or ceftazidime-avibactam. --------------------------------------------------------------------------- \90\ Alexander, et al., ``CRE Infections: Results From a Retrospective Series and Implications for the Design of Prospective Clinical Trials,'' Open Forum Infectious Diseases. --------------------------------------------------------------------------- A total of 72 patients were enrolled in the TANGO[dash]II trial. Of these, 50 of the patients (69.4 percent) had a gram-negative baseline organism (m-MITT population), and 43 of the patients (59.7 percent) had a baseline CRE (mCRE-MITT population). Within the mCRE-MITT population, 20 of the patients had bacteremia, 15 of the patients had a cUTI/AP, 5 of the patients had HABP/VABP, and 3 of the patients had a cIAI. The most common baseline CRE pathogens were K. pneumoniae (86 percent) and Escherichia coli (7 percent). Cure rates of the mCRE-MITT population at EOT for VABOMERETM and BAT groups were 64.3 percent and 40 percent, respectively, TOC, 7 days after EOT, were 57.1 percent and 26.7 percent, respectively, 28-day mortality was 17.9 percent (5 of 28 patients) and 33.3 percent (5 of 15 patients), respectively. The applicant asserted that with further sensitivity analysis, taking into account prior antibiotic failures among the VABOMERETM study arm, the 28[dash]day all-cause mortality rates were even lower among VABOMERETM versus BAT patients (5.3 percent (1 of 19 patients) versus 33.3 percent (5 of 15 patients)). Additionally, in July 2017, randomization in the trial was stopped early following a recommendation by the TANGO[dash]II Data Safety Monitoring Board (DSMB) based on risk-benefit considerations that randomization of additional patients to the BAT comparator arm should not continue. According to the applicant, subgroup analyses of the TANGO[dash]II studies include an analysis of adverse events in which VABOMERETM compared to BAT demonstrated the following: VABOMERETM was associated with less severe treatment emergent adverse events of 13.3 percent versus 28 percent. VABOMERETM was less likely to be associated with a significant increase in creatinine 3 percent versus 26 percent. Efficacy results of the TANGO[dash]II trial cUTI/AP subgroup demonstrated VABOMERETM was associated with an overall success rate at EOT for the mCRE-MITT populations of 72 percent (8 of 11 patients) versus 50 percent (2 of 4 patients) and an overall success rate at TOC of 27.3 percent (3 of 7 patients) versus 50 percent (2 of 4 patients). We note that many of the TANGO[dash]II trial outcomes showing improvements in the use of VABOMERETM over BAT are not statistically significant. We also note that the TANGO[dash]II study included a small number of patients; the study population in the mCRE[dash]MITT only included 43 patients. Additionally, the cUTI/AP subgroup analysis only included a total of 15 patients and did not show an increased overall success rate at TOC (27.3 percent versus 50 percent) over the BAT group. We are inviting public comments with respect to our concern as to whether the lack of statistically significant outcomes and the small number of study participants allows for enough information to evaluate substantial clinical improvement. We are inviting public comments on whether the VABOMERETM technology meets the substantial clinical improvement criterion, including with respect to the specific concerns we have raised. Below we summarize and respond to written public comments we received regarding VABOMERETM during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: The applicant submitted information regarding the comparison of VABOMERETM to other antibiotic treatments for a cUTI known to be effective against gram[dash]negative uropathogens. The applicant asserted that doripenem is a carbapenem antibiotic and, therefore, is subject to degradation and inactivation by carbapenemases, including the Klebsiella pneumoniae carbapenemase (KPC). The applicant stated that doripenem has been shown to have poor activity in vitro against CRE and VABOMERETM, in contrast, takes a novel, first in class beta-lactamase inhibitor, vaborbactam, and combines it with the carbapenem drug meropenem in a manner that-- because of the unique, novel, and new properties of vaborbactam when combined with meropenem to create VABOMERETM--to effectively restore the effectiveness of meropenem (a carbapenem) in fighting against carbapenem-resistant bacteria. The applicant indicated that extensive in vitro studies have been conducted and show that carbapenems such as doripenem have poor activity in vitro against KPC- producing CRE. Because the in vitro data show that doripenem has poor activity against KPC-producing CRE, the applicant stated that no comparative clinical efficacy data [[Page 20304]] between doripenem and VABOMERETM exists. Response: We appreciate the applicant's comments. However, we believe that because the study population for VABOMERETM is patients with cUTIs and not UTIs with KPCs, we are concerned that the applicant does not offer comparison data to other antibiotic treatments of cUTIs known to be effective against gram[dash]negative uropathogens. As noted, we are inviting public comments on whether the VABOMERETM technology meets the substantial clinical improvement criterion, including with respect to the specific concerns we have raised. d. DURAGRAFT[reg] Vascular Conduit Solution Somahlution, Inc. submitted an application for new technology add- on payments for DURAGRAFT[reg] for FY 2019. DURAGRAFT[reg] is designed to protect the endothelium of the vein graft following harvesting and prior to grafting to prevent vascular graft disease (VGD) and vein graft failure (VGF), and to reduce the clinical complications associated with graft failure. These complications include myocardial infarction and repeat revascularization. DURAGRAFT[reg] is formulated into a solution that is used during standard graft handling, flushing, and bathing steps. VGD is the principal cause of both early (within 30 days) and intermediate/late (months to years) VGF. The principal mediator of VGD following grafting in bypass surgeries is damage that occurs during intra-operative vascular graft harvesting and handling.91 92 Endothelium can be destroyed or damaged intraoperatively through the acute physical stress of harvesting, storage, and handling, and through more insidious processes such as those associated with ischemic injury, metabolic stress and oxidative damage. According to the applicant, more recently, it has been demonstrated that damage associated with graft storage solution has the highest correlation with the development of 12-month VGF.93 94 This is likely due not only to the active tissue damage associated with commonly used storage solutions, but also to their inability to protect against ischemic injury.95 96 97 VGD encompasses the pathophysiological changes that occur in damaged vein grafts following their use in surgical grafting. These changes, apparent within minutes to hours of grafting, are manifested as endothelial dysfunction, death and/or denudation and include pro-inflammatory, pro-thrombogenic and proliferative changes within the graft. These initial responses to damage cause even more damage in a domino-like effect, thereby perpetuating the response-damage cycle that is the basis of VGD progression. --------------------------------------------------------------------------- \91\ Harskamp, Ralf E., MD, Alexander, John H., MD, MHS, Schulte, Phillip J., Phd, et al., ``Vein Graft Preservation Solutions, Patency, and Outcomes After Coronary Artery Bypass Graft Surgery: follow-up from the PREVENT IV randomized clinical trial'', Jama Surg, 2014, vol. 149(8), pp. 798-805. \92\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein Graft Disease: `Never Ending Story' of the Eternal Return,'' Res Cardiovasc Med, 2014, vol. 3(3), pp. e21092. \93\ Ibid. \94\ Ibid. \95\ Weiss, D.R., Juchem, G., Kemkes, B.M., et al., ``Extensive deendothelialization and thrombogenicity in routinely prepared vein grafts for coronary bypass operations: facts and remedy,'' Century Publishing Corporation, International Journal of Clinical Experimental Medicine, 2009 May 28, vol. 2(2), pp. 95-113. \96\ Wilbring, M., Tugtekin, S.M., Zatschler, B., et al., ``Even short-time storage in physiological saline solution impairs endothelial vascular function of saphenous vein grafts,'' Elsevier Science Inc., European Journal of Cardio-Thoracic Surgery, 2011 Oct, vol. 40(4), pp. 811-815. \97\ Thatte, H.S., Biswas, K.S., Najjar, S.F., et al., ``Multi- photon microscopic evaluation of saphenous vein endothelium and its preservation with a new solution,'' GALA, Elsevier Science Inc., Ann Thorac Surg, 2003 Apr, vol. 75(4), pp. 1145-1152. --------------------------------------------------------------------------- The applicant further noted that endothelial dysfunction and inflammation also result in the diminished ability of the graft to respond appropriately to new blood flow patterns and adaptive positive remodeling may be thwarted. This is because proper remodeling is dependent upon a functional endothelial response to shear stress that involves the production of remodeling factors by the endothelium including nitro vasodilators, prostaglandins, lipoxyoxygenases, hyperpolarizing factors and other growth factors. Therefore, damaged, missing and/or dysfunctional endothelial cells prevent, to varying extents, graft adaption which makes the graft susceptible to shear- mediated endothelial damage. The collective damage results in intimal hyperplasia or graft wall thickening that is the basis for atheroma development and subsequent lumen narrowing and graft failure, which is the end state of VGD. The applicant pointed to several references to highlight pathologic changes leading to VGD, occlusion and loss of vasomotor function.98 99 100 101 102 103 104 105 The applicant summarized, that when the damaged luminal surface of a vein graft is presented to the bloodstream at time of reperfusion, a domino[dash]effect of further damage is triggered through inflammatory, thrombogenic and aberrant hyper-proliferative processes that lead to both early and late VGF. Presenting an intact functional endothelial layer at the time of grafting is, therefore, tantamount to protecting the graft and its associated endothelium from damage that occurs post- grafting, in turn conferring protection against graft failure. Given the low success rate of failed graft intervention, addressing graft endothelial protection at the time of surgery is critical.\106\ --------------------------------------------------------------------------- \98\ Verrier, E.D., Boyle, E.M., ``Endothelial cell injury in cardiovascular surgery: an overview,'' Ann Thorac Surg, 1997, vol. 64, pp. S2-S8. \99\ Harskamp, R.E., Lopes, R.D., Baisden, C.E., et al., ``Saphenous vein graft failure after coronary artery bypass surgery: pathophysiology, management, and future directions,'' Ann Thorac Surg., 2013 May, vol. 257(5), pp. 824-33. \100\ Hess, C.N., Lopes, R.D., Gibson, C.M., et al., ``Saphenous vein graft failure after coronary artery bypass surgery: insights from PREVENT IV,'' Circulation 2014 Oct 21, vol. 130(17), pp. 1445- 51. \101\ Sellke, F.W., Boyle, E.M., Verrier, E.D., ``The pathophysiology of vasomotor dysfunction,'' Ann Thorac Surg, 1997, vol. 64, pp. S9-S15. \102\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein graft disease: pathogenesis, predisposition and prevention,'' Circulation 1998, vol. 97(9), pp. 916-31. \103\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr Opin Cardiol, 1995, vol. 10, pp. 562-8. \104\ Davies, M.G., Hagen, P.O., ``Pathophysiology of vein graft failure: a review,'' Eur J Vasc Endovasc Surg, 1995, vol. 9, pp. 7- 18. \105\ Edmunds, L.H., ``Techniques of myocardial revascularization. In: Edmunds LH, ed. Cardiac surgery in the adult,'' New York: McGraw-Hill, 1997, pp. 481-534. \106\ Kim, F.Y., Marhefka, G., Ruggiero, N.J., et al., ``Saphenous vein graft disease: review of pathophysiology, prevention, and treatment,'' Cardiol, Rev 2013, vol. 21(2), pp. 101- 9. --------------------------------------------------------------------------- With respect to the newness criterion, DURAGRAFT[reg] has not received FDA approval at the time of the development of this proposed rule. The applicant indicated that it anticipates FDA approval of its premarket application by the second quarter of 2018. The applicant also indicated that ICD-10-PCS code XY0VX83 (Extracorporeal introduction of endothelial damage inhibitor to vein graft, new technology group 3) would identify procedures involving the use of the DURAGRAFT[reg] technology. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or similar mechanism of action to achieve a therapeutic outcome, according to the applicant, there are currently no other treatment options available with the [[Page 20305]] same mechanism of action as that of DURAGRAFT[reg]. Moreover, the applicant conveyed there are currently no commercial solutions approved for treating arteries or veins intended for bypass surgery. The applicant explained that the DURAGRAFT[reg] treatment has been formulated into a solution so that it can be used to treat grafts during handling, flushing, and bathing steps without changing surgical practice to perform the treatment. According to the applicant, DURAGRAFT[reg] is specifically designed to inhibit endothelial cell damage and death, as well as prevent damage to other cells of the vascular conduit, which achieves a superior clinical outcome in coronary artery bypass grafting (CABG). The applicant did not directly address within its application the second and third criteria; whether a product is assigned to the same or a different MS-DRG and whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. However, the applicant stated, as previously indicated, that there are currently no other treatment options available that utilize the same mechanism of action as that of the DURAGRAFT[reg]. Based on the applicant's statements presented above, we are concerned that the mechanism of action of the DURAGRAFT[reg] may be the same or similar to other vein graft storage solutions. We also are concerned with the lack of information regarding how the technology meets the substantial similarity criteria. Specifically, we understand that there are other vein graft storage solutions available, such as various saline, blood, and electrolyte solutions. We believe that additional information would be helpful regarding whether the use of the technology treats the same or similar patient population or type of disease, and whether the product is assigned to the same or different MS-DRG as compared to the other storage solutions. We are inviting public comments on whether DURAGRAFT[reg] meets the substantial similarity criteria and the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. In order to identify the range of MS-DRGs that cases representing potential patients who may be eligible for treatment using DURAGRAFT[reg] may map to, the applicant identified all MS-DRGs for patients who underwent coronary artery bypass grafting (CABG). Specifically, the applicant searched the FY 2016 MedPAR file for claims that included IPPS patients and identified potential cases by the following ICD-10-PCS procedure codes: ------------------------------------------------------------------------ ICD-10-PCS procedure code Code title ------------------------------------------------------------------------ 021009W................... Bypass coronary artery, one artery from aorta with autologous venous tissue, open approach. 02100AW................... Bypass coronary artery, one artery from aorta with autologous arterial tissue, open approach. 021049W................... Drainage of intracranial subdural space, percutaneous approach 02104AW................... Bypass cerebral ventricle to cerebral cisterns, percutaneous approach. 021109W................... Bypass coronary artery, two arteries from aorta with autologous venous tissue, open approach. 02110AW................... Bypass coronary artery, two arteries from aorta with autologous arterial tissue, open approach. 021149W................... Bypass coronary artery, two arteries from aorta with autologous venous tissue, percutaneous endoscopic approach. 02114AW................... Bypass coronary artery, two arteries from aorta with autologous arterial tissue, percutaneous endoscopic approach. 021209W................... Bypass coronary artery, three arteries from aorta with autologous venous tissue, open approach. 02120AW................... Bypass coronary artery, three arteries from aorta with autologous arterial tissue, open approach. 021249W................... Bypass coronary artery, three arteries from aorta with autologous venous tissue, percutaneous endoscopic approach. 02124AW................... Bypass coronary artery, three arteries from aorta with autologous arterial tissue, percutaneous endoscopic approach. 021309W................... Bypass coronary artery, four or more arteries from aorta with autologous venous tissue, open approach. 02130AW................... Bypass coronary artery, four or more arteries from aorta with autologous arterial tissue, open approach. 021349W................... Bypass coronary artery, four or more arteries from aorta with autologous venous tissue, percutaneous endoscopic approach. 02134AW................... Bypass coronary artery, four or more arteries from aorta with autologous arterial tissue, percutaneous endoscopic approach. ------------------------------------------------------------------------ This resulted in potential cases spanning 98 MS-DRGs, with approximately 93 percent of all potential cases, 59,139, mapping to the following 10 MS-DRGs: ------------------------------------------------------------------------ MS-DRG MS-DRG title ------------------------------------------------------------------------ MS-DRG 3................. Extracorporeal Membrane Oxygenation (ECMO) or Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth & Neck with Major Operating Room. MS-DRG 216............... Cardiac Valve and Other Major Cardiothoracic Procedure with Cardiac Catheterization with MCC. MS-DRG 219............... Cardiac Valve and Other Major Cardiothoracic Procedure without Cardiac Catheterization with MCC. MS-DRG 220............... Cardiac Valve and Other Major Cardiothoracic Procedure without Cardiac Catheterization with CC. MS-DRG 228............... Other Cardiothoracic Procedures with MCC. MS-DRG 229............... Other Cardiothoracic Procedures without CC. MS-DRG 233............... Coronary Bypass with Cardiac Catheterization with MCC. MS-DRG 234............... Coronary Bypass with Cardiac Catheterization without MCC. MS-DRG 235............... Coronary Bypass without Cardiac Catheterization with MCC. MS-DRG 236............... Coronary Bypass without Cardiac Catheterization without MCC. ------------------------------------------------------------------------ Using the 59,139 identified cases, the average case-weighted unstandardized charge per case was $200,886. The applicant then standardized the charges. The applicant did not remove charges for any current treatment because, as [[Page 20306]] discussed above, the applicant indicated there are no other current treatment options available. The applicant noted that it did not provide an inflation factor to project future charges. The applicant added charges for the DURAGRAFT[reg] technology. This charge was created by applying the national average CCR for implantable devices of 0.332 from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38103) to the cost of the device. According to the applicant, no further charges or related charges were added. Based on the FY 2018 IPPS/LTCH PPS Table 10 thresholds, the average case-weighted threshold amount was $164,620. The final average case-weighted standardized charge per case was $185,575. Because the final average case-weighted standardized charge per case exceeds the average case-weighted threshold amount, the applicant maintained that the technology meets the cost criterion. We are inviting public comments on whether DURAGRAFT[reg] meets the cost criterion. With respect to the substantial clinical improvement criterion, the applicant asserted that the substitutional use of DURAGRAFT[reg] significantly reduces clinical complications associated with VGF following CABG surgery. According to the applicant, DURAGRAFT[reg] provides a benefit by protecting vascular grafts and their fragile luminal endothelial layer from the point of harvest until the point of grafting; an intra[dash]operative ischemic interval lasting from about 10 minutes to 3 hours depending on the complexity of the surgery. According to the applicant, there are currently no products available to protect vascular grafts during this time interval. The current standard practice is to place grafts in heparinized saline or heparinized autologous blood to keep them wet; a practice which has been shown to cause significant damage to the graft within minutes, and which has been shown to clinically and statistically correlate with the development of 12-month VGF.107 108 109 110 Therefore, neglecting to protect the endothelial layer prior to implantation can have long-term consequences. --------------------------------------------------------------------------- \107\ Harskamp, Ralf E., MD, Alexander, John H., MD, MHS, Schulte, Phillip J., Phd, et al., ``Vein Graft Preservation Solutions, Patency, and Outcomes After Coronary Artery Bypass Graft Surgery: follow-up from the PREVENT IV randomized clinical trial'', Jama Surg, 2014, vol. 149(8), pp. 798-805. \108\ Weiss, D.R., Juchem, G., Kemkes, B.M., et al., ``Extensive deendothelialization and thrombogenicity in routinely prepared vein grafts for coronary bypass operations: facts and remedy,'' Century Publishing Corporation, International Journal of Clinical Experimental Medicine, 2009 May 28, vol. 2(2), pp. 95-113. \109\ Wilbring, M., Tugtekin, S.M., Zatschler, B., et al., ``Even short-time storage in physiological saline solution impairs endothelial vascular function of saphenous vein grafts,'' Elsevier Science Inc., European Journal of Cardio-Thoracic Surgery, 2011 Oct, vol. 40(4), pp. 811-815. \110\ Thatte, H.S., Biswas, K.S., Najjar, S.F., et al., ``Multi- photon microscopic evaluation of saphenous vein endothelium and its preservation with a new solution,'' GALA, Elsevier Science Inc., Ann Thorac Surg, 2003 Apr, vol. 75(4), pp. 1145-1152. --------------------------------------------------------------------------- When a damaged luminal surface (endothelium) of a vascular graft is presented to the bloodstream at the time of reperfusion, a domino[dash]effect of further damage is triggered in vivo through inflammatory, thrombogenic, and aberrant adaptive responses including hyper-proliferative processes that lead to VGF. These pathophysiologic responses occur within minutes of reperfusion of a graft that has received sub-optimal treatment/handling initiating a cascade of exacerbating damage that can continue for years later. Presenting an intact functional endothelial layer at the time of grafting is, therefore, tantamount to protecting the graft from damage that occurs post-grafting, in turn conferring protection against graft failure. Given the low success rate of failed graft intervention addressing the graft, endothelial protection at the time of surgery is critical.\111\ --------------------------------------------------------------------------- \111\ Kim, F.Y., Marhefka, G., Ruggiero, N.J., et al., ``Saphenous vein graft disease: review of pathophysiology, prevention, and treatment,'' Cardiol Rev 2013, vol. 21(2), pp. 101- 9. --------------------------------------------------------------------------- The combined PREVENT IV sub-analyses of Hess and Harskamp demonstrate that from dozens of factors evaluated for impact on the development of 12-month VGF, exposure to solutions used for intra[dash]operative graft wetting and storage have the largest correlation with the development of VGF.112, 113 Short-term exposure of free vascular grafts to these solutions is routine in CABG operations, where 10 minutes to 3 hours may elapse between the vein harvest and reperfusion.114, 115 According to the applicant, standard of care solutions are heparinized saline and heparinized autologous blood, which were never designed to protect vascular grafts and have also demonstrated an inability to protect against ischemic injury, actively harming the graft endothelium as well.116 117 118 119 According to the applicant, given the criticality of presenting an intact functional endothelium at the time of reperfusion, it should not be surprising that the use of these solutions is so highly associated with 12-month VGF. Based on these data, DURAGRAFT[reg] treatment has been designed to be a fully protective solution. DURAGRAFT[reg] is formulated into a flushing, wetting, and storage solution replacing solutions traditionally used for this purpose and, therefore, does not change surgical practice. --------------------------------------------------------------------------- \112\ Harskamp, Ralf E., MD, Alexander, John H., MD, MHS, Schulte, Phillip J., Phd, et al., ``Vein Graft Preservation Solutions, Patency, and Outcomes After Coronary Artery Bypass Graft Surgery: follow-up from the PREVENT IV randomized clinical trial'', Jama Surg, 2014, vol. 149(8), pp. 798-805. \113\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein Graft Disease: `Never Ending Story' of the Eternal Return,'' Res Cardiovasc Med, 2014, vol. 3(3), pp. e21092. \114\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein graft disease: pathogenesis, predisposition and prevention,'' Circulation 1998, vol. 97(9), pp. 916-31. \115\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr Opin Cardiol, 1995, vol. 10, pp. 562-8. \116\ Harskamp, Ralf E., MD, Alexander, John H., MD, MHS, Schulte, Phillip J., Phd, et al., ``Vein Graft Preservation Solutions, Patency, and Outcomes After Coronary Artery Bypass Graft Surgery: follow-up from the PREVENT IV randomized clinical trial,'' Jama Surg, 2014, vol. 149(8), pp. 798-805. \117\ Weiss, D.R., Juchem, G., Kemkes, B.M., et al., ``Extensive deendothelialization and thrombogenicity in routinely prepared vein grafts for coronary bypass operations: facts and remedy,'' Century Publishing Corporation, International Journal of Clinical Experimental Medicine, 2009 May 28, vol. 2(2), pp. 95-113. \118\ Wilbring, M., Tugtekin, S.M., Zatschler, B., et al., ``Even short-time storage in physiological saline solution impairs endothelial vascular function of saphenous vein grafts,'' Elsevier Science Inc., European Journal of Cardio-Thoracic Surgery, 2011 Oct, vol. 40(4), pp. 811-815. \119\ Thatte, H.S., Biswas, K.S., Najjar, S.F., et al., ``Multi- photon microscopic evaluation of saphenous vein endothelium and its preservation with a new solution,'' GALA, Elsevier Science Inc., Ann Thorac Surg, 2003 Apr, vol. 75(4), pp. 1145-1152. --------------------------------------------------------------------------- The applicant noted that retrospective studies designed to assess clinical effectiveness and safety were conducted based on the readily available databases already in existence as a result of the use of DURAGRAFT[reg] treatment in two hospitals that had noncommercial access to the product through hospital pharmacies. These studies evaluated the effect of DURAGRAFT[reg] use during CABG surgery on post-CABG clinical complications associated with VGF, including myocardial infarction (MI) and repeat revascularization. The applicant conveyed that because of the time, resources and funding required for randomized studies evaluating clinical outcomes following CABG surgery, conducting such a study was not a viable approach for a small company such as Somahlution. The first retrospective study (Protocol 001), an unpublished, independent Physician Investigator (PI), single-center, multi-surgeon retrospective, [[Page 20307]] comparative study (DURAGRAFT[reg] vs. Saline or Blood Solutions), was a pilot study conducted at the University of CHU in Angers France, which followed patients for 5 years post-CABG surgery. This pilot study was conducted to assess the safety and effect of DURAGRAFT[reg] treatment on both short and long-term clinical outcomes. This study also served as the basis for the design of a larger retrospective study conducted at the U.S. Department of Veterans Affairs (VA) Medical Centers, discussed later. The objective of this single[dash]center clinical study in CABG patients was to evaluate the potential benefits of DURAGRAFT[reg] treatment as compared to a no[dash]treatment control group (saline). The investigator who prepared the analysis remained blinded to individual patient data. Eligibility criteria included patients with first[dash]time CABG surgery in which at least one vein graft was used. Patients with in-situ internal mammary artery (IMA) graft(s) only (no saphenous vein or free arterial grafts) and concomitant valve surgery and/or aortic aneurysm repair were excluded. The institutional review board of the University Health Alliance (UHA) approved the protocol, and patients gave written informed consent for their follow-up. A total of 630 patients who underwent elective and isolated CABG surgery with at least one saphenous vein graft at a single[dash]center in Europe between January 2002 and December 2008 were included. The no-treatment control group (saline) included 375 patients who underwent CABG surgery from January 2002 to May 2005 and the DURAGRAFT[reg] treatment group included 255 patients who underwent CABG surgery from June 2005 to December 2008. At long-term follow-up (greater than 30 days and up to 5 years), 5 patients were lost to follow-up (10 died before the 30-day follow[dash]up). Therefore, a total of 247 patients from the DURAGRAFT[reg] treatment group (97 percent) and 368 patients from the no-treatment control group (saline) (98 percent) were available for the long-term analysis. Patients undergoing CABG surgery whose vascular grafts were treated intraoperatively with DURAGRAFT[reg] demonstrated no statistically significant differences in major adverse cardiac events (MACE) within the first 30 days following CABG surgery. According to the applicant, these data suggest that DURAGRAFT[reg] treatment is at least as safe as the standard of care used in CABG surgeries in that long-term outcomes between the two groups were not statistically different. However, also according to the applicant, a consistent numerical trend toward improved clinical effectiveness outcomes for the DURAGRAFT[reg] treatment group compared to the no-treatment control (saline) group was clearly identified. Although statistically insignificant, there was a consistent reduction observed in the rates for multiple endpoints such as all-cause death, MI, MACE, and revascularization. This study found reductions in DURAGRAFT[reg]-treated grafts relative to saline for revascularization (57 percent), MI (70 percent), MACE (37 percent) and all[dash]cause death (23 percent) compared to standard of care (heparinized saline/blood) through 5 years follow[dash]up. Based on the small sample-size for this evaluation of only 630 patients, and the known frequencies of these events following CABG surgeries, statistical differences were not expected. A subsequent post-hoc analysis also was performed by the researchers at CHU-Angers to evaluate whether any long-term clinical variables (such as dual antiplatelet therapy, beta- blockers, angiotensin receptor-blockers, statins, diabetes, lifestyle and other factors) had any impact on the study endpoints. The conclusions of the post-hoc analyses were that the assessed clinical variables did not impact the clinical study findings and so any differences between groups were likely due to ``test article'' effect. According to the applicant, importantly, the data collected from this feasibility study are consistent with data collected in the statistically[dash]powered VA study in which statistically significant reductions of MI, repeat revascularization, and MACE were observed in the DURAGRAFT[reg] treatment group, lending confidence that the observed trends in this study, as well as the VA study, represent real differences associated with DURAGRAFT[reg] use. The second study, the U.S. VA Hospital Study (Protocol 002), was an unpublished, independent PI initiated, single-center, multi-surgeon, retrospective, comparative (DURAGRAFT[reg] vs. Saline) clinical trial, which was conducted to assess the safety and impact of DURAGRAFT[reg] treatment on both short and long-term clinical outcomes in patients who underwent isolated CABG surgery with saphenous vein grafts (SVGs) at the Boston (West Roxbury) VA Medical Center between 1996 and 2004. The time interval from 1996 through 1999 represents a time period when DURAGRAFT[reg] treatment was not available and heparinized saline was routinely used to wet and store grafts, while 2001 through 2004 represents a time period after the center began exclusively using DURAGRAFT[reg], which was prepared by the hospital's pharmacy. The year 2000 was omitted from this analysis by the PI due to the transition of the implementation of DURAGRAFT[reg] treatment into the clinic and the uncertainty of its use in CABG patients during the transition period. Data were extracted from a total of 2,436 patients who underwent a CABG procedure with at least one SVG from 1996 through 1999 (Control n=1,400 pts.) and 2001 through 2004 (DURAGRAFT[reg] treatment n=1,036 pts.). The median age was 66 years old for the control treatment group and 67 years old for the DURAGRAFT[reg] treatment group. Patients were excluded from the study if they had a prior history of CABG procedures, had no use of SVG, or underwent additional procedures during the CABG surgery. Mean follow-up in the DURAGRAFT[reg] treatment group was 8.5 4.2 years and 9.9 5.6 years in the control treatment group. According to the applicant, this study supports not only safety, but also improved long-term clinical outcomes in DURAGRAFT[reg][dash]treated CABG patients. Thirty-day MI also was significantly reduced in this study. The VA study found statistically significant reductions in DURAGRAFT[reg]-treated grafts relative to saline for revascularization (35 percent), MI (45 percent), and MACE (19 percent) from the follow-up period of 1,000 days to 15 years post- surgery. According to the applicant, in addition to the retrospective studies, a multi[dash]center, within-patient randomized, prospective study utilizing multidetector computed tomography (MDCT) angiography was conducted to assess safety and the effect of the use of DURAGRAFT[reg] on the graft by assessing early anatomic markers of VGD such as graft wall thickening and early stenotic events. The study was based on an ``in-patient control'' design in which both the control saline exposed vascular graft and a DURAGRAFT[reg][dash]treated graft were grafted within the same patient to reduce patient bias and allow a paired analysis of the grafts. The study was conducted under two protocols. The first study protocol evaluated patients up to 3 months post-CABG and included 1[dash] and 3-month protocol driven MDCT scans in 125 patients (250 grafts). The second study, a longer-term safety and efficacy study of 97 patients, included a 12-month protocol driven angiogram. The 3 month (full data set) and 12 month (interim data set) data demonstrate that safety and efficacy appear to be equivalent for [[Page 20308]] DURAGRAFT[reg] and standard of care (SoC) at 3 months, but between 3 months and 9 months a separation between DURAGRAFT[reg] and SoC begins to emerge and by 12 months DURAGRAFT[reg] use is associated with a numerical trend towards improved safety relative to SoC. Furthermore by 12 months, the interim analysis demonstrated that differences in markers of early graft disease were able to be discerned between DURAGRAFT[reg][dash]treated grafts and SoC. Reductions in both wall thickness and degree of stenosis were observed in DURAGRAFT[reg][dash]treated grafts relative to SoC grafts. These reductions were observed when the entire graft was assessed and were more profound when the proximal region of the graft was specifically evaluated. According to the applicant, this is of note because the proximal region of the graft is the region in which early graft disease has been shown to more frequently manifest in many grafting indications, including CABG, peripheral bypass, aortic grafting, and AV fistula grafting indications, and is thought to be due to hemodynamic perturbations that occur in this region where arterial flow is just entering the venous environment. While there are no notable differences at 3 months in either safety or efficacy, there are trends towards better safety at 12 months in patients in the DURAGRAFT[reg] treatment group compared to the control group.\120\ The efficacy results of the prospective study were presented at the October 2017 meeting of the TCT Congress in Denver. --------------------------------------------------------------------------- \120\ Perrault, L., ``SOMVC001 (DuraGraft) Vascular Graft Treatment in Patients Undergoing Coronary Artery Bypass Grafting,'' American Heart Association, Inc, Circulation, 2016, vol. 134, pp. A23242, originally published November 11, 2016. --------------------------------------------------------------------------- The retrospective studies demonstrated an association of reduced risk of non-fatal myocardial infarction, repeat revascularization, and MACE with DURAGRAFT[reg] treatment. However, we have a number of concerns relating to these studies. In addition to the studies being unpublished, we are concerned that they leave too many variables unaccounted for that could affect vein integrity such as method of vein harvest, vein distention pressure, and post-operative care (including use of anti-platelet and anti-lipid treatments). Also, control groups underwent CABG procedures many years earlier than the DURAGRAFT[reg] treatment groups in both studies. Over the years, with advances in medical management and surgical techniques, long-term survival and risk of cardiac events are expected to improve. Finally, it may be helpful to gain more insight from data that will be available upon completion and results of the multi-center, prospective, randomized, double-blind, comparative, within[dash]person (DURAGRAFT[reg] vs. Saline) control trial that is currently ongoing. We are inviting public comments on whether DURAGRAFT[reg] meets the substantial clinical improvement criterion. Below we summarize and respond to written public comments we received regarding the DURAGRAFT[reg] during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: One commenter, a cardiothoracic surgeon, stated that after practicing cardiac surgery for over 30 years, authoring peer[dash]reviewed publications in Cardiac Surgery, and participating in several clinical studies, it supported the approval of new technology add-on payments for the DURAGRAFT[reg] technology. The commenter indicated that one of the reasons why vein grafts get occluded could be because of poor handling during and after harvest. The commenter expressed that there are currently no other solutions used in treatment options available that protect vascular conduits once they are harvested aside from the standard practice of storing them in saline or blood-based solutions until they are ready for implantation. The commenter stated that saline and blood-based solutions are very damaging to vein segments, and the damage that occurs is linked to poor clinical outcomes including increased risk of myocardial infarction (MI) and increased rates of repeat revascularization. The commenter indicated that it had many years of first-hand experience with the use of DURAGRAFT[reg] because the commenter served as the Principal Investigator for a retrospective clinical study that evaluated the DURAGRAFT[reg]'s effect on clinical outcomes compared to standard-of- care treatment options. The commenter conveyed that the results of the retrospective clinical study included statistically significant reductions in MI and repeat revascularization rates. The commenter also pointed out its awareness of a prospective clinical study the DURAGRAFT[reg]'s manufacturer has conducted evaluating radiologic assessments to analyze graft disease, which precedes loss of patency. According to the commenter, the study demonstrated increased wall thickness and increased stenosis in grafts stored in saline compared to grafts stored using the DURAGRAFT[reg]. The commenter stated that this finding from the prospective clinical study is very consistent with the clinical results of the retrospective study. The commenter concluded by stating that it supported the commercial availability and use of the DURAGRAFT[reg], including use in the treatment of its own patients. Response: We appreciate the commenter's input. We will take these comments into consideration when deciding whether to approve new technology add-on payment for the DURAGRAFT[reg] for FY 2019. Comment: Another commenter, a cardiovascular and thoracic surgeon with clinical expertise in coronary artery bypass grafting surgery (CABG) who has been involved in endothelial dysfunction as a primary field of study and the Principal Investigator for the multi[dash]center, within-patient, randomized, prospective study that Somahlution submitted to the FDA in support of U.S. product clearance, supported the approval of new technology add-on payments for the DURAGRAFT[reg]. The commenter indicated that as an author and co-author of more than 250 articles in peer-reviewed publications, a senior author of more than 75 papers and writer of several book chapters, and having delivered over 40 conference presentations worldwide, the study results, specifically of the 12-month multidector computed tomography (MDCT) imaging showing less lumen narrowing or stenosis, and less wall thickening as a resulting outcome of the DURAGRAFT[reg][dash]treated veins compared to heparinized-saline, are critically important from a clinical perspective. According to the commenter, the primary mechanism of the DURAGRAFT[reg] technology is to protect the endothelial cells in the vein graft and this has been repeatedly demonstrated in pre- clinical studies. The commenter explained that the findings of the clinical anatomic changes in the graft demonstrated in the prospective study are consistent with the pre-clinical findings and the literature that has clearly pointed to damaged endothelium of the graft as the starting insult for later development of poor patient outcomes from graft disease and failure. Finally, the commenter noted that surgeons in all countries currently use a variety of graft storage and preservation solutions during a CABG procedure because there has been no other available solution used in treatment options, aside from the DURAGRAFT[reg], with systematic evaluation demonstrating a clear safety [[Page 20309]] profile and benefit to patient outcomes. The commenter encouraged CMS to approve new technology add-on payments for the DURAGRAFT[reg] technology to provide additional support for this new preservation solution to become available to surgeons in the United States. Response: We appreciate the commenter's input. We will take these comments into consideration when deciding whether to approve new technology add-on payments for DURAGRAFT[reg] for FY 2019. e. remed[emacr][reg] System Respicardia, Inc. submitted an application for new technology add- on payments for the remed[emacr][reg] System for FY 2019. According to the applicant, the remed[emacr][reg] System is indicated for use as a transvenous phrenic nerve stimulator in the treatment of adult patients who have been diagnosed with moderate to severe central sleep apnea. The remed[emacr][reg] System consists of an implantable pulse generator, and a stimulation and sensing lead. The pulse generator is placed under the skin, in either the right or left side of the chest, and it functions to monitor the patient's respiratory signals. A transvenous lead for unilateral stimulation of the phrenic nerve is placed either in the left pericardiophrenic vein or the right brachiocephalic vein, and a second lead to sense respiration is placed in the azygos vein. Both leads, in combination with the pulse generator, function to sense respiration and, when appropriate, generate an electrical stimulation to the left or right phrenic nerve to restore regular breathing patterns. The applicant's application describes central sleep apnea (CSA) as a chronic respiratory disorder characterized by fluctuations in respiratory drive, resulting in the cessation of respiratory muscle activity and airflow during sleep.\121\ The applicant reported that CSA, as a primary disease, has a low prevalence in the United States population; and it is more likely to occur in those individuals who have cardiovascular disease, heart failure, atrial fibrillation, stroke, or chronic opioid usage. The apneic episodes which occur in patients with CSA cause hypoxia, increased blood pressure, increased preload and afterload, and promotes myocardial ischemia and arrhythmias. In addition, CSA ``enhances oxidative stress, causing endothelial dysfunction, inflammation, and activation of neurohormonal systems, which contribute to progression of underlying diseases.'' \122\ --------------------------------------------------------------------------- \121\ Jagielski, D., Ponikowski, P., Augostini, R., Kolodziej, A., Khayat, R., Abraham, W.T., 2016, ``Transvenous Stimulation of the Phrenic Nerve for the Treatment of Central Sleep Apnoea: 12 months' experience with the remede[reg]system,'' European Journal of Heart Failure, pp. 1-8. \122\ Costanzo, M.R., Ponikowski, P., Javaheri, S., Augostini, R., Goldberg, L., Holcomb, R., Abraham, W.T., ``Transvenous Neurostimulation for Centra Sleep Apnoea: A randomised controlled trial,'' Lancet, 2016, vol. 388, pp. 974-982. --------------------------------------------------------------------------- According to the applicant, prior to the introduction of the remed[emacr][reg] System, typical treatments for CSA took the form of positive airway pressure devices. Positive airway pressure devices, such as continuous positive airway pressure (CPAP), have previously been used to treat patients diagnosed with obstructive sleep apnea. Positive airway devices deliver constant pressurized air via a mask worn over the mouth and nose, or nose alone. For this reason, positive airway devices may only function when the patient wears the necessary mask. Similar to CPAP, adaptive servo-ventilation (ASV) provides noninvasive respiratory assistance with expiratory positive airway pressure. However, ASV adds servo-controlled inspiratory pressure, as well, in an effort to maintain airway patency.\123\ --------------------------------------------------------------------------- \123\ Cowie, M.R., Woehrle, H., Wegscheider, K., Andergmann, C., d'Ortho, M.P., Erdmann, E., Teschler, H., ``Adaptive Servo- Ventilation for Central Sleep Apneain Systolic Heart Failure,'' N Eng Jour of Med, 2015, pp. 1-11. --------------------------------------------------------------------------- On October 6, 2017, the remed[emacr][reg] System was approved by the FDA as an implantable phrenic nerve stimulator indicated for the use in the treatment of adult patients who have been diagnosed with moderate to severe CSA. The device was available commercially upon FDA approval. Therefore, the newness period for the remed[emacr][reg] System is considered to begin on October 6, 2017. The applicant has indicated that the device also is designed to restore regular breathing patterns in the treatment of CSA in patients who also have been diagnosed with heart failure. The applicant was approved for two unique ICD-10-PCS procedure codes for the placement of the leads: 05H33MZ (Insertion of neurostimulator lead into right innominate (brachiocephalic) vein) and 05H03MZ (Insertion of neurostimulator lead into azygos vein), effective 10/01/2016. The applicant indicated that implantation of the pulse generator is currently reported using ICD-10-PCS procedure code 0JH60DZ (Insertion of multiple array stimulator generator into chest subcutaneous tissue). As discussed above, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for the purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, the remed[emacr][reg] System provides stimulation to nerves to stimulate breathing. Typical treatments for hyperventilation CSA include supplemental oxygen and CPAP. Mechanical ventilation also has been used to maintain a patent airway. The applicant asserted that the remed[emacr][reg] System is a neurostimulation device resulting in negative airway pressure, whereas devices such as CPAP and ASV utilize positive airway pressure. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant stated that the remed[emacr][reg] System is assigned to MS-DRGs 040 (Peripheral, Cranial Nerve and Other Nervous System Procedures with MCC), 041 (Peripheral, Cranial Nerve and Other Nervous System Procedures with CC or Peripheral Neurostimulator), and 042 (Peripheral, Cranial Nerve and Other Nervous System Procedures without CC/MCC). The current procedures for the treatment options of CPAP and ASV are not assigned to these MS- DRGs. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, according to the applicant, the remed[emacr][reg] System is indicated for the use as a transvenous unilateral phrenic nerve stimulator in the treatment of adult patients who have been diagnosed with moderate to severe CSA. The applicant stated that the remed[emacr][reg] System reduces the negative symptoms associated with CSA, particularly among patients who have been diagnosed with heart failure. The applicant asserted that patients who have been diagnosed with heart failure are particularly negatively affected by CSA and currently available CSA treatment options of CPAP and ASV. According to the applicant, the currently available treatment options, CPAP and ASV, have been found to have worsened mortality and morbidity outcomes for patients who have been diagnosed with both CSA and heart failure. Specifically, ASV is currently contraindicated in the treatment of CSA in patients who have been diagnosed with heart failure. The applicant also suggested that the remed[emacr][reg] System is particularly suited for the treatment of CSA in patients who [[Page 20310]] also have been diagnosed with heart failure. We are concerned that, while the remed[emacr][reg] System may be beneficial to patients who have been diagnosed with both CSA and heart failure, the FDA approved indication is for use in the treatment of adult patients who have been diagnosed with moderate to severe CSA. We note that the applicant's clinical analyses and data results related to patients who specifically were diagnosed with CSA and heart failure. We are inviting public comments on whether the remed[emacr][reg] System meets the newness criterion. With regard to the cost criterion, the applicant provided the following analysis to demonstrate that the technology meets the cost criterion. The applicant identified cases representing potential patients who may be eligible for treatment involving the remed[emacr][reg] System within MS-DRGs 040, 041, and 042. Using the Standard Analytical File (SAF) Limited Data Set (MedPAR) for FY 2015, the applicant included all claims for the previously stated MS-DRGs for its cost threshold calculation. The applicant stated that typically claims are selected based on specific ICD-10-PCS parameters, however this is a new technology for which no ICD-10-PCS procedure code and ICD-10-CM diagnosis code combination exists. Therefore, all claims for the selected MS-DRGs were included in the cost threshold analysis. This process resulted in 4,462 cases representing potential patients who may be eligible for treatment involving the remed[emacr][reg] System assigned to MS-DRG 040; 5,309 cases representing potential patients who may be eligible for treatment involving the remed[emacr][reg] System assigned to MS-DRG 041; and 2,178 cases representing potential patients who may be eligible for treatment involving the remed[emacr][reg] System assigned to MS-DRG 042, for a total of 11,949 cases. Using the 11,949 identified cases, the applicant determined that the average unstandardized case-weighted charge per case was $85,357. Using the FY 2015 MedPAR dataset to identify the total mean charges for revenue code 0278, the applicant removed charges associated with the current treatment options for each MS-DRG as follows: $9,153.83 for MS- DRG 040; $12,762.31 for MS-DRG 041; and $21,547.73 for MS-DRG 042. The applicant anticipated that no other related charges would be eliminated or replaced. The applicant then standardized the charges and applied a 2-year inflation factor of 1.104055 obtained from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38524). The applicant then added charges for the new technology to the inflated average case-weighted standardized charges per case. No other related charges were added to the cases. The applicant calculated a final inflated average case-weighted standardized charge per case of $175,329 and a Table 10 average case- weighted threshold amount of $78,399. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant maintained that the technology meets the cost criterion. With regard to the analysis above, we are concerned that all cases in MS-DRGs 040, 041, and 042 were used in the analysis. We are unsure if all of these cases represent patients that may be truly eligible for treatment involving the remed[emacr][reg] System. We are inviting public comments on whether the remed[emacr][reg] System meets the cost criterion. With respect to the substantial clinical improvement criterion, the applicant asserted that the remed[emacr][reg] System meets the substantial clinical improvement criterion. The applicant stated that the remed[emacr][reg] System offers a treatment option for a patient population unresponsive to, or ineligible for, treatment involving currently available options. According to the applicant, patients who have been diagnosed with CSA have no other available treatment options than the remed[emacr] System. The applicant stated that published studies on both CPAP and ASV have proven that primary endpoints have not been met for treating patients who have been diagnosed with CSA. In addition, according to the ASV study, there was an increase in cardiovascular mortality. According to the applicant, the remed[emacr][reg] System will prove to be a better treatment for the negative effects associated with CSA in patients who have been diagnosed with heart failure, such as cardiovascular insults resulting from sympathetic nervous system activation, pulmonary hypertension, and arrhythmias, which ultimately contribute to the downward cycle of heart failure,\124\ when compared to the currently available treatment options. The applicant also indicated that prior studies have assessed CPAP and ASV as options for the treatment of diagnoses of CSA primarily in patients who have been diagnosed with heart failure. --------------------------------------------------------------------------- \124\ Abraham, W., Jagielski, D., Oldenburg, O., Augostini, R., Kreuger, S., Kolodziej, A., Ponikowski, P., ``Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnea,'' JACC: Heart Failure, 2015, vol. 3(5), pp. 360-369. --------------------------------------------------------------------------- The applicant shared the results from two studies concerning the effects of positive airway pressure ventilation treatment: The Canadian Continuous Positive Airway Pressure for Patients with Central Sleep Apnea and Heart Failure trial found that, while CPAP managed the negative symptoms of CSA, such as improved nocturnal oxygenation, increased ejection fraction, lower norepinephrine levels, and increased walking distance, it did not affect overall patient survival; \125\ and --------------------------------------------------------------------------- \125\ Bradley, T.D., Logan, A.G., Kimoff, R.J., Series, F., Morrison, D., Ferguson, K., Phil, D., 2005, ``Continous Positive Airway Pressure for Central Sleep Apnea and Heart Failure,'' N Eng Jour of Med, vol. 353(19), pp. 2025-2033. --------------------------------------------------------------------------- In a randomized trial of 1,325 patients who had been diagnosed with heart failure who received treatment with ASV plus standard treatment or standard treatment alone, ASV was found to increase all-cause and cardiovascular mortality as compared to the control treatment.\126\ --------------------------------------------------------------------------- \126\ Cowie, M.R., Woehrle, H., Wegscheider, K., Andergmann, C., d'Ortho, M.-P., Erdmann, E., Teschler, H., ``Adaptive Servo- Ventilation for Central Sleep Apneain Systolic Heart Failure,'' N Eng Jour of Med, 2015, pp. 1-11. --------------------------------------------------------------------------- The applicant also stated that published literature indicates that currently available treatment options do not meet primary endpoints with concern to the treatment of CSA; patients treated with ASV experienced an increased likelihood of mortality,\127\ and patients treated with CPAP experienced alleviation of symptoms, but no change in survival.\128\ The applicant provided further research, which suggested that a primary drawback of CPAP in the treatment of diagnoses of CSA is a lack of patient adherence to therapy.