Federal Register Vol. 83, No.225,
Federal Register Volume 83, Issue 225 (November 21, 2018)
Federal Register Volume 83, Issue 225 (November 21, 2018)
| Page Range | 58721-59268 | |
| FR Document |
![58721
Rules and Regulations Federal Register
Vol. 83, No. 225
Wednesday, November 21, 2018
This section of the FEDERAL REGISTER the NRC’s Public Document Room (PDR) Nuclear Security and Incident Response
contains regulatory documents having general reference staff at 1–800–397–4209, 301– rather than to a division director.
applicability and legal effect, most of which 415–4737, or by email to pdr.resource@
are keyed to and codified in the Code of 10 CFR Parts 40, 73, and 76
nrc.gov.
Federal Regulations, which is published under Correct Division Title. In §§ 40.23(c),
50 titles pursuant to 44 U.S.C. 1510.
• NRC’s PDR: You may examine and
purchase copies of public documents at 40.66(c), and 40.67(c) and (d), 73.26,
The Code of Federal Regulations is sold by the NRC’s PDR, Room O1–F21, One 73.27, 73.67, and 76.5a, this final rule
the Superintendent of Documents. White Flint North, 11555 Rockville corrects the title of the Division of
Pike, Rockville, Maryland 20852. Security Policy to read as Division of
Physical and Cyber Security Policy.
FOR FURTHER INFORMATION CONTACT: Jill
NUCLEAR REGULATORY
Shepherd-Vladimir, Office of Nuclear 10 CFR Part 40
COMMISSION
Material Safety and Safeguards, U.S. Correct Designation. In
10 CFR Parts 37, 40, 70, 71, 72, 73, 76, Nuclear Regulatory Commission, § 40.23(b)(2)(ix), this final rule replaces
and 95 Washington, DC 20555–0001; telephone: the Division of Security Policy with the
301–415–1230, email: Jill.Shepherd- higher level designation of the Office of
[NRC–2018–0183] Vladimir@nrc.gov. Nuclear Security and Incident
RIN 3150–AK14 SUPPLEMENTARY INFORMATION: Response.
Correct Telephone Number. In
Miscellaneous Corrections— I. Introduction
§ 40.23(d), this final rule removes the
Organizational Changes The NRC is amending its regulations incorrect telephone number ‘‘(301) 415–
AGENCY: Nuclear Regulatory in parts 37, 40, 70, 71, 72, 73, 76, and 6828’’ and replaces it with the correct
Commission. 95 of title 10 of the Code of Federal telephone number ‘‘(301) 287–3598’’ for
ACTION: Final rule.
Regulations (10 CFR) to make the Director of the Division of Physical
miscellaneous corrections. These and Cyber Security Policy.
SUMMARY: The U.S. Nuclear Regulatory changes include removing an office
10 CFR Part 70
Commission (NRC) is amending its from a list of office recipients, removing
regulations to make miscellaneous an office reference, correcting an office Correct Office Designation. In
corrections. These changes include designation and a phone number, § 70.32(c)(2), (e), and (i), this final rule
removing an office from a list of office removing and correcting division titles, replaces the Office of Nuclear Security
recipients, removing an office reference, and removing a followup reporting and Incident Response with the Office
correcting an office designation and a instruction. This document is necessary of Nuclear Material Safety and
phone number, removing and correcting to inform the public of these non- Safeguards.
division titles, and removing a followup substantive amendments to the NRC’s 10 CFR Part 72
reporting instruction. This document is regulations.
necessary to inform the public of these Remove Division Title. In § 72.186(b),
II. Summary of Changes this final rule removes the Division of
non-substantive amendments to the
NRC’s regulations. 10 CFR Part 37 Spent Fuel Management so that
notifications go to the Director, Office of
DATES: This final rule is effective on Remove Office Reference. In § 37.7(a), Nuclear Material Safety and Safeguards
December 21, 2018. this final rule removes the Director, rather than to division level
ADDRESSES: Please refer to Docket ID Division of Security Policy, Office of management.
NRC–2018–0183 when contacting the Nuclear Security and Incident
NRC about the availability of Response, from the list of recipients. 10 CFR Part 95
information for this action. You may Remove Division Title. In § 95.9(a),
10 CFR Parts 37 and 40
obtain publicly-available information this final rule removes the Division of
related to this action by any of the Remove Reporting Instruction. In Security Operations so that notification
following methods: §§ 37.