\129\ --------------------------------------------------------------------------- \127\ Ibid. \128\ Bradley, T.D., Logan, A.G., Kimoff, R.J., Series, F., Morrison, D., Ferguson, K., Phil, D., 2005, ``Continous Positive Airway Pressure for Central Sleep Apnea and Heart Failure,'' N Engl Jour of Med, vol. 353(19), pp. 2025-2033. \129\ Ponikowski, P., Javaheri, S., Michalkiewicz, D., Bart, B.A., Czarnecka, D., Jastrzebski, M., Abraham, W.T., ``Transvenous Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnoea in Heart Failure,'' European Heart Journal, 2012, vol. 33, pp. 889- 894. --------------------------------------------------------------------------- The applicant also stated that the remed[emacr] System represents a substantial clinical improvement over existing technologies because of the reduction in the number of future hospitalizations, few device[dash]related complications, and improvement in CSA symptoms and quality of life. Specifically, the applicant stated that the clinical data has shown a statistically significant reduction in Apnea-hypopnea index (AHI), improvement in quality of life, and significantly improved Minnesota Living with Heart Failure Questionnaire score. In addition, the applicant [[Page 20311]] indicated that study results showed the remed[emacr] System demonstrated an acceptable safety profile, and there was a trend toward fewer heart failure hospitalizations. The applicant provided six published articles as evidence. All six articles were prospective studies. In three of the six studies, the majority of patients studied had been diagnosed with CSA with a heart failure comorbidity, while the remaining three studies only studied patients who had been diagnosed with CSA with a heart failure comorbidity. The first study \130\ assessed the treatment of patients who had been diagnosed with CSA in addition to heart failure. According to the applicant, as referenced in the results of the published study, Ponikowski, et al., assessed the treatment effects of 16 of 31 enrolled patients with evidence of CSA within 6 months prior to enrollment who met inclusion criteria (apnea-hypopnea index of greater than or equal to 15 and a central apnea index of greater than or equal to 5) and who did not meet exclusion criteria (a baseline oxygen saturation of less than 90 percent, being on supplemental oxygen, having evidence of phrenic nerve palsy, having had severe chronic obstructive pulmonary disease (COPD), having hard angina or a myocardial infarction in the past 3 months, being pacemaker dependent, or having inadequate capture of the phrenic nerve during neurostimulation). Of the 16 patients whose treatment was assessed, all had various classifications of heart failure diagnoses: 3 (18.8 percent) were classified as class I on the New York Heart Association classification scale (No limitation of physical activity. Ordinary physical activity does not cause undue fatigue, palpitation, dyspnea (shortness of breath)); 8 (50 percent) were classified as a class II (Slight limitation of physical activity. Comfortable at rest. Ordinary physical activity results in fatigue, palpitation, dyspnea (shortness of breath)); and 5 (31.3 percent) were classified as class III (Marked limitation of physical activity. Comfortable at rest. Less than ordinary activity causes fatigue, palpitation, or dyspnea).\131\ After successful surgical implantation of a temporary transvenous lead for unilateral phrenic nerve stimulation, patients underwent a control night without nerve stimulation and a therapy night with stimulation, while undergoing polysomnographic (PSG) testing. Comparison of both nights was performed. --------------------------------------------------------------------------- \130\ Ponikowski, P., Javaheri, S., Michalkiewicz, D., Bart, B.A., Czarnecka, D., Jastrzebski, M., Abraham, W.T., ``Transvenous Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnoea in Heart Failure,'' European Heart Journal, 2012, vol. 33, pp. 889- 894. \131\ ``Classes of Heart Failure,'' 2017, May 8, Retrieved from American Heart Association: Available at: http://www.heart.org/HEARTORG/Conditions/HeartFailure/AboutHeartFailure/Classes-of-Heart-Failure_UCM_306328_Article.jsp#.WmE2rlWnGUk. --------------------------------------------------------------------------- According to the applicant, some improvements of CSA symptoms were identified in statistical analyses. Sleep time and efficacy were not statistically significantly different for control night and therapy night, with median sleep times of 236 minutes and 245 minutes and sleep efficacy of 78 percent and 71 percent, respectively. There were no statistical differences across categorical time spent in each sleep stage (for example, N1, N2, N3, and REM) between control and therapy nights. The average respiratory rate and hypopnea index did not differ statistically across nights. Marginal positive statistical differences occurred between control and therapy nights for the baseline oxygen saturation median values (95 and 96 respectively) and obstructive apnea index (OAI) (1 and 4, respectively). Beneficial statistically significant differences occurred from control to therapy nights for the average heart rate (71 to 70, respectively), arousal index events per hour (32 to 12, respectively), apnea-hypopnea index (AHI) (45 to 23, respectively), central apnea index (CAI) (27 to 1, respectively), and oxygen desaturation index of 4 percent (ODI = 4 percent) (31 to 14, respectively). Two adverse events were noted: (1) Lead tip thrombus noted when lead was removed; the patient was anticoagulated without central nervous system sequelae; and (2) an episode of ventricular tachycardia upon lead placement and before stimulation was initiated. The episode was successfully treated by defibrillation of the patient's implanted ICD. Neither adverse event was directly related to the phrenic nerve stimulation therapy. The second study \132\ was a prospective, multi-center, nonrandomized study that followed patients diagnosed with CSA and other underlying comorbidities. According to the applicant, as referenced in the results of the published study, Abraham, et al., 49 of the 57 enrolled patients who were followed indicated a primary endpoint of a reduction of AHI with secondary endpoints of feasibility and safety of the therapy. Patients were included if they had an AHI of 20 or greater and apneic events that were related to CSA. Among the study patient population, 79 percent had diagnoses of heart failure, 2 percent had diagnoses of atrial fibrillation, 13 percent had other cardiac etiology diagnoses, and the remainder of patients had other cardiac unrelated etiology diagnoses. Exclusion criteria were similar to the previous study (that is, (Ponikowski P., 2012)), with the addition of a creatinine of greater than 2.5 mg/dl. After implantation of the remed[emacr][reg] System, patients were assessed at baseline, 3 months (n=47) and 6 months (n=44) on relevant measures. At 3 months, statistically nonsignificant results occurred for the OAI and hypopnea index (HI) measures. The remainder of the measures showed statistically significant differences from baseline to 3 months: AHI with a -27.1 episodes per hour of sleep difference; CAI with a -23.4 episodes per hour of sleep difference; MAI with a -3 episodes per hour of sleep difference; ODI = 4 percent with a -23.7 difference; arousal index with -12.5 episodes per hour of sleep difference; sleep efficiency with a 8.4 percent increase; and REM sleep with a 4.5 percent increase. Similarly, among those assessed at 6 months, statistically significant improvements on all measures were achieved, including OAI and HI. Regarding safety, a data safety monitoring board (DSMB) adjudicated and found the following 3 of 47 patients (6 percent) as having serious adverse events (SAE) related to the device, implantation procedure or therapy. None of the DSMB adjudicated SAEs was due to lead dislodgement. Two SAEs of hematoma or headache were related to the implantation procedure and occurred as single events in two patients. A single patient experienced atypical chest discomfort during the first night of stimulation, but on reinitiation of therapy on the second night no further discomfort occurred. --------------------------------------------------------------------------- \132\ Abraham, W., Jagielski, D., Oldenburg, O., Augostini, R., Kreuger, S., Kolodziej, A., Ponikowski, P., ``Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnea,'' JACC: Heart Failure, 2015, vol. 3(5), pp. 360-369. --------------------------------------------------------------------------- The third study \133\ assessed the safety and feasibility of phrenic nerve stimulation for 6 monthly follow-ups of 8 patients diagnosed with heart failure with CSA. Of the eight patients assessed, one was lost to follow-up and one died from pneumonia. According to the applicant, as referenced in the results in the published study, Zheng, et al. (2015), no unanticipated serious adverse events were found to be related to the therapy; in one patient, a lead became dislodged and subsequently successfully repositioned. Three [[Page 20312]] patients reported improved sleep quality, and all patients reported increased energy. A reduction in sleep apneic events and decreases in AHI and CAI were related to application of the treatment. Gradual increases to the 6-minute walking time occurred through the study. --------------------------------------------------------------------------- \133\ Zhang, X., Ding, N., Ni, B., Yang, B., Wang, H., & Zhang, S.J., 2015, ``Satefy and Feasibility of Chronic Transvenous Phrenic Nerve Stimulation for Treatment of Central Sleep Apnea in Heart Failure Patients,'' The Clinical Respiratory Journal, pp. 1-9. --------------------------------------------------------------------------- The fourth study \134\ extended the previous Phase I study \135\ from 6 months to 12 months, and included only 41 of the original 49 patients continuing in the study. Of the 57 patients enrolled at the time of the Phase I study, 41 were evaluated at the 12-month follow-up. Of the 41 patients examined at 12 months, 78 percent had diagnoses of CSA related to heart failure, 2 percent had diagnoses of atrial fibrillation with related CSA, 12 percent had diagnoses of CSA related to other cardiac etiology diagnoses, and the remainder of patients had diagnoses of CSA related to other noncardiac etiology diagnoses. At 12 months, 6 sleep parameters remained statistically different and 3 were no longer statistically significant. The HI, OAI, and arousal indexes were no longer statistically significantly different from baseline values. A new parameter, time spent with peripheral capillary oxygen saturation (SpO 2 ) below 90 percent was not statistically different at 12 months (31.4 minutes) compared to baseline (38.2 minutes). The remaining 6 parameters showed maintenance of improvements at the 12-month time point as compared to the baseline: AHI from 49.9 to 27.5 events per hour; CAI from 28.2 to 6.0 events per hour; MAI from 3.0 to 0.5 events per hour; ODI = 4 percent from 46.1 to 26.9 events per hour; sleep efficiency from 69.3 percent to 75.6 percent; and REM sleep from 11.4 percent to 17.1 percent. At the 3-month, 6-month, and 12-month time points, patient quality of life was assessed to be 70.8 percent, 75.6 percent, and 83.0 percent, respectively, indicating that patients experienced mild, moderate, or marked improvement. Seventeen patients were followed at 18 months with statistical differences from baseline for AHI and CAI. Three patients died over the 12-month follow- up period: 2 died of end-stage heart failure and 1 died from sudden cardiac death. All three deaths were adjudicated by the DSMB and none were related to the procedure or to phrenic nerve stimulation therapy. Five patients were found to have related serious adverse events over the 12-month study time. Three events were previously described in the results referenced in the published study, Abraham, et al., and an additional 2 SAEs occurred during the 12-month follow-up. One patient experienced impending pocket perforation resulting in pocket revision, and another patient experienced lead failure. --------------------------------------------------------------------------- \134\ Jagielski, D., Ponikowski, P., Augostini, R., Kolodziej, A., Khayat, R., & Abraham, W.T., 2016, ``Transvenous Stimulation of the Phrenic Nerve for the Treatment of Central Sleep Apnoea: 12 months' experience with the remede[reg]system,'' European Journal of Heart Failure, 2016, pp. 1-8. \135\ Abraham, W., Jagielski, D., Oldenburg, O., Augostini, R., Kreuger, S., Kolodziej, A., Ponikowski, P., 2015, ``Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnea,'' JACC: Heart Failure, 2015, vol. 3(5), pp. 360-369. --------------------------------------------------------------------------- The fifth study \136\ was a randomized control trial with a primary outcome of achieving a reduction in AHI of 50 percent or greater from baseline to 6 months enrolling 151 patients with the neurostimulation treatment (n=73) and no stimulation control (n=78). Of the total sample, 96 (64 percent) of the patients had been diagnosed with heart failure; 48 (66 percent) of the treated patients had been diagnosed with heart failure, and 48 (62 percent) of the control patients had been diagnosed with heart failure. Sixty-four (42 percent) of all of the patients included in the study had been diagnosed with atrial fibrillation and 84 (56 percent) had been diagnosed with coronary artery disease. All of the patients had been treated with the remed[emacr][reg] System device implanted; the system was activated in the treatment group during the first month. ``Over about 12 weeks, stimulation was gradually increased in the treatment group until diaphragmatic capture was consistently achieved without disrupting sleep.'' \137\ While patients and physicians were unblinded, the polysomnography core laboratory remained blinded. The per-protocol population from which statistical comparisons were made is 58 patients treated with the remed[emacr][reg] System and 73 patients in the control group. The authors appropriately controlled for Type I errors (false positives), which arise from performing multiple tests. Thirty- five treated patients and 8 control patients met the primary end point, the number of patients with a 50 percent or greater reduction in AHI from baseline; the difference of 41 percent is statistically significant. All seven of the secondary endpoints were assessed and found to have statistically significant difference in change from baseline between groups at the 6-month follow-up after controlling for multiple comparisons: CAI of -22.8 events per hour lower for the treatment group; AHI (continuous) of -25.0 events per hour lower for the treatment group; arousal events per hour of -15.2 lower for the treatment group; percent of sleep in REM of 2.4 percent higher for the treatment group; patients with marked or moderate improvement in patient global assessment was 55 percent higher in the treatment group; ODI = 4 percent was -22.7 events per hour lower for the treatment group; and the Epworth sleepiness scale was -3.7 lower for the treatment group. At 12 months, 138 (91 percent) of the patients were free from device, implant, and therapy related adverse events. --------------------------------------------------------------------------- \136\ Costanzo, M.R., Ponikowski, P., Javaheri, S., Augostini, R., Goldberg, L., Holcomb, R., Abraham, W.T.,''Transvenous Neurostimulation for Centra Sleep Apnoea: A randomised controlled trial,'' Lancet, 2016, vol. 388, pp. 974-982. \137\ Ibid. --------------------------------------------------------------------------- The final study data was from the pivotal study with limited information in the form of an abstract \138\ and an executive summary.\139\ The executive summary detailed an exploratory analysis of the 141 patients enrolled in the pivotal trial which were patients diagnosed with CSA. The abstract indicated that the 141 patients from the pivotal trial were randomized to either the treatment arm (68 patients) in which initiation of treatment began 1 month after implantation of the remed[emacr][reg] System device with a 6[dash]month follow[dash]up period, or to the control group arm (73 patients) in which the initiation of treatment with the remed[emacr][reg] System device was delayed for 6 months after implantation. Randomization efficacy was compared across baseline polysomnography and associated respiratory indices in which four of the five measures showed no statistical differences between those treated and controls; treated patients had an average MAI score of 3.1 as compared to control patients with an average MAI score of 2.2 (p=0.029). Patients included in the trial must have been medically stable, at least 18 years old, have had an electroencephalogram within 40 days of scheduled implantation, had an apnoea-hypopnoea index (AHI) of 20 events per hour or greater, a central apnoea index at least 50 percent of all apneas, and an obstructive apnea index less than or equal to 20 percent.\140\ Primary exclusion criteria were CSA caused by pain medication, heart failure of state D from the American Heart Association, a [[Page 20313]] new implantable cardioverter defibrillator, pacemaker dependent subjects without any physiologic escape rhythm, evidence of phrenic nerve palsy, documented history of psychosis or severe bipolar disorder, a cerebrovascular accident within 12 months of baseline testing, limited pulmonary function, baseline oxygen saturation less than 92 percent while awake and on room air, active infection, need for renal dialysis, or poor liver function.\141\ Patients included in this trial were primarily male (89 percent), white (95 percent), with at least one comorbidity with cardiovascular conditions being most prevalent (heart failure at 64 percent), with a concomitant implantable cardiovascular stimulation device in 42 percent of patients at baseline. The applicant stated that, after randomization, there were no statistically significant differences between the treatment and control groups, with the exception of the treated group having a statistically higher rate of events per hour on the mixed apnea index (MAI) at baseline than the control group. --------------------------------------------------------------------------- \138\ Goldberg, L., Ponikowski, P., Javaheri, S., Augostini, R., McKane, S., Holcomb, R., Costanzo, M.R., ``In Heart Failure Patients with Central Sleep Apnea, Transvenous Stimulation of the Phrenic Nerve Improves Sleep and Quality of Life,'' Heart Failure Society of America, 21st annual meeting. 2017. \139\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. \140\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. \141\ Ibid. --------------------------------------------------------------------------- The applicant asserted that the results from the pivotal trial \142\ allow for the comparison of heart failure status in patients; we note that patients with American Heart Association objective assessment Class D (Objective evidence of severe cardiovascular disease. Severe limitations. Experiences symptoms even while at rest) were excluded from this pivotal trial. The primary endpoint in the pivotal trial was the proportion of patients with an AHI reduction greater than or equal to 50 percent at 6 months. When controlling for heart failure status, both treated groups experienced a statistically greater proportion of patients with AHI reductions than the controls at 6 months (58 percent more of treated patients with diagnoses of heart failure and 35 percent more of treated patients without diagnoses of heart failure as compared to their respective controls). The secondary endpoints assessed were the CAI average events per hour, AHI average events per hour, arousal index (ArI) average events per hour, percent of sleep in REM, and oxygen desaturation index 4 percent (ODI = 4 percent) average events per hour. Excluding the percent of sleep in REM, the treatment groups for both patients with diagnoses of heart failure and non-heart failure conditions experienced statistically greater improvements at 6 months on all secondary endpoints as compared to their respective controls. Lastly, quality of life secondary endpoints were assessed by the Epworth sleepiness scale (ESS) average scores and the patient global assessment (PGA). For both the ESS and PGA assessments, both treatment groups of patients with diagnoses of heart failure and non-heart failure conditions had statistically beneficial changes between baseline and 6 months as compared to their respective control groups. --------------------------------------------------------------------------- \142\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. --------------------------------------------------------------------------- The applicant provided analyses from the above report focusing on the primary and secondary polysomnography endpoints, specifically, across patients who had been diagnosed with CSA with heart failure and non-heart failure. Eighty patients included in the study from the executive summary report had comorbid heart failure, while 51 patients did not. Of those patients with heart failure, 35 were treated while 45 patients were controls. Of those patients without heart failure, 23 were treated and 28 patients were controls. The applicant did not provide baseline descriptive statistical comparisons between treated and control groups controlling for heart failure status. Across all primary and secondary endpoints, the patient group who were diagnosed with CSA and comorbid heart failure experienced statistically significant improvements. Excepting percent of sleep in REM, the patient group who were diagnosed with CSA without comorbid heart failure experienced statistically significant improvements in all primary and secondary endpoints. We are inviting public comments on whether this current study design is sufficient to support substantial clinical improvement of the remed[emacr][reg] System with respect to all patient populations, particularly the non-heart failure population. As previously noted, the applicant also contends that the technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatment options. Specifically, the applicant stated that the remed[emacr][reg] System is the only treatment option for patients who have been diagnosed with moderate to severe CSA; published studies on positive pressure treatments like CPAP and ASV have not met primary endpoints; and there was an increase in cardiovascular mortality according to the ASV study. According to the applicant, approximately 40 percent of patients who have been diagnosed with CSA have heart failure. The applicant asserted that the use of the remed[emacr] System not only treats and improves the symptoms of CSA, but there is evidence of reverse remodeling in patients with reduced left ventricular ejection fraction (LVEF). We are concerned that the remed[emacr][reg] System is not directly compared to the CPAP or ASV treatment options, which, to our understanding, are the current treatment options available for patients who have been diagnosed with CSA without heart failure. We note that the FDA indication for the implantation of the remed[emacr][reg] System is for use in the treatment of adult patients who have been diagnosed with CSA. We also note that the applicant's supporting studies were directed primarily at patients who had been treated with the remed[emacr][reg] System who also had been diagnosed with heart failure. The applicant asserted that it would not be appropriate to use CPAP and ASV treatment options when comparing CPAP and ASV to the remed[emacr][reg] System in the patient population of heart failure diagnoses because these treatment options have been found to increase mortality outcomes in this population. In light of the limited length of time in which the remed[emacr][reg] System has been studied, we are concerned that any claims on mortality as they relate to treatment involving the use of the remed[emacr][reg] System may be limited. Therefore, we are concerned as to whether there is sufficient data to determine that the technology represents a substantial clinical improvement with respect to patients who have been diagnosed with CSA without heart failure. The applicant has shown that, among the subpopulation of patients who have been diagnosed with CSA and heart failure, the remed[emacr][reg] System decreases morbidity outcomes as compared to the CPAP and ASV treatment options. We understand that not all patients evaluated in the applicant's supporting clinical trials had been diagnosed with CSA with a comorbidity of heart failure. However, in all of the supporting studies for this application, the vast majority of study patients did have this specific comorbidity of CSA and heart failure. Of the three studies which enrolled both patients diagnosed with CSA with and without heart failure,143 144 145 146 only two studies [[Page 20314]] performed analyses controlling for heart failure status.147 148 The data from these two studies, the Costanzo, et al. (2016) and the Respicardia, Inc. executive report, are analyses based on the same pivotal trial data and, therefore, do not provide results from two separate samples. Descriptive comparisons are made in the executive summary of the pivotal trial \149\ between all treated and control patients. However, we are unable to determine the similarities and differences between patients with heart failure and non-heart failure treated versus controlled groups. Because randomization resulted in one difference between the overall treated and control groups (MAI events per hour), it is possible that further failures of randomization may have occurred when controlling for heart failure status in unmeasured variables. Finally, the sample size analyzed and the subsample sizes of the heart failure patients (80) and non-heart failure patients (51) are particularly small. It is possible that these results are not representative of the larger population of patients who have been diagnosed with CSA. --------------------------------------------------------------------------- \143\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. \144\ Costanzo, M.R., Ponikowski, P., Javaheri, S., Augostini, R., Goldberg, L., Holcomb, R., Abraham, W.T., ``Transvenous Neurostimulation for Centra Sleep Apnoea: A randomised controlled trial,'' Lancet, 2016, vol. 388, pp. 974-982. \145\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. \146\ Jagielski, D., Ponikowski, P., Augostini, R., Kolodziej, A., Khayat, R., & Abraham, W.T., ``Transvenous Stimulation of the Phrenic Nerve for the Treatment of Central Sleep Apnoea: 12 months' experience with the remede[reg]system,'' European Journal of Heart Failure, 2016, pp. 1-8. \147\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. \148\ Costanzo, M.R., Ponikowski, P., Javaheri, S., Augostini, R., Goldberg, L., Holcomb, R., Abraham, W.T., ``Transvenous Neurostimulation for Centra Sleep Apnoea: A randomised controlled trial,'' Lacet, 2016, vol. 388, pp. 974-982. \149\ Respicardia, Inc. (n.d.). Remede System Pivotal Trial. https://clinicaltrials.gov/ct2/show/NCT01816776. --------------------------------------------------------------------------- Therefore, we are concerned that differences in morbidity and mortality outcomes between CPAP, ASV, and the remed[emacr][reg] System in the general CSA patient population have not adequately been tested or compared. Specifically, the two patient populations, those who have been diagnosed with heart failure and CSA versus those who have been diagnosed with CSA alone, may experience different symptoms and outcomes associated with their disease processes. Patients who have been diagnosed with CSA alone present with excessive sleepiness, poor sleep quality, insomnia, poor concentration, and inattention.\150\ Conversely, patients who have been diagnosed with the comorbid conditions of CSA as a result of heart failure experience significant cardiovascular insults resulting from sympathetic nervous system activation, pulmonary hypertension, and arrhythmias, which ultimately contribute to the downward cycle of heart failure.\151\ --------------------------------------------------------------------------- \150\ Badr, M.S., 2017, Dec 11, ``Central sleep apnea: Risk factors, clinical presentation, and diagnosis,'' Available at: https://www.uptodate.com/contents/central-sleep-apnea-risk-factors-clinical-presentation-and-diagnosis?csi=d3a535e6-1cca-4cd5-ab5e-50e9847bda6c&source=contentShare. \151\ Abraham, W., Jagielski, D., Oldenburg, O., Augostini, R., Kreuger, S., Kolodziej, A., Ponikowski, P., ``Phrenic Nerve Stimulation for the Treatment of Central Sleep Apnea,'' JACC: Heart Failure, 2015, vol. 3(5), pp. 360-369. --------------------------------------------------------------------------- We also note that the clinical study had a small patient population (n=151), with follow[dash]up for 6 months. We are interested in longer follow[dash]up data that would further validate the points made by the applicant regarding the beneficial outcomes seen in patients who have been diagnosed with CSA who have been treated using the remed[emacr][reg] System. We also are interested in additional information regarding the possibility of electrical stimulation of unintended targets and devices combined with the possibility of interference from outside devices. Furthermore, we are unsure with regard to the longevity of the implanted device, batteries, and leads because it appears that the technology is meant to remain in use for the remainder of a patient's life. We are inviting public comments on whether the remed[emacr][reg] System represents a substantial clinical improvement over existing technologies. We did not receive any public comments in response to the published notice in the Federal Register regarding the substantial clinical improvement criterion for the remed[emacr][reg] System or at the New Technology Town Hall Meeting. f. Titan Spine nanoLOCK[reg] (Titan Spine nanoLOCK[reg] Interbody Device) Titan Spine submitted an application for new technology add-on payments for the Titan Spine nanoLOCK[reg] Interbody Device (the Titan Spine nanoLOCK[reg]) for FY 2019. (We note that the applicant previously submitted an application for new technology add-on payments for this device for FY 2017.) The Titan Spine nanoLOCK[reg] is a nanotechnology-based interbody medical device with a dual acid-etched titanium interbody system used to treat patients diagnosed with degenerative disc disease (DDD). One of the key distinguishing features of the device is the surface manufacturing technique and materials, which produce macro, micro, and nano[dash]surface textures. According to the applicant, the combination of surface topographies enables initial implant fixation, mimics an osteoclastic pit for bone growth, and produces the nano-scale features that interface with the integrins on the outside of the cellular membrane. Further, the applicant noted that these features generate better osteogenic and angiogenic responses that enhance bone growth, fusion, and stability. The applicant asserted that the Titan Spine nanoLOCK[reg]'s clinical features also reduce pain, improve recovery time, and produce lower rates of device complications such as debris and inflammation. On October 27, 2014, the Titan Spine nanoLOCK[reg] received FDA clearance for the use of five lumbar interbody devices and one cervical interbody device: The nanoLOCK[reg] TA--Sterile Packaged Lumbar ALIF Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy; the nanoLOCK[reg] TAS--Sterile Packaged Lumbar ALIF Stand Alone Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy; the nanoLOCK[reg] TL--Sterile Packaged Lumbar Lateral Approach Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy; the nanoLOCK[reg] TO--Sterile Packaged Lumbar Oblique/PLIF Approach Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy; the nanoLOCK[reg] TT--Sterile Packaged Lumbar TLIF Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy; and the nanoLOCK[reg] TC--Sterile Packaged Cervical Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy. The applicant received FDA clearance on December 14, 2015, for the nanoLOCK[reg] TCS-- Sterile Package Cervical Stand Alone Interbody Fusion Device with nanoLOCK[reg] surface, available in multiple sizes to accommodate anatomy. According to the applicant, July 8, 2016 was the first date that the nanotechnology production facility completed validations and clearances needed to manufacture the nanoLOCK[reg] interbody fusion devices. Once validations and clearances were completed, the technology was available on the U.S. market on October 1, 2016. Therefore, the applicant believes that the newness period for nanoLOCK[reg] would begin on October 1, 2016. Procedures involving the Titan Spine nanoLOCK[reg] technology can be identified by the following ICD-10-PCS Section ``X'' New Technology codes:XRG0092 (Fusion of occipital-cervical joint using nanotextured [[Page 20315]] surface interbody fusion device, open approach); XRG1092 (Fusion of cervical vertebral joint using nanotextured surface interbody fusion device, open approach); XRG2092 (Fusion of 2 or more cervical vertebral joints using nanotextured surface interbody fusion device, open approach); XRG4092 (Fusion of cervicothoracic vertebral joint using nanotextured surface interbody fusion device, open approach); XRG6092 (Fusion of thoracic vertebral joint using nanotextured surface interbody fusion device, open approach); XRG7092 (Fusion of 2 to 7 thoracic vertebral joints using nanotextured surface interbody fusion device, open approach); XRG8092 (Fusion of 8 or more thoracic vertebral joints using nanotextured surface interbody fusion device, open approach); XRGA092 (Fusion of thoracolumbar vertebral joint using nanotextured surface interbody fusion device, open approach); XRGB092 (Fusion of lumbar vertebral joint using nanotextured surface interbody fusion device, open approach); XRGC092 (Fusion of 2 or more lumbar vertebral joints using nanotextured surface interbody fusion device, open approach); and XRGD092 (Fusion of lumbosacral joint using nanotextured surface interbody fusion device, open approach). We note that the applicant expressed concern that interbody fusion devices that have failed to gain or apply for FDA clearance with nanoscale features could confuse health care providers with marketing and advertising using terms related to nanotechnology and ultimately adversely affect patient outcomes. Therefore, the applicant believed that there is a need for additional clarity to the current ICD-10-PCS Section ``X'' codes previously identified for health care providers regarding interbody fusion nanotextured surface devices. The applicant submitted a request for code revisions at the March 2018 ICD-10 Coordination and Maintenance Meeting regarding the ICD-10-PCS Section ``X'' New Technology codes used to identify procedures involving the Titan Spine nanoLOCK[reg] technology. As discussed previously, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for the purposes of new technology add-on payments. We note that the substantial similarity discussion is applicable to both the lumbar and the cervical interbody devices because all of the devices use the Titan Spine nanoLOCK[reg] technology. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant stated that, for both interbody devices (the lumbar and the cervical interbody device), the Titan Spine nanoLOCK[reg]'s surface stimulates osteogenic cellular response to assist in bone formation during fusion. According to the applicant, the mechanism of action exhibited by the Titan Spine's nanoLOCK[reg] surface technology involves the ability to create surface features that are meaningful to cellular regeneration at the nano-scale level. During the manufacturing process, the surface produces macro, micro, and nano-surface textures. The applicant believes that this unique combination and use of these surface topographies represents a new approach to stimulating osteogenic cellular response. The applicant further asserted that the macro-scale textured features are important for initial implant fixation; the micro-scale textured features mimic an osteoclastic pit for supporting bone growth; and the nano-scale textured features interface with the integrins on the outside of the cellular membrane, which generates the osteogenic and angiogenic (mRNA) responses necessary to promote healthy bone growth and fusion. The applicant stated that when correctly manufactured, an interbody fusion device includes a hierarchy of complex surface features, visible at different levels of magnification, that work collectively to impact cellular response through mechanical, cellular, and biochemical properties. The applicant stated that Titan Spine's proprietary and unique surface technology, the Titan Spine nanoLOCK[reg] interbody devices, contain optimized nano[dash]surface characteristics, which generate the distinct cellular responses necessary for improved bone growth, fusion, and stability. The applicant further stated that the Titan Spine nanoLOCK[reg]'s surface engages with the strongest portion of the vertebral endplate, which enables better resistance to subsidence because a unique dual acid-etched titanium surface promotes earlier bone in-growth. According to the applicant, the Titan Spine nanoLOCK[reg]'s surface is created by using a reductive process of the titanium itself. The applicant asserted that use of the Titan Spine nanoLOCK[reg] significantly reduces the potential for debris generated during impaction when compared to treatments using Polyetheretherketone (PEEK)-based implants coated with titanium. According to the results of an in vitro study \152\ (provided by the applicant), which examined factors produced by human mesenchymal stem cells on spine implant materials that compared angiogenic factor production using PEEK-based versus titanium alloy surfaces, osteogenic production levels were greater with the use of rough titanium alloy surfaces than the levels produced using smooth titanium alloy surfaces. Human mesenchymal stem cells were cultured on tissue culture polystyrene, PEEK, smooth TiAlV, or macro-/micro-/nanotextured rough TiAlV (mmnTiAlV) disks. Osteoblastic differentiation and secreted inflammatory interleukins were assessed after 7 days. The results of an additional study \153\ provided by the applicant examined whether inflammatory microenvironment generated by cells as a result of use of titanium aluminum-vanadium (Ti-alloy, TiAlV) surfaces is effected by surface micro[dash]texture, and whether it differs from the effects generated by PEEK-based substrates. This in vitro study compared angiogenic factor production and integrin gene expression of human osteoblast-like MG63 cells cultured on PEEK or titanium-aluminum vanadium (titanium alloy). Based on these study results, the applicant asserted that the use of micro[dash]textured surfaces has demonstrated greater promotion of osteoblast differentiation when compared to use of PEEK-based surfaces. --------------------------------------------------------------------------- \152\ Olivares-Navarrete, R., Hyzy, S., Gittens, R., ``Rough Titanium Alloys Regulate Osteoblast Production of Angiogenic Factors,'' The Spine Journal, 2013, vol. 13(11), pp. 1563-1570. \153\ Olivares-Navarrete, R., Hyzy, S., Slosar, P., et al., ``Implant Materials Generate Different Peri-implant Inflammatory Factors,'' SPINE, 2015, vol. 40(6), pp. 339-404. --------------------------------------------------------------------------- The applicant maintains that the nanoLOCK[reg] was the first, and remains the only, device in spinal fusion, to apply for and successfully obtain a clearance for nanotechnology from the FDA. According to the applicant, in order for a medical device to receive a nanotechnology FDA clearance, the burden of proof includes each of the following to be present on the medical device in question: (1) Proof of specific nano scale features, (2) proof of capability to manufacture nano-scale features with repeatability and documented frequency across an entire [[Page 20316]] device, and (3) proof that those nano-scale features provide a scientific benefit, not found on devices where the surface features are not present. The applicant further stated that many of the commercially available interbody fusion devices are created using additive manufacturing processes to mold or build surface from the ground up. Conversely, Titan Spine applied a subtractive surface manufacturing to remove pieces of a surface. The surface features that remain after this subtractive process generate features visible at magnifications that additive manufacturing has not been able to produce. According to the applicant, this subtractive process has been validated by the White House Office of Science and Technology, the National Nanotechnology Initiative, and the FDA that provide clearances to products that exhibit unique and repeatable features at predictive frequency due to a manufacturing technique. With regard to the second criterion, whether a product is assigned to the same or a different MS-DRG, cases representing patients that may be eligible for treatment involving the Titan Spine nanoLOCK[reg] technology would map to the same MS-DRGs as other (lumbar and cervical) interbody devices currently available to Medicare beneficiaries and also are used for the treatment of patients who have been diagnosed with DDD (lumbar or cervical). With regard to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant stated that the Titan Spine nanoLOCK[reg] can be used in the treatment of patients who have been diagnosed with similar types of diseases, such as DDD, and for a similar patient population receiving treatment involving both lumbar and cervical interbody devices. In summary, the applicant maintained that the Titan Spine nanoLOCK[reg] technology has a different mechanism of action when compared to other spinal fusion devices. Therefore, the applicant did not believe that the Titan Spine nanoLOCK[reg] technology is substantially similar to existing technologies. We are concerned that the Titan Spine nanoLOCK[reg] interbody devices may be substantially similar to currently available titanium interbody devices because other roughened[dash]surface interbody devices also stimulate bone growth. While there is a uniqueness to the nanotechnology used by the applicant, other devices also stimulate bone growth such as PEEK-based surfaces and, therefore, we remain concerned that the Titan Spine nanoLOCK[reg] interbody devices use the same or similar mechanism of action as other devices. We are inviting public comments on whether the Titan Spine nanoLOCK[reg] interbody devices are substantially similar to existing technologies and whether these devices meet the newness criterion. The applicant provided three analyses of claims data from the FY 2016 MedPAR file to demonstrate that the Titan Spine nanoLOCK[reg] interbody devices meet the cost criterion. We note that cases reporting procedures involving lumbar and cervical interbody devices would map to different MS-DRGs. As discussed in the Inpatient New Technology Add[dash]On Payment Final Rule (66 FR 46915), two separate reviews and evaluations of the technologies are necessary in this instance because cases representing patients receiving treatment for diagnoses associated with lumbar procedures that may be eligible for use of the technology under the first indication would not be expected to be assigned to the same MS-DRGs as cases representing patients receiving treatment for diagnoses associated with cervical procedures that may be eligible for use of the technology under the second indication. Specifically, cases representing patients who have been diagnosed with lumbar DDD and who have received treatment that involved implanting a lumbar interbody device would map to MS-DRG 028 (Spinal Procedures with MCC), MS-DRG 029 (Spinal Procedures with CC or Spinal Neurostimulators), MS-DRG 030 (Spinal Procedures without CC/MCC), MS- DRG 453 (Combined Anterior/Posterior Spinal Fusion with MCC), MS-DRG 454 (Combined Anterior/Posterior Spinal Fusion with CC), MS-DRG 455 (Combined Anterior/Posterior Spinal Fusion without CC/MCC), MS-DRG 456 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC), MS-DRG 457 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusion without MCC), MS-DRG 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions without CC/MCC), MS-DRG 459 (Spinal Fusion Except Cervical with MCC), and MS-DRG 460 (Spinal Fusion Except Cervical without MCC). Cases representing patients who have been diagnosed with cervical DDD and who have received treatment that involved implanting a cervical interbody device would map to MS-DRG 471 (Cervical Spinal Fusion with MCC), MS- DRG 472 (Cervical Spinal Fusion with CC), and MS-DRG 473 (Cervical Spinal Fusion without CC/MCC). Procedures involving the implantation of lumbar and cervical interbody devices are assigned to separate MS-DRGs. Therefore, the devices categorized as lumbar interbody devices and the devices categorized as cervical interbody devices must distinctively (each category) meet the cost criterion and the substantial clinical improvement criterion in order to be eligible for new technology add[dash]on payments beginning in FY 2019. The first analysis searched for any of the ICD-10-PCS procedure codes within the code series Lumbar--0SG [body parts 0 1 3] [open approach only 0] [device A only] [anterior column only 0, J], which typically are assigned to MS-DRGs 028, 029, 030, and 453 through 460. The average case-weighted unstandardized charge per case was $153,005. The applicant then removed charges related to the predicate technology and then standardized the charges. The applicant then applied an inflation factor of 1.09357, the value used in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527) to update the charges from FY 2016 to FY 2018. The applicant added charges related to the Titan Spine nanoLOCK[reg] lumbar interbody devices. This resulted in a final inflated average case-weighted standardized charge per case of $174,688, which exceeds the average case-weighted Table 10 MS-DRG threshold amount of $83,543. The second analysis searched for any of the ICD-10-PCS procedure codes within the code series Cervical--0RG [body parts 0--A] [open approach only 0] [device A only] [anterior column only 0, J], which typically are assigned to MS-DRGs 028, 029, 030, 453 through 455, and 471 through 473. The average case-weighted unstandardized charge per case was $88,034. The methodology used in the first analysis was used for the second analysis, which resulted in a final inflated average case-weighted standardized charge per case of $101,953, which exceeds the average case-weighted Table 10 MS-DRG threshold amount of $83,543. The third analysis was a combination of the first and second analyses described earlier that searched for any of the ICD-10-PCS procedure codes within the Lumbar and Cervical code series listed above that are assigned to the MS-DRGs in the analyses above. The average case[dash]weighted unstandardized charge per case was $127,736. The methodology used for the first and second analysis was used for the third analysis, which resulted in a [[Page 20317]] final inflated average case-weighted standardized charge per case of $149,915, which exceeds the average case-weighted Table 10 MS-DRG threshold amount of $104,094. Because the final inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount in all of the applicant's analyses, the applicant maintained that the technology meets the cost criterion. We are inviting public comments on whether the Titan Spine nanoLOCK[reg] meets the cost criterion. With regard to the substantial clinical improvement criterion for the Titan Spine nanoLOCK[reg] Interbody Lumbar and Cervical Devices, the applicant submitted the results of two clinical evaluations. The first clinical evaluation was a case series and the second was a case control study. Regarding the case series, 4 physicians submitted clinical information on 146 patients. The 146 patients resulted from 2 surgery groups: a cervical group of 73 patients and a lumbar group of 73 patients. The division into cervical and lumbar groups was due to differences in surgical procedure and expected recovery time. Subsequently, the collection and analyses of data were presented for lumbar and cervical nanoLOCK[reg] device implants. Data was collected using medical record review. Patient baseline characteristics, the reason for cervical and lumbar surgical intervention, inclusion and exclusion criteria, details on the types of pain medications and the pattern of usage preoperatively and postoperatively were not provided. We note that the applicant did not provide an explanation of why the outcomes studied in the case series were chosen for review. However, the applicant noted that the case series data were restricted to patients treated with the Titan Spine nanoLOCK[reg] device, with both retrospective and prospective data collection. These data appeared to be clinically related and included: (1) Pain medication usage; (2) extremity and back pain (assessed using the Numeric Pain Rating Scale (NPRS)); and (3) function (assessed using the Oswestry Disability Index (ODI)). Clinical data collection began with time points defined as ``Baseline (pre-operation), Month 1 (0-4 weeks), Month 2 (5-8 weeks), Month 3 (9-12 weeks), Month 4 (13-16 weeks), Month 5 (17-20 weeks) and Month 6+ (>20 weeks)''. The n, mean, and standard deviation were presented for continuous variables (NPRS extremity pain, back pain, and ODI scores), and the n and percentage were presented for categorical variables (subjects taking pain medications). All analyses compared the time point (for example, Month 1) to the baseline. Pain scores for extremities (leg and arm) were assessed using the NPRS, an 11[dash]category ordinal scale where 0 is the lowest value and 10 is the highest value and, therefore, higher scores indicate more severe pain. Of the 73 patients in the lumbar group, the applicant presented data on 18 cases for leg or arm pain at baseline that had a mean score of 6.4, standard deviation (SD) 2.3. Between Month 1 and Month 6+ the number of lumbar patients for which data was submitted for leg or arm pain ranged from 3 patients (Month 5, mean score 3.7, SD 3.5) to 15 patients (Month 6+, mean score 2.5, SD 2.4), with varying numbers of patients for each of the other defined time points of Month 1 through Month 4. None of the defined time points of Month 1 through Month 4 had more than 14 patients or less than 3 patients that were assessed. Of the 73 patients in the cervical group, 7 were assessed for leg or arm pain at baseline and had a mean score of 5.1, SD 3.5. Between Month 1 and Month 6+ the number of cervical patients assessed for leg or arm pain ranged from 0 patients (Month 5, no scores) to 5 patients (Month 1, mean score 4.2, SD 2.6), with varying numbers of patients for each of the other defined time points of Month 1 through Month 4. None of the defined time points of Month 1 through Month 4 had more than 5 patients or less than 2 patients that were assessed. Back pain scores were also assessed using the NPRS, where 0 is the lowest value and 10 is the highest value and, therefore, higher scores indicate more severe pain. Of the 73 patients in the lumbar group, 66 were assessed for back pain at baseline and had a mean score of 7.9, SD 1.8. Between Month 1 and Month 6+ the number of lumbar patients assessed for back pain ranged from 4 patients (Month 5, mean score 4.0, SD 2.7) to 43 patients (Month 1, mean score 4.5, SD 2.7), with varying numbers of patients for each defined time point. Of the 73 patients in the cervical group, 71 were assessed for back pain at baseline and had a mean score of 7.5, SD 2.3. Between Month 1 and Month 6+ the number of cervical patients assessed for back pain ranged from 2 patients (Month 5, mean score 7.0, SD 2.8) to 47 patients (Month 1, mean score 4.4, SD 2.9), with varying numbers of patients for each defined time point. Function was assessed using the ODI, which ranges from 0 to 100, with higher scores indicating increased disability/impairment. Of the 73 patients in the lumbar group, 59 were assessed for ODI scores at baseline and had a mean score of 52.5, SD 18.7. Between Month 1 and Month 6+ the number of lumbar patients assessed for ODI scores ranged from 3 patients (Month 5, mean score 33.3, SD 19.8) to 38 patients (Month 1, mean score 48.1, SD 19.7), with varying numbers of patients for each defined time point. Of the 73 patients in the cervical group, 56 were assessed for ODI scores at baseline and had a mean score of 53.6, SD 18.2. Between Month 1 and Month 6+ the number of cervical patients assessed for ODI score ranged from 1 patient (Month 5, mean score 80, no SD noted) to 41 patients (Month 1, mean score 48.6, SD 20.5), with varying numbers of patients for each defined time point. The percentages of patients not taking pain medicines per day for the lumbar and cervical groups over time were assessed. Of the 73 patients in the lumbar group, 69 were assessed at baseline and 27.5 percent of the 69 patients were not taking pain medication. Between Month 1 and Month 6+ the number of lumbar patients assessed for not taking pain medicines ranged from 5 patients (Month 5, 80 percent were not taking pain medicines) to 46 patients (Month 1, 54.3 percent were not taking pain medicines), with varying numbers of patients for each defined time point. Of the 73 patients in the cervical group, 72 were assessed and 22.2 percent of the 72 patients were not taking pain medicines at baseline. Between Month 1 and Month 6+ the number of cervical patients assessed for not taking pain medicines ranged from 2 patients (Month 5, 100 percent were not taking pain medicines) to 50 patients (Month 1, 70 percent were not taking pain medicines), with varying numbers of patients for each defined time point. According to the applicant, both the lumbar and cervical groups showed a trend of improvement in all four clinical outcomes over time for which they collected data in their case series. However, the applicant also indicated that the trend was difficult to assess due to the relatively limited number of subjects with available assessments more than 4 months post-implant. The applicant shared that it had missing values for over 80 percent of the subjects in the study after the 4th post-operative month. According to the applicant and its results of the clinical evaluation, which was based on data from less than 20 percent of subjects, there was a statistically significant reduction in back pain for nanoLOCK[reg] patients from ``Baseline,'' based on improvement at earlier than standard time points. [[Page 20318]] We are concerned that the small sample size of patients assessed at each timed follow-up point for each of the clinical outcomes evaluated in the case series limits our ability to draw meaningful conclusions from these results. The applicant provided t-test results for the lumbar and cervical groups assessed for pain (back, leg, and arm). We are concerned that the t-test resulting from small sample sizes (for example, 2 of 73 patients in Month 5, and 5 of 73 patients in Month 6+) does not indicate a statistically meaningful improvement in pain scores. Based on the results of the case series provided by the applicant, we are unable to determine whether the findings regarding extremity and back pain, ODI scores, and percentage of subjects not taking pain medication for patients who received treatment involving the Titan Spine nanoLOCK[reg] devices represent a substantial clinical improvement due to the inconsistent sample size over time across both treatment arms in all evaluated outcome measures. The quantity of missing data in this case series, along with the lack of explanation for the missing data, raises concerns for the interpretation of these results. We also are unable to determine based on this case series whether there were improvements in extremity pain and back pain, ODI scores, and percentage of subjects not taking pain medicines for patients who received treatment involving the Titan Spine nanoLOCK[reg] devices versus conventional and other intervertebral body fusion devices, as there were no comparisons to current therapies. As noted above, the applicant did not provide an explanation of why the outcomes studied in the case series were chosen for review. Therefore, we believe that we may have insufficient information to determine if the outcomes studied in the case series are validated proxies for evidence that the nanoLOCK[reg]'s surface promotes greater osteoblast differentiation when compared to use of PEEK-based surfaces. We are inviting public comments regarding our concerns, including with respect to why the outcomes studied in the case series were chosen for review. The applicant's second clinical evaluation was a case-control study with a 1:5 case control ratio. The applicant used deterministically linked, de-identified, individual[dash]level health care claims, electronic medical records (EMR), and other data sources to identify 70 cases and 350 controls for a total sample size of 420 patients. The applicant also identified OM1TM data source and noted that the OM1TM data source reflects data from all U.S. States and territories and is representative of the U.S. national population. The applicant used OM1TM data between January 2016 and June 2017, and specifically indicated that these data contain medical and pharmacy claims information, laboratory data, vital signs, problem lists, and other clinical details. The applicant indicated that cases were selected using the ICD-10-PCS Section ``X'' New Technology codes listed above and controls were chosen from fusion spine procedures (Fusion Spine Anterior Cervical, Fusion Spine Anterior Cervical and Discectomy, Fusion Spine Anterior Posterior Cervical, Fusion Spine Transforaminal Interbody Lumbar, Fusion Spine Cervical Thoracic, Fusion Spine Transforaminal Interbody Lumbar with Navigation, and Fusion Spine Transforaminal Interbody Lumber Robot-Assisted). Further, the applicant stated that cases and controls were matched by age (within 5 years), year of surgery, Charlson Comorbidity Index, and gender. According to the applicant, regarding clinical outcomes studied, unlike the case series, the case-control study captured Charlson Comorbidity Index, the average length of stay (ALOS), and 30-day unplanned readmissions; like the case series, this case-control study captured the use of pain medications by assessing the cumulative post-surgical opioid use. The mean age for all patients in the study was 55 years old, and 47 percent were male. For the clinical length of stay outcome, the applicant noted that the mean length of stay was slightly longer among control patients, 3.9 days (SD = 5.4) versus 3.2 days (SD = 2.9) for cases, and a larger proportion of patients in the control group had lengths of stay equal to or longer than 5 days (21 percent versus 17 percent). Three control patients (0.8 percent) were readmitted within 30 days compared to zero readmissions among case patients. A slightly lower proportion of case patients were on opioids 3 months post-surgery compared to control patients (15 percent versus 16 percent). We are concerned that there may be significant outliers not identified in the case and control arms because for the mean length of stay outcome, the standard deviation for control patients (5.4 days) is larger than the point estimate (3.9 days). Based on the results of this clinical evaluation provided by the applicant, we are unable to determine whether the findings regarding lengths of stay and cumulative post-surgical opioid use for patients who received treatment involving the nanoLOCK[reg] devices versus conventional intervertebral body fusion devices represent a substantial clinical improvement. Without further information on selection of controls and whether there were adjustments in the statistical analyses controlling for confounding factors (for example, cause of back pain, level of experience of the surgeon, BMI and length of pain), we are concerned that the interpretation of the results may be limited. Finally, we are concerned that the current data does not adequately support a strong association between the outcome measures of length of stay, readmission rates, and use of opioids and the use of nano-surface textures in the manufacturing of the Titan Spine nanoLOCK[reg] device. For these reasons, we are concerned that the current data do not support a substantial clinical improvement over the currently available devices used for lumbar and cervical DDD treatment. We note that the applicant indicated its intent to submit the results of additional ongoing studies to support the evidence of substantial clinical improvement over existing technologies for patients who receive treatment involving the nanoLOCK[reg] devices versus patients receiving treatment involving other interbody fusion devices. We are inviting public comments on whether the Titan Spine nanoLOCK[reg] meets the substantial clinical improvement criterion. Below we summarize and respond to written public comments received regarding the nanoLOCK[reg] during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: One commenter focused on two items related to the substantial clinical improvement and the lack of real-world evidence and published studies regarding the nanoLOCK[reg] technologies. The first item referenced by the commenter related to CMS' concern presented in the FY 2017 IPPS/LTCH PPS final rule that the results of the in vitro studies that the applicant for the nanoLOCK[reg] technology relied upon in its application may not have necessarily correlated with the clinical results specified by the applicant. Specifically, because at that time the applicant had only conducted in vitro studies, without obtaining any clinical data from live patients during a specific clinical trial, CMS stated that it was unable to substantiate the clinical results that the applicant believed the technology achieved from a clinical standpoint based on the results of the studies provided. As a result, CMS stated that it was concerned that the results of the studies provided by the [[Page 20319]] applicant did not demonstrate that the Titan Spine nanoLOCK[reg] technologies met the substantial clinical improvement criterion. The commenter also indicated that it believed the applicant has yet to publish data that would satisfy the concerns CMS noted in the FY 2017 IPPS/LTCH PPS final rule. In addition, the commenter noted that the applicant suggested that the health care community has started to move away from randomized controlled trials toward real-world evidence, and then presented claims analyses that attempted to link any assumed substantial clinical improvement in patient outcomes from fusion surgery to the nanoLOCK[reg] technology. In response to this assertion, the commenter stated that without a randomized controlled study of this technology as compared to the standard of care or, as CMS noted in FY 2017, clinical data from live patients during a specific clinical trial, these links cannot be scientifically substantiated. The commenter also noted that none of the studies presented during the February 13, 2018 New Technology Town Hall meeting appear to be published at this time, which would subject them to a rigorous peer- reviewed process. The commenter continued to support CMS' concern previously expressed in the FY 2017 IPPS/LTCH PPS final rule regarding whether substantial clinical improvement has been demonstrated. The second item of focus referenced by the commenter was also presented by CMS in the FY 2017 IPPS/LTCH PPS final rule. The commenter noted that there are other titanium surfaced devices currently available on the U.S. market. In the FY 2017 IPPS/LTCH PPS final rule, CMS stated that, while these devices do not use the Titan Spine nanoLOCK[reg] technology, their surfaces also are made of titanium. Therefore, CMS believed that the Titan Spine nanoLOCK[reg] interbody devices may be substantially similar to currently available titanium interbody devices. The commenter stated that it agreed with the statements CMS made in the FY 2017 IPPS/LTCH PPS final rule and also believed that the Titan Spine nanoLOCK[reg] technology is not only substantially similar to other currently available titanium interbody devices, but also is similar to other technologies with microscopic, roughened surfaces with nano-scale features. The commenter indicated that the verification of these surfaces and visualization of nano-scale features in other orthopedic and spinal implants have been confirmed in consensus standards, as well as in electron microscopy techniques, including atomic force microscopy. In addition, the commenter stated that the success of these devices at an in vitro level has been reported in the peer-reviewed literature, similar to that published on the nanoLOCK[reg]. Despite verification of the applicant's claims regarding these surfaces, visualization of nano-scale features, and success of these devices at an in vitro level being reported in peer- reviewed literature, the commenter believed that, at this time, there is not enough scientifically[dash]validated evidence of improvement in patient outcomes to substantiate approval of new technology add-on payments for any device manufactured with nano-scale features, including the Titan Spine nanoLOCK[reg] technology. Response: We appreciate the commenter's input. We will take these comments into consideration when deciding whether to approve new technology add-on payments for the Titan Spine nanoLock[reg] for FY 2019. Comment: One commenter supported the approval of new technology add-on payments for the Titan Spine nanoLock[reg] technology. The commenter stated that Titan Spine is the only company that has received FDA approval for the use of ``nanotechnology'' in its indication for treatment use and has published substantial research on the cellular impact of its unique topographic, nano-textured surface. (We note, as described above, this technology is currently FDA cleared (not FDA approved) and the technology was available on the U.S. market once validations and clearances were completed.) The commenter asserted that, for these reasons, the nanoLOCK[reg] represents an emerging technology that should not be considered substantially similar to other spinal technologies on the market. The commenter further asserted that the real[dash]world evidence gathered from multiple, independent data sources (including actual electronic medical records (EMR) and healthcare claims) on nanoLOCK[reg] usage in the treatment of patients consistently shows patient improvement in terms of clinically and economically relevant outcomes--faster recovery times, reduced length of hospital stays, and reductions in downstream medical costs such as opiate utilization, among others. The commenter stated that impressive patient outcomes by use of the nanoLOCK[reg] are unmatched by other competing devices, improving patient outcomes of Medicare beneficiaries with serious spinal pathologies. Response: We appreciate the commenters' input. We will take these comments into consideration when deciding whether to approve new technology add-on payments for the Titan Spine nanoLock[reg] for FY 2019. g. Plazomicin Achaogen, Inc. submitted an application for new technology add-on payments for Plazomicin for FY 2019. According to the applicant, Plazomicin is a next-generation aminoglycoside antibiotic, which has been found in vitro to have enhanced activity against many multi-drug resistant (MDR) gram-negative bacteria. The proposed indication for the use of Plazomicin, which had not received FDA approval as of the time of the development of this proposed rule, is for the treatment of adult patients who have been diagnosed with the following infections caused by designated susceptible microorganisms: (1) Complicated urinary tract infection (cUTI), including pyelonephritis; and (2) bloodstream infections (BSIs). The applicant stated that it expects that Plazomicin would be reserved for use in the treatment of patients who have been diagnosed with these types of infections who have limited or no alternative treatment options, and would be used only to treat infections that are proven or strongly suspected to be caused by susceptible microorganisms. The applicant stated that there is a strong need for antibiotics that can treat infections caused by MDR Enterobacteriaceae, specifically carbapenem resistant Enterobacteriaceae (CRE). Life[dash]threatening infections caused by MDR bacteria have increased over the past decade, and the patient population diagnosed with infections caused by CRE is projected to double within the next 5 years, according to the Centers for Disease Control and Prevention (CDC). Infections caused by CRE are often associated with poor patient outcomes due to limited treatment options. Patients who have been diagnosed with BSIs due to CRE face mortality rates of up to 50 percent. Patients most at risk for CRE infections are those with CRE colonization, recent hospitalization or stay in a long-term care or skilled-nursing facility, an extensive history of antibacterial use, and whose care requires invasive devices like urinary catheters, intravenous (IV) catheters, or ventilators. The applicant estimated, using data from the Center for Disease Dynamics, Economics & Policy (CDDEP), that the Medicare population that has been diagnosed with antibiotic-resistant cUTI numbers approximately 207,000 and approximately 7,000 for BSIs/sepsis due to CRE. [[Page 20320]] The applicant noted that due to the public health concern of increasing antibiotic resistance and the need for new antibiotics to effectively treat MDR infections, Plazomicin has received the following FDA designations: Breakthrough Therapy; Qualified Infectious Disease product, Priority Review; and Fast Track. The applicant noted that Breakthrough Therapy designation was granted on May 17, 2017, for the treatment of bloodstream infections (BSIs) caused by certain Enterobacteriaceae in patients who have been diagnosed with these types of infections who have limited or no alternative treatment options. The applicant noted that Plazomicin is the first antibacterial agent to receive this designation. The applicant noted that on December 18, 2014, the FDA designated Plazomicin as a Qualified Infectious Disease Product (QIDP) for the indications of hospital-acquired bacterial pneumonia (HAPB), ventilator-associated bacterial pneumonia (VABP), and complicated urinary tract infection (cUTI), including pyelonephritis and catheter-related blood stream infections (CRBSI). The applicant noted that Fast Track designation was granted by the FDA on August 12, 2012, for the Plazomicin development program for the treatment of serious and life-threatening infections due to CRE. Plazomicin had not received approval from the FDA as of the time of the development of this proposed rule. However, the applicant indicated that it anticipates receiving approval from the FDA by July 1, 2018. The applicant has submitted a request for approval for a unique ICD-10-PCS procedure code for the use of Plazomicin, beginning with FY 2019. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant asserted that Plazomicin does not use the same or similar mechanism of action to achieve a therapeutic outcome as any other drug assigned to the same or a different MS-DRG. The applicant stated that Plazomicin has a unique chemical structure designed to improve activity against aminoglycoside-resistant bacteria, which also are often resistant to other key classes of antibiotics, including beta-lactams and carbapenems. Bacterial resistance to aminoglycosides usually occurs through enzymatic modification by aminoglycoside modifying enzymes (AMEs) to compromise binding the target bacterial site. According to the applicant, AMEs were found in 98.6 percent of aminoglycoside nonsusceptible E. coli, Klebsiella spp, Enterobacter spp, and Proteus spp collected in 2016 U.S. surveillance studies. Genes encoding AMEs are typically located on elements that also carry other causes of antibiotic resistance like B-lactamase and/or carbapenemase genes. Therefore, extended spectrum beta-lactamases (ESBL) producing Enterobacteriaceae and CRE are commonly resistant to currently available aminoglycosides. According to the applicant, Plazomicin contains unique structural modifications at key positions in the molecule to overcome antibiotic resistance, specifically at the 6 and N1 positions. These side chain substituents shield Plazomicin from inactivation by AMEs, such that Plazomicin is not inactivated by any known AMEs, with the exception of N[dash]acetyltransferase (AAC) 2'-Ia, -Ib, and -Ic, which is only found in Providencia species. According to the applicant, as an aminoglycoside, Plazomicin also is not hydrolyzed by B-lactamase enzymes like ESBLs and carbapenamases. Therefore, the applicant asserted that Plazomicin is a potent therapeutic agent for treating MDR Enterobacteriaceae, including aminoglycoside-resistant isolates, CRE strains, and ESBL-producers. The applicant asserted that the mechanism of action is new due to the unique chemical structure. With regard to the general mechanism of action against bacteria, we are concerned that the mechanism of action of Plazomicin appears to be similar to other aminoglycoside antibiotics. As with other aminoglycosides, Plazomicin is bactericidal through inhibition of bacterial protein synthesis. The applicant maintained that the structural changes to the antibiotic constitute a new mechanism of action because it allows the antibiotic to remain active despite AMEs. Additionally, the applicant stated that Plazomicin would be the first, new aminoglycoside brought to market in over 40 years. We are inviting public comments on whether Plazomicin's mechanism of action is new, including comments in response to our concern that its mechanism of action to eradicate bacteria (inhibition of bacterial protein synthesis) may be similar to that of other aminoglycosides, even if improvements to its structure may allow Plazomicin to be active even in the presence of common AMEs that inactivate currently marketed aminoglycosides. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, we believe that potential cases representing patients who may be eligible for treatment involving Plazomicin would be assigned to the same MS-DRGs as cases representing patients who receive treatment for UTI or bacteremia. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant asserted that Plazomicin is intended for use in the treatment of patients who have been diagnosed with cUTI, including pyelonephritis, and bloodstream infections, who have limited or no alternative treatment options. Because the applicant anticipates that Plazomicin will be reserved for use in the treatment of patients who have limited or no alternative treatment options, the applicant believed that Plazomicin may be indicated to treat a new patient population for which no other technologies are available. However, it is possible that existing antimicrobials could also be used to treat those same bacteria Plazomicin is intended to treat. Specifically, the applicant is seeking FDA approval for use in the treatment of patients who have been diagnosed with cUTI, including pyelonephritis, caused by the following susceptible microorganisms: Escherichia coli (including cases with concurrent bacteremia), Klebsiella pneumoniae, Proteus spp (including P. mirabilis and P. vulgaris), and Enterobactercloacae, and for use in the treatment of patients who have been diagnosed with BSIs caused by the following susceptible microorganisms: Klebsiella pneumonia and Escherichia coli. Because the susceptible organisms for which Plazomicin is proposed to be indicated include nonresistant strains that existing antibiotics may effectively treat, we are concerned that Plazomicin may not treat a new patient population. Therefore, we are inviting public comments on whether Plazomicin treats a new type of disease or a new patient population. We also are inviting public comments on whether Plazomicin is substantially similar to any existing technologies and whether it meets the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. In order to identify the range of MS-DRGs that potential cases representing [[Page 20321]] patients who have been diagnosed with the specific types of infections for which the technology has been proposed to be indicated for use in the treatment of and who may be potentially eligible for treatment involving Plazomicin may map to, the applicant identified all MS-DRGs in claims that included cases representing patients who have been diagnosed with UTI or Septicemia. The applicant searched the FY 2016 MedPAR data for claims reporting 16 ICD-10-CM diagnosis codes for UTI and 45 ICD-10-CM diagnosis codes for Septicemia and identified a total of 2,046,275 cases assigned to 702 MS-DRGs. The applicant also performed a similar analysis based on 75 percent of identified claims, which spanned 43 MS-DRGs. MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours with MCC) accounted for roughly 25 percent of all cases in the first analysis of the 702 MS- DRGs identified, and almost 35 percent of the cases in the second analysis of the 43 MS-DRGs identified. Other MS-DRGs with a high volume of cases based on mapping the ICD-10-CM diagnosis codes, in order of number of discharges, were: MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours without MCC); MS-DRG 690 (Kidney and Urinary Tract Infections without MCC); MS-DRG 689 (Kidney and Urinary Tract Infections with MCC); MS-DRG 853 (Infectious and Parasitic Diseases with O.R. Procedure with MCC); and MS-DRG 683 (Renal Failure with CC). The applicant calculated an average unstandardized case-weighted charge per case using 2,046,275 identified cases (100 percent of all cases) and using 1,533,449 identified cases (75 percent of all cases) of $69,414 and $63,126, respectively. The applicant removed 50 percent of the charges associated with other drugs (associated with revenue codes 025x, 026x, and 063x) from the MedPAR data because the applicant anticipates that the use of Plazomicin would reduce the charges associated with the use of some of the other drugs, noting that this was a conservative estimate because other drugs would still be required for these patients during their hospital stay. The applicant then standardized the charges and applied the 2[dash]year inflation factor of 9.357 percent from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527) to inflate the charges from FY 2016 to FY 2018. No charges for Plazomicin were added in the analysis because the applicant explained that the anticipated price for Plazomicin has yet to be determined. Based on the FY 2018 IPPS/LTCH PPS Table 10 thresholds, the average case-weighted threshold amount was $56,996 in the first scenario utilizing 100 percent of all cases, and $55,363 in the second scenario utilizing 75 percent of all cases. The inflated average case-weighted standardized charge per case was $62,511 in the first scenario and $57,054 in the second analysis. Because the inflated average case- weighted standardized charge per case exceeds the average case-weighted threshold amount in both scenarios, the applicant maintained that the technology meets the cost criterion. The applicant noted that the case- weighted threshold amount is met before including the average per patient cost of the technology in both analyses. As such, the applicant anticipated that the inclusion of the cost of Plazomicin, at any price point, would further increase charges above the average case-weighted threshold amount. The applicant also supplied additional cost analyses, directing attention at each of the two proposed indications individually; the cost analyses considered potential cases representing patients who have been diagnosed with cUTI who may be eligible for treatment involving Plazomicin separately from potential cases representing patients who have been diagnosed with BSI/Bacteremia who may be eligible for treatment involving Plazomicin, with the cost analysis for each considering 100 percent and 75 percent of identified cases using the FY 2016 MedPAR data and the FY 2018 GROUPER Version 36. The applicant reported that, for potential cases representing patients who have been diagnosed with Bacteremia and who may be eligible for treatment involving Plazomicin, 100 percent of identified cases spanned 539 MS- DRGs, with 75 percent of the cases mapping to the following 4 MS-DRGs: 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours with MCC), 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours without MCC), 853 (Infectious and Parasitic Diseases with O.R. Procedure with MCC), and 870 (Septicemia or Severe Sepsis with Mechanical Ventilation 96+ hours). According to the applicant, for potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin, 100 percent of identified cases mapped to 702 MS-DRGs, with 75 percent of the cases mapping to 56 MS-DRGs. Potential cases representing patients who have been diagnosed with cUTIs and who may be eligible for treatment involving Plazomicin assigned to MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours with MCC) accounted for approximately 18 percent of all of the cases assigned to any of the identified 56 MS-DRGs (75 percent of cases sensitivity analysis), followed by MS-DRG 690 (Kidney and Urinary Tract Infections without MCC), which comprised almost 13 percent of all of the cases assigned to any of the identified 56 MS- DRGs. Two other common MS-DRGs containing potential cases representing potential patients who may be eligible for treatment involving Plazomicin who have been diagnosed with the specific type of indicated infections for which the technology is intended to be used, using the applicant's analysis approach for UTI based on mapping the ICD-10-CM diagnosis codes were: MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours without MCC) and MS-DRG 689 (Kidney and Urinary Tract Infections with MCC). For potential cases representing patients who have been diagnosed with BSI and who may be eligible for treatment involving Plazomicin, the applicant calculated the average unstandardized case-weighted charge per case using 1,013,597 identified cases (100 percent of all cases) and using 760,332 identified cases (75 percent of all cases) of $87,144 and $67,648, respectively. The applicant applied the same methodology as the combined analysis above. Based on the FY 2018 IPPS/ LTCH PPS final rule Table 10 thresholds, the average case-weighted threshold amount for potential cases representing patients who have been diagnosed with BSI assigned to the MS-DRGs identified in the sensitivity analysis was $66,568 in the first scenario utilizing 100 percent of all cases, and $61,087 in the second scenario utilizing 75 percent of all cases. The inflated average case-weighted standardized charge per case was $77,004 in the first scenario and $60,758 in the second scenario; in the 100 percent of Bacteremia cases sensitivity analysis, the final inflated case-weighted standardized charge per case exceeded the average case[dash]weighted threshold amount for potential cases representing patients who have been diagnosed with BSI and who may be eligible for treatment involving Plazomicin assigned to the MS- DRGs identified in the sensitivity analysis by $10,436 before including costs of Plazomicin. In the 75 percent of all cases sensitivity analysis scenario, the [[Page 20322]] final inflated case-weighted standardized charge per case did not exceed the average case[dash]weighted threshold amount for potential cases representing patients who have been diagnosed with BSI assigned to the MS-DRGs identified in the sensitivity analysis, at $329 less than the average case-weighted threshold amount. Because the applicant has not yet determined pricing for Plazomicin, however, it is possible that Plazomicin may also exceed the average case-weighted threshold amount for potential cases representing patients who have been diagnosed with BSI and who may be eligible for treatment involving Plazomicin assigned to the MS-DRGs identified in the 75 percent cases sensitivity analysis. For potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin, the applicant calculated the average unstandardized case-weighted charge per case using 100 percent of all cases and 75 percent of all cases of $59,908 and $48,907, respectively. The applicant applied the same methodology as the combined analysis above. Based on the FY 2018 IPPS/LTCH PPS final rule Table 10 thresholds, the average case-weighted threshold amount for potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin assigned to the MS-DRGs identified in the first scenario utilizing 100 percent of all cases was $51,308, and $46,252 in the second scenario utilizing 75 percent of all cases. The inflated average case-weighted standardized charge per case was $53,868 in the first scenario and $45,185 in the second scenario. In the 100 percent of cUTI cases sensitivity analysis, the final inflated case[dash]weighted standardized charge per case exceeded the average case-weighted threshold amount for potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin assigned to the MS-DRGs identified in the 100 percent of all cases sensitivity analysis by $2,560 before including costs of Plazomicin. In the 75 percent of all cases scenario, the final inflated case-weighted standardized charge per case did not exceed the average case-weighted threshold amount for potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin assigned to the MS-DRGs identified in the 75 percent sensitivity analysis, at $1,067 less than the average case-weighted threshold amount. Because the applicant has not yet determined pricing for Plazomicin, however, it is possible that Plazomicin may also exceed the average case[dash]weighted threshold amount for potential cases representing patients who have been diagnosed with cUTI and who may be eligible for treatment involving Plazomicin assigned to the MS-DRGs identified in the 75 percent of all cases sensitivity analysis if charges for Plazomicin are more than $1,067. We are inviting public comments on whether Plazomicin meets the cost criterion. With respect to the substantial clinical improvement criterion, the applicant asserted that Plazomicin is a next generation aminoglycoside that offers a treatment option for a patient population who have limited or no alternative treatment options. Patients who have been diagnosed with BSI or cUTI caused by MDR Enterobacteria, particularly CRE, are difficult to treat because carbapenem resistance is often accompanied by resistance to additional antibiotic classes. For example, CRE may be extensively drug resistant (XDR) or even pandrug resistant (PDR). CRE are resistant to most antibiotics, and sometimes the only treatment option available to health care providers is a last- line antibiotic (such as colistin and tigecycline) with higher toxicity. According to the applicant, Plazomicin would give the clinician an alternative treatment option for patients who have been diagnosed with MDR bacteria like CRE because it has demonstrated activity against clinical isolates that possess a broad range of resistance mechanisms, including ESBLs, carbapenemases, and aminoglycoside modifying enzymes that limit the utility of different classes of antibiotics. Plazomicin also can be used to treat patients who have been diagnosed with BSI caused by resistant pathogens, such as ESBL[dash]producing Enterobacteriaceae, CRE, and aminoglycoside- resistant Enterobacteriaceae. The applicant maintained that Plazomicin is a substantial clinical improvement because it offers a treatment option for patients who have been diagnosed with serious bacterial infections that are resistant to current antibiotics. We note that Plazomicin is not indicated exclusively for resistant bacteria, but rather for certain susceptible organisms of gram[dash]negative bacteria, including resistant and nonresistant strains for which existing antibiotics may be effective. We are concerned that the applicant focused solely on Plazomicin's activity for resistant bacteria and did not supply information demonstrating substantial clinical improvement in treating nonresistant strains in the bacteria families for which Plazomicin is indicated. The applicant stated that Plazomicin also meets the substantial clinical improvement criterion because it significantly improves clinical outcomes for a patient population compared to currently available treatment options. Specifically, the applicant asserted that Plazomicin has: (1) A mortality benefit and improved safety profile in treating patients who have been diagnosed with BSI due to CRE; and (2) statistically better outcomes at test-of-cure in patients who have been diagnosed with cUTI, including higher eradication rates for ESBL- producing pathogens, and lower rate of subsequent clinical relapses. The applicant conducted two Phase III studies, CARE and EPIC. The CARE trial compared Plazomicin to colistin, a last-line antibiotic that is a standard of care agent for patients who have been diagnosed with BSI when caused by CRE. The EPIC trial compared Plazomicin to meropenem for the treatment of patients who have been diagnosed with cUTI/acute polynephritis. The CARE clinical trial was a randomized, open label, multi[dash]center Phase III study comparing the efficacy of Plazomicin against colistin in the treatment of patients who have been diagnosed with BSIs or hospital[dash]acquired bacterial pneumonia (HABP)/ ventilator-acquired bacterial pneumonia (VABP) due to CRE. Due to the small number of enrolled patients with HAPB/VABP, however, results were only analyzed for patients who had been diagnosed with BSI due to CRE. The primary endpoint was day 28 all-cause mortality or significant disease complications. Patients were randomized to receive 7 to 14 days of IV Plazomicin or colistin, along with an adjunctive therapy of meropenem or tigecycline. All-cause mortality and significant disease complications were consistent regardless of adjunctive antibiotics received, suggesting that the difference in outcomes was driven by Plazomicin and colistin, with little impact from meropenem and tigecycline. Follow[dash]up was done at test[dash]of[dash]cure (TOC; 7 days after last dose of IV study drug), end of study (EOS; day 28), and long-term follow[dash]up (LFU; day 60). Safety analysis included all patients; microbiological modified intent-to-treat (mMITT) analysis included 17/18 Plazomicin and 20/21 colisitin patients. Baseline characteristics like age, gender, APACHE II score, infection type, [[Page 20323]] baseline pathogens, creatinine clearance, and adjunctive therapy with either meropenem or tigecycline were comparable in the Plazomicin and colistin groups. According to the applicant, the following results demonstrate a reduced mortality benefit in the patients who had been diagnosed with BSI subset. All-cause mortality at day 28 in the Plazomicin group was more than 5 times less than in the colistin group and all-cause mortality or significant complications at day 28 was reduced by 39 percent in the Plazomicin group compared to the colistin group. There was a large sustained 60[dash]day survival benefit in the patients who had been diagnosed with BSI subset, with survival approximately 70 percent in the Plazomicin group compared to 40 percent in the colistin group. Additionally, according to the applicant, faster median time to clearance of CRE bacteremia of 1.5 versus 6 days for Plazomicin versus colistin and higher rate of documented clearance by day 5 (86 percent versus 46 percent) supported the reduced mortality benefit due to faster and more sustained clearance of bacteremia and also demonstrated clinical improvement in terms of more rapid beneficial resolution of the disease. The applicant maintained that Plazomicin also represents a substantial clinical improvement in improved safety outcomes. Patients treated with Plazomicin had a lower incidence of renal events (10 percent versus 41.7 percent when compared to colistin), fewer Treatment Emergent Adverse Events (TEAEs), specifically blood creatinine increases and acute kidney injury, and approximately 30 percent fewer serious adverse events were in the Plazomicin group. According to the applicant, other substantial clinical improvements demonstrated by the CARE study for use of Plazomicin in patients who had been diagnosed with BSI included lower rate of superinfections or new infections, occurring in half as many patients treated with Plazomicin versus colistin (28.6 percent versus 66.7 percent). According to the applicant, the CARE study demonstrates decreased all-cause mortality and significantly reduced disease complications at day 28 (EOS) and day 60 for patients who had been diagnosed with BSI, in addition to a superior safety profile to colistin. However, the applicant stated that, with the achieved enrollment, this study was not powered to support formal hypothesis testing and p-values and 90 percent confidence intervals are provided for descriptive purposes. The total number of patients who had been diagnosed with BSI was 29, with 14 receiving Plazomicin and 15 receiving colistin. While we understand the difficulty enrolling a large number of patients who have been diagnosed with BSI caused by CRE due to severity of the illness and the need for administering treatment promptly, we are concerned that results indicating reduced mortality and treatment advantages over existing standard of care for patients who have been diagnosed with BSI due to CRE are not statistically significant due to the small sample size. Therefore, we are concerned that the results from the CARE study cannot be used to support substantial clinical improvement. The EPIC clinical trial was a randomized, multi[dash]center, multi[dash]national, double[dash]blind study evaluating the efficacy and safety of Plazomicin compared with meropenem in the treatment of patients who have been diagnosed with cUTI based on composite cure endpoint (achieving both microbiological eradication and clinical cure) in the microbiological modified intent-to-treat (mMITT) population. Patients received between 4 to 7 days of IV therapy, followed by optional oral therapy like levofloxacin (or any other approved oral therapy) as step down therapy for a total of 7 to 10 days of therapy. Test[dash]of[dash]cure (TOC) was done 15 to 19 days and late follow[dash]up (LFU) 24 to 32 days after the first dose of IV therapy. Six hundred nine patients fulfilled inclusion criteria, and were randomized to receive either Plazomicin or meropenem, with 306 patients receiving Plazomicin and 303 patients receiving meropenem. Safety analysis included 303 (99 percent) Plazomicin patients and 301 (99.3 percent) meropenem patients. mMITT analysis included 191 (62.4 percent) Plazomicin patients and 197 (65 percent) meropenem patients; exclusion from mMITT analysis was due to lack of study[dash]qualifying uropathogen, which were pathogens susceptible to both Plazomicin and meropenem. In the mMITT population, both groups were comparable in terms of gender, age, percentage of patients who had been diagnosed with cUTI/acute pyelonephritis (AP)/urosepsis/bacteremia/moderate renal impairment at baseline. According to the applicant, Plazomicin successfully achieved the primary efficacy endpoint of composite cure (combined microbiological eradication and clinical cure). At the TOC visit, 81.7 percent of Plazomicin patients versus 70.1 percent of meropenem patients achieved composite cure; this was statistically significant with a 95 percent confidence interval. Plazomicin also demonstrated higher eradication rates for key resistant pathogens than meropenem at both TOC (89.4 percent versus 75.5 percent) and LFU (77 percent versus 60.4 percent), suggesting that the Plazomicin treatment benefit observed at TOC was sustained. Specifically, Plazomicin demonstrated higher eradication rates, defined as baseline uropathogen reduced to less than 104, against the most common gram-negative uropathogens, including ESBL producing (82.4 percent Plazomicin versus 75.0 percent meropenem) and aminoglycoside resistant (78.8 percent Plazomicin versus 68.6 percent meropenem) pathogens. This was statistically significant, although of note, as total numbers of Enterobacteriaceae exceeded population of mMITT (191 Plazomicin, 197 meropenem) this presumably included patients who were otherwise excluded from the mMITT population. According to the applicant, importantly, higher microbiological eradication rates at the TOC and LFU visits were associated with a lower rate of clinical relapse at LFU for Plazomicin treated patients (3 versus 14, or 1.8 percent Plazomicin versus 7.9 percent meropenem), with majority of the meropenem failures having had asymptomatic bacteriuria; that is, positive urine cultures without clinical symptoms, at TOC (21.1 percent), suggesting that the higher microbiological eradication rate at the TOC visit in Plazomicin-treated patients decreased the risk of subsequent clinical relapse. Plazomicin decreased recurrent infection by four-fold compared to meropenem, suggesting improved patient outcomes, such as reduced need for additional therapy and re-hospitalization for patients who have been diagnosed with cUTI. The safety profile of Plazomicin compared to meropenem was similar. The applicant noted that higher bacteria eradication results for Plazomicin were not due to meropenem resistance, as only patients with isolates susceptible to both drugs were included in the study. According to the applicant, the EPIC clinical trial results demonstrate clear differentiation of Plazomicin from meropenem, an agent considered by some as a gold-standard for treatment of patients who have been diagnosed with cUTI in cases due to resistant pathogens. While the EPIC clinical trial was a non-inferiority study, the applicant contended that statistically significant improved outcomes and lower clinical relapse rates for patients treated with Plazomicin demonstrate that Plazomicin meets the substantial clinical [[Page 20324]] improvement criterion for the cUTI indication. Specifically, according to the applicant, the efficacy results for Plazomicin combined with a generally favorable safety profile provide a compelling benefit-risk profile for patients who have been diagnosed with cUTI, and particularly those with infections due to resistant pathogens. Most patients enrolled in the EPIC clinical trial were from Eastern Europe. It is unclear how generalizable these results would be to patients in the United States as the susceptibilities of bacteria vary greatly by location. The applicant maintains that this is consistent with prior studies and is unlikely to have affected the results of the study because the pharmacokinetics of Plazomicin and meropenem are not expected to be affected by race or ethnicity. However, bacterial resistance can vary regionally and we are interested in how this data can be extrapolated to a majority of the U.S. population. It is also unknown how quickly resistance to Plazomicin might develop. Additionally, the microbiological breakdown of the bacteria is unknown without the full published results, and patients outside of the mMITT population were included when the applicant reported the statistically superior microbiological eradication rates of Enterobacteriaceae at TOC. We are concerned whether there is still statistical superiority of Plazomicin in the intended bacterial targets in the mMITT. Finally, because both Plazomicin and meropenem were also utilized in conjunction with levofloxacin, it is unclear to us whether combined antibiotic therapy will continue to be required in clinical practice, and how levofloxacin activity or resistance might affect the clinical outcome in both patient groups. We are inviting public comments on whether Plazomicin meets the substantial clinical improvement criterion for patients who have been diagnosed with BSI and cUTI, including with respect to whether Plazomicin constitutes a substantial clinical improvement for the treatment of patients who have been diagnosed with BSI who have limited or no alternative treatment options, and whether statistically better outcomes at test-of-cure visit, including higher eradication rates for ESBL-producing pathogens, and lower rate of subsequent clinical relapses constitute a substantial clinical improvement for patients who have been diagnosed with cUTI. We did not receive any public comments in response to the published notice in the Federal Register regarding the substantial clinical improvement criterion for Plazomicin or at the New Technology Town Hall meeting. h. GIAPREZATM The La Jolla Pharmaceutical Company submitted an application for new technology add-on payments for GIAPREZATM for FY 2019. GIAPREZATM, a synthetic human angiotensin II, is administered through intravenous infusion to raise blood pressure in adult patients who have been diagnosed with septic or other distributive shock. The applicant stated that shock is a life-threatening critical condition characterized by the inability to maintain blood flow to vital tissues due to dangerously low blood pressure (hypotension). Shock can result in organ failure and imminent death, such that mortality is measured in hours and days rather than months or years. Standard therapy for shock currently uses fluid and vasopressors to raise the mean arterial pressure (MAP). The two classes of standard of care (SOC) vasopressors are catecholamines and vasopressins. Patients do not always respond to existing standard of care therapies. Therefore, a diagnosis of shock can be a difficult and costly condition to treat. According to the applicant, 35 percent of patients who are diagnosed with shock fail to respond to standard of care treatment options using catecholamines and go on to second-line treatment, which is typically vasopressin. Eighty percent of patients on vasopressin fail to respond and have no other alternative treatment options. The applicant estimated that CMS covered charges to treat patients who are diagnosed with vasodilatory shock who fail to respond to standard of care therapy are approximately 2 to 3 times greater than the costs of other conditions, such as acute myocardial infarction, heart failure, and pneumonia. According to the applicant, one[dash]third of patients in the intensive care unit are affected by vasodilatory shock, with 745,000 patients who have been diagnosed with shock being treated annually, of whom approximately 80 percent are septic. With respect to the newness criterion, according to the applicant, the expanded access program (EAP), or FDA authorization for the ``compassionate use'' of an investigational drug outside of a clinical trial, was initiated August 8, 2017. GIAPREZATM was granted Priority Review status and received FDA approval on December 21, 2017, for the use in the treatment of adults who have been diagnosed with septic or other distributive shock as an intravenous infusion to increase blood pressure. We note that the applicant has submitted a request for approval for a unique ICD[dash]10[dash]PCS code for the administration of GIAPREZATM beginning in FY 2019. Currently, there are no ICD-10-PCS procedure codes to uniquely identify procedures involving GIAPREZATM. As discussed above, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, GIAPREZATM is the first synthetic formulation of human angiotensin II, a naturally occurring peptide hormone in the human body. Angiotensin II is one of the major bioactive components of the renin-angiotensin-aldosterone system (RAAS), which serves as one of the body's central regulators of blood pressure. Angiotensin II increases blood pressure through vasoconstriction, increased aldosterone release, and renal control of fluid and electrolyte balance. Current therapies for the treatment of patients who have been diagnosed with shock do not leverage the RAAS. The applicant asserted that GIAPREZATM is a novel treatment with a unique mechanism of action relative to SOC treatments for patients who have been diagnosed with shock, which is adequate fluid resuscitation and vasopressors. Specifically, the two classes of SOC vasopressors are catecholamines like Norepinephrine, epinephrine, dopamine, and phenylephrine IV solutions, and vasopressins like Vasostrict[reg] and vasopressin-sodium chloride IV solutions. Catecholamines leverage the sympathetic nervous system and vasopressin leverages the arginine-vasopressin system to regulate blood pressure. However, the third system that works to regulate blood pressure, the RAAS, is not currently leveraged by any available therapies to raise mean arterial pressure in the treatment of patients who have been diagnosed with shock. The applicant maintained that GIAPREZATM is the first synthetic human angiotensin II approved by the FDA and the only FDA-approved vasopressor that leverages the RAAS and, therefore, GIAPREZATM utilizes a different mechanism of action than currently available treatment options. The applicant explained that GIAPREZATM leverages the RAAS, which is a body system not used by existing vasopressors to raise blood pressure through inducing [[Page 20325]] vasoconstriction. We are concerned that GIAPREZATM's general mechanism of action, increasing blood pressure by inducing vasoconstriction through binding to certain G[dash]protein receptors to stimulate smooth muscle contraction, may be similar to that of norepinephrine, albeit leveraging a different body system. We are inviting public comments on whether GIAPREZATM uses a different mechanism of action to achieve a therapeutic outcome with respect to currently available treatment options, including comments or additional information regarding whether the mechanism of action used by GIAPREZATM is different from that of other treatment methods of stimulating vasoconstriction. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, we believe that potential cases representing patients who may be eligible for treatment involving GIAPREZATM would be assigned to the same MS-DRGs as cases representing patients who receive SOC treatment for a diagnosis of shock. As explained below in the discussion of the cost criterion, the applicant believed that potential cases representing patients who may be eligible for treatment involving GIAPREZATM would be assigned to MS-DRGs that contain cases representing patients who have failed to respond to administration of fluid and vasopressor therapies. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, according to the applicant, once patients have failed treatment using catecholamines, treatment options for patients who have been diagnosed with severe septic or other distributive shock are limited. Agents that were previously available are each associated with their own adverse events (AEs). The applicant noted that primary options that have been investigated include vasopressin, corticosteroids, methylene blue, and blood purification techniques. Of these options, the applicant stated that only vasopressin has a recommendation as add on vasopressor therapy in current treatment guidelines, but the recommendations are listed as weak with moderate quality of evidence. According to the applicant, there is uncertainty regarding vasopressin's effect on mortality due to mixed clinical trial results, and higher doses of vasopressin have been associated with cardiac, digital, and splanchnic ischemia. Therefore, the applicant asserted that there is a significant unmet medical need for treatments for patients who have been diagnosed with septic or distributive shock who remain hypotensive, despite adequate fluid and vasopressor therapy and for medications that can provide catecholamine-sparing effects. The applicant also noted that there is currently no standard of care for addressing the clinical state of septic or other distributive shock experienced by patients who fail to respond to fluid and available vasopressor therapy. Additionally, no clinical evidence or consensus for treatments is available. Based on the applicant's statements as summarized above, it appears that the applicant is asserting that GIAPREZATM provides a new therapeutic treatment option for critically[dash]ill patients who have been diagnosed with shock who have limited options and worsening prognosis. However, we are concerned that GIAPREZATM may not offer a treatment option to a new patient population, specifically because the FDA approval for GIAPREZATM does not reserve the use of GIAPREZATM only as a last-line drug or adjunctive therapy for a subset of the patient population who have been diagnosed with shock who have failed to respond to standard of care treatment options. According to the FDA labeling, GIAPREZATM is a vasoconstrictor to increase blood pressure in adult patients who have been diagnosed with septic or other distributive shock. Patients who have been diagnosed with septic or other distributive shock are not a new patient population. Therefore, it appears that GIAPREZATM is used to treat the same or similar type of disease (a diagnosis of shock) and a similar patient population receiving SOC therapy for the treatment of shock. We are inviting public comments on whether GIAPREZATM meets the substantial similarity criteria and the newness criterion. With regard to the cost criterion, the applicant conducted an analysis for a narrower indication, patients who have been diagnosed with refractory shock who have failed to respond to standard of care vasopressors, and an analysis for a broader indication of all patients who have been diagnosed with septic or other distributive shock. We believe that only this broader analysis, which reflects the patient population for which the applicant's technology is approved by the FDA, is relevant to demonstrate that the technology meets the cost criterion and, therefore, we are only summarizing this broader analysis below. In order to identify the range of MS-DRGs that potential cases representing potential patients who may be eligible for treatment using GIAPREZATM may map to, the applicant used two separate analyses to identify the MS-DRGs for patients who have been diagnosed with shock or related diagnoses. The applicant also performed three sensitivity analyses on the MS-DRGs for each of the two selections: 100 Percent of the MS-DRGs, 80 percent of the MS-DRGs, and 25 percent of the MS-DRGs. Therefore, a total of six scenarios were included in the cost analysis. The first analysis (Scenario 1) selected the MS-DRGs most representative of the potential patient cases where treatment involving GIAPREZATM would have the greatest clinical impact and outcomes of improvement over present treatment options. The applicant searched for 28 different ICD-9-CM codes under this scenario. The second analysis (Scenario 2) used the 80 most relevant ICD-9-CM diagnosis codes based on the inclusion criteria of the GIAPREZATM Phase III clinical trial, ATHOS-3, and an additional 8 ICD-9-CM diagnosis codes for clinical presentation associated with vasodilatory or distributive shock patients failing fluid and standard of care therapy to capture any additional potential cases that may be applicable based on clinical presentations associated with this patient population. Among only the top quartile of potential patient cases, the single MS-DRG representative of most potential patient cases was MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours with MCC) for both ICD-9-CM diagnosis code selection scenarios, and in both selections, it accounted for a potential patient case percentage surpassing 25 percent. Because GIAPREZATM is not reserved exclusively as a last-line drug based on the FDA indication, the applicant removed 50 percent of drug charges for prior technologies or other charges associated with prior technologies from the unstandardized charges before standardization in order to account for other drugs that may be replaced by the use of GIAPREZATM. The applicant has not yet supplied CMS with pricing for GIAPREZATM and did not include charges for the new technology when conducting this analysis. For all analyses' scenarios, the applicant standardized charges using the FY 2015 impact file and then inflated the charges to FY 2019 using an inflation factor of 15.4181 percent (or 1.154181) by multiplying the inflation factor of 1.098446 in the FY 2017 IPPS/LTCH PPS final rule (81 FR 57286) by the inflation factor of 1.05074 in the FY 2018 IPPS/LTCH PPS final rule (82 FR [[Page 20326]] 38524). The final inflated average case[dash]weighted standardized charge per case was calculated for each scenario and compared with the average case-weighted threshold amount for each group of MS-DRGs based on the thresholds in Table 10. Results of the analyses for each of the two code selection scenarios, each with three sensitivity analyses for a total of six analyses, are summarized in the tables below: ---------------------------------------------------------------------------------------------------------------- Final average Number of MS- Case- weighted inflated Amount DRGs assessed Number of new technology standardized exceeded Medicare cases add-on payment charge per threshold threshold case ---------------------------------------------------------------------------------------------------------------- Cost Analysis Based on ICD-9-CM Diagnosis Code Scenario 1 ---------------------------------------------------------------------------------------------------------------- ICD-9-CM Diagnosis Code Selection (28 Codes): 100 Percent................. 439 120,966 $77,427 $77,427 $34,095 80 Percent.................. 10 96,102 77,641 100,167 22,526 25 Percent.................. 1 66,980 53,499 71,951 18,452 ---------------------------------------------------------------------------------------------------------------- Cost Analysis Based on ICD-9-CM Diagnosis Code Scenario 2 ---------------------------------------------------------------------------------------------------------------- ICD-9-CM Diagnosis Code Selection (88 Codes): 100 Percent................. 466 164,892 78,675 112,174 33,499 80 Percent.................. 52 131,690 79,732 108,396 28,664 25 Percent.................. 1 67,016 53,499 71,688 18,189 ---------------------------------------------------------------------------------------------------------------- The applicant maintained that, based on the Table 10 thresholds, the inflated average case-weighted standardized charge per case in the analyses exceeded the average case-weighted threshold amount. The applicant noted that the inflated average case[dash]weighted standardized charge per case exceeds the average case-weighted threshold amount by at least $18,189, without the average per patient cost of the technology. As such, the applicant anticipated that the inclusion of the cost of GIAPREZATM, at any price point, would further increase charges above the average case-weighted threshold amount. Therefore, the applicant stated that the technology meets the cost criterion. We note that we are unsure whether the selection in both scenarios fully captures the broader indication for which the FDA approved the use of GIAPREZATM. We are inviting public comments on whether GIAPREZATM meets the cost criterion, including with respect to the concern we have raised. With respect to the substantial clinical improvement criterion, the applicant summarized that it believes that GIAPREZATM represents a substantial clinical improvement because it: (1) Addresses an unmet medical need for patients who have been diagnosed with septic or distributive shock that, despite standard of care vasopressors, are unable to maintain adequate mean arterial pressure; (2) is the only agent shown in randomized clinical trial to rapidly and sustainably achieve or maintain target blood pressure in patients who do not respond adequately to fluid and vasopressor therapy; (3) although not powered for mortality, the ATHOS-3 trial demonstrated a strong trend to reduce the risk of death in adults from septic or distributive shock who remain hypotensive despite fluid therapy and vasopressor therapy, a severe, life-threatening condition, for which there are no other therapies; (4) provides a catecholamine-sparing effect; and (5) is generally safe and well-tolerated, with no significant differences in the percentages of patients with any grade adverse events or serious adverse events when compared to placebo. With regard to expanding on the statements above, the applicant believes that the use of GIAPREZATM offers clinicians a significant new tool to manage and treat severe hypotension in all adult patients who have been diagnosed with septic or other distributive shock who are unresponsive to existing vasopressor therapies. The applicant also stated that the use of GIAPREZATM provides a new therapeutic option for critically[dash]ill adult patients who have been diagnosed with septic or other distributive shock who have limited options and worsening prognoses. The applicant maintained that GIAPREZATM was shown to be an effective treatment option for critically[dash]ill patients who have been diagnosed with refractory shock. The applicant reported that a randomized, double-blind placebo controlled trial called ATHOS-3 \154\ examined the ability of GIAPREZATM to increase mean arterial pressure (MAP), with the primary endpoint being achievement of a MAP of greater than or equal to 75 mmHg (the research-backed guideline set by the Surviving Sepsis Campaign) or a 10 mmHg increase in baseline MAP. Significantly more patients in the treatment arm met the primary endpoint (69.9 percent versus 23.4 percent, P<0.001). The applicant asserted that this MAP improvement constitutes a significant substantial clinical improvement because patients treated with GIAPREZATM were three times more likely to achieve acceptable blood pressure than patients receiving the placebo. The MAP significantly and rapidly increased in patients treated with GIAPREZATM and was sustained over 48 hours consistent across subgroups and the treatment effect of GIAPREZATM was confirmed using multivariate analysis. The group treated with GIAPREZATM also experienced a greater mean increase in MAP; the MAP increased by a mean of 12.5 mmHg for the GIAPREZATM group compared to a mean of 2.9 mmHg for the placebo group. --------------------------------------------------------------------------- \154\ Khanna, A., English, S.W., Wang, X.S., et al., ``Angiotensin II for the treatment of vasodilatory shock,'' [supplementary appendix] [published online ahead of print May 21, 2017], N Engl J Med., 2017, doi: 10.1056/NEJMoa1704154. --------------------------------------------------------------------------- Second, the applicant maintained that GIAPREZATM demonstrated potential improvement in organ function by lowering the cardiovascular sequential organ failure assessment (SOFA) scores of patients at 48 hours (-1.75 GIAPREZATM group versus -1.28 placebo group). However, we are concerned that lower cardiovascular SOFA scores may not demonstrate substantial clinical improvement because there was no difference in the improvement of other components of [[Page 20327]] the SOFA score or the overall SOFA score. Third, the applicant asserted that GIAPREZATM represents a substantial clinical improvement because the use of GIAPREZATM reduced the need to increase overall doses of catecholamine vasopressors. The applicant stated that patients receiving higher doses of catecholamine vasopressors suffer from cardiac toxicity, organ dysfunction, and other metabolic complications that are associated with higher mortality. By decreasing the overall dosage of catecholamine vasopressors, GIAPREZATM potentially reduces the adverse effects of vasopressors. The mean change in catecholamine vasopressors in patients receiving GIAPREZATM versus patients receiving the placebo at 3 hours was -0.03 versus 0.03 (P<0.001), showing that GIAPREZATM allowed for catecholamines to be titrated down, while patients not receiving GIAPREZATM required additional catecholamine doses. The vasopressor mean doses were consistently lower in the GIAPREZATM group, and at 48 hours, vasopressors had been discontinued in 28.5 percent of patients in the placebo group versus 40.5 percent of the GIAPREZATM group. We note that, while GIAPREZATM may potentially reduce certain adverse effects associated with SOC treatments, the FDA labeling cautions that the use of GIAPREZATM can cause dangerous blood clots with serious consequences (clots in arteries and veins, including deep venous thrombosis); according to the FDA label, prophylactic treatment for blood clots should be used. The applicant stated that while the study was not powered to detect mortality effects, there was a nonsignificant trend toward longer survival in the GIAPREZATM group. Overall mortality rates at 7 days and 8 days in the modified intent to treat (MITT) population were 22 percent less in the GIAPREZATM group than in the placebo group. At 28 days, the mortality rate in the placebo group was 54 percent versus 46 percent in the GIAPREZATM group. However, the p-values for the decrease in mortality with GIAPREZATM at 7 days, 8 days, and 28 days did not demonstrate statistical significance. The applicant concluded that GIAPREZATM is the first commercial product to increase blood pressure in adults who have been diagnosed with septic or other distributive shock that leverages the renin-angiotensin-aldosterone system. The applicant stated that the results of the ATHOS-3 study provide support for a well-tolerated new therapeutic agent that demonstrates significant improvements in mean arterial pressure. Additionally, the applicant noted that hypotension in adults who have been diagnosed with septic or other distributive shock is a prevalent life-threatening condition where therapeutic options are limited and a high unmet medical need exists. The applicant stated that the use of GIAPREZATM will represent a safe and effective new therapy that not only leverages a system that current therapies are not utilizing, but also offers a viable alternative where one does not exist. We understand that, in this heterogeneous and difficult to treat patient population, studies assessing mortality as a primary endpoint are difficult, and as such, surrogate endpoints (that is, achieving baseline MAP) have been explored to assess the efficacy of treatments. While the outcomes presented by the applicant, such as achieving target MAP, lower SOFA scores, and reduced catecholamine usage, could be surrogates for clinical outcomes in these patients, there is not a strong pool of evidence connecting these single data points directly with morbidity and mortality. Therefore, we are unsure whether achieving target MAP, lower SOFA scores, and reduced catecholamine usage represents a substantial clinical improvement or instead short- term, temporary improvements without a change in overall patient prognosis. In response to this concern about MAP constituting a meaningful measure for substantial clinical improvement, the applicant supplied additional information from the current Surviving Sepsis guidelines, which recommend an initial target MAP of 65 mmHg. The applicant explained that as MAP falls below a critical threshold, inadequate tissue perfusion occurs, potentially resulting in multiple organ dysfunction and death. Therefore, early and adequate hemodynamic support and treatment of hypotension is critical to restore adequate organ perfusion and prevent worsening organ dysfunction and failure. In diagnoses of septic or distributive shock, the goal of treatment is to increase and maintain a threshold MAP in order to improve tissue perfusion. According to the applicant, tissue perfusion becomes linearly dependent on arterial pressure below a threshold MAP. In patients who have been diagnosed with septic shock requiring vasopressors, the current Surviving Sepsis guidelines are based on available evidence that demonstrates that adequate MAP is important to clinical outcomes and that prolonged decreases in MAP below 65 mmHg is associated with poor outcome. According to information supplied by the applicant, even short durations like less than 5 minutes of low MAP have been associated with severe outcomes, such as myocardial infarction, stroke, and acute kidney injury. The applicant stated that a retrospective study \155\ found that MAP was independently related to ICU and hospital mortality in patients with severe sepsis or septic shock. --------------------------------------------------------------------------- \155\ Walsh, M., Devereaux, P.J., Garg, A.X., et al., ``Relationship between Intraoperative Mean Arterial Pressure and Clinical Outcomes after Noncardiac Surgery Toward an Empirical Definition of Hypotension,'' Anesthesiology, 2013, vol. 119(3), pp. 507-515. --------------------------------------------------------------------------- Finally, we are concerned that the study results may demonstrate substantial clinical improvement only for patients who are unresponsive to the administration of fluids and vasopressors because patients were only included in the ATHOS-3 study if they failed fluids and vasopressors, rather than for the broader patient population of adult patients who have been diagnosed with septic or other distributive shock for which GIAPREZATM was approved by the FDA for use as an available treatment option. The applicant continues to maintain that the use of GIAPREZATM has significant efficacy in improving blood pressure for patients who have been diagnosed with distributive shock, while decreasing adrenergic vasopressor usage, thereby, providing another avenue for therapy in this difficult to treat patient population. However, we are still concerned that the results from the clinical trial may be too narrow to accurately represent the entire patient population that has been diagnosed with septic or other distributive shock and, therefore, we are concerned that the clinical trial's results may not adequately demonstrate that GIAPREZATM is a substantial clinical improvement over existing therapies for all the patients for whom the treatment option is indicated. We are inviting public comments on whether GIAPREZATM meets the substantial clinical improvement criterion. We did not receive any public comments in response to the published notice in the Federal Register regarding the substantial clinical improvement criterion for GIAPREZATM or at the New Technology Town Hall meeting. i. GammaTileTM Isoray Medical, Inc. and GT Medical Technologies, Inc. submitted an application for new technology add-on payments for FY 2019 for the GammaTileTM. (We note that Isoray [[Page 20328]] Medical, Inc. and GammaTile, LLC previously submitted an application for new technology add[dash]on payments for GammaTileTM for FY 2018, which was withdrawn prior to the issuance of the FY 2018 IPPS/ LTCH PPS final rule.) The GammaTileTM is a brachytherapy technology for use in the treatment of patients who have been diagnosed with brain tumors, which uses cesium-131 radioactive sources embedded in a collagen matrix. GammaTileTM is designed to provide adjuvant radiation therapy to eliminate remaining tumor cells in patients who required surgical resection of brain tumors. According to the applicant, the GammaTileTM technology is a new vehicle of delivery for and inclusive of cesium-131 brachytherapy sources embedded within the product. The applicant stated that the technology has been manufactured for use in the setting of a craniotomy resection site where there is a high chance of local recurrence of a CNS or dual- based tumor. The applicant asserted that the use of the GammaTileTM technology provides a new, unique modality for treating patients who require radiation therapy to augment surgical resection of malignancies of the brain. By offsetting the radiation sources with a 3 mm gap of a collagen matrix, the applicant asserted that the use of the GammaTileTM technology resolves issues with ``hot'' and ``cold'' spots associated with brachytherapy, improves safety, and potentially offers a treatment option for patients with limited, or no other, available options. The GammaTileTM is biocompatible and bioabsorbable, and is left in the body permanently without need for future surgical removal. The applicant asserted that the commercial manufacturing of the product will significantly improve on the process of constructing customized implants with greater speed, efficiency, and accuracy than is currently available, and requires less surgical expertise in placement of the radioactive sources, allowing a greater number of surgeons to utilize brachytherapy techniques in a wider variety of hospital settings. The applicant for the GammaTileTM technology anticipates FDA clearance by the spring of 2018. In its application, the applicant indicated that it anticipated that the product would be cleared by the FDA for use in both the primary and salvage treatment of radiosensitive malignances of the brain. However, in discussions with the applicant, the applicant indicated that it is only anticipating FDA clearance for use in the salvage treatment of recurrent radiosensitive malignances of the brain. The applicant submitted a request for approval for a unique ICD-10-PCS code for the use of the GammaTileTM technology, which was approved effective October 1, 2017 (FY 2018). The ICD-10-PCS code used to identify procedures involving the use of the GammaTileTM technology is 00H004Z (Insertion of radioactive element, cesium-131 collagen implant into brain, open approach). As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant stated that when compared to treatment using external beam radiation therapy, GammaTileTM uses a new and unique mechanism of action to achieve a therapeutic outcome. The applicant explained that the GammaTileTM technology is fundamentally different in structure, function, and safety from all external beam radiation therapies, and delivers treatment through a different mechanism of action. In contrast to external beam radiation modalities, the applicant further explained that the GammaTileTM is a form of internal radiation termed brachytherapy. Brachytherapy treatments are performed using radiation sources positioned very close to the area requiring radiation treatment and only deliver radiation to the tissues that are immediately adjacent to the margin of the surgical resection. For this reason, brachytherapy is a current standard of care treatment for many non-central nervous system tumors, including breast, cervical, and prostate cancers. Due to the custom positioning of the radiological sources and the use of the cesium-131 isotope, the applicant noted that the GammaTileTM technology focuses therapeutic levels of radiation on an extremely small area of the brain. Unlike all external beam techniques, the applicant stated that this radiation does not pass externally inward through the skull and healthy areas of the brain to reach the targeted tissue and, therefore, may limit neurocognitive deficits seen with the use of external beam techniques. Because of the rapid reduction in radiation intensity that is characteristic of cesium-131, the applicant asserted that the GammaTileTM technology can target the margin of the excision with greater precision than any alternative treatment option, while sparing healthy brain tissue from unnecessary and potentially damaging radiation exposure. The applicant also stated that, when compared to other types of brain brachytherapy, GammaTileTM uses a new and unique mechanism of action to achieve a therapeutic outcome. The applicant explained that cancerous cells at the margins of a tumor resection cavity can also be irradiated with the placement of brachytherapy sources in the tumor cavity. However, the applicant asserted that the GammaTileTM technology is a pioneering form of brachytherapy for the treatment of brain tumors that uses the isotope cesium-131 embedded in a collagen implant that is customized to the geometry of the brain cavity. According to the applicant, use of cesium-131 and the custom distribution of seeds in a three-dimensional collagen device result in a unique and highly effective delivery of radiation therapy to brain tissue. With regard to the second criterion, whether a product is assigned to the same or a different MS-DRG, the GammaTileTM technology is a treatment option for patients who have been diagnosed with brain tumors that progress locally after initial treatment with external beam radiation therapy, and potential cases representing patients that may be eligible for treatment involving this technology are assigned to the same MS-DRG (MS-DRG 23 (Craniotomy with Major Device Implant/Acute Complex CNS PDX with MCC or Chemotherapy Implant)) as other current treatment forms of brachytherapy and external beam radiation therapy. With regard to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant stated that the GammaTileTM technology offers a treatment option for a patient population with limited, or no other, available treatment options. The applicant explained that treatment options for patients who have been diagnosed with brain tumors that progress locally after initial treatment with external beam radiation therapy are limited, and there is no current standard of care in this setting. According to the applicant, surgery alone for recurrent tumors may provide symptom relief, but does not remove all of the cancer cells. The applicant further stated that repeating external beam radiation therapy for adjuvant treatment is hampered by an increasing risk of brain injury because additional external beam radiation therapy will increase the [[Page 20329]] total dose of radiation to brain tissue, as well as increase the total volume of irradiated brain tissue. Secondary treatment with external beam radiation therapy is often performed with a reduced and, therefore, less effective dose. The applicant stated that the technique of implanting cesium-131 seeds in a collagen matrix is currently only available to patients in one location, and requires a high degree of expertise to implant. The manufacturing process of the GammaTileTM will greatly expand the availability of treatment beyond research programs at highly specialized cancer treatment centers. Based on the above, the applicant concluded that the GammaTileTM technology is not substantially similar to other existing technologies and meets the newness criterion. However, we are concerned that the mechanism of action of the GammaTileTM may be the same or similar to current forms or radiation or brachytherapy. Specifically, while the placement of the cesium-131 source (or any radioactive source) in a collagen matrix offset may constitute a new delivery vehicle, we are concerned that this sort of improvement in brachytherapy for the use in the salvage treatment of radiosensitive malignancies of the brain may not represent a new mechanism of action. We are inviting public comments on whether GammaTileTM meets the substantial similarity criteria and the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis. The applicant worked with the Barrow Neurological Institute at St. Joseph's Hospital and Medical Center (St. Joseph's) to obtain actual claims from mid-2015 through mid-2016 for craniotomies that did not involve placement of the GammaTileTM technology. The cases were assigned to MS-DRGs 25 through 27 (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC, and without CC/MCC, respectively). For the 460 claims, the average case-weighted unstandardized charge per case was $143,831. The applicant standardized the charges for each case and inflated each case's charges by applying the FY 2017 IPPS/LTCH PPS final rule outlier charge inflation factor of 1.05074 by the age of each case (that is, the factor was applied to 2015 claims 3 times and 2016 claims 2 times). The applicant then calculated an estimate for ancillary charges associated with placement of the GammaTileTM device, as well as standardized charges for the GammaTileTM device itself. The applicant determined it meets the cost criterion because the final inflated average case[dash]weighted standardized charge per case (including the charges associated with the GammaTileTM device) of $246,310 exceeds the average case-weighted threshold amount of $141,249 for MS-DRG 23, the MS-DRG that would be assigned for cases involving placement of the GammaTileTM device. The applicant also noted that its analysis does not include a reduction in costs due to reduced operating room times. The applicant stated that there is significant time and workload associated with assembling the device, and codes billed for this work are paid at a flat rate. We are inviting public comments on whether the GammaTileTM technology meets the cost criterion. With regard to substantial clinical improvement, the applicant stated that the GammaTileTM technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments for recurrent CNS malignancies and significantly improves clinical outcomes when compared to currently available treatment options. The applicant explained that therapeutic options for patients who have been diagnosed with large or recurrent brain metastases are limited. However, according to the applicant, the GammaTileTM technology provides a treatment option for patients who have been diagnosed with radiosensitive recurrent brain tumors that are not eligible for treatment with any other currently available treatment option. Specifically, the applicant stated that the GammaTileTM device may provide the only radiation treatment option for patients who have been diagnosed with tumors located close to sensitive vital brain sites (for example, brain stem) and patients who have been diagnosed with recurrent brain tumors who may not be eligible for additional treatment involving the use of external beam radiation therapy. There is a lifetime limit for the amount of radiation therapy a specific area of the body can receive. Patients whose previous treatment includes external beam radiation therapy may be precluded from receiving high doses of radiation associated with subsequent external beam radiation therapy, and the GammaTileTM technology can also be used to treat tumors that are too large for treatment with external beam radiation therapy. Patients who have been diagnosed with these large tumors are not eligible for treatment with external beam radiation therapy because the radiation dose to healthy brain tissue would be too high. The applicant described how the GammaTileTM technology improves clinical outcomes compared to existing treatment options, including external beam radiation therapy and other forms of brain brachytherapy. To demonstrate that the GammaTileTM technology represents a substantial clinical improvement over existing technologies, the applicant submitted data from three abstracts (described below), with one associated paper demonstrating feasibility or superior progression-free survival compared to the patient's own historical control rate. In a presentation at the Society for Neuro-Oncology in November 2014 (Dardis, Christopher; Surgery and permanent intraoperative brachytherapy improves time to progression of recurrent intracranial neoplasms), the outcomes of 20 patients who were diagnosed with 27 tumors covering a variety of histological types treated with the GammaTileTM prototype were presented. The applicant noted the following with regard to the patients: (1) All tumors were intracranial, supratentorial masses and included low and high[dash]grade meningiomas, metastases from various primary cancers, high[dash]grade gliomas, and others; (2) all treated masses were recurrent following treatment with surgery and/or radiation and the group averaged two prior craniotomies and two prior courses of external beam radiation treatment; and (3) following surgical excision, the prototype GammaTileTM were placed in the resection cavity to deliver a dose of 60 Gray to a depth of 5 mm of tissue; and all patients had previously experienced re-growth of their tumors at the site of treatment and the local control rate of patients entering the study was 0 percent. With regard to outcomes, the applicant stated that, after their initial treatment, patients had a median progression-free survival time of 5.8 months; post treatment with the prototype GammaTileTM, at the time of this analysis, only 1 patient had progressed at the treatment site, for a local control rate of 96 percent; and median progression-free survival time, a measure of how long a patient lives without recurrence of the treated tumor, has not been reached (as this value can only be calculated when more than 50 percent of treated patients have failed the prescribed treatment). A second set of outcomes on the prototype GammaTileTM was presented at the Society for Neuro-Oncology Conference on Meningioma in June 2016 (Brachman, David; Surgery and [[Page 20330]] permanent intraoperative brachytherapy improves time to progress of recurrent intracranial neoplasms). This study enrolled 16 patients with 20 recurrent grade 2 or 3 meningiomas, who had undergone prior surgical excision external beam radiation therapy. These patients underwent surgical excision of the tumor, followed by adjuvant radiation therapy with the prototype GammaTileTM. The applicant noted the following outcomes: (1) Of the 20 treated tumors, 19 showed no evidence of radiographic progression at last follow-up, yielding a local control rate of 95 percent; 2 of the 20 patients exhibited radiation necrosis (1 symptomatic, 1 asymptomatic); and (2) the median time to failure from the prior treatment with external beam radiation therapy was 10.3 months and after treatment with the prototype GammaTileTM only 1 patient failed at 18.2 months. Therefore, the median treatment site progression-free survival time after the prototype GammaTileTM treatment has not yet been reached (average follow[dash]up of 16.7 months, range 1 to 37 months). A third prospective study was accepted for presentation at the November 2016 Society for Neuro-Oncology annual meeting (Youssef, Emad; Cs131 implants for salvage therapy of recurrent high grade gliomas). In this study, 13 patients who were diagnosed with recurrent high[dash]grade gliomas (9 with glioblastoma and 4 with grade 3 astrocytoma) were treated in an identical manner to the cases described above. Previously, all patients had failed the international standard treatment for high[dash]grade glioma, a combination of surgery, radiation therapy, and chemotherapy referred to as the ``Stupp regimen.'' For the prior therapy, the median time to failure was 9.2 months (range 1 to 40 months). After therapy with a prototype GammaTileTM, the applicant noted the following: (1) The median time to same site local failure has not been reached and 1 failure was seen at 18 months (local control 92 percent); and (2) with a median follow[dash]up time of 8.1 months (range 1 to 23 months) 1 symptomatic patient (8 percent) and 2 asymptomatic patients (15 percent) had radiation-related MRI changes. However, no patients required re-operation for radiation necrosis or wound breakdown. Dr. Youssef was accepted to present at the 2017 Society for Neuro-Oncology annual meeting, where he provided an update of 58 tumors treated with the GammaTileTM technology. At a median whole group follow[dash]up of 10.8 months, 12 patients (20 percent) had a local recurrence at an average of 11.33 months after implant. Six and 18 month recurrence free survival was 90 percent and 65 percent, respectively. Five patients had complications, at a rate that was equal to or lower than rates previously published for patients without access to the GammaTileTM technology. The applicant also included discussion of a presentation by D.S. Pinnaduwage, Ph.D., at the August 2017 annual meeting of the American Association of Physicists in Medicine. Dr. Pinnaduwage compared the brain radiation dose of the GammaTileTM technology with other radioactive seed sources. Iodine-125 and palladium-103 were substituted in place of the cesium-131 seeds. The study reported findings that other radioactive sources reported higher rates of radiation necrosis and that ``hot spots'' increased with larger tumor size, further limiting the use of these isotopes. The study concluded that the larger high-dose volume with palladium-103 and iodine-125 potentially increases the risk for radiation necrosis, and the inhomogeneity becomes more pronounced with increasing target volume. The applicant asserted that, when considered in total, the data reported in these three studies support the conclusion that a significant therapeutic effect results from the addition of GammaTileTM radiation therapy to the site of surgical removal. According to the applicant, the fact that these patients had failed prior best available treatments (aggressive surgical and adjuvant radiation management) presents the unusual scenario of a salvage therapy outperforming the current standard-of-care. The applicant noted that follow-up data continues to accrue on these patients. The applicant stated that the use of the GammaTileTM technology reduces rates of mortality compared to alternative treatment options. The applicant explained that studies on the GammaTileTM technology have shown improved local control of tumor recurrence. According to the applicant, the results of these studies showed local control rates of 92 percent to 96 percent for tumor sites that had local control rates of 0 percent from previous treatment. The applicant noted that these studies also have not reached median progression-free survival time with follow-up times ranging from 1 to 37 months. Previous treatment at these same sites resulted in median progression-free survival times of 5.8 to 10.3 months. The applicant further stated that the use of the GammaTileTM technology reduces rates of radiation necrosis compared to alternative treatment options. The applicant explained that the rate of symptomatic radiation necrosis in the GammaTileTM clinical studies of 5 to 8 percent is substantially lower than the 26 percent to 57 percent rate of symptomatic radiation necrosis requiring re-operation historically associated with brain brachytherapy, and lower than the rates reported for initial treatment of similar tumors with modern external beam and stereotactic radiation techniques. The applicant indicated that this is consistent with the customized and ideal distribution of radiation therapy provided by the GammaTileTM technology. The applicant also asserted that the use of GammaTileTM technology reduces the need for re-operation compared to alternative treatment options. The applicant explained that patients receiving a craniotomy, followed by external beam radiation therapy or brachytherapy, could require re-operation in the following three scenarios: Tumor recurrence at the excision site could require additional surgical removal; Symptomatic radiation necrosis could require excision of the affected tissue; and Certain forms of brain brachytherapy require the removal of brachytherapy sources after a given period of time. However, according to the applicant, because of the high local control rates, low rates of symptomatic radiation necrosis, and short half-life of cesium-131, the GammaTileTM technology will reduce the need for re-operation compared to external beam radiation therapy and other forms of brain brachytherapy. Additionally, the applicant stated that the use of GammaTileTM technology reduces the need for additional hospital visits and procedures compared to alternative treatment options. The applicant noted that the GammaTileTM technology is placed during surgery, and does not require any additional visits or procedures. The applicant contrasted this improvement with external beam radiation therapy, which is often delivered in multiple fractions that must be administered over multiple days. The applicant provided an example where whole brain radiotherapy (WBRT) is delivered over 2 to 3 weeks, while the placement of the GammaTileTM technology occurs during the craniotomy and does not add any time to a patient's recovery. [[Page 20331]] The applicant further summarized how the GammaTileTM technology is a substantial clinical improvement over existing treatment options as: (1) Providing a treatment option for patients with no other available treatment options; (2) reducing rate of mortality compared to alternative treatment options; (3) reducing rate of radiation necrosis; (4) reducing the need for re-operation; (5) reducing the need for additional hospital visits and procedures; and (6) providing more rapid beneficial resolution of the disease process treatment. Based on consideration of all of the data presented above, the applicant believed that the use of the GammaTileTM technology represents a substantial clinical improvement over existing technologies. The studies were limited to patients who have been diagnosed with recurrent tumors after previous surgical resection. As previously discussed, the applicant explained that it is anticipating FDA clearance for the use of the GammaTileTM only in the treatment of recurrent malignancies. We are concerned with the limited nature of the clinical efficacy and safety data provided by the applicant. The findings presented appear to be derived from relatively small case-studies. While the applicant described increases in median time to disease recurrence in support of improvement, we are concerned with regard to the lack of analysis, meta-analysis, or statistical tests that indicated that seeded brachytherapy procedures represented a statistically significant improvement over alternative treatments, as limited as they may be. We also are concerned with the lack of studies involving the actual manufactured device. In addition, we are concerned that the applicant referenced various findings in its application, but did not include relevant reference materials to substantiate those findings. For instance, the applicant made statements regarding the low complication rates with the use of GammaTileTM prototypes, without any discussion of average rates with comparison to other alternative treatments. We are inviting public comments on whether GammaTileTM meets the substantial clinical improvement criterion. We did not receive any public comments on the GammaTileTM technology in response to the published notice in the Federal Register or at the New Technology Town Hall Meeting. j. Supersaturated Oxygen (SSO 2 ) Therapy (DownStream[reg] System) TherOx, Inc. submitted an application for new technology add-on payments for the Supersaturated Oxygen (SSO2 ) Therapy (the DownStream[reg] System) for FY 2019. The DownStream[reg] System is an adjunctive therapy designed to ameliorate progressive myocardial necrosis by minimizing microvascular damage in patients who have received treatment for a diagnosis of acute myocardial infarction (AMI) following percutaneous intervention (PCI) with coronary artery stent placement. The applicant stated that, while contemporary therapies for patients who have received treatment for a diagnosis of AMI have focused on relieving blockages and improving blood flow to the diseased myocardium, little has been done to provide localized hyperbaric oxygen to ischemic tissue. According to the applicant, patients who have received treatment for a diagnosis of AMI are at high risk for reduced quality of life, heart failure, and higher mortality as a result of the extent of necrosis or infarct size experienced in the myocardium during the infarction. The applicant asserted that the net effect of the SSO2 Therapy is to reduce the infarct size and, therefore, preserve heart muscle. The SSO2 Therapy consists of three main components: the DownStream[reg] System; the DownStream cartridge; and the SSO2 delivery catheter. The DownStream[reg] System and cartridge function together to create an oxygen-enriched saline solution called SSO2 solution from hospital[dash]supplied oxygen and physiologic saline. A small amount of the patient's blood is then mixed with the SSO2 solution, producing oxygen-enriched hyperoxemic blood, which is then delivered to the left main coronary artery (LMCA) via the delivery catheter at a flow rate of 100 ml/min. The duration of the SSO2 Therapy is 60 minutes and the infusion is performed in the catheterization laboratory. The oxygen partial pressure (pO2) of the infusion is elevated to ~1,000 mmHg, therefore providing oxygen locally to the myocardium at a hyperbaric level for 1 hour. After the 60-minute SSO2 infusion is complete, the cartridge is unhooked from the patient and discarded per standard practice. Coronary angiography is performed as a final step before removing the delivery catheter and transferring the patient to the intensive care unit (ICU). According to the applicant, the SSO2 Therapy has been designated as a Class III medical device (high risk) by the FDA. The applicant indicated that it expects to receive pre-market approval from the FDA in the first quarter of 2018. The applicant asserted that use of the SSO2 Therapy can be identified by the ICD-10-PCS procedure codes 5A0512C (Extracorporeal supersaturated oxygenation, intermittent) and 5A0522C (Extracorporeal supersaturated oxygenation, continuous). As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. According to the applicant, the SSO2 Therapy is administered adjunctively immediately following completion of successful PCI. The applicant maintained that currently available treatment options for patients who have been diagnosed and begun initial treatment for AMI involve the revascularization of the blocked coronary artery by means of either thrombolytic therapy or PCI with stent placement accompanied by the administration of adjunctive pharmacologic agents such as glycoprotein IIb/IIIa inhibitors, or via coronary artery bypass graft (CABG) surgery. The applicant asserted that because there are no other approved therapies for patients who have been diagnosed with AMI post- PCI, the SSO2 Therapy meets the newness criterion. Below we evaluate the applicant's assertions with respect to whether the SSO2 Therapy meets each of the three substantial similarity criteria. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, the SSO2 Therapy employs two mechanisms of action: (1) First, the increased oxygen levels re-open the microcirculatory system within the infarct zone, which has experienced ischemia during the occlusion period; and (2) second, once reopened, the blood flow contains additional oxygen to restart the metabolic processes within the stunned myocardium. The applicant asserted that these mechanisms have been studied in preclinical investigations sponsored by the applicant, where controlled studies were performed in both porcine and canine AMI models to determine the safety, effectiveness, and mechanism of action of the SSO2 Therapy. According to the applicant, the findings of these studies demonstrated improved left ventricular function, infarct size reduction, a microvascular mechanism of action, and that the SSO2 Therapy is nontoxic. Based on the information provided by the applicant, current [[Page 20332]] treatment options for patients who have been diagnosed and receive treatment for AMI function to restore coronary artery blood flow, which addresses macrovascular disease but not the underlying cellular changes resulting from hypoxia. The applicant maintains that currently available treatment options for patients who have been diagnosed and receive treatment for AMI do not treat hypoxemic damage at the microvascular or microcirculatory level, and that SSO2 Therapy does not use the same or a similar mechanism of action as any existing treatment available for patients who have been diagnosed and receive treatment for a diagnosis of AMI. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, we believe that potential cases involving the SSO2 Therapy may be assigned to the same MS- DRG(s) as other cases involving PCI with stent placement also used to treat patients who have been diagnosed with AMI. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant asserted that, in spite of many advances and refinements in PCI for reopening the blocked coronary artery, patients who have been diagnosed and receiving treatment for AMI are at high risk for reduced quality of life, heart failure, and higher mortality, as a result of the extent of necrosis experienced in the myocardium during the infarction. According to the applicant, patients who have been diagnosed with and receiving treatment for AMI continue to experience elevated early and late Major Adverse Cardiac Events (MACE), as well as a higher risk for congestive heart failure (CHF) development. The applicant made the following assertions: The net effect of the SSO2 Therapy is to reduce the infarct size, or extent of necrosis, in the myocardium post-AMI and, therefore, improve left ventricular function, leading to improved patient outcomes; there are no other approved therapies for patients who have been diagnosed with and receive treatment for AMI post-PCI and submitted data evaluating the SSO2 Therapy directly as compared to the currently available standard of care, PCI with stenting alone; and SSO2 Therapy's emphasis is on treating patients who have been diagnosed with AMI at the microvascular level instead of reopening the blocked coronary artery at the macrovascular level as with other treatments and that it, therefore, treats a different type of disease than currently available treatment options for patients who have been diagnosed with and receive treatment for AMI. We are inviting public comments on whether the SSO2 Therapy is substantially similar to existing technologies and whether it meets the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. In order to identify the range of MS-DRGs to which potential cases representing potential patients who may be eligible for treatment involving the SSO2 Therapy may map, the applicant identified all MS-DRGs for cases of patients who have been diagnosed with anterior STEMI as a principal diagnosis. Specifically, the applicant searched the FY 2016 MedPAR file for claims reporting diagnoses of anterior STEMI by ICD-10-CM diagnosis codes I21.0 (ST elevation myocardial infarction of anterior wall), I21.01 (ST elevation (STEMI) myocardial infarction involving left main coronary artery), I21.02 (ST elevation (STEMI) myocardial infarction involving left anterior descending coronary artery), or I21.09 (ST elevation (STEMI) myocardial infarction involving other coronary artery of anterior wall) as a primary diagnosis. The applicant identified 11,030 potential cases across 4 MS- DRGs, with approximately 86 percent of all potential cases mapping to the following 2 MS-DRGs: MS-DRG 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Vessels/Stents) and MS-DRG 247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent without MCC). The remaining 14 percent of potential cases mapped to MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-Drug Eluting Stent with MCC or 4+ Vessels/Stents) and MS-DRG 249 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent without MCC). Using the 11,030 identified cases, the applicant determined that the average unstandardized case-weighted charge per case was $94,290. The applicant then standardized the charges. The applicant did not remove charges for the current treatment because, as discussed above, the SSO2 Therapy will be used as an adjunctive treatment option following successful PCI with stent placement. The applicant then applied the inflation factor of 1.05074 from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38524) 3 times to inflate the charges from FY 2016 to FY 2019. The applicant added charges related to the new technology, which accounts for the use of 1 cartridge per patient, as well as the 60 minutes of procedure time, to the average charges per case. Based on the FY 2018 IPPS/LTCH PPS final rule Table 10 threshold amounts, the average case[dash]weighted threshold amount was $91,064. The inflated average case-weighted standardized charge per case was $146,974. Because the inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount, the applicant maintained that the technology meets the cost criterion. We are inviting comments on whether or not the SSO2 Therapy meets the cost criterion. With regard to the substantial clinical improvement criterion, according to the applicant, the preferred standard of care for the treatment of patients who have been diagnosed with AMI involves the revascularization of the blocked coronary artery by means of PCI with stent placement, accompanied by the administration of adjunctive pharmacologic agents such as antiplatelet drugs, including glycoprotein IIb/IIIa inhibitors. The applicant stated that the clinical unmet need for these patients, particularly patients who have been diagnosed with anterior wall STEMI with the greatest potential impact to their ventricle, is to provide incremental therapeutic benefit beyond PCI with stenting to reduce the damage to their myocardium. The applicant believed that SSO2 Therapy fulfills this unmet clinical need in the treatment of patients who have been diagnosed with ST-elevation AMI by reducing infarct size as compared to the standard of care, PCI with stenting alone. The applicant asserted that, as an adjunctive treatment, the SSO2 Therapy has demonstrated superiority over PCI with stenting alone in reducing the infarct size for high-risk patients diagnosed with anterior AMI treated within 6 hours of symptom onset. The applicant also noted that the SSO2 Therapy has been shown to preserve left ventricular integrity as compared to patients who receive treatment involving PCI with stenting alone, utilizing direct measurements of left ventricular volume over the 30-day post- procedure period. The applicant noted that the quantification of the extent of necrosis or infarction in the muscle is the best physical measure of the consequences of AMI for patients in post-intervention, as the infarct size is the quantification of the extent of scarring of the left ventricle post-AMI and, therefore, provides a direct measure of the health of the [[Page 20333]] myocardium and indirectly on the heart's structure and function. A large infarct means the muscle cannot contract normally, leading to left ventricular enlargement, reduced ejection fraction, clinical heart failure, and death. The applicant highlighted the importance of the SSO2 Therapy's mechanism of action, which treats hypoxemic damage at the microvascular or microcirculatory level, by noting that the degree to which microvascular impairment in the myocardium is irreversible and unaffected by therapeutic intervention leads to a greater extent of infarction. Furthermore, the applicant noted that compromised microvascular flow remains a serious problem in STEMI care and leads to microvascular obstruction (MVO), which a recent study has shown to be an important independent predictor of mortality and heart failure (HF) hospitalization at 1 year. The applicant asserted that MVO is closely tied to the resultant damage or infarct size in patients diagnosed with acute STEMI and is of critical importance to address mechanistically in any treatment administered in conjunction to PCI, to effect an improved outcome in primary care. The applicant performed controlled studies in both porcine and canine AMI models to determine the safety, effectiveness, and mechanism of action of the SSO2 Therapy. The key summary points from these animal studies are:The SSO 2 Therapy administration post-AMI acutely improves heart function as measured by left ventricular ejection fraction (LVEF) and regional wall motion as compared with non- treated control subjects.The SSO 2 Therapy administration post-AMI results in tissue salvage, as determined by post-sacrifice histological measurements of the infarct size. Control animals exhibit larger infarcts than the SSO2 -treated animals.The SSO 2 Therapy has been shown to be non-toxic to the coronary arteries, myocardium, and end organs in randomized, controlled swine studies with or without induced acute myocardial infarction.The SSO 2 Therapy administration post-AMI has exhibited regional myocardial blood flow improvement in treated animals as compared to controls.A significant reduction in myeloperoxidase (MPO) levels was observed in the SSO 2 -treated animals versus controls, which indicate improvement in underlying myocardial hypoxia.Transmission electron microscopy (TEM) photographs have shown amelioration of endothelial cell edema and restoration of capillary patency in ischemic zone cross-sectional histological examination of the SSO 2 -treated animals, while nontreated controls exhibit significant edema and vessel constriction at the microvascular level. The applicant also submitted results from five clinical studies that it asserted demonstrate the substantial clinical benefit associated with the SSO2 Therapy. These studies include the Phase I/IA feasibility trial, the European OYSTER-AMI study, the AMIHOT I and AMIHOT II randomized trials, and the IC-HOT clinical study. The Phase I/IA and OYSTER-AMI studies demonstrated that the SSO2 Therapy held promise in improving left ventricular function, especially in the infarct zone, for patients who have been diagnosed with and receiving treatment for AMI. Specifically, an IDE- sanctioned Phase I pilot study was conducted in the United States and Italy involving 29 patients who had been diagnosed with and receiving treatment involving the SSO2 Therapy for anterior AMI and found significant LV functional improvement over time as noted in the 2-D echocardiography analysis of the combined Phase I/IA data. Baseline measurements of ejection fraction (EF) and wall motion score index (WMSI) were taken immediately post-PCI prior to SSO2 Therapy administration. An improving trend in EF and significant improvement in WMSI were observed at 24-hours after SSO2 Therapy administration, and further improvement in ventricular function was demonstrated at 1 and 3 months compared to baseline. The analysis demonstrated that these improvements in global LV functional measures were due to recovery of ventricular function in the infarct zone; regional WMSI assessments showed no change in the noninfarct zone. Similar results were found in the European OYSTER-AMI trial, which assessed supersaturated oxygen in reperfused ST-elevation AMI, directing attention to 41 patients receiving treatment involving the SSO2 Therapy versus untreated controls. The study showed that the supersaturated oxygen treatment group had a significantly faster cardiac enzyme and ST segment elevation reduction, therefore suggesting an improvement in microvascular reperfusion. The SSO2 Therapy treatment group also showed a significantly better improvement in left ventricular wall motion and ejection fraction,\156\ which a number of studies have shown to be directly related to mortality.\157\ The OYSTER-AMI study further suggested that the SSO2 Therapy reduces the infarct size, as demonstrated in reduced cardiac enzyme CK and CK-MB release. --------------------------------------------------------------------------- \156\ Bartorelli, A.L., ``Hyperoxemic Perfusion for Treatment of Reperfusion Microvascular Ischemia in Patients with Myocardial Infarction,'' Am J Cardivasc Drugs, 2003, vol. 3(4), pp. 253-6. \157\ Stone, G.W., et al., ``Relationship between infarct size and outcomes following primary PCI: Patient-level analysis from 10 randomized trials,'' J Am Coll Cardio, vol. 67.14, 2016, pp. 1674- 1683. --------------------------------------------------------------------------- The AMIHOT I clinical trial was designed as a prospective, randomized evaluation of patients who had been diagnosed with and receiving treatment for AMI presenting within 24 hours of symptom onset, including both anterior and inferior patients diagnosed with AMI. The AMIHOT I trial was conducted with IDE approval from FDA. The study included 269 randomized patients, with 3 independent biomarkers (infarction size reduction, regional wall motion score improvement at 3 months, and reduction in ST segment elevation) designated as co-primary endpoints to evaluate the effectiveness of the SSO2 Therapy. The study was designed to demonstrate superiority of the SSO2 Therapy group as compared to controls for each of these endpoints, and to demonstrate non-inferiority of the SSO2 Therapy group as compared to control with respect to 30-day MACE. The study population was comprised of qualifying patients who had been diagnosed with AMI and receiving treatment with either PCI alone or with the SSO2 Therapy as an adjunct to successful PCI within 24 hours of symptom onset. According to the applicant, results for the control/SSO2 Therapy group comparisons for the three co- primary effectiveness endpoints demonstrated a nominal improvement in the test group, although this nominal improvement did not achieve clinical and statistical significance in the entire population. A pre- specified analysis of the SSO2 Therapy patients who were revascularized within 6 hours of AMI symptom onset and who had anterior wall infarction showed a marked improvement in all three co-primary endpoints as compared to the control group. Key safety data revealed no statistically significant differences in the composite primary endpoint of 1-month (30 days) Major Adverse Cardiac Event (MACE) rates between the SSO2 Therapy and control groups. MACE includes the combined incidence of death, reinfarction, target vessel revascularization, and stroke. In total, 9/134 (6.7 percent) patients in the SSO2 Therapy group and 7/135 (5.2 percent) patients in the control group experienced 30-day MACE (p=0.62). [[Page 20334]] Another pivotal trial in the evaluation of the SSO2 Therapy, the AMIHOT II trial, randomized 301 patients who had been diagnosed with and receiving treatment for anterior AMI with either PCI plus the SSO2 therapy or PCI alone. The AMIHOT II trial had a Bayesian statistical design that allows for the informed borrowing of data from the previously completed AMIHOT I trial. The primary efficacy endpoint of the study required proving superiority of the infarct size reduction with the SSO2 Therapy as compared to patients who were receiving treatment involving PCI with stenting alone. The primary safety endpoint for the AMIHOT II trial required a determination of noninferiority in the 30-day MACE rate, comparing the SSO2 Therapy group with the control group, within a safety delta of 6.0 percent. Endpoint evaluation was performed using a Bayesian hierarchical model that evaluated the AMIHOT II result conditionally in consideration of the AMIHOT I 30-day MACE data. According to the applicant, the results of the AMIHOT II trial showed that the SSO2 therapy, together with PCI and stenting, demonstrated a relative reduction of 26 percent in the left ventricular infarct size and absolute reduction of 6.5 percent compared to PCI and stenting alone. We are interested in information regarding at what timeframe in the study was the reduction of infarct size measured. In addition, the applicant stated that the finding of device effectiveness was supported by additional analyses that showed a 53 percent increased likelihood of having a small infarct among the SSO2 therapy patients.\158\ In assessing 30-day Major Adverse Cardiac Events (MACE), while higher in the SSO2 Therapy group, the rates were statistically noninferior (5.4 percent versus 3.8 percent). However, given the higher 30[dash]day MACE outcome among the SSO2 Therapy patients in both the AMIHOT I and AMIHOT II trials, we are concerned about the lack of long-term data on improvement in patient clinical outcomes, despite the lack of statistical significance. --------------------------------------------------------------------------- \158\ Stone, G.W., Martin, J.L., Boer, M.J., et al., ``Effect of Supersaturated Oxygen Deliver on Infarct Size After Percutaneous Coromary Intervention in Acute Myocardial Infarction,'' Cir Cardiovasc Interv, 2009, vol. 2, pp. 366-75. --------------------------------------------------------------------------- The applicant also submitted the IC-HOT clinical trial, which was designed to confirm the safety and efficacy of the use of the SSO2 Therapy in those individuals presenting with a diagnosis of anterior AMI who have undergone successful PCI with stenting of the proximal and/or mid left anterior descending artery within 6 hours of experiencing AMI symptoms. It is an IDE, nonrandomized, single arm study. The study was primarily focused on safety, utilizing a composite endpoint of 30-day Net Adverse Clinical Events (NACE). A maximum observed event rate of 10.7 percent was established based on a contemporary PCI trial of comparable patients who had been diagnosed with anterior wall STEMI. The IC-HOT trial exhibited a 7.1 percent observed NACE rate, meeting the study endpoint. Notably, no 30-day mortalities were observed, and the type and frequency of 30-day adverse events occurred at similar or lower rates than in contemporary STEMI studies of PCI-treated patients who had been diagnosed with anterior AMI. Furthermore, according to the applicant, the IC-HOT study supported the conclusions of effectiveness established in AMIHOT II with a measured 30-day median infarct size = 19.4 percent (as compared to the AMIHOT II SSO2 Therapy group infarct size = 20.0 percent). Notable measures include 4[dash]day microvascular obstruction (MVO), which has been shown to be an independent predictor of outcomes, 4[dash]day and 30[dash]day left ventricular end diastolic and end systolic volumes, and 30[dash]day infarct size. The IC-HOT study results exhibited a favorable MVO as compared to contemporary trial data, and decreasing left ventricular volumes at 30 days, compared to contemporary PCI populations that exhibit increasing left ventricular size. The applicant asserted that the IC-HOT clinical trial data continue to demonstrate substantial clinical benefit of the SSO2 Therapy as compared to the standard of care, PCI with stenting alone. We are inviting public comments on whether the SSO2 Therapy meets the substantial clinical improvement criterion. Below we summarize and respond to written public comments we received regarding the DownStream[reg] System during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: A number of commenters supported the approval of new technology add-on payments for the DownStream[reg] System (SSO2 Therapy) for the treatment of patients diagnosed with AMI. The commenters asserted that SSO2 Therapy is effective at significantly reducing infarct size in patients diagnosed with anterior wall myocardial infarction who have been treated with primary percutaneous intervention. The commenters reiterated the results of the AMIHOT II randomized trial which demonstrated that treatment with SSO2 Therapy following successful PCI in patients diagnosed with an anterior wall myocardial infarction resulted in a 6.5 percent absolute reduction and a 26 percent relative reduction in infarct size, compared to treatment with PCI alone (the percentages above are based on a 26.5 percent median infarct size in the control PCI group versus 20 percent infarct size in the SSO2 Therapy group). One commenter stated that the infarct size reduction of 6.5 percent documented in the AMIHOT II trial results is substantial when it comes to patient care. In addition, other commenters believed that SSO2 Therapy is a safe treatment option because there was no significant difference in Major Adverse Cardiac Events (MACE) between the treatment and control groups. The commenters also referenced the results from the IC-HOT confirmatory study. The commenters believed that the results of this study demonstrated stabilization of the left ventricular size with no dilatation at 30 days, which confirmed the efficacy and safety of SSO2 Therapy. The commenters stated that, in a sample patient population of 98 patients diagnosed with anterior wall myocardial infarction, to achieve a result in infarct size of 19.4 percent of the left ventricular following use of SSO2 Therapy is similar to the results achieved in the patients enrolled in the treatment group of the AMIHOT II trial and is also substantial to patient care. The commenters emphasized that patients diagnosed with anterior wall myocardial infarction are high[dash]risk patients with a high mortality rate, and patients who survive experiences with large infarct size and left ventricular dysfunction eventually suffer congestive heart failure, ultimately requiring a defibrillator and have poor quality of life. The commenters also noted that the MRI results documented from the IC-HOT trial have shown a reduction in left ventricular volumes, suggesting the left ventricular cavity did not dilate and the ventricle remained stable, which is consistent with the experience of many of the commenters that treated patients using SSO2 Therapy as part of the trial. Another commenter noted that 25 percent of the patients in the IC[dash]HOT trial had a normal ejection fraction at follow[dash]up MRI scan. The commenters believed that SSO2 Therapy should be a standard[dash]of[dash]care, given the low number of adverse events and the low instances of new heart failure admissions in their [[Page 20335]] experience with the use of SSO2 Therapy. Another commenter provided additional clinical studies in response to a question presented at the New Technology Town Hall meeting regarding the relationship between myocardial infarct size and clinical outcomes. The commenter stated that these clinical studies would provide further context to the research regarding the relationship between myocardial infarct size and clinical outcomes and emphasized that this relationship is not dependent on the type of treatment administered. The commenter opined that as long as infarct size is reduced, long-term clinical benefit follows. The commenter maintained that the strong correlation between the scarring of the left ventricle as a consequence of diagnoses of AMI and important long-term clinical outcomes has been well documented in large-scale thrombolytic therapy trials, one of which showed that a 5 percent reduction in medium infarct size was associated with improved clinical outcomes and established the superiority of primary PCI over thrombolysis as the standard[dash]of[dash]care for the treatment of AMI.\159\ The commenter indicated that, based on the results of the additional clinical studies, recognizing the significance of the relationship between infarct size and clinical outcomes, additional trials were performed to evaluate the effect of continued infarct size reduction, such as a pooled patient[dash]level analysis to evaluate myocardial infarct size measured within 30 days of STEMI and its relationship to mortality as well as hospitalization for heart failure during and up to 1-year follow up. The commenter stated that one trial demonstrated a highly significant relationship for mortality and hospitalization for heart failure, where every 5 percent increase in infarct size was associated with a 19 percent increase in mortality at 1 year.\160\ The commenter further stated that the results of this trial indicated that this relationship was independent of other high-risk clinical and angiographic features in patients with a large infarction, including age, sex, diabetes, hypertension, hyperlipidemia, current smoking, and symptom-to-first device time.\161\ The commenter believed that, given this established relationship, the 6.5 percent absolute reduction in median infarct size demonstrated with the use of SSO2 Therapy in the AMIHOT II trial is clinically meaningful. The commenter concluded that SSO2 Therapy is the only therapy to date that has demonstrated a significant and clinically meaningful reduction in infarct size beyond that achieved with PCI alone. --------------------------------------------------------------------------- \159\ Sch[ouml]mig, A., Kastrati, A., Dirschinger, J., et al., ``Coronary stenting plus platelet glycoprotein IIb/IIIa blockade compared with tissue plasminogen activator in acute myocardial infarction. Stent versus Thrombolysis for Occluded Coronary Arteries in Patients with Acute Myocardial Infarction Study Investigators,'' New England Journal of Medicine, 2000, vol. 343(6), pp. 385-91. \160\ Stone, G.W., Selker, H.P., Thiele, H., et al., ``Relationship between infarct size and outcomes following primary PCI,'' JACC, 2016, vol. 67(14), pp. 1674-83. \161\ Ibid. --------------------------------------------------------------------------- Response: We appreciate all of the commenters' input. However, we are concerned whether the additional clinical studies presented regarding the relationship between myocardial infarct size and clinical outcomes can be applied to SSO2 Therapy and whether the applicant has provided enough information to demonstrate that the reduction of infarct size with use of SSO2 Therapy is a substantial clinical improvement. We are inviting public comments regarding these concerns. k. Cerebral Protection System (Sentinel[reg] Cerebral Protection System) Claret Medical, Inc. submitted an application for new technology add-on payments for the Cerebral Protection System (Sentinel[reg] Cerebral Protection System) for FY 2019. According to the applicant, the Sentinel Cerebral Protection System is indicated for the use as an embolic protection (EP) device to capture and remove thrombus and debris while performing transcatheter aortic valve replacement (TAVR) procedures. The device is percutaneously delivered via the right radial artery and is removed upon completion of the TAVR procedure. The De Novo request for the Sentinel[reg] Cerebral Protection System was granted on June 1, 2017 (DEN160043). Aortic stenosis (AS) is a narrowing of the aortic valve opening. AS restricts blood flow from the left ventricle to the aorta and may also affect the pressure in the left atrium. The most common presenting symptoms of AS include dyspnea on exertion or decreased exercise tolerance, exertional dizziness (presyncope) or syncope and exertional angina. Symptoms experienced by patients who have been diagnosed with AS and normal left ventricular systolic function rarely occur until stenosis is severe (defined as valve area is less than 1.0 cm2, the jet velocity is over 4.0 m/sec, and/or the mean transvalvular gradient is greater than or equal to 40 mmHg).\162\ AS is a common valvular disorder in elderly patients. The prevalence of AS increases with age, and some degree of valvular calcification is present in 75 percent of patients who are 85 to 86 years old.\163\ TAVR procedures are the standard of care treatment for patients who have been diagnosed with severe AS. Patients undergoing TAVR procedures are often older, frail, and may be affected by multiple comorbidities, implying a significant risk for thromboembolic cerebrovascular events.\164\ Embolic ischemic strokes can occur in patients undergoing surgical and interventional cardiovascular procedures, such as stenting (carotid, coronary, peripheral), catheter ablation for atrial fibrillation, endovascular stent grafting, left atrial appendage closure (LAAO), patent formal ovale (PFO) closure, balloon aortic valvuloplasty, surgical valve replacement (SAVR), and TAVR. Clinically overt stroke, or silent ischemic cerebral infarctions, associated with the TAVR procedure, may result from a variety of causes, including mechanical manipulation of instruments or other interventional devices used during the procedure. These mechanical manipulations are caused by, but not limited to, the placement of a relatively large bore delivery catheter in the aortic arch, balloon valvuloplasty, valve positioning, valve re-positioning, valve expansion, and corrective catheter manipulation, as well as use of guidewires and guiding or diagnostic catheters required for proper positioning of the TAVR device. The magnitude and timing of embolic activity resulting from these manipulations was studied by Szeto, et al.,\165\ using a transcranial Doppler, and it was found that embolic material is liberated throughout the TAVR procedure with some of the emboli reaching the central nervous system leading to cerebral ischemic infarctions. Some of the cerebral ischemic infarctions lead to neurologic injury and clinically apparent stroke. Szeto, et al., also noted that the rate of [[Page 20336]] silent ischemic cerebral infarctions following TAVR procedures is estimated to be between 68 and 91 percent.166 167 --------------------------------------------------------------------------- \162\ Otto, C., Gaasch, W., ``Clinical manifestations and diagnosis of aortic stenosis in adults,'' In S. Yeon (Ed.), 2016, Available at: https://www.uptodate.com/contents/clinical-manifestations-and-diagnosis-of-aortic-stenosis-in-adults. \163\ Lindroos, M., et al., ``Prevalence of aortic valve abnormalities in the elderly: An echocardiographic study of a random population sample,'' J Am Coll Cardio, 1993, vol. 21(5), pp. 1220- 1225. \164\ Giustino, G., et al., ``Neurological Outcomes With Embolic Protection Devices in Patients Undergoing Transcatheter Aortic Valve Replacement,'' J Am Coll Cardio, CARDIOVASCULAR INTERVENTIONS, 2016, vol. 9(20). \165\ Szeto, W.Y., et al., ``Cerebral Embolic Exposure During Transfemoral and Transapical Transcatheter Aortic Valve Replacement,'' J Card Surg, 2011, vol. 26, pp. 348-354. \166\ Gupta, A., Giambrone, A.E., Gialdini, G., et al., ``Silent brain infarction and risk of future stroke: A systematic review and meta-analysis,'' Stroke, 2016, vol. 47, pp. 719-25. \167\ Mokin, M., Zivadinov, R., Dwyer, M.G., Lazar, R.M., Hopkins, L.N., Siddiqui, A.H., ``Transcatheter aortic valve replacement: perioperative stroke and beyond,'' Expert Rev Neurother, 2017, vol. 17, pp. 327-34. --------------------------------------------------------------------------- The TAVR procedure is a minimally invasive procedure that does not involve open heart surgery. During a TAVR procedure the prosthetic aortic valve is placed within the diseased native valve. The prosthetic valve then becomes the functioning aortic valve. As previously outlined, stroke is one of the risks associated with TAVR procedures. According to the applicant, the risk of stroke is highest in the early post[dash]procedure period and, as previously outlined, is likely due to mechanical factors occurring during the TAVR procedure.\168\ Emboli can be generated as wire-guided devices are manipulated within atherosclerotic vessels, or when calcified valve leaflets are traversed and then crushed during valvuloplasty and subsequent valve deployment.\169\ Stroke rates in patients evaluated 30 days after TAVR procedures range from 1.0 percent to 9.6 percent,\170\ and have been associated with increased mortality. Additionally, new ``silent infarcts,'' assessed via diffusion-weighted magnetic resonance imaging (DW-MRI), have been found in a majority of patients after TAVR procedures.\171\ --------------------------------------------------------------------------- \168\ Nombela-Franco, L., et al., ``Timing, predictive factors, and prognostic value of cerebrovascular events in a large cohort of patients undergoing transcatheter aortic valve implantation,'' Circulation, 2012, vol. 126(25), pp. 3041-53. \169\ Freeman, M., et al., ``Cerebral events and protection during transcatheter aortic valve replacement,'' Catheterization and Cardiovascular Interventions, 2014, vol. 84(6), pp. 885-896. \170\ Haussig, S., Linke, A., ``Transcatheter aortic valve replacement indications should be expanded to lower-risk and younger patients,'' Circulation, 2014. vol. 130(25), pp. 2321-31. \171\ Kahlert, P., et al., ``Silent and apparent cerebral ischemia after percutaneous transfemoral aortic valve implantation: a diffusion-weighted magnetic resonance imaging study,'' Circulation, 2010, vol. 121(7), pp. 870-8. --------------------------------------------------------------------------- As stated earlier, the De Novo request for the Sentinel[reg] Cerebral Protection System was granted on June 1, 2017. The FDA concluded that this device should be classified into Class II (moderate risk). Effective October 1, 2016, ICD-10-PCS Section ``X'' code X2A5312 (Cerebral embolic filtration, dual filter in innominate artery and left common carotid artery, percutaneous approach) was approved to identify cases involving TAVR procedures using the Sentinel[reg] Cerebral Protection System. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, the Sentinel[reg] Cerebral Protection System device is inserted at the beginning of the TAVR procedure, via a small tube inserted through a puncture in the right wrist. Next, using a minimally invasive catheter, two small filters are placed in the brachiocephalic and left common carotid arteries. The filters collect debris, preventing it from becoming emboli, which can travel to the brain. These emboli, if left uncaptured, can cause cerebral ischemic lesions, often referred to as silent ischemic cerebral infarctions, potentially leading to cognitive decline or clinically overt stroke. At the completion of the TAVR procedure, the filters, along with the collected debris, are removed. The applicant stated that there are no other similar products for commercial sale available in the United States for cerebral protection during TAVR procedures. Two neuroprotection devices, the TriguardTM Cerebral Protection Device (Keystone Heart, Herzliya Pituach, Israel) and the Embrella Embolic DeflectorTM System (Edwards Lifesciences, Irvine, CA) are used in Europe. These devices work by deflecting embolic debris distally, rather than capturing and removing debris with filters. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, as stated earlier, the Sentinel[reg] Cerebral Protection System is an EP device used to capture and remove thrombus and debris while performing TAVR procedures. Therefore, potential cases representing patients who may be eligible for treatment involving this device would map to the same MS-DRGs as cases involving TAVR procedures. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, according to the applicant, this technology will be used to treat patients who have been diagnosed with severe aortic valve stenosis who are eligible for a TAVR procedure. The applicant asserted that there are currently no approved alternative treatment options for cerebral protection during TAVR procedures, and the Sentinel[reg] Cerebral Protection System is the first and only embolic protection device for use during TAVR procedures and, therefore, meets the newness criterion. The applicant also asserted that the device meets the newness criterion, as evidenced by the FDA's granting of the De Novo request and there was no predicate device. Based on the above, it appears that the Sentinel[reg] Cerebral Protection System is not substantially similar to other existing technologies. We are inviting public comments on whether the Sentinel[reg] Cerebral Protection System is substantially similar to any existing technology and whether it meets the newness criterion. The applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. The applicant searched the FY 2016 MedPAR file for cases with the following ICD-10-CM procedure codes to identify cases involving TAVR procedures, which are potential cases representing patients who may be eligible for treatment involving use of the Sentinel[reg] Cerebral Protection System: 02RF37Z (Replacement of aortic valve with autologous tissue substitute, percutaneous approach); 02RF38Z (Replacement of aortic valve with zooplastic tissue, percutaneous approach); 02RF3JZ (Replacement of aortic valve with synthetic substitute, percutaneous approach); 02RF3KZ (Replacement of aortic valve with nonautologous tissue substitute, percutaneous approach); 02RF37H (Replacement of aortic valve with autologous tissue substitute, transapical, percutaneous approach ); 02RF38H (Replacement of aortic valve with zooplastic tissue, transapical, percutaneous approach); 02RF3JH (Replacement of aortic valve with synthetic substitute, transapical, percutaneous approach); and 02RF3KH (Replacement of aortic valve with nonautologous tissue substitute, transapical, percutaneous approach). This process resulted in 26,012 potential cases. The applicant limited its search to MS-DRG 266 (Endovascular Cardiac Valve Replacement with MCC) and MS-DRG 267 (Endovascular Cardiac Valve Replacement without MCC) because these two MS-DRGs accounted for 97.4 percent of the total cases identified. Using the 26,012 identified cases, the applicant determined that the average unstandardized case-weighted charge per case was $211,261. No charges were removed for the prior technology because the device is used to capture [[Page 20337]] and remove thrombus and debris while performing TAVR procedures. The applicant then standardized the charges, but did not inflate the charges. The applicant then added charges for the new technology to the average case-weighted standardized charges per case by taking the cost of the device and dividing the amount by the CCR of 0.332 for implantable devices from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38103). The applicant calculated a final inflated average case[dash]weighted standardized charge per case of $187,707 and a Table 10 average case[dash]weighted threshold amount of $170,503. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount, the applicant maintained that the technology meets the cost criterion. We are inviting public comments on whether the Sentinel[reg] Cerebral Protection System meets the cost criterion. With regard to the substantial clinical improvement criterion, the applicant asserted that the Sentinel[reg] Cerebral Protection System represents a substantial clinical improvement over existing technologies because it is the first and only cerebral embolic protection device commercially available in the United States for use during TAVR procedures. The applicant stated that the data below shows that the Sentinel[reg] Cerebral Protection System effectively captures brain bound embolic debris and significantly improves clinical outcomes (that is, stroke) beyond the current standard of care, that is, TAVR procedures with no embolic protection. The applicant provided the results of four key studies: (1) The SENTINEL[reg] study \172\ conducted by Claret Medical, Inc.; (2) the CLEAN[dash]TAVI trial; \173\ (3) the Ulm real-world registry; \174\ and (4) the MISTRAL-C study.\175\ --------------------------------------------------------------------------- \172\ Kapadia, S., Kodali, S., Makkar, R., et al., ``Protection against cerebral embolism during transcatheter aortic valve replacement,'' JACC, 2017, vol. 69(4), pp. 367-377. \173\ Haussig, S., Mangner, N., Dwyer, M.G., et al., ``Effect of a Cerebral Protection Device on Brain Lesions Following Transcatheter Aortic Valve Implantation in Patients With Severe Aortic Stenosis: The CLEAN-TAVI Randomized Clinical Trial,'' JAMA, 2016, vol. 316, pp. 592-601. \174\ Seeger, J., et al., ``Cerebral Embolic Protection During Transfemoral Aortic Valve Replacement Significantly Reduces Death and Stroke Compared With Unprotected Procedures,'' JACC Cardiovasc Interv, 2017, in press. \175\ Mieghem, Van, et al., ``Filter-based cerebral embolic protection with transcatheter aortic valve implantation: the randomized MISTRAL-C trial,'' Eurointervention, 2016, vol. 12(4), pp. 499-507. --------------------------------------------------------------------------- The applicant reported that the SENTINEL[reg] study was a prospective, single blind, multi-center, randomized study using the Sentinel[reg] Cerebral Protection System which enrolled patients who had been diagnosed with severe symptomatic calcified native aortic valve stenosis indicated for a TAVR procedure. A total of 363 patients at 19 centers in the United States and Germany were randomized across 3 arms (Safety, Test, and Control) in a 1:1:1 fashion. According to the applicant, evaluations performed for patients in each arm were as follows:Safety Arm patients who underwent a TAVR procedure involving the Sentinel[reg] Cerebral Protection System--Patients enrolled in this arm of the study received safety follow-up at discharge, at 30 days and 90 days post-procedure; and neurological evaluation at baseline, discharge, 30 days and 90 days (only in the case of a stroke experienced less than or equal to 30 days) post- procedure. The Safety Arm patients did not undergo MRI or neurocognitive assessments. Test Arm patients who underwent a TAVR procedure involving the Sentinel[reg] Cerebral Protection System--Patients enrolled in this arm of the study underwent safety follow-up at discharge, at 30 days and 90 days post-procedure; MRI assessment for efficacy at baseline, 2 to 7 days and 30 days post-procedure; neurological evaluation at baseline, discharge, 30 days and 90 days (only in the case of a stroke experienced less than or equal to 30 days) post-procedure; neurocognitive evaluation at baseline, 2 to 7 days (optional), 30 days and 90 days post-procedure; Quality of Life assessment at baseline, 30 days and 90 days; and histopathological evaluation of debris captured in the Sentinel[reg] Cerebral Protection System's device filters. Control Arm patients who underwent a TAVR procedure only-- Patients enrolled in this arm of the study underwent safety follow-up at discharge, at 30 days and 90 days post-procedure; MRI assessment for efficacy at baseline, 2 to 7 days and 30 days post-procedure; neurological evaluation at baseline, discharge, 30 days and 90 days (only in the case of a stroke experienced less than or equal to 30 days) post-procedure; neurocognitive evaluation at baseline, 2 to 7 days (optional), 30 days and 90 days post[dash]procedure; and Quality of Life assessment at baseline, 30 days and 90 days. The primary safety endpoint was occurrence of major adverse cardiac and cerebrovascular events (MACCE) at 30 days compared with a historical performance goal. MACCE was defined as follows: All causes of death; all strokes (disabling and nondisabling, Valve Academic Research Consortium-2 (VARC-2)); and acute kidney injury (stage 3, VARC-2). The point estimate for the historical performance goal for the primary safety endpoint at 30 days post-TAVR procedure was derived from a review of published reports of 30-day TAVR procedure outcomes. The VARC-2 established an independent collaboration between academic research organizations and specialty societies (cardiology and cardiac surgery) in the United States and Europe to create consistent endpoint definitions and consensus recommendations for implementation in TAVR procedure clinical research.\176\ --------------------------------------------------------------------------- \176\ Leon, M.B., Piazza, N., Nikolsky, E., et al., ``Standardized endpoint definitions for transcatheter aortic valve implantation clinical trials: a consensus report from the Valve Academic Research Consortium,'' European Heart Journal, 2011, vol. 32(2), pp. 205-217, doi:10.1093/eurheartj/ehq406. --------------------------------------------------------------------------- The applicant reported that results of the SENTINEL[reg] study demonstrated the following: The rate of MACCE was numerically lower than the control arm, 7.3 percent versus 9.9 percent, but was not statistically significant from that of the control group (p = 0.41). New lesion volume was 178.0 mm\3\ in control patients and 102.8 mm\3\ in the Sentinel[reg] Cerebral Protection System device arm (p = 0.33). A post[dash]hoc multi[dash]variable analysis identified preexisting lesion volume and valve type as predictors of new lesion volume. Strokes experienced at 30 days were 9.1 percent in control patients and 5.6 percent in patients treated with the Sentinel[reg] Cerebral Protection System devices (p = 0.25). Neurocognitive function was similar in control patients and patients treated with the Sentinel[reg] Cerebral Protection System devices, but there was a correlation between lesion volume and neurocognitive decline (p = 0.0022). Debris was found within filters in 99 percent of patients and included thrombus, calcification, valve tissue, artery wall, and foreign material. The applicant also noted that the post-hoc analysis of this data demonstrated that there was a 63 percent reduction in 72-hour stroke rate (compared to control), p = 0.05. According to the applicant, the CLEAN-TAVI (Claret Embolic Protection and TAVI) trial, was a small, randomized, double-blind, controlled trial. The trial consisted of 100 patients assigned to either EP (n = 50) with the Claret Medical, Inc. device (the Sentinel[reg] Cerebral Protection System) or to no EP (n = 50). Patients were all [[Page 20338]] treated with femoral access and self-expandable (SE) devices. The study endpoint was the number of brain lesions at 2 days post[dash]procedure versus baseline. Patients were evaluated with DW[dash]MRI at 2 and 7 days post[dash]TAVR procedure. The mean age of patients was 80 years old; 43 percent were male. The study results showed that patients treated with the Sentinel[reg] Cerebral Protection System had a lower number of new lesions (4.00) than patients in the control group (10.0); (p<0.001). According to the applicant, the single-center Ulm study, a large propensity matched trial, with 802 consecutive patients, occurred at the University of Ulm between 2014 and 2016. The first 522 patients (65.1 percent of patients) underwent a TAVR procedure without EPs, and the subsequent 280 patients (34.9 percent of patients) underwent a TAVR procedure with EP involving the Sentinel[reg] Cerebral Protection System. For both arms of the study, a TAVR procedure was performed in identical settings except without cerebral EP, and neurological follow- up was performed within 7 days post-procedure. The primary endpoint was a composite of all-cause mortality or all-stroke according to the VARC- 2 criteria within 7 days. The authors who documented the study noted the following: Patient baseline characteristics and aortic valve parameters were similar between groups, that both filters of the device were successfully positioned in 280 patients, all neurological follow- up was completed by the 7th post-procedure date, and that propensity score matching was performed to account for possible confounders. Results indicated a decreased rate of disabling and nondisabling stroke at 7 days post[dash]procedure was seen in those patients who were treated with the Sentinel[reg] Cerebral Protection System device versus control patients (1.6 percent versus 4.6 percent, p = 0.03). At 48 hours, stroke rates were lower with patients treated with the Sentinel[reg] Cerebral Protection System device versus control patients (1.1 percent versus 3.6 percent, p = 0.03). In multi[dash]variate analysis, TAVR procedures performed without the use of a EP device was found to be an independent predictor of stroke within 7 days (p = 0.04). The aim of the MISTRAL-C study was to determine if the Sentinel[reg] Cerebral Protection System affects new brain lesions and neurocognitive performance after TAVR procedures. The study was designed as a multi-center, double-blind, randomized trial enrolling patients who were diagnosed with symptomatic severe aortic stenosis and 1:1 randomization to TAVI patients treated with or without the Sentinel[reg] Cerebral Protection System. From January 2013 to August 2015, 65 patients were enrolled in the study. Patients ranged in age from 77 years old to 86 years old, 15 (47 percent) were female and 17 (53 percent) were male patients randomized to the Sentinel[reg] Cerebral Protection System group and 16 (49 percent) were female and 17 (51 percent) were male patients randomized to the control group. There were 3 mortalities between 5 days and 6 months post[dash]procedure for the Sentinel[reg] Cerebral Protection System group. There were no strokes reported for the Sentinel[reg] Cerebral Protection System group. There were 7 mortalities between 5 days and 6 months post[dash]procedure for the control group. There were 2 strokes reported for the control group. Patients underwent DW-MRI and neurological examination, including neurocognitive testing 1 day before and 5 to 7 days after TAVI. Follow-up DW-MRI and neurocognitive testing was completed in 57 percent of TAVI patients treated with the Sentinel[reg] Cerebral Protection System and 80 percent for the group of TAVI patients treated without the Sentinel[reg] Cerebral Protection System. New brain lesions were found in 78 percent of the patients with follow-up MRI. According to the applicant, patients treated with the Sentinel[reg] Cerebral Protection System had numerically fewer new lesions and a smaller total lesion volume (95 mm3 versus 197 mm3). Overall, 27 percent of the patients treated with the Sentinel[reg] Cerebral Protection System and 13 percent of the patients treated in the control group had no new lesions. Ten or more new brain lesions were found only in the patients treated in the control group (20 percent in the control group versus 0 percent in the Sentinel[reg] Cerebral Protection System group, p = 0.03). Neurocognitive deterioration was present in 4 percent of the patients treated with the Sentinel[reg] Cerebral Protection System versus 27 percent of the patients treated without (p=0.017). The filters captured debris in all of the patients treated with Sentinel[reg] Cerebral Protection System device. In the Ulm study, the primary outcome was a composite of all-cause mortality or stroke at 7 days, and occurred in 2.1 percent of the Sentinel[reg] Cerebral Protection System group versus 6.8 percent of the control group (p = 0.01, number needed to treat (NNT) = 21). Use of the Sentinel[reg] Cerebral Protection System device was associated with a 2.2 percent absolute risk reduction in mortality with NNT 45. Composite endpoint of major adverse cardiac and cerebrovascular events (MACCE) was found in 2.1 percent of those patients undergoing a TAVR procedure with the use of the Sentinel[reg] Cerebral Protection System device versus 7.9 percent in the control group (p = 0.01). Similar but statistically nonsignificant trends were found in the SENTINEL[reg] study, with rate of MACCE of 7.3 percent in the Sentinel[reg] Cerebral Protection System group versus 9.9 percent in the control group (p = 0.41). The applicant reported that the four studies discussed above that evaluated the Sentinel[reg] Cerebral Protection System device have limitations because they are either small, nonrandomized and/or had significant loss to follow[dash]up. A meta-analysis of EP device studies, the majority of which included use of the Sentinel[reg] Cerebral Protection System device, found that use of cerebral EP devices was associated with a nonsignificant reduction in stroke and death.\177\ --------------------------------------------------------------------------- \177\ Giustino, G., et al., ``Neurological Outcomes With Embolic Protection Devices in Patients Undergoing Transcatheter Aortic Valve Replacement,'' Journal of the American College of Cardiology: Cardiovascular Interventions, 2016, vol. 9(20), pp. 2124-2133. --------------------------------------------------------------------------- We are concerned that the use of cerebral protection devices may not be associated with a significant reduction in stroke and death. We note that the SENTINEL[reg] study, although a randomized study, did not meet its primary endpoint, as illustrated by nonstatistically significant reduction in new lesion volume on MRI or nondisabling strokes within 30 days (5.6 percent stroke rate in the Sentinel[reg] Cerebral Protection System device group versus a 9.1 percent stroke rate in the control group at 30 days; p = 0.25). We also note that only with a post[dash]hoc analysis of the SENTINEL[reg] study data were promising trends noted, where the device use was associated with a 63 percent reduction in stroke events at 72 hours (p = 0.05). Additionally, although there was a statistically significant difference between the patients treated with and without cerebral embolic protection in the composite of all-cause mortality or stroke at 7 days, the Ulm study was a nonrandomized study and propensity matching was performed during analyses. We are concerned that studies involving the Sentinel[reg] Cerebral Protection System may be inconclusive regarding whether the device represents a substantial clinical improvement for patients undergoing TAVR procedures. We also are concerned that the SENTINEL[reg] studies did not show a substantial decrease in neurological [[Page 20339]] complications for patients undergoing TAVR procedures. We are inviting public comments on whether the Sentinel[reg] Cerebral Protection System meets the substantial clinical improvement criterion. Below we summarize and respond to a written public comment we received regarding the Sentinel[reg] Cerebral Protection System during the open comment period in response to the New Technology Town Hall meeting notice published in the Federal Register. Comment: One commenter noted that the TriGUARD device, a similar device to the Sentinel[reg] Cerebral Protection System device, has been commercially available throughout Europe and its member countries, including the United Kingdom since June 29, 2013. The commenter indicated that the TriGUARD device received its Israel Medical Device Registration and Approval (AMAR) on November 5, 2015. The commenter asserted that because the Sentinel[reg] Cerebral Protection System is the first and only cerebral EP device commercially available in the United States for use during TAVR procedures it represents a substantial clinical improvement over currently available and existing technologies. Response: We appreciate the information provided by the commenter. We will take this information into consideration when deciding whether to approve new technology add-on payments for the Sentinel[reg] Cerebral Protection System for FY 2019. l. AZEDRA[reg] (Ultratrace[reg] Iobenguane Iodine-131) Solution Progenics Pharmaceuticals, Inc. submitted an application for new technology add-on payments for AZEDRA[reg] (Ultratrace[reg] iobenguane Iodine-131) for FY 2019. AZEDRA[reg] is a drug solution formulated for intravenous (IV) use in the treatment of patients who have been diagnosed with obenguane avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma. AZEDRA[reg] contains a small molecule ligand consisting of meta-iodobenzylguanidine (MIBG) and \131\Iodine (\131\I) (hereafter referred to as ``\131\I-MIBG''). The applicant noted that iobenguane Iodine-131 is also known as \131\I- MIBG). The applicant reported in its application that pheochromocytomas and paragangliomas are rare tumors with an incidence of approximately 2 to 8 people per million per year.178 179 Both tumors are catecholamine[dash]secreting neuroendocrine tumors, with pheochromocytomas being the more common of the two and comprising 80 to 85 percent of cases. While 10 percent of pheochromocytomas are malignant, whereby ``malignant'' is defined by the World Health Organization (WHO) as ``the presence of distant metastases,'' paragangliomas have a malignancy frequency of 25 percent.180 181 Approximately one-half of malignant tumors are pronounced at diagnosis, while other malignant tumors develop slowly within 5 years.\182\ Pheochromocytomas and paragangliomas tend to be indistinguishable at the cellular level and frequently at the clinical level. For example catecholamine-secreting paragangliomas often present clinically like pheochromocytomas with hypertension, episodic headache, sweating, tremor, and forceful palpitations.\183\ Although pheochromocytomas and paragangliomas can share overlapping histopathology, epidemiology, and molecular pathobiology characteristics, there are differences between these two neuroendocrine tumors in clinical behavior, aggressiveness and metastatic potential, biochemical findings and association with inherited genetic syndrome differences, highlighting the importance of distinguishing between the presence of malignant pheochromocytoma and the presence of malignant paraganglioma. At this time, there is no curative treatment for malignant pheochromocytomas and paragangliomas. Successful management of these malignancies requires a multidisciplinary approach of decreasing tumor burden, controlling endocrine activity, and treating debilitating symptoms. According to the applicant, decreasing metastatic tumor burden would address the leading cause of mortality in this patient population, where the 5-year survival rate is 50 percent for patients with untreated malignant pheochromocytomas and paragangliomas.\184\ The applicant stated that controlling catecholamine hypersecretion (for example, severe paroxysmal or sustained hypertension, palpitations and arrhythmias) would also mean decreasing morbidity associated with hypertension (for example, risk of stroke, myocardial infarction and renal failure), and begin to address the 30-percent cardiovascular mortality rate associated with malignant pheochromocytomas and paragangliomas. --------------------------------------------------------------------------- \178\ Beard, C.M., Sheps, S.G., Kurland, L.T., Carney, J.A., Lie, J.T., ``Occurrence of pheochromocytoma in Rochester, Minnesota'', pp. 1950-1979. \179\ Stenstr[ouml]m, G., Sv[auml]rdsudd, K., ``Pheochromocytoma in Sweden 1958-1981. An analysis of the National Cancer Registry Data,'' Acta Medica Scandinavica, 1986, vol. 220(3), pp. 225-232. \180\ Fishbein, Lauren, ``Pheochromocytoma and Paraganglioma,'' Hematology/Oncology Clinics 30, no. 1, 2016, pp. 135-150. \181\ Lloyd, R.V., Osamura, R.Y., Kl[ouml]ppel, G., & Rosai, J. (2017). World Health Organization (WHO) Classification of Tumours of Endocrine Organs. Lyon, France: International Agency for Research on Center (IARC). \182\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp. 343-373. \183\ Carty, S.E., Young, W.F., Elfky, A., ``Paraganglioma and pheochromocytoma: Management of malignant disease,'' UpToDate. Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease. \184\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp. 343-373. --------------------------------------------------------------------------- The applicant reported that, at this time, controlling catecholamine activity in pheochromocytomas and paragangliomas is medically achieved with administration of combined alpha and beta- adrenergic blockade, and surgically with tumor tissue reduction. Because there is no curative treatment for malignant pheochromocytomas and paragangliomas, resecting both primary and metastatic lesions whenever possible to decrease tumor burden \185\ provides a methodology for controlling catecholamine activity and lowering cardiovascular mortality risk. Besides surgical removal of tumor tissue for lowering tumor burden, there are other treatment options that depend upon tumor type (that is, pheochromocytoma tumors versus paraganglioma tumors), anatomic location, and the number and size of the metastatic tumors. Currently, these treatment options include: (1) Radiation therapy; (2) nonsurgical local ablative therapy with radiofrequency ablation, cryoablation, and percutaneous ethanol injection; (3) transarterial chemoembolization for liver metastases; and (4) radionuclide therapy using metaiodobenzylguanidine (MIBG) or somatostatin. Regardless of the method to reduce local tumor burden, periprocedural medical care is needed to prevent massive catecholamine secretion and hypertensive crisis.\186\ --------------------------------------------------------------------------- \185\ Noda, T., Nagano, H., Miyamoto, A., et al., ``Successful outcome after resection of liver metastasis arising from an extraadrenal retroperitoneal paraganglioma that appeared 9 years after surgical excision of the primary lesion,'' Int J Clin Oncol, 2009, vol. 14, pp. 473. \186\ Carty, S.E., Young, W.F., Elfky, A., ``Paraganglioma and pheochromocytoma: Management of malignant disease,'' UpToDate. Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease. --------------------------------------------------------------------------- [[Page 20340]] The applicant stated that AZEDRA[reg] specifically targets neuroendocrine tumors arising from chromaffin cells of the adrenal medulla (in the case of pheochromocytomas) and from neuroendocrine cells of the extra-adrenal autonomic paraganglia (in the case of paraganglioms).\187\ According to the applicant, AZEDRA[reg] is a more consistent form of \131\I-MIBG compared to compounded formulations of \131\I-MIBG that are not currently approved by the FDA. If approved by the FDA, the applicant asserted that AZEDRA[reg] would be the only drug indicated for use in the treatment of patients, who if left untreated, experience debilitating clinical symptoms and high mortality rates from iobenguane avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma tumors. --------------------------------------------------------------------------- \187\ Ibid. --------------------------------------------------------------------------- Among local tumor tissue reduction options, use of external beam radiation therapy (ERBT) at doses greater than 40 Gy can provide local pheochromocytoma and paraganglioma tumor control and relief of symptoms for tumors at a variety of sites, including the soft tissues of the skull base and neck, abdomen, and thorax, as well as painful bone metastases.\188\ However, the applicant stated that ERBT irradiated tissues are unresponsive to subsequent treatment with \131\I-MIBG radionuclide.\189\ MIBG was initially used for the imaging of paragangliomas and pheochromocytomas because of its similarity to noradrenaline, which is taken up by chromaffin cells. Conventional MIBG used in imaging expanded to off-label compassionate use in patients who had been diagnosed with malignant pheochromocytomas and paragangliomas. Because \131\I-MIBG is sequestered within pheochromocytoma and paraganglioma tumors, subsequent malignant cell death occurs from radioactivity. Approximately 50 percent of tumors are eligible for \131\I-MIBG therapy based on having MIBG uptake with diagnostic imaging. According to the applicant, despite uptake by tumors, studies have also found that \131\I-MIBG therapy has been limited by total radiation dose, hematologic side effects, and hypertension. While the pathophysiology of total radiation dose and hematologic side effects are more readily understandable, hypertension is believed to be precipitated by large quantities of non[dash]iodinated MIBG or ``cold'' MIBG being introduced along with radioactive \131\I-MIBG therapy.\190\ The ``cold'' MIBG blocks synaptic reuptake of norepinephrine, which can lead to tachycardia and paroxysmal hypertension within the first 24 hours, the majority of which occur within 30 minutes of administration and can be dose-limiting.\191\ --------------------------------------------------------------------------- \188\ Ibid. \189\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al., ``Malignant pheochromocytomas and paragangliomas: a phase II study of therapy with high-dose 131I-metaiodobenzylguanidine (131I- MIBG),'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465. \190\ Loh, K.C., Fitzgerald, P.A., Matthay, K.K., Yeo, P.P., Price, D.C., ``The treatment of malignant pheochromocytoma with iodine-131 metaiodobenzylguanidine (\131\I-MIBG): a comprehensive review of 116 reported patients,'' J Endocrinol Invest, 1997, vol. 20(11), pp. 648-658. \191\ Gonias, S, et al., ``Phase II Study of High-Dose [\131\I]Metaiodobenzylguanidine Therapy for Patients With Metastatic Pheochromocytoma and Paraganglioma,'' J of Clin Onc, July 27, 2009. --------------------------------------------------------------------------- The applicant asserted that its new proprietary manufacturing process called Ultratrace[reg] allows AZEDRA[reg] to be manufactured without the inclusion of unlabeled or ``cold'' MIBG in the final formulation. The applicant also noted that targeted radionuclide MIBG therapy to reduce tumor burden is one of two treatments that have been studied the most. The other treatment is cytotoxic chemotherapy and, specifically, Carboplatin, Vincristine, and Dacarbazine (CVD). The applicant stated that cytotoxic chemotherapy is an option for patients who experience symptoms with rapidly progressive, non-resectable, high tumor burden, or that cytoxic chemotherapy is another option for a large number of metatstatic bone lesions.\192\ According to the applicant, CVD was believed to have an effect on malignant pheochromocytomas and paragangliomas due to the embryonic origin being similar to neuroblastomas. The response rates to CVD have been variable between 25 percent and 50 percent.193 194 These patients experience side effects consistent with chemotherapeutic treatment with CVD, with the added concern of the precipitation of hormonal complications such as hypertensive crisis, thereby requiring close monitoring during cytotoxic chemotherapy.\195\ According to the applicant, use of CVD relative to other tumor burden reduction options is not an ideal treatment because of nearly 100 percent recurrence rates, and the need for chemotherapy cycles to be continually readministered at the risk of increased systemic toxicities and eventual development of resistance. Finally, there is a subgroup of patients that are asymptomatic and have slower progressing tumors where frequent follow-up is an option for care.\196\ Therefore, the applicant believed that AZEDRA[reg] offers cytotoxic radioactive therapy for the anticipated indicated population that avoids harmful side effects that typically result from use of low-specific activity products. --------------------------------------------------------------------------- \192\ Carty, S.E., Young, W.F., Elfky, A., ``Paraganglioma and pheochromocytoma: Management of malignant disease,'' UpToDate. Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease. \193\ Niemeijer, N.D., Alblas, G., Hulsteijn, L.T., Dekkers, O.M. and Corssmit, E.P.M., ``Chemotherapy with cyclophosphamide, vincristine and dacarbazine for malignant paraganglioma and pheochromocytoma: systematic review and meta[hyphen]analysis,'' Clinical endocrinology, 2014, vol 81(5), pp. 642-651. \194\ Ayala-Ramirez, Montserrat, et al., ``Clinical Benefits of Systemic Chemotherapy for Patients with Metastatic Pheochromocytomas or Sympathetic Extra-Adrenal Paragangliomas: Insights from the Largest Single Institutional Experience,'' Cancer, 2012, vol. 118(11), pp. 2804-2812. \195\ Wu, L.T., Dicpinigaitis, P., Bruckner, H., et al., ``Hypertensive crises induced by treatment of malignant pheochromocytoma with a combination of cyclophosphamide, vincristine, and dacarbazine,'' Med Pediatr Oncol, 1994, vol. 22(6), pp. 389-392. \196\ Carty, S.E., Young, W.F., Elfky, A., ``Paraganglioma and pheochromocytoma: Management of malignant disease,'' UpToDate. Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease. --------------------------------------------------------------------------- The applicant reported that the anticipated and recommended AZEDRA[reg] dosage and frequency for patients receiving treatment involving \131\I-MIBG therapy for a diagnosis of avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma tumors is: Dosimetric Dosing--5 to 6 micro curies (mCi) (185 to 222 MBq) for a patient weighing more than or equal to 50 kg, and 0.1 mCi/kg (3.7 MBq/kg) for patients weighing less than 50 kg. Each recommended dosimetric dose is administered as an IV injection. Therapeutic Dosing--500 mCi (18.5 GBq) for patients weighing more than 62.5 kg, and 8 mCi/kg (296 MBq/kg) for patients weighing less than or equal to 62.5 kg. Therapeutic doses are administered by IV infusion, in ~50 mL over a period of ~30 minutes (100 mL/hour), administered approximately 90 days apart. With respect to the newness criterion, the applicant indicated that FDA granted Orphan Drug designation for AZEDRA[reg] on January 18, 2006, followed by Fast Track designation on March 8, 2006, and Breakthrough Therapy designation on July 26, 2015. The applicant's New Drug Application (NDA) proceeded on a rolling basis, and was completed on November 2, 2017. [[Page 20341]] However, at the time of the development of this proposed rule, the applicant indicated that it had not yet received FDA approval for the indicated use of AZEDRA[reg]. The applicant stated that it anticipates FDA approval by June 30, 2018. Currently, there are no approved ICD-10- PCS procedure codes to uniquely identify procedures involving the administration of AZEDRA[reg]. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or similar mechanism of action, the applicant stated that while AZEDRA[reg] and low[dash]specific activity conventional I-131 MIBG both target the same transporter sites on the tumor cell surface, the therapies' safety and efficacy outcomes are different. These differences in outcomes are because AZEDRA[reg] is manufactured using the proprietary Ultratrace[reg] technology, which maximizes the molecules that carry the tumoricidal component (I-131 MIBG, the warhead) and minimizes the extraneous unlabeled component (MIBG, free ligands), which could cause cardiovascular side effects. Therefore, according to the applicant, AZEDRA[reg] is designed to increase efficacy and decrease safety risks, whereas conventional I-131 MIBG uses existing technologies and results in a product that overwhelms the normal reuptake system with excess free ligands, which leads to safety issues as well as decreasing the probability of the warhead binding to the tumor cells. With regard to the second criterion, whether a product is assigned to the same or a different DRG, the applicant noted that there are no specific MS-DRGs for the assignment of cases involving the treatment of patients who have been diagnosed with pheochromocytoma and paraganglioma. We believe that potential cases representing patients who may be eligible for treatment involving the administration of AZEDRA[reg] would be assigned to the same MS-DRGs as cases representing patients who receive treatment for obenguane avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma. We also refer readers to the cost criterion discussion below, which includes the applicant's list of the MS-DRGs that potential cases involving treatment with the administration of AZEDRA[reg] most likely would map. With regard to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, if approved, AZEDRA[reg] would be the only FDA-approved drug indicated for use in the treatment of patients who have been diagnosed with malignant pheochromocytoma and paraganglioma tumors that avidly take up \131\I- MIBG and are recurrent and/or unresectable. The applicant stated that these patients face serious mortality and morbidity risks if left untreated, as well as potentially suffer from side effects if treated by available off-label therapies. The applicant also contended that AZEDRA[reg] can be distinguished from other currently available treatments because it potentially provides the following advantages: AZEDRA[reg] will have a very limited impact on normal norepinephrine reuptake due to the negligible amount of unlabeled MIBG present in the dose. Therefore, AZEDRA[reg] is expected to pose a much lower risk of acute drug-induced hypertension. There is minimal unlabeled MIBG to compete for the norepinephrine transporter binding sites in the tumor, resulting in more effective delivery of radioactivity. Current off-label therapeutic use of \131\I is compounded by individual pharmacies with varied quality and conformance standards. Because of its higher specific activity (the activity of a given radioisotope per unit mass), AZEDRA[reg] infusion times are significantly shorter than conventional \131\I administrations. Therefore, with these potential advantages, the applicant maintained that AZEDRA[reg] represents an effective option for the treatment of patients who have been diagnosed with malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma tumors, where there is a clear, unmet medical need. For the reasons cited earlier, the applicant believed that AZEDRA[reg] is not substantially similar to other currently available therapies and/or technologies and meets the ``newness'' criterion. We are inviting public comments on whether AZEDRA[reg] is substantially similar to other currently available therapies and/or technologies and meets the ``newness'' criterion. The applicant reported that it conducted an analysis using FY 2015 MedPAR data to demonstrate that AZEDRA[reg] meets the cost criterion. The applicant searched for potential cases representing patients who may be eligible for treatment involving AZEDRA[reg] that had one of the following ICD-9-CM diagnosis codes (which the applicant believed is indicative of diagnosis appropriate for treatment involving AZEDRA[reg]): 194.0 (Malignant neoplasm of adrenal gland), 194.6 (Malignant neoplasm of aortic body and other paraganglia), 209.29 (Malignant carcinoid tumor of other sites), 209.30 (Malignant poorly differentiated neuroendocrine carcinoma, any site), 227.0 (Benign neoplasm of adrenal gland), 237.3 (Neoplasm of uncertain behavior of paraganglia)--in combination with one of the following ICD-9-CM procedure codes describing the administration of a radiopharmaceutical: 00.15 (High-dose infusion interleukin-2); 92.20 (Infusion of liquid brachytherapy radioisotope); 92.23 (Radioisotopic teleradiotherapy); 92.27 (Implantation or insertion of radioactive elements); 92.28 (Injection or instillation of radioisotopes). The applicant stated that the combination of these diagnosis and procedure codes in this process was intended to identify potential cases representing patients who had been diagnosed with a correlating condition relating to AZEDRA[reg]'s intended treatment use and who had received subsequent treatment with a predecessor radiopharmaceutical therapy (such as, for example, a potential off-label use of conventional I-131 MIBG therapy) for malignant and/or recurrent pheochromocytoma and paraganglioma tumors. The applicant reported that the potential cases used for the cost analysis mapped to MS-DRGs 054 and 055 (Nervous System Neoplasms with and without MCC, respectively), MS-DRG 271 (Other Major Cardiovascular Procedures with CC), MS-DRG 436 (Malignancy of Hepatobiliary System or Pancreas with CC), MS-DRG 827 (Myeloproliferated Disorder or Poorly Differentiated Neoplasm with Major O.R. Procedure with CC), and MS-DRG 843 (Other Myeloproliferated Disorder or Poorly Differentiated Neoplasm Diagnosis with MCC). Due to patient privacy concerns, the applicant stated that the MedPAR data did not identify the exact number of cases assigned to the six identified MS-DRGs. For purposes of its analysis, the applicant assumed an equal distribution between these six MS-DRGs. The applicant noted in its application that potential cases that may be eligible for treatment involving the administration of AZEDRA[reg] would typically map to other MS-DRGs such as MS-DRGs 643, 644, and 645 (Endocrine Disorders with MCC, with CC, and without CC/MCC, respectively), and MS-DRG 849 (Radiotherapy). [[Page 20342]] However, because data were not available for these MS-DRGs they were not included in the analysis. Using the identified cases, the applicant determined that the average unstandardized case[dash]weighted charge per case was $95,472. The applicant used a 3-year inflation factor of 1.14359 (a yearly inflation factor of 1.04574 applied over 3 years), based on the FY 2018 IPPS/LTCH PPS final rule (82 FR 38527), to inflate the charges from FY 2015 to FY 2018. The applicant determined an inflated average case-weighted standardized charge per case of $103,833. Because the price of AZEDRA[reg] has yet to be determined, the applicant did not include the price of the drug in its analysis, nor did the applicant remove any charges associated with any predecessor radiopharmaceutical therapy use of MIBG agents. Based on the FY 2018 IPPS/LTCH PPS Table 10 thresholds, the average case- weighted threshold amount was $58,352. The applicant contended that AZEDRA[reg] meets the cost criterion because the inflated average case[dash]weighted standardized charge per case exceeds the average case-weighted threshold amount before including the average per patient cost for the product. We are concerned with the limited number of cases the applicant analyzed, and the applicant's inability to determine the exact number of cases representing patients that potentially may be eligible for treatment involving AZEDRA[reg] for each MS-DRG. We also are concerned that the MS-DRGs identified by the applicant's search of the FY 2015 MedPAR data do not match the MS-DRGs that the applicant noted that potential cases that may be eligible for treatment involving the administration of AZEDRA[reg] would typically map (MS-DRGs 643, 644, and 645, and MS-DRG 849). However, we acknowledge the difficulty in obtaining cost data for such a rare condition. We also note that, for the six identified MS-DRGs, the applicant's inflated average case[dash]weighted standardized charge per case of $103,833 exceeded all individual Table 10 average case[dash]weighted threshold amounts ($97,188 for MS-DRG 271 being the greatest). We are inviting public comments on whether the AZEDRA[reg] technology meets the cost criterion. With regard to substantial clinical improvement, the applicant maintained that the use of AZEDRA[reg] has been shown to reduce the use of antihypertensive medications, reduce tumor size, improve blood pressure control, reduce secretion of tumor biomarkers, and demonstrate strong evidence of overall survival rates. In addition, the applicant asserted that AZEDRA[reg] provides a treatment option for those outlined in its anticipated indication patient population. The applicant asserted that AZEDRA[reg] meets the substantial clinical improvement criterion based on the results from two clinical studies: (1) MIP-IB12 (IB12): A Phase I Study of Iobenguane (MIBG) I-131 in Patients With Malignant Pheochromocytoma/Paraganglioma; \197\ and (2) MIP-IB12B (IB12B): A Study Evaluating Ultratrace[reg] Iobenguane I-131 in Patients With Malignant Relapsed/Refractory Pheochromocytoma/ Paraganglioma. The applicant explained that the IB12B study is similar to the IB12 study in that both studies evaluated two open[dash]label, single[dash]arm studies. The applicant reported that both studies included patients who had been diagnosed with malignant and/or recurrent and/or unresectable pheochromocytoma and Paraganglioma tumors, and both studies assessed objective tumor response, biochemical tumor response, overall survival rates, occurrence of hypertensive crisis, and the long[dash]term benefit of AZEDRA[reg] treatment relative to the need for antihypertensives. According to the applicant, the study designs, however, differed in dose regimens (1 dose administered to patients in the IB12 study, and 2 doses administered to patients in the IB12B study) and primary study endpoints. Differences in the designs of the studies prevented direct comparison of study endpoints and pooling of the data. However, the applicant stated that results from safety data from the IB12 study and the IB12B study were pooled and used to support substantial clinical improvement assertions. We note that the results from neither the IB12 study nor the IB12B study compared the effects of AZEDRA[reg] to any of the other treatment options to decrease tumor burden (for example, cytotoxic chemotherapy, radiation therapy, and surgical debulking). --------------------------------------------------------------------------- \197\ Noto, Richard B., et al., ``Phase 1 Study of High- Specific-Activity I-131 MIBG for Metastatic and/or Recurrent Pheochromocytoma or Paraganglioma (IB12 Phase 1 Study),'' J Clin Endocrinol Metab, vol. 103(1), pp. 213-220. --------------------------------------------------------------------------- Regarding the data results from the IB12 study, the applicant asserted that, based on the reported safety and tolerability, and primary endpoint of radiological response at 12 months, high-specific- activity I-131 MIBG may be an effective alternative therapeutic option for patients who have been diagnosed with iobenguane-avid, metastatic and/or recurrent pheochromocytoma and paraganglioma tumors for whom there are no approved therapies and for those patients who have failed available treatment options. In addition, the applicant used the exploratory finding of decreased or discontinuation of antihypertensive medications relative to baseline medications as evidence that AZEDRA[reg] has clinical benefit and positive impact on the long[dash]term effects of hypertension induced norepinephrine producing malignant pheochromocytoma and paraganlioma tumors. We understand that the applicant used antihypertensive medications as a proxy to assess the long-term effects of hypertension such as renal, myocardial, and cerebral end organ damage. The applicant reported that it studied 15 of the original IB12 study's 21-patient cohort, and found 33 percent (n=5) had decreased or discontinuation of antihypertensive medications during the 12 months of follow-up. The applicant did not provide additional data on the incidence of renal insufficiency/failure, myocardial ischemic/infarction events, or transient ischemic attacks or strokes. It was unclear to us if these five patients also had decreased urine metanephrines, changed their diet, lost significant weight, or if other underlying comorbidities that influence hypertension were resolved, making it difficult to understand the significance of this exploratory finding. Regarding the applicant's assertion that the use of AZEDRA[reg] is safer and more effective than alternative therapies, we note that the IB12 study was a dose-escalating study and did not compare current therapies with AZEDRA[reg]. We also note the following: (1) The average age of the 21 enrolled patients in the IB12 study was 50.4 years old (a range of 30 to 72 years old); (2) the gender distribution was 61.9 percent (n=13) male and 38.1 percent (n=8) female; and (3) 76.2 percent (n=16) were white, 14.3 percent (n=3) were black or African American, and 9.5 percent (n=2) were Asian. We agree with the study's conductor \198\ that the size of the study is a limitation, and with a younger, predominately white, male patient population, generalization of study results to a more diverse population may be difficult. The applicant reported that one other aspect of the patient population indicated that all 21 patients received prior anti-cancer therapy for treatment of malignant [[Page 20343]] pheochromocytoma and paraganglioma tumors, which included the following: 57.1 Percent (n=12) received radiation therapy including external beam radiation and conventional MIBG; 28.6 percent (n=6) received cytotoxic chemotherapy (for example, CVD and other chemotherapeutic agents); and 14.3 percent (n=3) received Octreotide.\199\ Although this population illustrates a population that has failed some of the currently available therapy options, which may potentially support a finding of substantial clinical improvement for those with no other treatment options, we are unclear which patients benefited from treatment involving AZEDRA[reg], especially in view of the finding of a Fitzgerald et al. study cited earlier \200\ that tissues previously irradiated by ERBT were found to be unresponsive to subsequent treatment with \131\I-MIBG radionuclide. It was not clear in the application how previously ERBT-treated patients who failed ERBT fared with the RECIST scores, biotumor marker results, and reduction in antihypertensive medications. We also lacked information to draw the same correlation between previously CVD[dash]treated patients and their RECIST scores, biotumor marker results, and reduction in antihypertensive medications. --------------------------------------------------------------------------- \198\ Noto, Richard B., et. al., ``Phase 1 Study of High- Specific-Activity I-131 MIBG for Metastatic and/or Recurrent Pheochromocytoma or Paraganglioma (IB12 Phase 1 Study),'' J Clin Endocrinol Metab, vol. 103(1), pp. 213-220. \199\ Ibid. \200\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al., ``Malignant pheochromocytomas and paragangliomas: a phase II study of therapy with high-dose 131I-metaiodobenzylguanidine (131I- MIBG).'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465. --------------------------------------------------------------------------- The applicant asserted that the use of AZEDRA[reg] reduces tumor size and reduces the secretion of tumor biomarkers, thereby providing important clinical benefits to patients. The IB12 study assessed the overall best tumor response based on Response Evaluation Criteria in Solid Tumors (RECIST).\201\ Tumor biomarker response was assessed as complete or partial response for serum chromogranin A and total metanephrines in 80 percent and 64 percent of patients, respectively, and the applicant noted that both the overall best tumor response based on RECIST and tumor biomarker response favorable results are at doses higher than 500 mCi. We noticed that tumor burden improvement, as measured by RECIST criteria, showed that none of the 21 patients achieved a complete response. In addition, although 4 patients showed partial response, these 4 patients also experienced dose[dash]limiting toxicity with hematological events, and that all 4 patients received administered doses greater than 18.5 GBq (500 mCi). We also note that, regardless of total administered activity (for example, greater than or less than 18.5 GBq (500 mCi)), 61.9 percent (n=13) of the 21 patients enrolled in the study had stable disease and 14.3 percent (n=2) of the 14 patients who received greater than administered doses of 18.5 GBq (500 mCi) had progressive disease. Finally, we also noticed that, for most tumor markers, there were no dose relationship trends. While we recognize that there is no FDA-approved therapy for patients who have been diagnosed with \131\I-MIBG avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma tumors, we have questions as to whether the overall tumor best response and overall best tumor marker data results from the IB12 study support a finding that the AZEDRA[reg] technology represents a substantial clinical improvement. --------------------------------------------------------------------------- \201\ Therasse, P., Arbuck, S.G., Eisenhauer, J.W., Kaplan, R.S., Rubinsten, L., Verweij, J., Van Blabbeke, M., Van Oosterom, A.T., Christian, M.D., and Gwyther, S.G., ``New guidelines to evaluate the response to treatment in solid tumors,'' J Natl Cancer Inst, 2000, vol. 92(3), pp. 205-16. Available at: http://www.eortc.be/Services/Doc/RECIST.pdf. --------------------------------------------------------------------------- Finally, regarding the applicant's assertion that, based on the IB12 study data, AZEDRA[reg] provides a safe alternative therapy for those patients who have failed other currently available treatment therapies, we note that none of the patients experienced hypertensive crisis, and that 76 percent (n=16) of the 21 patients enrolled in the study experienced Grade III or IV adverse events. Although the applicant indicated the adverse events were related to the study drug, the applicant also noted that there was no statistically significant difference between the greater than or less than 18.5 GBq administered doses; both groups had adverse events rates greater than 75 percent. Specifically, 5 of 7 patients (76 percent) who received less than or equal to 18.5 GBq administered doses, and 11 of 14 patients (79 percent) who received greater than 18.5 GBq administered doses experienced Grade III or IV adverse advents. The most common (greater than or equal to 10 percent) Grade III and IV adverse events were neutropenia, leukopenia, thrombocytopenia, nausea, and vomiting. We also note that: (1) There were 5 deaths during the study that occurred from approximately 2.5 months up to 22 months after treatment and there was no detailed data regarding the 5 deaths, especially related to the total activity received during the study; (2) there was no information about which patients received prior radiation therapy with EBRT and/or conventional MIBG relative to those who experienced Grade III or IV adverse events; and (3) the total lifetime radiation dose was not provided by the applicant. We are inviting public comments on whether the safety data profile from the IB12 study supports a finding that AZEDRA[reg] represents a substantial clinical improvement for patients who received treatment with \131\I-MIBG for a diagnosis of avid malignant and/or recurrent and/or unresectable pheochromocytoma and paraganglioma tumors, given the risks for Grade III or IV adverse events. The applicant provided study data results from the IB12B study (MIP-IB12B), an open[dash]label, prospective 5[dash]year follow-up, single[dash]arm, multi[dash]center, Phase II pivotal study to evaluate the safety and efficacy of the use of AZEDRA[reg] for the treatment of patients who have been diagnosed with malignant and/or recurrent pheochromocytoma and paraganglioma tumors to support substantial clinical improvement. The applicant reported that IB12B's primary endpoint is the proportion of patients with a reduction (including discontinuation) of all antihypertensive medication by at least 50 percent for at least 6 months. Seventy-four patients who received at least 1 dosimetric dose of AZEDRA[reg] were evaluated for safety and 68 patients who received at least 1 therapeutic dose of AZEDRA[reg], each at 500 mCi (or 8 mCi/kg for patients weighing less than or equal to 62.5 kg), were assessed for specific clinical outcomes. The applicant asserted that results from this prospective study met the primary endpoint (reduction or discontinuation of anti-hypertensive medications), as well as demonstrated strong supportive evidence from key secondary endpoints (overall tumor response, tumor biomarker response, and overall survival rates) that confers important clinical relevance to patients who have been diagnosed with malignant pheochromocytoma and paraganlioma tumors. The applicant also indicated that the use of AZEDRA[reg] was shown to be generally well tolerated at doses administered at 8 mCi/kg. We note that the data results from the IB12B study did not have a comparator arm, making it difficult to interpret the clinical outcome data relative to other currently available therapies. As discussed for the IB12 study, the applicant reported that antihypertension treatment was a proxy for effectiveness of AZEDRA[reg] on norepinephrine induced hypertension producing tumors. In the IB12B study, 25 percent (17/68) of patients met the primary [[Page 20344]] endpoint of having a greater than 50 percent reduction in antihypertensive agents for at least 6 months. The applicant further indicated that an additional 16 patients showed a greater than 50 percent reduction in antihypertensive agents for less than 6 months, and pooling data results from these 33 patients, the applicant concluded that 49 percent (33/68) achieved a greater than 50 percent reduction at any time during the study 12-month follow-up period. The applicant further compared its data results from the IB12B study regarding antihypertension medication and the frequency of post[dash]infusion hypertension with published studies on MIBG and CVD therapy. The applicant noted a retrospective analysis of CVD therapy of 52 patients who had been diagnosed with metastatic pheochromocytoma and paraganliom tumors that found only 15 percent of CVD[dash]treated patients achieved a 50-percent reduction in antihypertensive agents. The applicant also compared its results for post-infusion hypertension with literature reporting on MIBG and found 14 and 19 percent (depending on the study) of patients receiving MIBG experience hypertension within 24 hours of infusion. Comparatively, the applicant stated that the use of AZEDRA[reg] had no acute events of hypertension following infusion. We are inviting public comments on whether these data results regarding hypertension support a finding that the AZEDRA[reg] technology represents a substantial clinical improvement, and if antihypertensive medication reduction is an adequate proxy for improvement in renal, cerebral, and myocardial end organ damage. Regarding reduction in tumor burden (as defined by RECIST scores), the applicant indicated that at the conclusion of the IB12B 12[dash]month follow-up period, 23.4 percent (n=15) of the 68 patients showed a partial response (PR), 68.8 percent (n=44) of the 68 patients achieved stable disease (SD), and 4.7 percent (n=3) of the 68 patients showed progressive disease. None of the patients showed completed response (CR). The applicant maintained that achieving SD is important for patients who have been treated for malignant pheochromocytoma and paraganglioma tumors because this is a progressive disease without a cure at this time. The applicant also indicated that literature shows that SD is maintained in approximately 47 percent of treatment na[iuml]ve patients who have been diagnosed with metastatic pheochromocytoma and paraganglioma tumors at 1 year due to the indolent nature of the disease.\202\ In the IB12B study, the data results equated to 23 percent of patients achieving partial response and 69 percent of patients achieving stable disease. According to the applicant, this compares favorably to treatment with both conventional radiolabeled MIBG and CVD chemotherapy. --------------------------------------------------------------------------- \202\ Hescot, S., Leboulleux, S., Amar, L., Vezzosi, D., Borget, I., Bournaud-Salinas, C., de la Fouchardiere, C., Lib[eacute], R., Do Cao, C., Niccoli, P., Tabarin, A., ``One-year progression-free survival of therapy-naive patients with malignant pheochromocytoma and paraganglioma,'' The J Clin Endocrinol Metab, 2013, vol. 98(10), pp. 4006-4012. --------------------------------------------------------------------------- The applicant stated that the data results demonstrated effective tumor response rates. The applicant reported that the IB12 and IB12B study data showed overall tumor response rates of 80 percent and 92 percent, respectively. In addition, the applicant contended that the study data across both trials show that patients demonstrated improved blood pressure control, reductions in tumor biomarker secretion, and strong evidence in overall survival rates. The overall median time to death from the first dose was 36.7 months in all treated patients. Patients who received 2 therapeutic doses had an overall median survival rate of 48.7 months, compared to 17.5 months for patients who only received a single dose. The applicant indicated that comparison of IB12B study data regarding overall survival rate with historical data is difficult due to the differences in the retrospective and heterogeneous nature of the published clinical studies and patient characteristics, especially when overall survival is calculated from the time of initial diagnosis. We agree with the applicant regarding the difficulties in comparing the results of the published clinical studies, and also believe that the differences in these studies may make it more difficult to evaluate whether the use of the AZEDRA[reg] technology improves overall survival rates relative to other therapies. We acknowledge the challenges with constructing robust clinical studies due to the extremely rare occurrence of patients who have been diagnosed with pheochromocytoma and paraganglioma tumors. However, we are concerned that because the data for both of these studies is mainly based upon retrospective studies and small, heterogeneous patient cohorts, it is difficult to draw strong conclusions regarding efficacy. Only very limited nonpublished data from two, single[dash]arm, noncomparative studies are available to evaluate the safety and effectiveness of Ultratrace[reg] I-131 MIBG, leading to a comparison of outcomes with historical controls. We are inviting public comments on whether the use of the AZEDRA[reg] technology meets the substantial clinical improvement criterion, including with respect to the specific concerns we have raised. Below we summarize and respond to two written public comments we received during the open comment period in response to the published notice in the Federal Register announcing the New Technology Town Hall Meeting regarding the substantial clinical improvement criterion aspect of AZEDRA[reg]'s application for new technology add-on payments for FY 2019 below. Comment: One commenter supported the approval of the application of AZEDRA[reg] for new technology add-on payments for FY 2019 and its substantial clinical improvement in the treatment options available for Medicare beneficiaries. The commenter believed that AZEDRA[reg] demonstrates a substantial clinical improvement over other available therapies (as described previously) and meets a current unmet need for the treatment of patients who have been diagnosed with pheochromocytoma and paraganglioma. The commenter stated that AZEDRA[reg]'s structure is unlike the structure of any existing treatment option, given the use of the Ultratrace[reg] technology which has demonstrated resulting occurrences of reduced serious cardiovascular side effects and increased efficacy due to its unique ``carrier-free'' structure. Another commenter also supported the approval of new technology add-on payments for AZEDRA[reg] and its substantial clinical improvement in the treatment options available for Medicare beneficiaries. This commenter stated that AZEDRA[reg] is much simpler to administer than low[dash]specific activity I-131 MIBG, offers quicker and simpler infusions, and provides a rational, personalized, and effective therapy with promising and highly significant clinical benefits for patients who have been diagnosed with advanced pheochromocytoma and paraganglioma. Response: We appreciate the commenters' input. We will take these comments into consideration when deciding whether to approve new technology add-on payments for AZEDRA[reg] for FY 2019. m. The AquaBeam System (Aquablation) PROCEPT BioRobotics Corporation submitted an application for new technology add-on payments for the [[Page 20345]] AquaBeam System (Aquablation) for FY 2019. According to the applicant, the AquaBeam System is indicated for the use in the treatment of patients experiencing lower urinary tract symptoms caused by a diagnosis of benign prostatic hyperplasia (BPH). The AquaBeam System consists of three main components: A console with two high-pressure pumps, a conformal surgical planning unit with trans-rectal ultrasound imaging, and a single-use robotic hand-piece. The applicant reported that The AquaBeam System provides the operating surgeon a multi-dimensional view, using both ultrasound image guidance and endoscopic visualization, to clearly identify the prostatic adenoma and plan the surgical resection area. Based on the planning inputs from the surgeon, the system's robot delivers Aquablation, an autonomous waterjet ablation therapy that enables targeted, controlled, heat-free and immediate removal of prostate tissue used for the purpose of treating lower urinary tract symptoms caused by a diagnosis of BPH. The combination of surgical mapping and robotically-controlled resection of the prostate is designed to offer predictable and reproducible outcomes, independent of prostate size, prostate shape or surgeon experience. In its application, the applicant indicated that benign prostatic hyperplasia (BPH) is one of the most commonly diagnosed conditions of the male genitourinary tract \203\ and is defined as the ``. . . enlargement of the prostate due to benign growth of glandular tissue . . .'' in older men.\204\ BPH is estimated to affect 30 percent of males that are older than 50 years old.205 206 BPH may compress the urethral canal possibly obstructing the urethra, which may cause symptoms that effect the lower urinary tract, such as difficulty urinating (dysuria), hesitancy, and frequent urination.207 208 209 --------------------------------------------------------------------------- \203\ Bachmann, A., Tubaro, A., Barber, N., d'Ancona, F., Muir, G., Witzsch, U., Thomas, J., ``180-W XPS GreenLight Laser Vaporisation Versus Transurethral Resection of the Prostate for the Treatment of Benign Prostatic Obstruction: 6-month safety and efficacy results of a european multicentre randomised trial--the GOLIATH study,'' European Association of Urology, 2014, vol. 65, pp. 931-942. \204\ Gilling, P., Anderson, P., and Tan, A., ``Aquablation of the Prostate for Symptomatic Benign Prostatic Hyperplasia: 1-Year results,'' The Journal of Urology, 2017, vol. 197, pp. 156-1572. \205\ Roehrborn, C., Gange, S., Shore, N., Giddens, J., Bolton, D., Cowan, B., Rukstalist, D., ``The Prostatic Urethral Lift for the Treatmentof Lower Urinary Tract Symptoms Associated with Prostate Enlargement Due to Benign Prostatic Hyperplasia: The LIFT study,'' The Journal of Urology, 2013, vol. 190, pp. 2161-2167. \206\ Sonksen, J., Barber, N., Speakman, M., Berges, R., Wetterauer, U., Greene, D., Gratzke, C., ``Prospective, Randomized, Multinational Study of Prostatic Urethral Lift Versus Transurethral Resection of the Prostate: 12-month results from the BPH6 study,'' European Association of Urology, 2015, vol. 68, pp. 643-652. \207\ Roehrborn, C., Gange, S., Shore, N., Giddens, J., Bolton, D., Cowan, B., Rukstalist, D., ``The Prostatic Urethral Lift for the Treatmentof Lower Urinary Tract Symptoms Associated with Prostate Enlargement Due to Benign Prostatic Hyperplasia: The LIFT study,'' The Journal of Urology, 2013, vol. 190, pp. 2161-2167. \208\ Sonksen, J., Barber, N., Speakman, M., Berges, R., Wetterauer, U., Greene, D., Gratzke, C., ``Prospective, Randomized, Multinational Study of Prostatic Urethral Lift Versus Transurethral Resection of the Prostate: 12-month results from the BPH6 study,'' European Association of Urology, 2015, vol. 68, pp. 643-652. \209\ Roehrborn, C., Gilling, P., Cher, D., andTemplin, B., ``The WATER Study (Waterjet Ablation Therapy for Ednoscopic Resection of prostate tissue),'' Redwood City: PROCEPT BioRobotics Corporation, 2017. --------------------------------------------------------------------------- The initial treatment for a patient who has been diagnosed with BPH is watchful waiting and medications.\210\ Symptom severity, as measured by one test, the International Prostate Symptom Score (IPSS), is the primary measure by which surgery necessity is decided.\211\ Many techniques exist for the surgical treatment of patients who have been diagnosed with BPH, and these surgical treatments differ primarily by the method of resection: Electrocautery in the case of Transurethral Resection of the Prostate (TURP), laser enucleation, plasma vaporization, photoselective vaporization, radiofrequency ablation, microwave thermotherapy, and transurethral incision \212\ are among the primary methods. TURP is the primary reference treatment for patients who have been diagnosed with BPH.\213\ \214\ \215\ \216\ \217\ --------------------------------------------------------------------------- \210\ Ibid. \211\ Cunningham, G. R., Kadmon, D., 2017, ``Clinical manifestations and diagnostic evaluation of benign prostatic hyperplasia,'' 2017. Available at: https://www.uptodate.com/ contents/clinical-manifestations-and-diagnostic-evaluation-of- benign-prostatic- hyperplasia?search=cunningham%20kadmon%202017%20benign%20prostatic&so urce=search_result&selectedTitle=2~150&usage_type=default&display_ran k=2. \212\ Ibid. \213\ Bachmann, A., Tubaro, A., Barber, N., d'Ancona, F., Muir, G., Witzsch, U., Thomas, J., ``180-W XPS GreenLight Laser Vaporisation Versus Transurethral Resection of the Prostate for the Treatment of Benign Prostatic Obstruction: 6-month safety and efficacy results of a european multicentre randomised trial--the GOLIATH study,'' European Association of Urology, 2014, vol. 65, pp. 931-942. \214\ Cunningham, G. R., Kadmon, D., ``Clinical manifestations and diagnostic evaluation of benign prostatic hyperplasia,'' 2017. Available at: https://www.uptodate.com/contents/clinical- manifestations-and-diagnostic-evaluation-of-benign-prostatic- hyperplasia?search=cunningham%20kadmon%202017%20benign%20prostatic&so urce=search_result&selectedTitle=2~150&usage_type=default&display_ran k=2. \215\ Mamoulakis, C., Efthimiou, I., Kazoulis, S., Christoulakis, I., and Sofras, F., ``The Modified Clavien Classification System: A standardized platform for reporting complications in transurethral resection of the prostate,'' World Journal of Urology, 2011, vol. 29, pp. 205-210. \216\ Roehrborn, C., Gange, S., Shore, N., Giddens, J., Bolton, D., Cowan, B., Rukstalist, D., ``The Prostatic Urethral Lift for the Treatmentof Lower Urinary Tract Symptoms Associated with Prostate Enlargement Due to Benign Prostatic Hyperplasia: The LIFT study,'' The Journal of Urology, 2013, vol. 190, pp. 2161-2167. \217\ Sonksen, J., Barber, N., Speakman, M., Berges, R., Wetterauer, U., Greene, D., Gratzke, C., ``Prospective, Randomized, Multinational Study of Prostatic Urethral Lift Versus Transurethral Resection of the Prostate: 12-month results from the BPH6 study,'' European Association of Urology, 2015, vol. 68, pp. 643-652. --------------------------------------------------------------------------- According to the applicant, while the TURP procedure achieves alleviation of the symptoms that affect the lower urinary tract associated with a diagnosis of BPH, morbidity rates caused by adverse events are high following the procedure. The TURP procedure has a well- documented history of associated adverse effects, such as hematuria, clot retention, bladder wall injury, hyponatremia, bladder neck contracture, urinary incontinence, and retrograde ejaculation.\218\ \219\ \220\ \221\ \222\ The likelihood of both adverse events and long[dash]term morbidity related to the TURP procedure increase with the size of the prostate.\223\ --------------------------------------------------------------------------- \218\ Roehrborn, C., Gilling, P., Cher, D., and Templin, B., ``The WATER Study (Waterjet Ablation Therapy for Ednoscopic Resection of prostate tissue),'' Redwood City: PROCEPT BioRobotics Corporation, 2017. \219\ Cunningham, G. R., & Kadmon, D., 2017, ``Clinical manifestations and diagnostic evaluation of benign prostatic hyperplasia,'' 2017. Available at: https://www.uptodate.com/ contents/clinical-manifestations-and-diagnostic-evaluation-of- benign-prostatic- hyperplasia?search=cunningham%20kadmon%202017%20benign%20prostatic&so urce=search_result&selectedTitle=2~150&usage_type=default&display_ran k=2. \220\ Mamoulakis, C., Efthimiou, I., Kazoulis, S., Christoulakis, I., Sofras, F., ``The Modified Clavien Classification System: A standardized platform for reporting complications in transurethral resection of the prostate,'' World Journal of Urology, 2011, vol. 29, pp. 205-210. \221\ Roehrborn, C., Gange, S., Shore, N., Giddens, J., Bolton, D., Cowan, B., Rukstalist, D., ``The Prostatic Urethral Lift for the Treatmentof Lower Urinary Tract Symptoms Associated with Prostate Enlargement Due to Benign Prostatic Hyperplasia: The LIFT study,'' The Journal of Urology, 2013, vol. 190, pp. 2161-2167. \222\ Sonksen, J., Barber, N., Speakman, M., Berges, R., Wetterauer, U., Greene, D., Gratzke, C., ``Prospective, Randomized, Multinational Study of Prostatic Urethral Lift Versus Transurethral Resection of the prostate: 12-month results from the BPH6 study,'' European Association of Urology, 2015, vol. 68, pp. 643-652. \223\ Bachmann, A., Tubaro, A., Barber, N., d'Ancona, F., Muir, G., Witzsch, U., Thomas, J., ``180-W XPS GreenLight Laser Vaporisation Versus Transurethral Resection of the Prostate for the Treatment of Benign Prostatic Obstruction: 6-month safety and efficacy results of a european multicentre randomised trial--the GOLIATH study,'' European Association of Urology, 2014, vol. 65, pp. 931-942. --------------------------------------------------------------------------- The applicant asserted that the AquaBeam System provides superior safety outcomes as compared to the [[Page 20346]] TURP procedure, while providing non-inferior efficacy in treating the symptoms that affect the lower urinary tract associated with a diagnosis of BPH. The applicant further stated that the AquaBeam System yields consistent and predictable procedure and resection times regardless of the size and shape of the prostate and the surgeon's experience. Lastly, according to the applicant, the AquaBeam System provides increased efficacy and safety for larger prostates as compared to the TURP procedure. With respect to the newness criterion, FDA granted the applicant's De Novo request on December 21, 2017, for use in the resection and removal of prostate tissue in males suffering from lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia. The applicant stated that the AquaBeam System was made available on the U.S. market immediately after the FDA granted the De Novo request. Therefore, if approved for new technology add-on payments, the newness period is considered to begin on December 21, 2017. There are currently no existing ICD-10-PCS procedure codes to specifically identify procedures involving the Aquablation method or technique for the treatment of symptoms that affect the lower urinary tract in patients who have been diagnosed with BPH. The applicant stated that it applied for approval for a distinct ICD[dash]10-PCS procedure code to uniquely identify procedures involving the AquaBeam System at the ICD-10 Maintenance and Coordination Committee March 2018 meeting. As discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for the purposes of new technology add-on payments. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant stated that the AquaBeam System is the first technology to deliver treatment to patients who have been diagnosed with BPH for the symptoms that effect the lower urinary tract caused by BPH via Aquablation therapy. The AquaBeam System utilizes intra[dash]operative image guidance for surgical planning and then Aquablation therapy to robotically resect tissue utilizing a high-velocity waterjet. According to the applicant, all other BPH treatment procedures only utilize cystoscopic visualization, whereas the AquaBeam System utilizes Aquablation therapy, a combination of cystoscopic visualization and intra[dash]operative image guidance. According to the applicant, the AquaBeam System's use of Aquablation therapy qualifies it as the only technology to utilize a high-velocity room temperature waterjet for tissue resection, while most other BPH surgical procedures utilize thermal energy to resect prostatic tissue, or require the implantation of clips to pull back prostatic tissue blocking the urethra. Lastly, according to the applicant, all other surgical modalities are executed by the operating surgeon, while the AquaBeam System allows planning by the surgeon and utilization of Aquablation therapy ensures accurate and efficient tissue resection is autonomously executed by the robot. With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant stated that potential cases representing potential patients who may be eligible for treatment involving the AquaBeam System's Aquablation therapy technique will ultimately map to the same MS-DRGs as cases for existing BPH treatment options. With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant stated that the AquaBeam System's Aquablation therapy will ultimately treat the same patient population as other available BPH treatment options. The applicant asserted that the AquaBeam System's Aquablation therapy has been shown to be more effective and safer than the TURP procedure for patients with larger prostate sizes. The applicant stated that prostates 80 ml or greater in size are not appropriate for the TURP procedure and, therefore, more intensive procedures such as surgery are required. Furthermore, the applicant claimed that the AquaBeam System's Aquablation therapy is particularly appropriate for smaller prostate sizes, ~30 ml, due to increased accuracy provided by both the computer assistance and ultrasound visualization. We have the following concerns regarding whether the AquaBeam System meets the newness criterion. Currently, there are many treatment options that utilize varying forms of ablation, such as mono and bipolar TURP procedures, laser, microwave, and radiofrequency, to treat the symptoms associated with a diagnosis of BPH. We are concerned that, while this device utilizes water to perform any tissue removal, its mechanism of action may not be different from that of other forms of treatment for patients who have been diagnosed with BPH. Further, the use of water to perform tissue removal in the treatment of associated symptoms in patients who have been diagnosed with BPH has existed in other areas of surgical treatment prior to the introduction of this product (for example, endometrial ablation and wound debridement). In addition, the standard operative treatment, such as with the TURP procedure, for patients who have been diagnosed with BPH is to widen the urethra compressed by an enlarged prostate in an effort to alleviate the negative effects of an enlarged prostate. Like other existing methods, the AquaBeam System's Aquablation therapy also ablates tissue to enlarge compression of the urethra. Additionally, while the robotic arm and computer programing may result in different outcomes for patients, we are uncertain that the use of the robotic hand and computer programming result in a new mechanism of action. We are inviting public comments on this issue. We also are inviting public comments on whether the AquaBeam System's Aquablation therapy is substantially similar to existing technologies and whether it meets the newness criterion. With regard to the cost criterion, the applicant conducted the following analysis to demonstrate that the technology meets the cost criterion. Given that the AquaBeam System's Aquablation therapy procedure does not currently have a unique ICD-10-PCS procedure code, the applicant searched the FY 2016 MedPAR data file for cases with the following current ICD-10-PCS codes describing other BPH minimally invasive procedures to identify potential cases representing potential patients who may be eligible for treatment involving the AquaBeam System's Aquablation therapy: 0V507ZZ (Destruction of prostate, via natural or artificial opening), 0V508ZZ (Destruction of prostate, via natural or artificial opening endoscopic), 0VT07ZZ (Resection of prostate, via natural or artificial opening), and 0VT08ZZ (Resection of prostate, via natural or artificial opening endoscopic). The applicant identified a total of 133 MS-DRGs using these ICD-10-PCS codes. In order to calculate the standardized charges per case, the applicant conducted two analyses, based on 100 percent and 75 percent of identified claims in the FY 2016 MedPAR data file. The applicant based its analysis on 100 percent of claims mapping to 133 MS-DRGs, and 75 percent of claims mapping to 6 MS-DRGs. The cases identified in the 75 percent analysis mapped to MS-DRGs 665 (Prostatectomy with MCC), 666 [[Page 20347]] (Prostatectomy with CC), 667 (Prostatectomy without CC/MCC), 713 (Transurethral Prostatectomy with CC/MCC), 714 (Transurethral Prostatectomy without CC/MCC), and 988 (Non-Extensive O.R. Procedures Unrelated to Principal Diagnosis with CC). In situations in which there were fewer than 11 cases for individual MS-DRGs in the MedPAR data file, a value of 11 was imputed to ensure confidentiality for patients. When evaluating 100 percent of the cases identified, the applicant included low-volume MS-DRGs that had equal to or less than 11 total cases to represent potential patients who may be eligible for treatment involving the AquaBeam System's Aquablation therapy in order to calculate the average case-weighted unstandardized and standardized charge amounts. The 75 percent analysis removed those MS-DRGs with 11 cases or less representing potential patients who may be eligible for treatment involving the AquaBeam System's Aquablation therapy, resulting in only 6 of the 133 MS-DRGs remaining for analysis. A total of 8,449 cases were included in the 100 percent analysis and 6,285 cases were included in the 75 percent analysis. Using the 100 percent and 75 percent samples, the applicant determined that the average case-weighted unstandardized charge per case was $69,662 and $47,475, respectively. The applicant removed 100 percent of total charges associated with the service category ``Medical/Surgical Supply Charge Amount'' (which includes revenue centers 027x and 062x) because the applicant believed that it was the most conservative choice, as this amount varies by MS-DRG. The applicant stated that the financial impact of utilizing the AquaBeam System's Aquablation therapy on hospital resources other than on ``Medical Supplies'' is unknown at this time. Therefore, a value of $0 was used for charges related to the prior technology. The applicant standardized the charges, and inflated the charges using an inflation factor of 1.09357, from the FY 2018 IPPS/LTCH PPS final rule (82 FR 38524). The applicant then added the charges for the new technology. The applicant computed a final inflated average case[dash]weighted standardized charge per case of $69,588 for the 100 percent sample, and $51,022 for the 75 percent sample. The average case-weighted threshold amount was $59,242 for the 100 percent sample, and $48,893 for the 75 percent sample. Because the final inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount for both analyses, the applicant maintained that the technology meets the cost criterion. We are inviting public comment regarding whether the technology meets the cost criterion. With respect to the substantial clinical improvement criterion, the applicant asserted that the Aquablation therapy provided by the AquaBeam System represents a substantial clinical improvement over existing treatment options for symptoms associated with the lower urinary tract for patients who have been diagnosed with BPH. Specifically, the applicant stated that the AquaBeam System's Aquablation therapy provides superior safety outcomes compared to the TURP procedure, while providing noninferior efficacy in treating the symptoms that effect the lower urinary tract associated with a diagnosis of BPH; the AquaBeam System's delivery of Aquablation therapy yields consistent and predictable procedure and resection times regardless of the size and shape of the prostate or the surgeon's experience; and the AquaBeam System's Aquablation therapy demonstrated superior efficacy and safety for larger prostates (that is, prostates sized 50 to 80 mL) as compared to the TURP procedure. The applicant provided the results of one Phase I and one Phase II trial published articles, the WATER Study Clinical Study Report, and a meta-analysis of current treatments with its application as evidence for the substantial clinical improvement criterion. According to the applicant, the first study \224\ enrolled 15 nonrandomized patients with a prostate volume between 25 to 80 ml in a Phase I trial testing the safety and feasibility of the AquaBeam System's Aquablation therapy; all patients received the AquaBeam System's Aquablation therapy. This study, a prospective, nonrandomized study, enrolled men who were 50 to 80 years old who were affected by moderate to severe lower urinary tract symptoms, who did not respond to standard medical therapy.\225\ Follow-up assessments were conducted at 1, 3, and 6 months and included information on adverse events, serum PSA level, uroflowmetry, PVR, quality of life, and the International Prostate Symptom Score (IPSS) and International Index of Erectile Function (IIEF) scores. The primary outcome was the assessment of safety as measured by adverse event reporting; secondary endpoints focused on alleviation of BPH symptoms.\226\ --------------------------------------------------------------------------- \224\ Gilling P., Reuther, R., Kahokehr, A., Fraundorfer, M., ``Aquablation--Image-guided Robot-assisted Waterjet Ablation of the Prostate: Initial clinical experience,'' British Journal of Urology International, 2016, vol. 117, pp. 923-929. \225\ Ibid. \226\ Ibid. --------------------------------------------------------------------------- The applicant indicated that 8 of the 15 patients who were enrolled in the trial had at least 1 procedure[dash]related adverse event (for example, catheterization, hematuria, dysuria, pelvic pain, bladder spasms), which the authors reported to be consistent with outcomes from minimally[dash]invasive transurethral procedures.\227\ There were no occurrences of incontinence, retrograde ejaculation, or erectile dysfunction at 30 days.\228\ Statistically significant improvement on all outcomes occurred over the 6[dash]month period. Average IPSS scores showed a negative slope with scores of 23.1, 11.8, 9.1, and 8.6 for baseline, 1 month, 3 months, and 6 months (p<0.01 in all cases). Average quality of life scores, which range from 1 to 5, where 1 is better and 5 is worse, decreased from 5.0 at baseline to 2.6 at 1 month, 2.2 at 3 months, and 2.5 at 6 months. Average maximum urinary flow rate increased steadily across time points from 8.6 ml/s at baseline to 18.6 ml/s at 6 months. Lastly, average post[dash]void residual urine volume decreased from 91 ml at baseline to 38 ml at 1 month, 60 ml at 3 months, and 30 ml at 6 months.\229\ --------------------------------------------------------------------------- \227\ Gilling, P., Anderson, P., and Tan, A., ``Aquablation of the Prostate for Symptomatic Benign Prostatic Hyperplasia: 1-Year results,'' The Journal of Urology, 2017, vol. 197, pp. 156-1572. \228\ Ibid. \229\ Ibid. --------------------------------------------------------------------------- The second study \230\ presents results from a Phase II trial involving 21 men with a prostate volume between 30 to 102 ml who received treatment involving the AquaBeam System's Aquablation therapy with follow-up at 1 year. This prospective study enrolled men between the ages of 50 and 80 years old who were effected by moderate to severe symptomatic BPH.\231\ The primary end point was the rate of adverse events; the secondary end points measured alleviation of symptoms associated with a diagnosis of BPH. Data was collected at baseline and at 1 month, 3 months, 6 months, and 12 months; 1 patient withdrew at 3 months. The authors asserted that the occurrence of post[dash]operative adverse events (urinary retention, dysuria, hematuria, urinary tract infection, bladder spasm, meatal stenosis) were consistent with other minimally[dash]invasive transurethral [[Page 20348]] procedures; \232\ 6 patients had at least 1 adverse event, including temporary urinary symptoms and medically[dash]treated urinary tract infections.\233\ The mean IPSS scores decreased from the baseline of 22.8 with 11.5 at 1 month, 7 at 3 months, 7.1 at 6 months, and 6.8 at 12 months and were statistically significantly different. Similarly, quality of life decreased from a mean score of 5 at baseline to 1.7 at 12 months, all time points were statistically significantly different from the baseline. --------------------------------------------------------------------------- \230\ Ibid. \231\ Ibid. \232\ Gilling, P., Anderson, P., and Tan, A., ``Aquablation of the Prostate for Symptomatic Benign Prostatic Hyperplasia: 1-Year results,'' The Journal of Urology, 2017, vol. 197, pp. 156-1572. \233\ Ibid. --------------------------------------------------------------------------- The third document provided by the applicant is the Clinical Study Report: WATER Study,\234\ a prospective multi[dash]center, randomized, blinded study. The WATER Study compared the AquaBeam System's Aquablation therapy to the TURP procedure for the treatment of lower urinary tract symptoms associated with a diagnosis of BPH. One hundred eighty one (181) patients with prostate volumes between 30 and 80 ml were randomized, 65 patients to the TURP procedure group and the other 116 to the AquaBeam System's Aquablation therapy group, with 176 (97 percent of patients) continuing at 3 and 6 month follow[dash]up, where 2 missing patients received treatment involving the AquaBeam System's Aquablation therapy and 3 received treatment involving the TURP procedure; randomization efficacy was assessed and confirmed with findings of no statistical differences between cases and controls among all characteristics measures, specifically prostate volume. Two primary endpoints were identified: (1) The safety endpoint was the proportion of patients with adverse events rates as ``probably or definitely related to the study procedure'' also classified as the Clavien-Dindo (CD) Grade 2 or higher or any Grade 1 resulting in persistent disability; and (2) the primary efficacy endpoint was a change in the IPSS score from baseline to 6 months. Three secondary endpoints were based on perioperative data and were: Length of hospital stay, length of operative time, and length of resection time. The occurrences of three secondary endpoints during the 6[dash]month follow[dash]up were: (1) Reoperation or reintervention within 6 months; (2) evaluation of proportion of sexually active patients; and (3) evaluation of proportion of patients with major adverse urologic events. --------------------------------------------------------------------------- \234\ Roehrborn, C., Gilling, P., Cher, D., Templin, B., ``The WATER Study (Waterjet Ablation Therapy for Ednoscopic Resection of prostate tissue),'' Redwood City: PROCEPT BioRobotics Corporation, 2017. --------------------------------------------------------------------------- At 3 months, 25 percent of the patients in the AquaBeam System's Aquablation therapy group and 40 percent of the patients in the TURP group had an adverse event. The difference of -15 percent has a 95 percent confidence interval of -29.2 and -1.0 percent. At 6 months, 25.9 percent of the patients in the AquaBeam System's Aquablation therapy group and 43.1 percent of the patients in the TURP group had an adverse event. The difference of -17 percent has a 95 percent confidence interval of -31.5 to -3.0 percent. An analysis of safety events classified with the CD system as possibly, probably or definitely related to the procedure resulted in a CD Grade 1 persistent event difference between -17.7 percent (favoring the AquaBeam System's Aquablation therapy) with 95 percent confidence interval of -30.1 to - 7.2 percent and a CD Grade 2 or higher event difference of -3.3 percent with 95 percent confidence interval of -16.5 to 8.7 percent. The applicant indicated that the primary efficacy endpoint was assessed by a change in IPSS score over time. While change in score and change in percentages are generally higher for the AquaBeam System's Aquablation therapy, no statistically significant differences occurred between the AquaBeam System's Aquablation therapy and the TURP procedure over time. For example, the AquaBeam System's Aquablation therapy group experienced changes in IPSS mean score by visit of 0, - 3.8, -12.5, -16.0, and -16.9 at baseline, 1 week, 1 month, 3 months, and 6 months, respectively, while the TURP group had mean scores of 0, -3.6, -11.1, -14.6, and -15.1 at baseline, 1 week, 1 month, 3 months, and 6 months, respectively. Lastly, the applicant indicated that secondary endpoints were assessed. A mean length of stay for both the AquaBeam System's Aquablation therapy and the TURP procedure groups of 1.4 was achieved. While the mean operative times were similar, the hand piece in and out time was statistically significantly shorter for the AquaBeam System's Aquablation therapy group at 23.3 minutes as compared to 34.2 in the TURP procedure group. The mean resection time was 23 minutes shorter for the AquaBeam System's Aquablation therapy group at 3.9 minutes. No statistically significant difference was seen between the AquaBeam System's Aquablation therapy and the TURP procedure groups on the outcomes of re-intervention and worsening sexual function; 32.9 percent of the AquaBeam System's Aquablation therapy group had worsening sexual function as compared to 52.8 percent of the TURP procedure group. While statistically significant differences occurred across groups for change in ejaculatory function, the difference no longer remained at 6 months. While a greater proportion of the TURP procedure group patients experienced a negative change in erectile function as compared to the AquaBeam System's Aquablation therapy group patients (10 percent versus 6.2 percent at 6 months), no statistically significant differences occurred. No statistically significant differences between groups occurred for major adverse urologic events. The applicant provided a meta-analysis of landmark studies regarding typical treatments for patients who have been diagnosed with BPH in order to provide supporting evidence for the assertion of superior outcomes achieved with the use of the AquaBeam System's Aquablation therapy. The applicant cited four ``landmark clinical trials,'' which report on the AquaBeam System's Aquablation therapy,\235\ the TURP procedure, Green light laser versus the TURP procedure,\236\ and Urolift.\237\ Comparisons are made between performance outcomes on three separate treatments for patients who have been diagnosed with BPH: The AquaBeam System's Aquablation therapy, the TURP procedure, and Urolift. The applicant stated that all three clinical trials included men with average IPSS baseline scores of 21 to 23 points. The applicant stated that, while total procedure times are similar across all three treatment options, the AquaBeam System's Aquablation therapy has dramatically less time and variability associated with the tissue treatment. The applicant further stated that the differences between treatment options were not assessed for statistical significance. The applicant indicated [[Page 20349]] that the AquaBeam System's Aquablation therapy, with an approximate score of 17, had the largest improvement in IPSS scores at 6 months as compared to 16 for the TURP procedure and 11 for Urolift. Compared to 46 percent in the TURP group, the applicant found that the AquaBeam System's Aquablation therapy and Urolift had much lower percentages, 4 percent and 0 percent, respectively, of an ejaculation[dash]related consequence in patients. Lastly, the applicant stated that safety events, as measured by the percentage of CD Grade 2 or higher events, were lower in the AquaBeam System's Aquablation therapy (19 percent) and Urolift (14 percent) than in TURP (29 percent). --------------------------------------------------------------------------- \235\ Roehrborn, C., Gilling, P., Cher, D., Templin, B., ``The WATER Study (Waterjet Ablation Therapy for Ednoscopic Resection of prostate tissue),'' Redwood City: PROCEPT BioRobotics Corporation, 2017. \236\ Bachmann, A., Tubaro, A., Barber, N., d'Ancona, F., Muir, G., Witzsch, U., Thomas, J., ``180-W XPS GreenLight Laser Vaporisation Versus Transurethral Resection of the Prostate for the Treatment of Benign Prostatic Obstruction: 6-month safety and efficacy results of a european multicentre randomised trial--the GOLIATH study,'' European Association of Urology, 2014, vol. 65, pp. 931-942. \237\ Sonksen, J., Barber, N., Speakman, M., Berges, R., Wetterauer, U., Greene, D., Gratzke, C., ``Prospective, Randomized, Multinational Study of Prostatic Urethral Lift Versus Transurethral Resection of the Prostate: 12-month results from the BPH6 study,'' European Association of Urology, 2015, vol. 68, pp. 643-652. --------------------------------------------------------------------------- We have several concerns related to the substantial clinical improvement criterion. The applicant performed a meta-analysis comparing results from three separate studies, which tested the effects of three separate treatment options. According to the applicant, the results provided consistently show the AquaBeam System's Aquablation therapy and Urolift as being superior to the standard treatment of the TURP procedure. We have concerns with the interpretation of these results that the applicant provided. The comparison of multiple clinical studies is a difficult issue. It is not clear if the applicant took into account the varying study designs, sample techniques, and other study specific issues, such as physician skill and patient health status. For instance, the applicant stated that a comparison of Urolift and the AquaBeam System's Aquablation therapy may not be appropriate due to the differing indications of the procedures; the applicant indicated that Urolift is primarily used for the treatment of patients who have been diagnosed with BPH who have smaller prostate volumes, whereas the AquaBeam System's Aquablation therapy procedure may be used in all prostate sizes. Similarly, the applicant stated that the TURP procedure is generally not utilized in patients with prostates larger than 80ml, whereas such patients may be eligible for treatment involving the AquaBeam System's Aquablation therapy. We note that the applicant submitted a meta-analysis in an effort to compare currently available therapies to the AquaBeam System's Aquablation therapy. The possibility of the heterogeneity of samples and methods across studies leads to the possible introduction of bias, which results in the difficulty or inability to distinguish between bias and actual outcomes. We are inviting public comments on the applicability of this meta-analysis. Additionally, the differences between the AquaBeam System's Aquablation therapy and standard treatment options may not be as impactful and confined to safety aspects. It appears that the data on efficacy supported the equivalence of the AquaBeam System's Aquablation therapy and the TURP procedure based upon noninferiority analysis. We agree that the safety data were reported as showing superiority of the AquaBeam System's Aquablation therapy over the TURP procedure, although the data were difficult to track because adverse consequences were combined into categories; the AquaBeam System's Aquablation therapy was reportedly better in terms of ejaculatory function. It was noted in the application that, while the AquaBeam System's Aquablation therapy was statistically superior to the TURP procedure in the CD Grade 1 + adverse events, it was not statistically different in the CD Grade 2 or greater category. The applicant stated that regardless of the method, the urethra is typically used as the means for performing the BPH treatment procedure, which necessarily increases the likelihood of CD Grade 2 adverse events in all transurethral procedures. In addition, the applicant noted that the treatment option may depend on the size of the prostate. The applicant stated that the AquaBeam System's Aquablation therapy is appropriate for small and large prostate sizes as a BPH treatment procedure. The AquaBeam System's Aquablation therapy has been shown to have limited positive outcomes as compared to the TURP procedure for prostates sized greater than 50 grams to 80 grams in each of the studies provided by the applicant. However, the applicant noted that the TURP procedure would not be used for prostates larger than 80 grams in size. Therefore, we believe that another proper comparator for the AquaBeam System's Aquablation therapy may be laser or radical/open surgical procedures given their respective indication for small and large prostate sizes. Lastly, the applicant compared AquaBeam System's Aquablation therapy and the standard of care TURP procedure to support a finding of improved safety. There are other treatment modalities available that may have a similar safety profile as the AquaBeam System's Aquablation therapy and we are interested in information that compares the AquaBeam System's Aquablation therapy to other treatment modalities. We are inviting public comments on whether the AquaBeam System's Aquablation therapy meets the substantial clinical improvement criterion. We did not receive any public comments in response to the published notice in the Federal Register regarding the AquaBeam System's Aquablation therapy or at the New Technology Town Hall Meeting. n. AndexXaTM (Andexanet alfa) Portola Pharmaceuticals, Inc. (Portola) submitted an application for new technology add-on payments for FY 2019 for the use of AndexXaTM (Andexanet alfa). (We note that the applicant previously submitted applications for new technology add-on payments for FY 2017 and FY 2018 for Andexanet alfa, which were withdrawn.) AndexXaTM is an antidote used to treat patients who are receiving treatment with an oral Factor Xa inhibitor who suffer a major bleeding episode and require urgent reversal of direct and indirect Factor Xa anticoagulation. Patients at high risk for thrombosis, including those who have been diagnosed with atrial fibrillation (AF) and venous thrombosis (VTE), typically receive treatment using long- term oral anticoagulation agents. Factor Xa inhibitors are included in a new class of anticoagulants. Factor Xa inhibitors are oral anticoagulants used to prevent stroke and systemic embolism in patients who have been diagnosed with AF. These oral anticoagulants are also used to treat patients who have been diagnosed with deep-vein thrombosis (DVT) and its complications, pulmonary embolism (PE), and patients who have undergone knee, hip, or abdominal surgery. Rivarobaxan (Xarelto[reg]), apixaban (Eliqis[reg]), betrixaban (Bevyxxa[reg]), and edoxaban (Savaysa[reg]) also are included in the new class of Factor Xa inhibitors, and are often referred to as ``novel oral anticoagulants'' (NOACs) or ``non-vitamin K antagonist oral anticoagulants.'' Although these anticoagulants have been commercially available since 2011, there is no FDA-approved therapy used for the urgent reversal of any Factor Xa inhibitor as a result of serious bleeding episodes. AndexXaTM has not received FDA approval as of the time of the development of this proposed rule. The applicant indicated that it anticipates receipt of FDA approval for the use of the technology during the first quarter of 2018. The applicant received approval for two unique ICD-10-PCS procedure codes that became effective October 1, [[Page 20350]] 2016 (FY 2017). The approved ICD-10-PCS procedure codes are: XW03372 (Introduction of Andexanet alfa, Factor Xa inhibitor reversal agent into peripheral vein, percutaneous approach, new technology group 2); and XW04372 (Introduction of Andexanet alfa, Factor Xa inhibitor reversal agent into central vein, percutaneous approach, new technology group 2). With regard to the ``newness'' criterion, as discussed earlier, if a technology meets all three of the substantial similarity criteria, it would be considered substantially similar to an existing technology and would not be considered ``new'' for purposes of new technology add-on payments. The applicant asserted that, if approved, AndexXaTM would be the first and the only antidote available used to treat patients who are receiving treatment with an oral Factor Xa inhibitor who suffer a major bleeding episode and require urgent reversal of direct and indirect Factor Xa anticoagulation. Therefore, the applicant asserted that the technology is not substantially similar to any other currently approved and available treatment options for Medicare beneficiaries. Below we discuss the applicant's assertion in the context of the three substantial similarity criteria. With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, according to the applicant, AndexXaTM, if approved, would be the first anticoagulant reversal agent that binds to direct Factor Xa inhibitors with high affinity, thereby sequestering the inhibitors and consequently rapidly reducing free plasma concentration of Factor Xa inhibitors, and neutralizing the inhibitors' anticoagulant effect, which allows for the restoration of normal hemostasis. AndexXaTM also binds to and sequesters antithrombin III molecules that are complexed with indirect inhibitor molecules, which disrupts the capacity of the antithrombin complex to bind to native Factor Xa inhibitors. According to the applicant, AndexXaTM represents a significant therapeutic advance because it provides rapid reversal of anticoagulation therapy in the event of a serious bleeding episode. Other anticoagulant reversal agents, such as KcentraTM and Idarucizumab, do not reverse the effects of Factor Xa inhibitors. With regard to the second criterion, whether a product is assigned to the same or a different MS-DRG, AndexXaTM would be the first FDA[dash]approved anticoagulant reversal agent for Factor Xa inhibitors. Therefore, the MS-DRGs do not contain cases that represent patients who have been treated with any anticoagulant reversal agents for Factor Xa inhibitors. With regard to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant stated that AndexXaTM, if approved, would be the only anticoagulant reversal agent available for treating patients who are receiving direct or indirect Factor Xa therapy who experience serious, uncontrolled bleeding events or who require emergency surgery. Therefore, the applicant believed that AndexXaTM would be the first type of treatment option available to this patient population. As a result, we believe that it appears that AndexXaTM is not substantially similar to any existing technologies. We are inviting public comments on whether AndexXaTM meets the substantial similarity criteria, and whether AndexXaTM meets the newness criterion. With regard to the cost criterion, the applicant researched the FY 2015 MedPAR claims data file for potential cases representing patients who may be eligible for treatment using AndexXaTM. The applicant used three sets of ICD-9-CM codes to identify these cases: (1) Codes identifying potential cases representing patients who were treated with an anticoagulant and, therefore, who are at risk of bleeding; (2) codes identifying potential cases representing patients with a history of conditions that were treated with Factor Xa inhibitors; and (3) codes identifying potential cases representing patients who experienced bleeding episodes as the reason for the current admission. The applicant included with its application the following table displaying a complete list of ICD-9-CM codes that met its selection criteria. ------------------------------------------------------------------------ ICD-9-CM codes applicable Applicable ICD-9-CM code description ------------------------------------------------------------------------ V12.50.................... Personal history of unspecified circulatory disease. V12.51.................... Personal history of venous thrombosis and embolism. V12.52.................... Personal history of thrombophlebitis. V12.54.................... Personal history of transient ischemic attack (TIA), and cerebral infarction without residual deficits. V12.55.................... Personal history of pulmonary embolism. V12.59.................... Personal history of other diseases of circulatory system. V43.64.................... Hip joint replacement. V43.65.................... Knee joint replacement. V58.43.................... Aftercare following surgery for injury and trauma. V58.49.................... Other specified aftercare following surgery. V58.73.................... Aftercare following surgery of the circulatory system, NEC. V58.75.................... Aftercare following surgery of the teeth, oral cavity and digestive system, NEC. V58.61.................... Long-term (current) use of anticoagulants. E934.2.................... Anticoagulants causing adverse effects in therapeutic use. 99.00..................... Perioperative autologous transfusion of whole blood or blood components. 99.01..................... Exchange transfusion. 99.02..................... Transfusion of previously collected autologous blood. 99.03..................... Other transfusion of whole blood. 99.04..................... Transfusion of packed cells. 99.05..................... Transfusion of platelets. 99.06..................... Transfusion of coagulation factors. 99.07..................... Transfusion of other serum. ------------------------------------------------------------------------ The applicant identified a total of 51,605 potential cases that mapped to 683 MS-DRGs, resulting in an average case-weighted charge per case of $72,291. The applicant also provided an analysis that was limited to cases [[Page 20351]] representing 80 percent of all potential cases identified (41,255 cases) that mapped to the top 151 MS-DRGs. Under this analysis, the average case-weighted charge per case was $69,020. The applicant provided a third analysis that was limited to cases representing 25 percent of all potential cases identified (12,873 cases) that mapped to the top 9 MS-DRGs. This third analysis resulted in an average case- weighted charge per case of $46,974. Under each of these analyses, the applicant also provided sensitivity analyses based on variables representing two areas of uncertainty: (1) Whether to remove 40 percent or 60 percent of blood and blood administration charges; and (2) whether to remove pharmacy charges based on the ceiling price of factor eight inhibitor bypass activity (FEIBA), a branded anti-inhibitor coagulant complex, or on the pharmacy indicator 5 (PI5) in the MedPAR data file, which correlates to potential cases utilizing generic coagulation factors. Overall, the applicant conducted twelve sensitivity analyses, and provided the following rationales: The applicant chose to remove 40 percent and 60 percent of blood and blood administration charges because potential patients who may be eligible for treatment using AndexXaTM for Factor Xa reversal may still require blood and blood products to treat other conditions. Therefore, the applicant believed that it would be inappropriate to remove all of the charges associated with blood and blood administration because all of the charges cannot be attributed to Factor Xa reversal. The applicant maintained that the amounts of blood and blood products required for treatment vary according to the severity of the bleeding. Therefore, the applicant stated that the use of AndexXaTM may replace 60 percent of blood and blood product administration charges for potential cases with less severity of bleeding, but only 40 percent of charges for potential cases with more severe bleeding. The applicant maintained that FEIBA is the highest priced clotting factor used for Factor Xa inhibitor reversal, and it is unlikely that pharmacy charges for Factor Xa reversal would exceed the FEIBA ceiling price of $2,642. Therefore, the applicant capped the charges to be removed at $2,642 to exclude charges unrelated to the reversal of Factor Xa anticoagulation. The applicant also considered an alternative scenario in which charges associated with pharmacy indicator 5 (PI5) were removed from the costs of potential cases that included this indicator in the MedPAR data. On average, charges removed from the costs of potential cases utilizing generic coagulation factors were much lower than the total pharmacy charges. The applicant noted that, in all 12 scenarios, the average case- weighted standardized charge per case for potential cases representing patients who may be eligible for treatment using AndexXaTM would exceed the average case-weighted threshold amounts in Table 10 of the FY 2018 IPPS/LTCH PPS final rule by more than $855. The applicant's order of operations used for each analysis is as follows: (1) Removing 60 percent or 40 percent of blood and blood product administration charges and up to 100 percent of pharmacy charges for PI5 or FEIBA from the average case-weighted unstandardized charge per case; and (2) standardizing the charges per cases using the Impact File published with the FY 2015 IPPS/LTCH PPS final rule. After removing the charges for the prior technology and standardizing charges, the applicant applied an inflation factor of 1.154181, which is a combination of 9.8446 percent, the value used in the FY 2017 IPPS final rule as the 2-year outlier threshold inflation factor, and 5.074 percent, the value used in the FY 2018 IPPS final rule as the 1-year outlier threshold inflation factor, to update the charges from FY 2015 to FY 2018. The applicant did not add charges for AndexXaTM as the price had not been set at the time of conducting this analysis. Under each scenario, the applicant stated that the inflated average case-weighted standardized charge per case exceeded the average case- weighted threshold amount (based on the FY 2018 IPPS Table 10 thresholds). Below we provide a table for all 12 scenarios that the applicant indicated demonstrate that the technology meets the cost criterion. ------------------------------------------------------------------------ Inflated average Average case- standardized weighted Scenario case- weighted threshold charge per amount case ------------------------------------------------------------------------ 100 Percent of Cases, FEIBA, 60 Percent $71,305 $60,209 Removal of Blood and Blood Product Administration Costs................... 100 Percent of Cases, PI5, 60 Percent 73,108 60,209 Removal of Blood and Blood Product Administration Costs................... 100 Percent of Cases, FEIBA, 40 Percent 72,172 60,209 Removal of Blood and Blood Product Administration Costs................... 100 Percent of Cases, PI5, 40 Percent 73,740 60,209 Removal of Blood and Blood Product Administration Costs................... 80 Percent of Cases, FEIBA, 60 Percent 68,400 58,817 Removal of Blood and Blood Product Administration Costs................... 80 Percent of Cases, PI5, 60 Percent 70,184 58,817 Removal of Blood and Blood Product Administration Costs................... 80 Percent of Cases, FEIBA, 40 Percent 69,279 58,817 Removal of Blood and Blood Product Administration Costs................... 80 Percent of Cases, PI5, 40 Percent 70,826 58,817 Removal of Blood and Blood Product Administration Costs................... 25 Percent of Cases, FEIBA, 60 Percent 46,127 45,272 Removal of Blood and Blood Product Administration Costs................... 25 Percent of Cases, PI5, 60 Percent 47,730 45,272 Removal of Blood and Blood Product Administration Costs................... 25 Percent of Cases, FEIBA, 40 Percent 47,089 45,272 Removal of Blood and Blood Product Administration Costs................... 25 Percent of Cases, PI5, 40 Percent 48,403 45,272 Removal of Blood and Blood Product Administration Costs................... ------------------------------------------------------------------------ We are inviting public comments on whether AndexXaTM meets the cost criterion. With regard to the substantial clinical improvement criterion, the applicant asserted that AndexXaTM represents a substantial clinical improvement for the treatment of patients who are receiving direct or indirect Factor Xa therapy who experience serious, uncontrolled bleeding events or who require emergency surgery because the technology addresses an unmet medical need for a universal antidote to direct and indirect Factor Xa inhibitors; if approved, would be the only agent shown in prospective clinical trials to rapidly (within 2 to 5 minutes) and sustainably reverse the anticoagulation activity of Factor Xa inhibitors; is potentially nonthrombogenic, as no serious adverse effects of thrombosis were observed in clinical trials; and could supplant currently available [[Page 20352]] treatments for bleeding from anti-Factor Xa therapy, which have not been shown to be effective in the treatment of all patients. With regard to addressing an unmet need for a universal antidote to direct and indirect Factor Xa inhibitors, the applicant asserted that the use of any anticoagulant is associated with an increased risk of bleeding, and bleeding complications can be life-threatening. Bleeding is especially concerning for patients treated with Factor Xa inhibitors because there are currently no antidotes to Factor Xa inhibitors available. As a result, when a patient anticoagulated with an oral direct Factor Xa inhibitor presents with life-threatening bleeding, clinicians often resort to using preparations of vitamin K dependent clotting factors, such as 4-factor prothrombin complex concentrates (PCCs). Despite the lack of any large, prospective, randomized study examining the efficacy and safety of these agents in this patient population, administration of 4-factor PCCs as a means to ``reverse'' the anticoagulant effect of Factor Xa inhibitors is commonplace in many hospitals due to the lack of any alternative in the setting of a serious or life[dash]threatening bleed. The applicant stated that AndexXaTM has a unique mechanism of action and represents a new biological approach to the treatment of patients who have been diagnosed with acute severe bleeding who require immediate reversal of the Factor Xa inhibitor therapy. The applicant explained that although AndexXaTM is structurally very similar to native Factor Xa inhibitors, the technology has undergone several modifications that restrict its biological activity to reversing the effects of Factor Xa inhibitors by binding with and sequestering direct or indirect Factor Xa inhibitors, which allows native Factor Xa inhibitors to dictate the normal coagulation and hemostasis process. As a result, the applicant maintained that AndexXaTM represents a safe and effective therapy for the management of severe bleeding in a fragile patient population and a substantial clinical improvement over existing technologies and reversal strategies. The applicant noted the following: (1) On average, patients with a bleeding complication were hospitalized for 6.3 to 8.5 days, and (2) the most common therapies currently used to manage severe bleeding events in patients undergoing anticoagulant treatment are blood and blood product transfusions, most frequently with packed red blood cells (RBC) or fresh frozen plasma (FFP).\238\ According to the applicant, the blood products that are currently being employed as reversal agents carry significant risks. For instance, no clinical studies have evaluated the safety and efficacy of FFP transfusions to treat bleeding associated with Factor Xa inhibitors.239 240 Furthermore, transfusions with packed RBCs carry a risk (1 to 4 per 50,000 transfusions) of acute hemolytic reactions, in which the recipient's antibodies attack the transfused red blood cells, which is associated with clinically significant anemia, kidney failure, and death.\241\ The applicant asserted that a RBC transfusion in trauma patients with major bleeding is associated with an increased risk of nonfatal vascular events and death.\242\ The applicant noted that, although patients who are treated with AndexXaTM would receive RBC transfusions if their hemoglobin is low enough to warrant it, AndexXaTM reduces the need for RBC transfusion. --------------------------------------------------------------------------- \238\ Truven, ``2016 Truven Medicare Projected Bleeding Events'', MARKETSCAN[reg] Medicare Supplemental Database, January 1, 2016 to December 31, 2016 Data pull, Data on File, Supplemental file. \239\ Siegal, D.M., ``Managing target-specific oral anticoagulant associated bleeding including an update on pharmacological reversal agents,'' J Thromb Thrombolysis, 2015 Apr, vol. 39(3), pp. 395-402. \240\ Kalus, J.S., ``Pharmacologic interventions for reversing the effects of oral anticoagulants,'' Am J Health Syst Pharm, 2013, vol. 70(10 Suppl 1), pp. S12-21. \241\ Sharma, S., Sharma, P., Tyler, L.N., ``Transfusion of Blood and Blood Products: Indications and Complications,'' Am Fam Physician, 2011, vol. 83(6), pp. 719-24. \242\ Perel, P., Clayton, T., Altman, D.G., et al., ``Red blood cell transfusion and mortality in trauma patients: risk-stratified analysis of an observational study,'' PLoS Med, 2014, vol. 11(6), pp. e1001664. --------------------------------------------------------------------------- The applicant asserted that laboratory studies have failed to provide consistent evidence of ``reversal'' of the anticoagulant effect of Factor Xa inhibitors across a range of different PCC products and concentrations. Results of thrombin generation assays have varied depending on the format of the assay. Despite years of experience with low molecular weight heparins and pentasaccharide anticoagulants, neither PCCs nor factor eight inhibitor bypassing activity are recognized as safe and effective reversal agents for these Factor Xa inhibitors.\243\ Unlike patients taking vitamin K antagonists, patients receiving treatment with oral Factor Xa inhibitor drugs have normal levels of clotting factors. Therefore, a strategy based on ``repleting'' factor levels is of uncertain foundation and could result in supra-normal levels of coagulation factors after rapid metabolism and clearance of the oral anticoagulant.\244\ --------------------------------------------------------------------------- \243\ Sarich, T.C., Seltzer, J.H., Berkowitz, S.D., et al., ``Novel oral anticoagulants and reversal agents: Considerations for clinical development,'' Am Heart J, 2015, vol. 169(6), pp. 751-7. \244\ Siegal, D.M., ``Managing target-specific oral anticoagulant associated bleeding including an update on pharmacological reversal agents,'' J Thromb Thrombolysis, 2015 Apr, vol. 39(3), pp. 395-402. --------------------------------------------------------------------------- The applicant provided results from two randomized, double-blind, placebo-controlled Phase III studies,245 246 the ANNEXA-A (reversal of apixaban) and ANNEXA[dash]R (reversal of rivaroxaban) trials. The primary endpoint in both these studies was the percent change in anti-Factor Xa activity. Secondary endpoints included proportion of participants with an 80 percent or greater reduction in anti-Factor Xa activity, change in unbound Factor Xa inhibitor concentration, and change in endogenous thrombin potential (ETP). A total of 145 participants were enrolled in the study, with 101 participants randomized to AndexXaTM and 44 participants randomized to placebo. The mean age of participants was 58 years old, and 39 percent were women. There was a mean of greater than 90 percent reduction in anti-Factor Xa activity in both parts of both studies in subjects receiving AndexXaTM. The studies also demonstrated the following: (1) Rapid and sustainable reversal of anticoagulation; (2) reduced Factor Xa inhibitor free plasma levels by at least 80 percent below a calculated no-effect level; and (3) reduced anti-Factor Xa activity to the lowest level of detection within 2 to 5 minutes of infusion. The applicant noted that decreased Factor Xa inhibitor levels have been shown to correspond to decreased bleeding complications, reconstitution of activity of coagulation factors, and correction of coagulation.247 248 249 --------------------------------------------------------------------------- \245\ Conners, J.M., ``Antidote for Factor Xa Anticoagulants,'' N Engl J Med, 2015 Nov 13. \246\ Siegal, D.M., Curnutte, J.T., Connolly, S.J., et al., ``Andexanet Alfa for the Reversal of Factor Xa Inhibitor Activity,'' N Engl J Med, 2015 Nov 11. \247\ Lu, G., DeGuzman, F., Hollenbach, S., et al., ``Reversal of low molecular weight heparin and fondaparinux by a recombinant antidote,'' (r-Antidote, PRT064445), Circulation, 2010, vol. 122, pp. A12420. \248\ Rose, M., Beasley, B., ``Apixaban clinical review addendum,'' Silver Spring, MD: Center for Drug Evaluation and Research, 2012. Available at: http://www.accessdata.fda.gov/drugsatfda_docs/nda/2012/202155Orig1s000MedR.pdf. \249\ Beasley, N., Dunnmon, P., Rose, M., ``Rivaroxaban clinical review: FDA draft briefing document for the Cardiovascular and Renal Drugs Advisory Committee,'' 2011. Available at: http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/drugs/CardiovascularandRenalDrugsAdvisoryCommittee/ucm270796.pdf. --------------------------------------------------------------------------- The applicant stated that the results from the two Phase III studies and previous proof-of-concept Phase II dose-finding studies showed that use of [[Page 20353]] AndexXaTM can rapidly reverse anticoagulation activity of Factor Xa inhibitors and sustain that reversal. Therefore, the applicant asserted that the use of AndexXaTM has the potential to successfully treat patients who only need short-duration reversal of the Factor Xa inhibitor anticoagulant, as well as patients who require longer duration reversal, such as patients experiencing a severe intracranial hemorrhage or requiring emergency surgery. Furthermore, the applicant noted that its technology's duration of action allows for a gradual return of Factor Xa inhibitor concentrations to placebo control levels within 2 hours following the end of infusion. With regard to AndexXaTM's nonthrombogenic nature, the applicant provided clinical trial data which revealed participants in Phase II and Phase III trials had no thrombotic events and there were no serious or severe adverse events reported. Results also showed that use of AndexXaTM has a much lower risk of thrombosis than typical procoagulants because the technology lacks the region responsible for inducing coagulation. Furthermore, the applicant asserted that the use of AndexXaTM is not associated with the known complications seen with RBC transfusions. The applicant asserted that, while the Phase II and Phase III trials and studies measured physiological hallmarks of reversal of NOACs, it is expected that the availability of a safe and reliable Factor Xa reversal will result in an overall better prognosis for patients--potentially leading to a reduction in length of hospital stay, fewer complications, and decreased mortality associated with unexpected bleeding episodes. The applicant also stated that use of AndexXaTM can supplant currently available treatments used for reversing severe bleeding from anti-Factor Xa therapy, which have not been shown to be effective in the treatment of all patients. With regard to PCCs and FFPs, the applicant stated that there is a lack of clinical evidence available for patients taking Factor Xa inhibitors that experience severe bleeding events. The applicant noted that the case reports provide a snapshot of emergent treatment of these often medically complex anti-Factor Xa-treated patients with major bleeds. However, the applicant stated that these analyses reveal the inconsistent approach in assessing the degree of anticoagulation in the patient and the variability in treatment strategy. The applicant explained that little or no assessment of efficacy in restoring coagulation in the patients was performed, and the major outcomes measures were bleeding cessation or mortality. The applicant concluded that overall, there is very little evidence for the efficacy suggested in some guidelines, and the evidence is insufficient to draw any conclusions. The applicant submitted interim data purporting to show substantial clinical improvement within its target patient population as part of an ongoing Phase IIIb/IV open[dash]label ANNEXA-4 study. The ANNEXA-4 study is a multi[dash]center, prospective, open-label, single group study that evaluated 67 patients who had acute, major bleeding within 18 hours of receipt of a Factor Xa inhibitor (32 patients receiving rivarobaxan, 31 receiving apixaban, and 4 receiving enoxaparin). The population in the study was reflective of a real-world population, with mean age of 77 years old, most patients with cardiovascular disease, and the majority of bleeds being intracranial or gastrointestinal. According to the applicant, the results of the ANNEXA-4 study demonstrate safe, reliable, and rapid reversal of Factor Xa levels in patients experiencing acute bleeding and are consistent with the results seen in the Phase II and Phase III trials, based on interim data. However, we are concerned that this interim data also indicate 18 percent of patients experienced a thrombotic event and 15 percent of patients died following reversal during the 30-day follow-up period in the ANNEXA-4 study. For this reason, we are concerned that there is insufficient data to determine substantial clinical improvement over existing technologies. We are inviting public comments on whether AndexXaTM meets the substantial clinical improvement criterion. We did not receive any public comments on the AndexXaTM technology in response to the published notice in the Federal Register or at the New Technology Town Hall Meeting. III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals A. Background 1. Legislative Authority Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary adjust the standardized amounts for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level. We currently define hospital labor market areas based on the delineations of statistical areas established by the Office of Management and Budget (OMB). A discussion of the proposed FY 2019 hospital wage index based on the statistical areas appears under section III.A.2. of the preamble of this proposed rule. Section 1886(d)(3)(E) of the Act requires the Secretary to update the wage index annually and to base the update on a survey of wages and wage-related costs of short[dash]term, acute care hospitals. (CMS collects these data on the Medicare cost report, CMS Form 2552-10, Worksheet S-3, Parts II, III, and IV. The OMB control number for approved collection of this information is 0938-0050.) This provision also requires that any updates or adjustments to the wage index be made in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. The proposed adjustment for FY 2019 is discussed in section II.B. of the Addendum to this proposed rule. As discussed in section III.I. of the preamble of this proposed rule, we also take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act when calculating IPPS payment amounts. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B), 1886(d)(8)(C), and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. The proposed budget neutrality adjustment for FY 2019 is discussed in section II.A.4.b. of the Addendum to this proposed rule. Section 1886(d)(3)(E) of the Act also provides for the collection of data every 3 years on the occupational mix of employees for short- term, acute care hospitals participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index. A discussion of the occupational mix adjustment that we are proposing to apply to the FY 2019 wage index appears under sections III.E.3. and F. of the preamble of this proposed rule. 2. Core-Based Statistical Areas (CBSAs) for the Proposed FY 2019 Hospital Wage Index The wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located. Under section 1886(d)(3)(E) [[Page 20354]] of the Act, beginning with FY 2005, we delineate hospital labor market areas based on OMB[dash]established Core[dash]Based Statistical Areas (CBSAs). The current statistical areas (which were implemented beginning with FY 2015) are based on revised OMB delineations issued on February 28, 2013, in OMB Bulletin No. 13-01. OMB Bulletin No. 13-01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico based on the 2010 Census, and provided guidance on the use of the delineations of these statistical areas using standards published on June 28, 2010 in the Federal Register (75 FR 37246 through 37252). We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963) for a full discussion of our implementation of the OMB labor market area delineations beginning with the FY 2015 wage index. Generally, OMB issues major revisions to statistical areas every 10 years, based on the results of the decennial census. However, OMB occasionally issues minor updates and revisions to statistical areas in the years between the decennial censuses through OMB Bulletins. On July 15, 2015, OMB issued OMB Bulletin No. 15-01, which provided updates to and superseded OMB Bulletin No. 13-01 that was issued on February 28, 2013. The attachment to OMB Bulletin No. 15-01 provided detailed information on the update to statistical areas since February 28, 2013. The updates provided in OMB Bulletin No. 15-01 were based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2012 and July 1, 2013. In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56913), we adopted the updates set forth in OMB Bulletin No. 15-01 effective October 1, 2016, beginning with the FY 2017 wage index. For a complete discussion of the adoption of the updates set forth in OMB Bulletin No. 15-01, we refer readers to the FY 2017 IPPS/ LTCH PPS final rule. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), we continued to use the OMB delineations that were adopted beginning with FY 2015 to calculate the area wage indexes, with updates as reflected in OMB Bulletin No. 15-01 specified in the FY 2017 IPPS/ LTCH PPS final rule. On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which provided updates to and superseded OMB Bulletin No. 15-01 that was issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01 provide detailed information on the update to statistical areas since July 15, 2015, and are based on the application of the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas to Census Bureau population estimates for July 1, 2014 and July 1, 2015. In OMB Bulletin No. 17-01, OMB announced that one Micropolitan Statistical Area now qualifies as a Metropolitan Statistical Area. The new urban CBSA is as follows: Twin Falls, Idaho (CBSA 46300). This CBSA is comprised of the principal city of Twin Falls, Idaho in Jerome County, Idaho and Twin Falls County, Idaho. The OMB bulletin is available on the OMB Web site at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf. We note that we did not have sufficient time to include this change in the computation of the proposed FY 2019 wage index, ratesetting, and Tables 2 and 3 associated with this proposed rule. This new CBSA may affect the budget neutrality factors and wage indexes, depending on whether the area is eligible for the rural floor and the impact of the overall payments of the hospital located in this new CBSA. We are providing below an estimate of this new area's wage index based on the average hourly wages for new CBSA 46300 and the national average hourly wages from the wage data for the proposed FY 2019 wage index (described below in section III.B. of the preamble of this proposed rule). Currently, provider 130002 is the only hospital located in Twin Falls County, Idaho, and there are no hospitals located in Jerome County, Idaho. Thus, the proposed wage index for CBSA 46300 is calculated using the average hourly wage data for one provider (provider 130002). Below in sections III.D. and E.2. of the preamble of this proposed rule, we provide the proposed FY 2019 unadjusted and occupational mix adjusted national average hourly wages. Taking the estimated average hourly wage of new CBSA 46300 and dividing by the proposed national average hourly wage results in the estimated wage indexes shown in the table below. ------------------------------------------------------------------------ Estimated Estimated occupational unadjusted mix adjusted wage index for wage index for new CBSA 46300 new CBSA 46300 ------------------------------------------------------------------------ Proposed National Average Hourly Wage... 42.990625267 42.948428861 Estimated CBSA Average Hourly Wage...... 35.833564813 38.127590025 Estimated Wage Index.................... 0.8335 0.8878 ------------------------------------------------------------------------ For FY 2019, we are using the OMB delineations that were adopted beginning with FY 2015 to calculate the area wage indexes, with updates as reflected in OMB Bulletin Nos. 13-01, 15-01, and 17-01. In the final rule, we will incorporate this change into the final FY 2019 wage index, ratesetting, and tables. 3. Codes for Constituent Counties in CBSAs CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. There are two different lists of codes associated with counties: Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS has listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the hospital wage index. As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through 38130), we have learned that SSA county codes are no longer being maintained and updated. However, the FIPS codes continue to be maintained by the U.S. Census Bureau. We believe that using the latest FIPS codes will allow us to maintain a more accurate and up-to-date payment system [[Page 20355]] that reflects the reality of population shifts and labor market conditions. The Census Bureau's most current statistical area information is derived from ongoing census data received since 2010; the most recent data are from 2015. The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the website at: https://www.census.gov/geo/reference/county-changes.html. We believe that it is important to use the latest counties or county equivalent entities in order to properly crosswalk hospitals from a county to a CBSA for purposes of the hospital wage index used under the IPPS. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through 38130) we adopted a policy to discontinue the use of the SSA county codes and began using only the FIPS county codes for purposes of crosswalking counties to CBSAs. In addition, in the same rule, we implemented the latest FIPS code updates which were effective October 1, 2017, beginning with the FY 2018 wage indexes. The updated changes were used to calculate the wage indexes in a manner generally consistent with the CBSA-based methodologies finalized in the FY 2005 IPPS final rule and the FY 2015 IPPS/LTCH PPS final rule. For FY 2019, we are continuing to use only the FIPS county codes for purposes of crosswalking counties to CBSAs. For FY 2019, Tables 2 and 3 associated with this proposed rule and the County to CBSA Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care Hospitals File posted on the CMS website reflect these county changes. B. Worksheet S-3 Wage Data for the Proposed FY 2019 Wage Index The proposed FY 2019 wage index values are based on the data collected from the Medicare cost reports submitted by hospitals for cost reporting periods beginning in FY 2015 (the FY 2018 wage indexes were based on data from cost reporting periods beginning during FY 2014). 1. Included Categories of Costs The proposed FY 2019 wage index includes all of the following categories of data associated with costs paid under the IPPS (as well as outpatient costs): Salaries and hours from short-term, acute care hospitals (including paid lunch hours and hours associated with military leave and jury duty); Home office costs and hours; Certain contract labor costs and hours, which include direct patient care, certain top management, pharmacy, laboratory, and nonteaching physician Part A services, and certain contract indirect patient care services (as discussed in the FY 2008 final rule with comment period (72 FR 47315 through 47317)); and Wage-related costs, including pension costs (based on policies adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586 through 51590)) and other deferred compensation costs. 2. Excluded Categories of Costs Consistent with the wage index methodology for FY 2018, the proposed wage index for FY 2019 also excludes the direct and overhead salaries and hours for services not subject to IPPS payment, such as skilled nursing facility (SNF) services, home health services, costs related to GME (teaching physicians and residents) and certified registered nurse anesthetists (CRNAs), and other subprovider components that are not paid under the IPPS. The proposed FY 2019 wage index also excludes the salaries, hours, and wage[dash]related costs of hospital[dash]based rural health clinics (RHCs), and Federally qualified health centers (FQHCs) because Medicare pays for these costs outside of the IPPS (68 FR 45395). In addition, salaries, hours, and wage-related costs of CAHs are excluded from the wage index for the reasons explained in the FY 2004 IPPS final rule (68 FR 45397 through 45398). 3. Use of Wage Index Data by Suppliers and Providers Other Than Acute Care Hospitals Under the IPPS Data collected for the IPPS wage index also are currently used to calculate wage indexes applicable to suppliers and other providers, such as SNFs, home health agencies (HHAs), ambulatory surgical centers (ASCs), and hospices. In addition, they are used for prospective payments to IRFs, IPFs, and LTCHs, and for hospital outpatient services. We note that, in the IPPS rules, we do not address comments pertaining to the wage indexes of any supplier or provider except IPPS providers and LTCHs. Such comments should be made in response to separate proposed rules for those suppliers and providers. C. Verification of Worksheet S-3 Wage Data The wage data for the proposed FY 2019 wage index were obtained from Worksheet S-3, Parts II and III of the Medicare cost report (Form CMS-2552-10, OMB Control Number 0938-0050) for cost reporting periods beginning on or after October 1, 2014, and before October 1, 2015. For wage index purposes, we refer to cost reports during this period as the ``FY 2015 cost report,'' the ``FY 2015 wage data,'' or the ``FY 2015 data.'' Instructions for completing the wage index sections of Worksheet S[dash]3 are included in the Provider Reimbursement Manual (PRM), Part 2 (Pub. No. 15-2), Chapter 40, Sections 4005.2 through 4005.4. The data file used to construct the proposed FY 2019 wage index includes FY 2015 data submitted to us as of February 6, 2018. As in past years, we performed an extensive review of the wage data, mostly through the use of edits designed to identify aberrant data. We asked our MACs to revise or verify data elements that result in specific edit failures. For the proposed FY 2019 wage index, we identified and excluded 80 providers with aberrant data that should not be included in the wage index, although if data elements for some of these providers are corrected, we intend to include data from those providers in the final FY 2019 wage index. We also adjusted certain aberrant data and included these data in the proposed wage index. For example, in situations where a hospital did not have documentable salaries, wages, and hours for housekeeping and dietary services, we imputed estimates, in accordance with policies established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). We instructed MACs to complete their data verification of questionable data elements and to transmit any changes to the wage data no later than March 23, 2018. In addition, as a result of the April and May appeals processes, and posting of the April 27, 2018 PUF, we may make additional revisions to the FY 2019 wage data, as described further below. The revised data would be reflected in the FY 2019 IPPS/LTCH PPS final rule. In constructing the proposed FY 2019 wage index, we included the wage data for facilities that were IPPS hospitals in FY 2015, inclusive of those facilities that have since terminated their participation in the program as hospitals, as long as those data did not fail any of our edits for reasonableness. We believed that including the wage data for these hospitals is, in general, appropriate to reflect the economic conditions in the various labor market areas during the relevant past period and to ensure that the current wage index represents the labor market area's current wages as compared to the national average of wages. However, we excluded the wage data for CAHs as discussed in the FY 2004 IPPS final rule (68 FR 45397 through 45398; that is, any hospital that is designated as a CAH by 7 days prior to the publication of the preliminary wage index public use file (PUF) is excluded from the calculation of the wage index). For this proposed [[Page 20356]] rule, we removed 8 hospitals that converted to CAH status on or after January 23, 2017, the cut-off date for CAH exclusion from the FY 2018 wage index, and through and including January 26, 2018, the cut-off date for CAH exclusion from the FY 2019 wage index. After excluding CAHs and hospitals with aberrant data, we calculated the proposed wage index using the Worksheet S-3, Parts II and III wage data of 3,260 hospitals. For the proposed FY 2019 wage index, we allotted the wages and hours data for a multicampus hospital among the different labor market areas where its campuses are located in the same manner that we allotted such hospitals' data in the FY 2018 wage index (82 FR 38131 through 38132); that is, using campus full-time equivalent (FTE) percentages as originally finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51591). Table 2, which contains the proposed FY 2019 wage index associated with this proposed rule (available via the internet on the CMS website), includes separate wage data for the campuses of 16 multicampus hospitals. The following chart lists the multicampus hospitals by CSA certification number (CCN) and the FTE percentages on which the wages and hours of each campus were allotted to their respective labor market areas: ------------------------------------------------------------------------ Full-time CSA certification number (CCN) of multicampus hospital equivalent (FTE) percentages ------------------------------------------------------------------------ 050121................................................ 0.81 05B121................................................ 0.19 070022................................................ 0.99 07B022................................................ 0.01 070033................................................ 0.92 07B033................................................ 0.08 100029................................................ 0.54 10B029................................................ 0.46 100167................................................ 0.37 10B167................................................ 0.63 140010................................................ 0.82 14B010................................................ 0.18 220074................................................ 0.89 22B074................................................ 0.11 330234................................................ 0.72 33B234................................................ 0.28 360019................................................ 0.95 36B019................................................ 0.05 360020................................................ 0.99 36B020................................................ 0.01 390006................................................ 0.95 39B006................................................ 0.05 390115................................................ 0.86 39B115................................................ 0.14 390142................................................ 0.83 39B142................................................ 0.17 460051................................................ 0.97 46B051................................................ 0.03 510022................................................ 0.95 51B022................................................ 0.05 670062................................................ 0.55 67B062................................................ 0.45 ------------------------------------------------------------------------ We note that, in past years, in Table 2, we have placed a ``B'' to designate the subordinate campus in the fourth position of the hospital CCN. However, for this proposed rule and future rulemaking, we have moved the ``B'' to the third position of the CCN. Because all IPPS hospitals have a ``0'' in the third position of the CCN, we believe that placement of the ``B'' in this third position, instead of the ``0'' for the subordinate campus, is the most efficient method of identification and interferes the least with the other, variable, digits in the CCN. D. Method for Computing the Proposed FY 2019 Unadjusted Wage Index 1. Proposed Methodology for FY 2019 The method used to compute the proposed FY 2019 wage index without an occupational mix adjustment follows the same methodology that we used to compute the proposed wage indexes without an occupational mix adjustment since FY 2012 (76 FR 51591 through 51593). As discussed in the FY 2012 IPPS/LTCH PPS final rule, in ``Step 5,'' for each hospital, we adjust the total salaries plus wage-related costs to a common period to determine total adjusted salaries plus wage-related costs. To make the wage adjustment, we estimate the percentage change in the employment cost index (ECI) for compensation for each 30-day increment from October 14, 2014, through April 15, 2016, for private industry hospital workers from the BLS' Compensation and Working Conditions. We have consistently used the ECI as the data source for our wages and salaries and other price proxies in the IPPS market basket, and we are not proposing any changes to the usage of the ECI for FY 2019. The factors used to adjust the hospital's data were based on the midpoint of the cost reporting period, as indicated in the following table. Midpoint of Cost Reporting Period ------------------------------------------------------------------------ After Before Adjustment factor ------------------------------------------------------------------------ 10/14/2014 11/15/2014 1.02567 11/14/2014 12/15/2014 1.02413 12/14/2014 01/15/2015 1.02257 01/14/2015 02/15/2015 1.02100 02/14/2015 03/15/2015 1.01941 03/14/2015 04/15/2015 1.01784 04/14/2015 05/15/2015 1.01627 05/14/2015 06/15/2015 1.01471 06/14/2015 07/15/2015 1.01316 07/14/2015 08/15/2015 1.01161 08/14/2015 09/15/2015 1.01007 09/14/2015 10/15/2015 1.00849 10/14/2015 11/15/2015 1.00685 11/14/2015 12/15/2015 1.00516 12/14/2015 01/15/2016 1.00343 01/14/2016 02/15/2016 1.00171 02/14/2016 03/15/2016 1.00000 03/14/2016 04/15/2016 0.99824 ------------------------------------------------------------------------ For example, the midpoint of a cost reporting period beginning January 1, 2015, and ending December 31, 2015, is June 30, 2015. An adjustment factor of 1.01316 would be applied to the wages of a hospital with such a cost reporting period. Using the data as previously described, the proposed FY 2019 national average hourly wage (unadjusted for occupational mix) is $42.990625267. Previously, we also would provide a Puerto Rico overall average hourly wage. As discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56915), prior to January 1, 2016, Puerto Rico hospitals were paid based on 75 percent of the national standardized amount and 25 percent of the Puerto Rico-specific standardized amount. As a result, we calculated a Puerto Rico-specific wage index that was applied to the labor share of the Puerto Rico[dash]specific standardized amount. Section 601 of the Consolidated Appropriations Act, 2016 (Pub. L. 114[dash]113) amended section 1886(d)(9)(E) of the Act to specify that the payment calculation with respect to operating costs of inpatient hospital services of a subsection (d) Puerto Rico hospital for inpatient hospital discharges on or after January 1, 2016, shall use 100 percent of the national standardized amount. As we stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56915 through 56916), because Puerto Rico hospitals are no longer paid with a Puerto Rico-specific standardized amount as of January 1, 2016, under section 1886(d)(9)(E) of the Act, as amended by section 601 of the Consolidated Appropriations Act, 2016, there is no longer a need to calculate a Puerto Rico-specific average hourly wage and wage index. Hospitals in Puerto Rico are now paid 100 percent of the national standardized amount and, therefore, are subject to the national average hourly wage (unadjusted for occupational mix) (which is $42.990625267 for this FY 2019 proposed rule) and the national wage index, which is applied to the national labor share of the national standardized amount. For FY 2019, we [[Page 20357]] are not proposing a Puerto Rico-specific overall average hourly wage or wage index. 2. Proposed Update of Policies Related to Other Wage-Related Costs, Clarification of the Calculation of Other Wage-Related Costs, and Proposals for FY 2020 and Subsequent Years Section 1886(d)(3)(E) of the Act requires the Secretary to update the wage index based on a survey of hospitals' costs that are attributable to wages and wage-related costs. In the September 1, 1994 IPPS final rule (59 FR 45356), we developed a list of ``core'' wage- related costs that hospitals may report on Worksheet S-3, Part II of the Medicare hospital cost report in order to include those costs in the wage index. Core wage-related costs include categories of retirement cost, plan administrative costs, health and insurance costs, taxes, and other specified costs such as tuition reimbursement. In addition to these categories of core wage-related costs, we allow hospitals to report wage-related costs other than those on the core list if the other wage-related costs meet certain criteria. The criteria for including other wage-related costs in the wage index are discussed in the September 1, 1994 IPPS final rule (59 FR 45357) and clarified in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38132 through 38136). In addition, the criteria for including other wage[dash]related costs in the wage index are listed in the Provider Reimbursement Manual (PRM), Part II, Chapter 40, Sections 4005.2 through 4005.4, Line 18 on W/S S-3 Part II and Line 25 and its subscripts on W/S S-3 Part IV of the Medicare cost report (Form CMS-2552-10, OMB control number 0938- 0050). In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38132 through 38136), we clarified that a hospital may be able to report a wage- related cost (defined as the value of the benefit) that does not appear on the core list if it meets all of the following criteria: The wage-related cost is provided at a significant financial cost to the employer. To meet this test, the individual wage- related cost must be greater than 1 percent of total salaries after the direct excluded salaries are removed (the sum of Worksheet S-3, Part II, Lines 11, 12, 13, 14, Column 4, and Worksheet S-3, Part III, Line 3, Column 4). The wage-related cost is a fringe benefit as described by the IRS and is reported to the IRS on an employee's or contractor's W-2 or 1099 form as taxable income. The wage-related cost is not furnished for the convenience of the provider or otherwise excludable from income as a fringe benefit (such as a working condition fringe). We noted that those wage-related costs reported as salaries on Line 1 (for example, loan forgiveness and sick pay accruals) should not be included as other wage[dash]related costs on Line 18. The above instructions for calculating the 1-percent test inadvertently omitted Line 15 for Home Office Part A Administrator on Worksheet S-3, Part II from the denominator. Line 15 should be included in the denominator because Home Office Part A Administrator is added to Line 1 in the wage index calculation. Therefore, in this proposed rule, we are correcting the inadvertent omission of Line 15 from the denominator, and we are clarifying that, for calculating the 1-percent test, each individual category of the other wage-related cost (that is, the numerator) should be divided by the sum of Worksheet S-3, Part III, Lines 3 and 4, Column 4 (that is, the denominator). Line 4 sums the following lines from Worksheet S-3, Part II: Lines 11, 12, 13, 14, 14.01, 14.02, and 15. We also direct readers to instructions for calculating the 1-percent test in the Provider Reimbursement Manual (PRM), Part II, Chapter 40, Section 4005.4, Line 25 and its subscripts on Worksheet S-3, Part IV of the Medicare cost report (Form CMS-2552- 10, OMB control number 0938-0050), which state: ``Calculate the 1- percent test by dividing each individual category of the other wage- related cost (that is, the numerator) by the sum of Worksheet S-3, Part III, Lines 3 and 4, Column 4, (that is, the denominator).'' In addition to our discussion about calculating the 1-percent test and other criteria for including other-wage related costs in the wage index, we stated in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38133 through 38166) that we would consider proposing to remove other wage- related costs from the wage index entirely. In the FY 2018 IPPS/LTCH PPS proposed and final rules (82 FR 19901 and 82 FR 38133, respectively), we stated that we originally allowed for the inclusion of wage-related costs other than those on the core list because we were concerned that individual hospitals might incur unusually large wage-related costs that are not reflected on the core list but that may represent a significant wage-related cost. However, we stated in the FY 2018 IPPS/LTCH PPS proposed and final rules (82 FR 19901 and 82 FR 38133, respectively) that we were reconsidering allowing other wage-related costs to be included in the wage index because internal reviews of the FY 2018 wage data showed that only a small minority of hospitals were reporting other wage-related costs that meet the 1-percent test described earlier. This year, as part of the wage index desk review process for FY 2019, internal reviews showed that only 8 hospitals out of the more than 3,000 IPPS hospitals in the wage index had other wage-related costs that were correctly reported for inclusion in the wage index. Given the extremely limited number of hospitals nationally using Worksheet S-3, Part IV, Line 25 and subscripts, and Worksheet S-3, Part II, Line 18, to correctly report other wage-related costs in accordance with the criteria to be included in the wage index, we continue to believe that other wage-related costs do not constitute an appropriate and significant portion of wage costs in a particular labor market area. In other words, while other wage-related costs may represent costs that may have an impact on an individual hospital's average hourly wage, we do not believe that costs reported by only a very small minority of hospitals (less than 0.003 percent) accurately reflect the economic conditions of the labor market area as a whole in which such an individual hospital is located. The fact that only 8 hospitals out of more than 3,000 IPPS hospitals included in the FY 2019 IPPS proposed wage index reported other wage-related costs correctly in accordance with the 1-percent test and related criteria indicates that, in fact, other wage-related costs are not a relative measure of the labor costs to be included in the IPPS wage index. Therefore, we believe that inclusion of other wage-related costs in the wage index in such a limited manner may distort the average hourly wage of a particular labor market area so that its wage index does not accurately represent that labor market area's current wages relative to national wages. Furthermore, the open-ended nature of the types of other wage- related costs that may be included on Line 25 and its subscripts of Worksheet S-3 Part IV and Line 18 of Worksheet S-3 Part II, in contrast to the concrete list of core wage-related costs, may hinder consistent and proper reporting of fringe benefits. Our internal reviews indicate widely divergent types of costs that hospitals are reporting as other wage-related costs on these lines. We are concerned that inconsistent reporting of other wage-related costs further compromises the accuracy of the wage index as a representation of the relative average hourly wage for each labor [[Page 20358]] market area. Our intent in creating a core list of wage-related costs in the September 1, 1994 IPPS final rule was to promote consistent reporting of fringe benefits, and we are increasingly concerned that inconsistent reporting of wage-related costs undermines this effort. Specifically, we expressed in the September 1, 1994 IPPS final rule that, since we began including fringe benefits in the wage index, we have been concerned with the inconsistent reporting of fringe benefits, whether because of a lack of provider proficiency in identifying fringe benefit costs or varying interpretations across fiscal intermediaries of the definition for fringe benefits in PRM-I, Section 2144.1 (59 FR 45356). We believe that the limited and inconsistent use of Line 25 and its subscripts of Worksheet S-3 Part IV and Line 18 of Worksheet S-3 Part II for reporting wage[dash]related costs other than the core list indicate that including other wage[dash]related costs in the wage index compromises the accuracy of the wage index as a relative measure of wages in a given labor market area. Therefore, for the reasons discussed earlier, for the FY 2020 wage index and subsequent years, we are proposing to only include the wage- related costs on the core list in the calculation of the wage index and not to include any other wage-related costs in the calculation of the wage index. Under our proposal, we would no longer consider any other wage-related costs beginning with the FY 2020 wage index. Considering the extremely limited number of hospitals reporting other wage-related costs and the inconsistency in types of other wage-related costs being reported, we believe this proposal will help ensure a more consistent and more accurate wage index representative of the relative average hourly wage for each labor market area. In addition, we believe that this proposal to no longer include other wage-related costs in the wage index calculation benefits the vast majority of hospitals because most hospitals do not report other wage-related costs. Because the wage index is budget neutral, hospitals in an area without other wage- related costs included in the wage index have their wage indexes reduced when other areas' wage indexes are raised by including other wage[dash]related costs in their wage index calculation. We also note that this proposal to exclude other wage[dash]related costs from the wage index, starting with the FY 2020 wage index, contributes to agency efforts to simplify hospital paperwork burden because it would eliminate the need for Line 18 on Worksheet S-3, Part II and Line 25 and its subscripts on Worksheet S-3, Part IV of the Medicare cost report (Form CMS-2552-10, OMB control number 0938-0050). We note that we would include in the FY 2019 wage index the other wage-related costs of the eight hospitals that accurately reported those costs in accordance with the current criteria. In summary, we are clarifying that our current policy for calculating the 1-percent test includes Line 15 for Home Office Part A Administrator on Worksheet S-3, Part II in the denominator. In addition, we are proposing to eliminate other wage-related costs from the calculation of the wage index for the FY 2020 wage index and subsequent years, as discussed earlier. We are inviting public comments on this proposal. 3. Proposals To Codify Policies Regarding Multicampus Hospitals We have received an increasing number of inquiries regarding the treatment of multicampus hospitals as the number of multicampus hospitals has grown in recent years. While the regulations at Sec. 412.230(d)(2)(iii) and (v) for geographic reclassification under the MGCRB include criteria for how multicampus hospitals may be reclassified, the regulations at Sec. 412.92 for sole community hospitals (SCHs), Sec. 412.96 for rural referral centers (RRC), Sec. 412.103 for rural reclassification, and Sec. 412.108 for Medicare[dash]dependent, small rural hospitals (MDHs) do not directly address multicampus hospitals. Thus, in this proposed rule, we are proposing to codify in these regulations the policies for multicampus hospitals that we have developed in response to recent questions regarding CMS' treatment of multicampus hospitals for purposes other than geographic reclassification under the MGCRB. The proposals below apply to hospitals with a main campus and one or more remote locations under a single provider agreement where services are provided and billed under the IPPS and that meet the provider-based criteria at Sec. 413.65 as a main campus and a remote location of a hospital, also referred to as multicampus hospitals or hospitals with remote locations. We are proposing that a main campus of a hospital cannot obtain an SCH, RRC, or MDH status or rural reclassification independently or separately from its remote location(s), and vice versa. Rather, if the criteria are met in the regulations at Sec. 412.92 for SCHs, Sec. 412.96 for RRCs, Sec. 412.103 for rural reclassification, or Sec. 412.108 for MDHs (as discussed later in this section), the hospital (that is, the main campus and its remote location(s)) would be granted the special treatment or rural reclassification afforded by the aforementioned regulations. We believe this is an appropriate policy for two reasons. First, each remote location of a hospital is included on the main campus's cost report and shares the same provider number. That is, the main campus and remote location(s) would share the same status or rural reclassification because the hospital is a single entity with one provider agreement. Second, it would not be administratively feasible for CMS and the MACs to track every hospital with remote locations within the same CBSA and to assign different statuses or rural reclassifications exclusively to the main campus or to its remote location. We note that, for wage index purposes only, CMS tracks multicampus remote locations located in different CBSAs in order to comply with the statutory requirement to adjust for geographic differences in hospital wage levels (section 1886(d)(3)(E) of the Act). However, for purposes of rural reclassification under Sec. 412.103, we do not believe it would be appropriate for a main campus and remote location(s) (whether located in the same or separate CBSAs) to be reclassified independently or separately from each other because, unlike MGCRB reclassifications which are used only for wage index purposes, Sec. 412.103 rural reclassifications have payment effects other than wage index (for example, payments to disproportionate share hospitals (DSHs), and non-Medicare payment provisions, such as the 340B Drug Pricing Program administered by HRSA). To qualify for rural reclassification or SCH, RRC, or MDH status, we are proposing that a hospital with remote locations must demonstrate that both the main campus and its remote location(s) satisfy the relevant qualifying criteria. A hospital with remote locations submits a joint cost report that includes data from its main campus and remote location(s), and its MedPAR data also combine data from the main campus and remote location(s). We believe that it would not be feasible to separate data by location, nor would it be appropriate, because we consider a main campus and remote location(s) to be one hospital. Therefore, where the regulations at Sec. 412.92, Sec. 412.96, Sec. 412.103, and Sec. 412.108 require data, such as bed count, number of discharges, or case-mix index, for example, to demonstrate that the hospital meets the qualifying criteria, we are proposing to codify in our regulations that the combined data from the main campus and its remote location(s) are to be used. [[Page 20359]] For example, if a hospital with a main campus with 200 beds and a remote location with 75 beds applies for RRC status, the combined count of 275 beds would be considered the hospital's bed count, and the main campus and its remote location would be granted RRC status if the hospital applies during the last quarter of its cost reporting period and both the main campus and the remote location are located in a rural area as defined in 42 CFR part 412, subpart D. This is consistent with the regulation at Sec. 412.96(b)(1), which states, in part, that the number of beds is determined under the provisions of Sec. 412.105(b). For Sec. 412.105(b), beds are counted from the main campus and remote location(s) of a hospital. We believe this is also consistent with Sec. 412.96(b)(1)(ii), which sets forth the criteria that the hospital is located in a rural area and the hospital has a bed count of 275 or more beds during its most recently completed cost reporting period, unless the hospital submits written documentation with its application that its bed count has changed since the close of its most recently completed cost reporting period for one or more of several reasons, including the merger of two or more hospitals. Similarly, combined data would be used for demonstrating the hospital meets criteria at Sec. 412.92 for SCH status. For example, the patient origin data, which are typically MedPAR data used to document the boundaries of the hospital's service area as required in Sec. 412.92(b)(1)(ii) and (iii), would be used from both locations. We reiterate that we believe this is the appropriate policy because the main campus and remote location are considered one hospital and that it is the only administratively feasible policy because there is currently no way to split the MedPAR data for each location. For Sec. 412.103 rural reclassification, a hospital with remote location(s) seeking to qualify under Sec. 412.103(a)(3), which requires that the hospital would qualify as an RRC or SCH if the hospital were located in a rural area, would similarly demonstrate that it meets the criteria at Sec. 412.92 or at Sec. 412.96, such as bed count, by using combined data from the main campus and its remote location(s) (with the exception of certain criteria discussed below related to location, mileage, travel time, and distance requirements). We refer readers to the portions of our discussion that explain how hospitals with remote locations would meet criteria for RRC or SCH status. A hospital seeking MDH status would also use combined data for bed count and discharges to demonstrate that it meets the criteria at Sec. 412.108(a)(1). For example, if the main campus of a hospital has 75 beds and its remote location has 30 beds, the bed count exceeds 100 beds and the hospital would not satisfy the criteria at Sec. 412.108(a)(1)(i) (which is proposed to be redesignated as 412.108(a)(1)(ii)). We are reminding readers that, under Sec. 412.108(b)(4) and Sec. 412.92(b)(3)(i), an approved MDH or SCH status determination remains in effect unless there is a change in the circumstances under which the status was approved. While we believe that this proposal is consistent with the policies for multicampus hospitals that we have developed in response to recent questions, current MDHs and SCHs should make sure that this proposal does not create a change in circumstance (such as an increase in the number of beds to more than 100 for MDHs or to more than 50 for SCHs), which an MDH or SCH is required to report to the MAC within 30 days of the event, in accordance with Sec. 412.108(b)(4)(ii) and (iii) and Sec. 412.92(b)(3)(ii) and (iii). With regard to other qualifying criteria set forth in the regulations at Sec. Sec. 412.92, 412.96, 412.103, and 412.108 that do not involve data that can be combined, specifically qualifying criteria related to location, mileage, travel time, and distance requirements, a hospital would need to demonstrate that the main campus and its remote location(s) each independently satisfy those requirements in order for the entire hospital, including its remote location(s), to be reclassified or obtain a special status. To qualify for SCH status, for example, it would be insufficient for only the main campus, and not the remote location, to meet distance criteria. Rather, the main campus and its remote location(s) would each need to meet at least one of the criteria at Sec. 412.92(a). Specifically, the main campus and its remote location must each be located more than 35 miles from other like hospitals, or if in a rural area (as defined in Sec. 412.64), be located between 25 and 35 miles from other like hospitals if meeting one of the criteria at Sec. 412.92(a)(1) (and each meet the criterion at Sec. 412.92(a)(1)(iii) if applicable), or between 15 and 25 miles from other like hospitals if the other like hospitals are inaccessible for at least 30 days in each 2 out of 3 years (Sec. 412.92(a)(2)), or travel time to the nearest like hospital is at least 45 minutes (Sec. 412.92(a)(3)). We believe that this is necessary to show that the hospital is indeed the sole source of inpatient hospital services reasonably available to individuals in a geographic area who are entitled to benefits under Medicare Part A, as required by section 1886(d)(5)(D)(iii)(II) of the Act. For hospitals with remote locations that apply for SCH classification under Sec. 412.92(a)(1)(i) and (ii), combined data are used to document the boundaries of the hospital's service area using data from across both locations, as discussed earlier, and all like hospitals within a 35-mile radius of each location are included in the analysis. To be located in a rural area to use the criteria in Sec. 412.92(a)(1), (2), and (3), the main campus and its remote location(s) must each be either geographically located in a rural area, as defined in Sec. 412.64, or reclassified as rural under Sec. 412.103. Similarly, for RRC classification under Sec. 412.96 and MDH classification under Sec. 412.108, the main campus and its remote location(s) must each be either geographically located in a rural area, as defined in 42 CFR part 412, subpart D, or reclassified as rural under Sec. 412.103 to meet the rural requirement portion of the criteria at Sec. 412.96(b)(1), Sec. 412.96(c), or Sec. 412.108(a)(1) (or for MDH, be located in a State with no rural area and satisfy any of the criteria under Sec. 412.103(a)(1) or (a)(3) or under Sec. 412.103(a)(2) as of January 1, 2018). For hospitals with remote locations that apply for RRC classification under Sec. 412.96(b)(2)(ii) or Sec. 412.96(c)(4), 25 miles is calculated from each location (the main campus and its remote location(s)), and combined data from both the main campus and its remote location(s) are used to calculate the percentage of Medicare patients, services furnished to Medicare beneficiaries, and discharges. For hospitals seeking to reclassify as rural by meeting the criteria at Sec. 412.103(a)(1), (a)(2), or (a)(6), we also are proposing to codify in our regulations that it would not be sufficient for only the main campus, and not its remote location(s), to demonstrate that its location meets the aforementioned criteria. Rather, under Sec. 412.103(a)(1) and (2) (which also are incorporated in Sec. 412.103(a)(6)), we are proposing that the main campus and its remote location(s) must each either be located (1) in a rural census tract of an MSA as determined under the most recent version of the Goldsmith Modification, the Rural-Urban Commuting Area codes (Sec. 412.103(a)(1)), or (2) in an area designated by any law or regulation of the State in which it is located as a rural area, or be designated as a rural hospital by State law or regulation (Sec. 412.103(a)(2)). For hospitals seeking to reclassify as rural [[Page 20360]] by meeting the criteria in Sec. 412.103(a)(3), which require that the hospital would qualify as an RRC or a SCH if the hospital were located in a rural area, we refer readers to our discussion presented earlier that explains how hospitals with remote locations would meet criteria for RRC or SCH status. We note that we have also received questions about how a hospital with remote locations that trains residents in approved medical residency training programs would be treated for IME adjustment purposes if it reclassifies as rural under Sec. 412.103. As we noted in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50114), the rural reclassification provision of Sec. 412.103 only applies to IPPS hospitals under section 1886(d) of the Act. Therefore, it applies for IME payment purposes, given that the IME adjustment under section 1886(d)(5)(B) of the Act is an additional payment under IPPS. In contrast, sections 1886(a)(4) and (d)(1)(A) of the Act exclude direct GME costs from operating costs and these costs are not included in the calculation of the IPPS payment rates for inpatient hospital services. Payment for direct GME is separately authorized under section 1886(h) of the Act and, therefore, not subject to Sec. 412.103. Therefore, if a geographically urban teaching hospital reclassifies as rural under Sec. 412.103, such a reclassification would only affect the teaching hospital's IME adjustment, and not its direct GME payment. Accordingly, we are clarifying that in order for the IME cap adjustment regulations at Sec. 412.105(f)(1)(iv)(A), Sec. 412.105(f)(1)(vii), and Sec. 412.105(f)(1)(xv) to be applicable to a teaching hospital with a main campus and a remote location(s), the main campus and its remote location(s), respectively, must each be either geographically located in a rural area as defined in 42 CFR part 412, subpart D, or reclassified as rural under Sec. 412.103. For direct GME purposes at Sec. 413.79, both the main campus and its remote location(s) are required to be geographically rural because a hospital's status for any direct GME payments or adjustments is unaffected by a Sec. 412.103 rural reclassification. We are proposing to codify these policies regarding the application of the qualifying criteria for hospitals with remote locations in the regulations at Sec. 412.92 for SCHs, Sec. 412.96 for RRCs, Sec. 412.103 for rural reclassification, or Sec. 412.108 for MDHs. Specifically, we are proposing to revise these regulations as follows: We are proposing to add paragraph (a)(4) to Sec. 412.92 to specify that, for a hospital with a main campus and one or more remote locations under a single provider agreement where services are provided and billed under the IPPS and that meets the provider-based criteria at Sec. 413.65 as a main campus and a remote location of a hospital, combined data from the main campus and its remote location(s) are required to demonstrate that the criteria at Sec. 412.92(a)(1)(i) and (ii) are met. For the mileage and rural location criteria at Sec. 412.92(a) and the mileage, accessibility, and travel time criteria specified at Sec. 412.92(a)(1) through (a)(3), the hospital must demonstrate that the main campus and its remote location(s) each independently satisfy those requirements. In Sec. 412.96, we are proposing to redesignate paragraph (d) as paragraph (e) and add a new paragraph (d) to specify that, for a hospital with a main campus and one or more remote locations under a single provider agreement where services are provided and billed under the IPPS and that meets the provider-based criteria at Sec. 413.65 as a main campus and a remote location of a hospital, combined data from the main campus and its remote location(s) are required to demonstrate that the criteria at Sec. 412.96(b)(1) and (2) and (c)(1) through (c)(5) are met. For purposes of meeting the rural location criteria in Sec. 412.96(b)(1) and (c) and the mileage criteria in Sec. 412.96(b)(2)(ii) and (c)(4), the hospital must demonstrate that the main campus and its remote location(s) each independently satisfy those requirements. We are proposing to add paragraph (a)(7) to Sec. 412.103 to specify that, for a hospital with a main campus and one or more remote locations under a single provider agreement where services are provided and billed under the IPPS and that meets the provider-based criteria at Sec. 413.65 as a main campus and a remote location of a hospital, the hospital must demonstrate that the main campus and its remote location(s) each independently satisfy the location criteria specified in Sec. 412.103(a)(1) and (2) (which criteria also are incorporated in Sec. 412.103(a)(6)). We are proposing to add paragraph (a)(3) to Sec. 412.108 to specify that, for a hospital with a main campus and one or more remote locations under a single provider agreement where services are provided and billed under the IPPS and that meets the provider-based criteria at Sec. 413.65 as a main campus and a remote location of a hospital, combined data from the main campus and its remote location(s) are required to demonstrate that the criteria in Sec. 412.108(a)(1) and (2) are met. For the location requirement specified at proposed amended paragraph (a)(1)(i) of this section, the hospital must demonstrate that the main campus and its remote location(s) each independently satisfy this requirement. We are inviting public comments on our proposals described above. E. Proposed Occupational Mix Adjustment to the FY 2019 Wage Index As stated earlier, section 1886(d)(3)(E) of the Act provides for the collection of data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index, for application beginning October 1, 2004 (the FY 2005 wage index). The purpose of the occupational mix adjustment is to control for the effect of hospitals' employment choices on the wage index. For example, hospitals may choose to employ different combinations of registered nurses, licensed practical nurses, nursing aides, and medical assistants for the purpose of providing nursing care to their patients. The varying labor costs associated with these choices reflect hospital management decisions rather than geographic differences in the costs of labor. 1. Use of 2016 Medicare Wage Index Occupational Mix Survey for the Proposed FY 2019 Wage Index Section 304(c) of the Consolidated Appropriations Act, 2001 (Pub. L. 106-554) amended section 1886(d)(3)(E) of the Act to require CMS to collect data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program. We collected data in 2013 to compute the occupational mix adjustment for the FY 2016, FY 2017, and FY 2018 wage indexes. As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19903) and final rule (82 FR 38137), a new measurement of occupational mix is required for FY 2019. The FY 2019 occupational mix adjustment is based on a new calendar year (CY) 2016 survey. Hospitals were required to submit their completed 2016 surveys (Form CMS-10079, OMB number 0938-0907) to their MACs by July 3, 2017. The preliminary, unaudited CY 2016 survey data were posted on the CMS website on July 12, 2017. As with the Worksheet S-3, Parts II and III cost report wage data, as part of the FY 2019 desk review process, the MACs revised or verified data elements in hospitals' occupational mix surveys that result in certain edit failures. [[Page 20361]] 2. Calculation of the Proposed Occupational Mix Adjustment for FY 2019 For FY 2019, we are proposing to calculate the occupational mix adjustment factor using the same methodology that we have used since the FY 2012 wage index (76 FR 51582 through 51586) and to apply the occupational mix adjustment to 100 percent of the FY 2019 wage index. Similar to the method we use for the calculation of the wage index without occupational mix, salaries and hours for a multicampus hospital are allotted among the different labor market areas where its campuses are located. Table 2 associated with this proposed rule (which is available via the Internet on the CMS website), which contains the proposed FY 2019 occupational mix adjusted wage index, includes separate wage data for the campuses of 16 multicampus hospitals. We refer readers to section III.C. of the preamble of this proposed rule for a chart listing the multicampus hospitals and the FTE percentages used to allot their occupational mix data. Because the statute requires that the Secretary measure the earnings and paid hours of employment by occupational category not less than once every 3 years, all hospitals that are subject to payments under the IPPS, or any hospital that would be subject to the IPPS if not granted a waiver, must complete the occupational mix survey, unless the hospital has no associated cost report wage data that are included in the FY 2019 wage index. For the proposed FY 2019 wage index, we are using the Worksheet S-3, Parts II and III wage data of 3,260 hospitals, and we are using the occupational mix surveys of 3,078 hospitals for which we also have Worksheet S-3 wage data, which represented a ``response'' rate of 94 percent (3,078/3,260). For the proposed FY 2019 wage index, we are applying proxy data for noncompliant hospitals, new hospitals, or hospitals that submitted erroneous or aberrant data in the same manner that we applied proxy data for such hospitals in the FY 2012 wage index occupational mix adjustment (76 FR 51586). As a result of applying this methodology, the proposed FY 2019 occupational mix adjusted national average hourly wage is $42.948428861. In summary, the proposed FY 2019 unadjusted national average hourly wage and the proposed FY 2019 occupational mix adjusted national average hourly wage is: ------------------------------------------------------------------------ Proposed unadjusted national Proposed occupational mix adjusted average hourly wage national average hourly wage ------------------------------------------------------------------------ $42.990625267 $42.948428861 ------------------------------------------------------------------------ F. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2019 Occupational Mix Adjusted Wage Index As discussed in section III.E. of the preamble of this proposed rule, for FY 2019, we are proposing to apply the occupational mix adjustment to 100 percent of the FY 2019 wage index. We calculated the proposed occupational mix adjustment using data from the 2016 occupational mix survey data, using the methodology described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51582 through 51586). Using the occupational mix survey data and applying the occupational mix adjustment to 100 percent of the FY 2019 wage index results in a proposed national average hourly wage of $42.948428861. The proposed FY 2019 national average hourly wages for each occupational mix nursing subcategory as calculated in Step 2 of the occupational mix calculation are as follows: ------------------------------------------------------------------------ Average hourly Occupational mix nursing subcategory wage ------------------------------------------------------------------------ National RN............................................. $41.67064907 National LPN and Surgical Technician.................... 24.68950438 National Nurse Aide, Orderly, and Attendant............. 16.96671421 National Medical Assistant.............................. 18.1339666 National Nurse Category................................. 35.05256013 ------------------------------------------------------------------------ The proposed national average hourly wage for the entire nurse category as computed in Step 5 of the occupational mix calculation is $35.05256013. Hospitals with a nurse category average hourly wage (as calculated in Step 4) of greater than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6) of less than 1.0. Hospitals with a nurse category average hourly wage (as calculated in Step 4) of less than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6) of greater than 1.0. Based on the 2016 occupational mix survey data, we determined (in Step 7 of the occupational mix calculation) that the national percentage of hospital employees in the nurse category is 42.3 percent, and the national percentage of hospital employees in the all other occupations category is 57.7 percent. At the CBSA level, the percentage of hospital employees in the nurse category ranged from a low of 26.6 percent in one CBSA to a high of 82.0 percent in another CBSA. We compared the FY 2019 proposed occupational mix adjusted wage indexes for each CBSA to the proposed unadjusted wage indexes for each CBSA. As a result of applying the proposed occupational mix adjustment to the wage data, the proposed wage index values for 232 (56.9 percent) urban areas and 23 (48.9 percent) rural areas would increase. The proposed wage index values for 113 (27.7 percent) urban areas would increase by greater than or equal to 1 percent but less than 5 percent, and the proposed wage index values for 7 (1.7 percent) urban areas would increase by 5 percent or more. The proposed wage index values for 9 (19.1 percent) rural areas would increase by greater than or equal to 1 percent but less than 5 percent, and 1 rural area's proposed wage index value would increase by 5 percent or more. However, the proposed wage index values for 175 (42.9 percent) urban areas and 24 (51.1 percent) rural areas would decrease. The proposed wage index values for 81 (19.9 percent) urban areas would decrease by greater than or equal to 1 percent but less than 5 percent, and 1 urban area's proposed wage index value would decrease by 5 percent or more. The proposed wage index values of 6 (12.8 percent) rural areas would decrease by greater than or equal to 1 percent and less than 5 percent, and no rural areas' proposed wage index values would decrease by 5 percent or more. The largest proposed positive impacts would be 6.42 percent for an urban area and 5.25 percent for a rural area. The largest proposed negative impacts would be 5.84 percent for an urban area and 1.6 percent for a rural area. One urban area's proposed wage indexes, but no rural area proposed wage indexes, would remain unchanged by application of the occupational mix adjustment. These results indicate that a larger percentage of urban areas (56.9 percent) would benefit from the occupational mix adjustment than would rural areas (48.9 percent). We also compared the FY 2019 wage data adjusted for occupational mix from the 2016 survey to the FY 2019 wage data adjusted for occupational mix from the 2013 survey. This analysis illustrates the effect on area wage indexes of using the 2016 survey data compared to the 2013 survey data; that is, it shows whether hospitals' wage indexes would increase or decrease under the 2016 survey data as compared to the prior 2013 survey data. Of the 407 [[Page 20362]] urban CBSAs and 47 rural CBSAs, our analysis shows that the FY 2019 wage index values for 179 (43.9 percent) urban areas and 20 (42.6 percent) rural areas would increase using the 2016 survey data. Ninety- eight (24.0 percent) urban areas would increase by greater than or equal to 1 percent but less than 5 percent, and 27 (6.6 percent) urban areas would increase by 5 percent or more. Nine (19.1 percent) rural areas would increase by greater than or equal to 1 percent but less than 5 percent, and 4 (8.5 percent) rural areas would increase by 5 percent or more. However, the wage index values for 229 (56.1 percent) urban areas and 27 (57.4 percent) rural areas would decrease using the 2016 survey data. One hundred thirty three (32.6 percent) urban areas would decrease by greater than or equal to 1 percent but less than 5 percent, and 24 (5.9 percent) urban areas would decrease by 5 percent or more. Eleven (23.4 percent) rural areas would decrease by greater than or equal to 1 percent but less than 5 percent, and 2 (4.3 percent) rural areas would decrease by 5 percent or more. The largest positive impacts using the 2016 survey data compared to the 2013 survey data are 17.2 percent for an urban area and 13.8 percent for a rural area. The largest negative impacts are 13.0 percent for an urban area and 14.0 percent for rural areas. No urban areas and no rural areas are unaffected. These results indicate that the wage indexes of more CBSAs overall (56.3 percent) would decrease due to application of the 2016 occupational mix survey data as compared to the 2013 occupational mix survey data to the wage index. Further, a slightly larger percentage of urban areas (43.9 percent) would benefit from the use of the 2016 occupational mix survey data as compared to the 2013 occupational mix survey data than would rural areas (42.6 percent). G. Proposed Application of the Rural, Imputed, and Frontier Floors 1. Proposed Rural Floor Section 4410(a) of Public Law 105-33 provides that, for discharges on or after October 1, 1997, the area wage index applicable to any hospital that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State. This provision is referred to as the ``rural floor.'' Section 3141 of Public Law 111-148 also requires that a national budget neutrality adjustment be applied in implementing the rural floor. Based on the proposed FY 2019 wage index associated with this proposed rule (which is available via the Internet on the CMS website), we estimated that 255 hospitals would receive an increase in their FY 2019 proposed wage index due to the application of the rural floor. 2. Proposed Expiration of Imputed Floor Policy In the FY 2005 IPPS final rule (69 FR 49109 through 49111), we adopted the ``imputed floor'' policy as a temporary 3-year regulatory measure to address concerns from hospitals in all[dash]urban States that have argued that they are disadvantaged by the absence of rural hospitals to set a wage index floor for those States. Since its initial implementation, we have extended the imputed floor policy eight times, the last of which was adopted in the FY 2018 IPPS/LTCH PPS final rule and is set to expire on September 30, 2018. (We refer readers to further discussions of the imputed floor in the IPPS/LTCH PPS final rules from FY 2014 through FY 2018 (78 FR 50589 through 50590, 79 FR 49969 through 49970, 80 FR 49497 through 49498, 81 FR 56921 through 56922, and 82 FR 38138 through 38142, respectively) and to the regulations at 42 CFR 412.64(h)(4).) Currently, there are three all- urban States--Delaware, New Jersey, and Rhode Island--with a range of wage indexes assigned to hospitals in these States, including through reclassification or redesignation. (We refer readers to discussions of geographic reclassifications and redesignations in section III.I. of the preamble of this proposed rule.) In computing the imputed floor for an all-urban State under the original methodology, which was established beginning in FY 2005, we calculated the ratio of the lowest-to-highest CBSA wage index for each all-urban State as well as the average of the ratios of lowest-to- highest CBSA wage indexes of those all-urban States. We then compared the State's own ratio to the average ratio for all-urban States and whichever is higher is multiplied by the highest CBSA wage index value in the State--the product of which established the imputed floor for the State. As of FY 2012, there were only two all-urban States--New Jersey and Rhode Island--and only New Jersey benefitted under this methodology. Under the previous OMB labor market area delineations, Rhode Island had only one CBSA (Providence-New Bedford-Fall River, RI- MA) and New Jersey had 10 CBSAs. Therefore, under the original methodology, Rhode Island's own ratio equaled 1.0, and its imputed floor was equal to its original CBSA wage index value. However, because the average ratio of New Jersey and Rhode Island was higher than New Jersey's own ratio, this methodology provided a benefit for New Jersey, but not for Rhode Island. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53368 through 53369), we retained the imputed floor calculated under the original methodology as discussed above, and established an alternative methodology for computing the imputed floor wage index to address the concern that the original imputed floor methodology guaranteed a benefit for one all-urban State with multiple wage indexes (New Jersey) but could not benefit the other all-urban State (Rhode Island). The alternative methodology for calculating the imputed floor was established using data from the application of the rural floor policy for FY 2013. Under the alternative methodology, we first determined the average percentage difference between the post[dash]reclassified, pre- floor area wage index and the post[dash]reclassified, rural floor wage index (without rural floor budget neutrality applied) for all CBSAs receiving the rural floor. (Table 4D associated with the FY 2013 IPPS/ LTCH PPS final rule (which is available via the Internet on the CMS website) included the CBSAs receiving a State's rural floor wage index.) The lowest post-reclassified wage index assigned to a hospital in an all-urban State having a range of such values then is increased by this factor, the result of which establishes the State's alternative imputed floor. We amended Sec. 412.64(h)(4) of the regulations to add paragraphs to incorporate the finalized alternative methodology, and to make reference and date changes. In summary, for the FY 2013 wage index, we did not make any changes to the original imputed floor methodology at Sec. 412.64(h)(4) and, therefore, made no changes to the New Jersey imputed floor computation for FY 2013. Instead, for FY 2013, we adopted a second, alternative methodology for use in cases where an all-urban State has a range of wage indexes assigned to its hospitals, but the State cannot benefit under the original methodology. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50589 through 50590), we extended the imputed floor policy (both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2014, while we continued to explore potential wage index reforms. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49969 through 49970), for FY 2015, we adopted a policy to extend the imputed floor policy (both the original methodology and alternative methodology) for another year, through September 30, 2015, as we continued to [[Page 20363]] explore potential wage index reforms. In that final rule, we revised the regulations at Sec. 412.64(h)(4) and (h)(4)(vi) to reflect the 1- year extension of the imputed floor. As discussed in section III.B. of the preamble of that FY 2015 final rule, we adopted the new OMB labor market area delineations beginning in FY 2015. Under the new OMB delineations, Delaware became an all-urban State, along with New Jersey and Rhode Island. Under the new OMB delineations, Delaware has three CBSAs, New Jersey has seven CBSAs, and Rhode Island continues to have only one CBSA (Providence-Warwick, RI-MA). We refer readers to a detailed discussion of our adoption of the new OMB labor market area delineations in section III.B. of the preamble of the FY 2015 IPPS/LTCH PPS final rule. Therefore, under the adopted new OMB delineations discussed in section III.B. of the preamble of the FY 2015 IPPS/LTCH PPS final rule, Delaware became an all-urban State and was subject to an imputed floor as well for FY 2015. In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49497 through 49498), for FY 2016, we extended the imputed floor policy (under both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2016. In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56921 through 56922), for FY 2017, we extended the imputed floor policy (under both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2017. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38138 through 38142), for FY 2018, we extended the imputed floor policy (under both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2018. In these three final rules, we revised the regulations at Sec. 412.64(h)(4) and (h)(4)(vi) to reflect the additional 1-year extensions. The imputed floor is set to expire effective October 1, 2018, and in this FY 2019 proposed rule, we are not proposing to extend the imputed floor policy. In the FY 2005 IPPS final rule (69 FR 49110), we adopted the imputed floor policy for all-urban States under the authority of section 1886(d)(3)(E) of the Act, which gives the Secretary broad authority to adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs of the DRG prospective payment rates for area differences in hospital wage levels by a factor (established by the Secretary). However, we have expressed reservations about the establishment of an imputed floor, considering that the imputed rural floor methodology creates a disadvantage in the application of the wage index to hospitals in States with rural hospitals but no urban hospitals receiving the rural floor (72 FR 24786 and 72 FR 47322). As we discussed in the FY 2008 IPPS final rule (72 FR 47322), the application of the rural and imputed floors requires transfer of payments from hospitals in States with rural hospitals but where the rural floor is not applied to hospitals in States where the rural or imputed floor is applied. For this reason, in this proposed rule, we are proposing not to apply an imputed floor to wage index calculations and payments for hospitals in all-urban States for FY 2019 and subsequent years. That is, hospitals in New Jersey, Delaware, and Rhode Island (and in any other all-urban State) would receive a wage index that is calculated without applying an imputed floor for FY 2019 and subsequent years. Therefore, only States containing both rural areas and hospitals located in such areas (including any hospital reclassified as rural under the provisions of Sec. 412.103 of the regulations) would benefit from the rural floor, in accordance with section 4410 of Public Law 105-33. In addition, we would no longer include the imputed floor as a factor in the national budget neutrality adjustment. Therefore, the proposed wage index and impact tables associated with this FY 2019 IPPS/LTCH PPS proposed rule (which are available via the Internet on the CMS website) do not reflect the imputed floor policy, and there is no proposed national budget neutrality adjustment for the imputed floor for FY 2019. We are inviting public comments on our proposal not to extend the imputed floor for FY 2019 and subsequent years. 3. Proposed State Frontier Floor for FY 2019 Section 10324 of Public Law 111-148 requires that hospitals in frontier States cannot be assigned a wage index of less than 1.0000. (We refer readers to the regulations at 42 CFR 412.64(m) and to a discussion of the implementation of this provision in the FY 2011 IPPS/ LTCH PPS final rule (75 FR 50160 through 50161).) In this FY 2019 IPPS/ LTCH PPS proposed rule, we are not proposing any changes to the frontier floor policy for FY 2019. In this proposed rule, 50 hospitals would receive the frontier floor value of 1.0000 for their FY 2019 wage index. These hospitals are located in Montana, Nevada, North Dakota, South Dakota, and Wyoming. The areas affected by the proposed rural and frontier floor policies for the proposed FY 2019 wage index are identified in Table 2 associated with this proposed rule, which is available via the Internet on the CMS website. H. Proposed FY 2019 Wage Index Tables In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49498 and 49807 through 49808), we finalized a proposal to streamline and consolidate the wage index tables associated with the IPPS proposed and final rules for FY 2016 and subsequent fiscal years. Prior to FY 2016, the wage index tables had consisted of 12 tables (Tables 2, 3A, 3B, 4A, 4B, 4C, 4D, 4E, 4F, 4J, 9A, and 9C) that were made available via the Internet on the CMS website. Effective beginning FY 2016, with the exception of Table 4E, we streamlined and consolidated 11 tables (Tables 2, 3A, 3B, 4A, 4B, 4C, 4D, 4F, 4J, 9A, and 9C) into 2 tables (Tables 2 and 3). In addition, as discussed in section III.J. of the preamble of this proposed rule, we are adding a Table 4 associated with this proposed rule entitled ``List of Counties Eligible for the Out-Migration Adjustment under Section 1886(d)(13) of the Act--FY 2019'' (which is available via Internet on the CMS Website) We refer readers to section VI. of the Addendum to this proposed rule for a discussion of the proposed wage index tables for FY 2019. I. Revisions to the Wage Index Based on Hospital Redesignations and Reclassifications 1. General Policies and Effects of Reclassification and Redesignation Under section 1886(d)(10) of the Act, the Medicare Geographic Classification Review Board (MGCRB) considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. Hospitals must apply to the MGCRB to reclassify not later than 13 months prior to the start of the fiscal year for which reclassification is sought (usually by September 1). Generally, hospitals must be proximate to the labor market area to which they are seeking reclassification and must demonstrate characteristics similar to hospitals located in that area. The MGCRB issues its decisions by the end of February for reclassifications that become effective for the following fiscal year (beginning October 1). The regulations applicable to reclassifications by the MGCRB are located in 42 CFR 412.230 through 412.280. (We refer readers to a discussion in the FY 2002 IPPS final rule (66 FR 39874 and 39875) regarding how the MGCRB defines mileage for [[Page 20364]] purposes of the proximity requirements.) The general policies for reclassifications and redesignations and the policies for the effects of hospitals' reclassifications and redesignations on the wage index are discussed in the FY 2012 IPPS/LTCH PPS final rule for the FY 2012 final wage index (76 FR 51595 and 51596). In addition, in the FY 2012 IPPS/LTCH PPS final rule, we discussed the effects on the wage index of urban hospitals reclassifying to rural areas under 42 CFR 412.103. Hospitals that are geographically located in States without any rural areas are ineligible to apply for rural reclassification in accordance with the provisions of 42 CFR 412.103. On April 21, 2016, we published an interim final rule with comment period (IFC) in the Federal Register (81 FR 23428 through 23438) that included provisions amending our regulations to allow hospitals nationwide to have simultaneous Sec. 412.103 and MGCRB reclassifications. For reclassifications effective beginning FY 2018, a hospital may acquire rural status under Sec. 412.103 and subsequently apply for a reclassification under the MGCRB using distance and average hourly wage criteria designated for rural hospitals. In addition, we provided that a hospital that has an active MGCRB reclassification and is then approved for redesignation under Sec. 412.103 will not lose its MGCRB reclassification; such a hospital receives a reclassified urban wage index during the years of its active MGCRB reclassification and is still considered rural under section 1886(d) of the Act and for other purposes. We discussed that when there is both a Sec. 412.103 redesignation and an MGCRB reclassification, the MGCRB reclassification controls for wage index calculation and payment purposes. We exclude hospitals with Sec. 412.103 redesignations from the calculation of the reclassified rural wage index if they also have an active MGCRB reclassification to another area. That is, if an application for urban reclassification through the MGCRB is approved, and is not withdrawn or terminated by the hospital within the established timelines, we consider the hospital's geographic CBSA and the urban CBSA to which the hospital is reclassified under the MGCRB for the wage index calculation. We refer readers to the April 21, 2016 IFC (81 FR 23428 through 23438) and the FY 2017 IPPS/LTCH PPS final rule (81 FR 56922 through 56930) for a full discussion of the effect of simultaneous reclassifications under both the Sec. 412.103 and the MGCRB processes on wage index calculations. 2. MGCRB Reclassification and Redesignation Issues for FY 2019 a. FY 2019 Reclassification Requirements and Approvals As previously stated, under section 1886(d)(10) of the Act, the MGCRB considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. The specific procedures and rules that apply to the geographic reclassification process are outlined in regulations under 42 CFR 412.230 through 412.280. At the time this proposed rule was constructed, the MGCRB had completed its review of FY 2019 reclassification requests. Based on such reviews, there are 337 hospitals approved for wage index reclassifications by the MGCRB starting in FY 2019. Because MGCRB wage index reclassifications are effective for 3 years, for FY 2019, hospitals reclassified beginning in FY 2017 or FY 2018 are eligible to continue to be reclassified to a particular labor market area based on such prior reclassifications for the remainder of their 3-year period. There were 259 hospitals approved for wage index reclassifications in FY 2017 that will continue for FY 2019, and 345 hospitals approved for wage index reclassifications in FY 2018 that will continue for FY 2019. Of all the hospitals approved for reclassification for FY 2017, FY 2018, and FY 2019, based upon the review at the time of this proposed rule, 941 hospitals are in a MGCRB reclassification status for FY 2019 (with 22 of these hospitals reclassified back to their geographic location). Under the regulations at 42 CFR 412.273, hospitals that have been reclassified by the MGCRB are permitted to withdraw their applications if the request for withdrawal is received by the MGCRB any time before the MGCRB issues a decision on the application, or after the MGCRB issues a decision, provided the request for withdrawal is received by the MGCRB within 45 days of the date that CMS' annual notice of proposed rulemaking is issued in the Federal Register concerning changes to the inpatient hospital prospective payment system and proposed payment rates for the fiscal year for which the application has been filed. For information about withdrawing, terminating, or canceling a previous withdrawal or termination of a 3[dash]year reclassification for wage index purposes, we refer readers to Sec. 412.273, as well as the FY 2002 IPPS final rule (66 FR 39887 through 39888) and the FY 2003 IPPS final rule (67 FR 50065 through 50066). Additional discussion on withdrawals and terminations, and clarifications regarding reinstating reclassifications and ``fallback'' reclassifications were included in the FY 2008 IPPS final rule (72 FR 47333) and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38148 through 38150). Changes to the wage index that result from withdrawals of requests for reclassification, terminations, wage index corrections, appeals, and the Administrator's review process for FY 2019 will be incorporated into the wage index values published in the FY 2019 IPPS/LTCH PPS final rule. These changes affect not only the wage index value for specific geographic areas, but also the wage index value that redesignated/ reclassified hospitals receive; that is, whether they receive the wage index that includes the data for both the hospitals already in the area and the redesignated/reclassified hospitals. Further, the wage index value for the area from which the hospitals are redesignated/ reclassified may be affected. Applications for FY 2020 reclassifications (OMB control number 0938-0573) are due to the MGCRB by September 4, 2018 (the first working day of September 2018). We note that this is also the deadline for canceling a previous wage index reclassification, withdrawal, or termination under 42 CFR 412.273(d). Applications and other information about MGCRB reclassifications may be obtained, beginning in mid-July 2018, via the Internet on the CMS website at: https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/index.html, or by calling the MGCRB at (410) 786[dash]1174. The mailing address of the MGCRB is: 1508 Woodlawn Drive, Suite 100, Baltimore, MD 21207. Under regulations in effect prior to FY 2018 (42 CFR 412.256(a)(1)), applications for reclassification were required to be mailed or delivered to the MGCRB, with a copy to CMS, and were not allowed to be submitted through the facsimile (FAX) process or by other electronic means. Because we believed this previous policy was outdated and overly restrictive and to promote ease of application for FY 2018 and subsequent years, in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56928), we revised this policy to require applications and supporting documentation to be submitted via the method prescribed in instructions by the MGCRB, with an electronic copy to CMS. Specifically, in the FY 2017 IPPS/LTCH PPS final rule, we revised Sec. 412.256(a)(1) to specify that an application must be submitted to the MGCRB according to the method prescribed by the MGCRB, with an [[Page 20365]] electronic copy of the application sent to CMS. We specified that CMS copies should be sent via email to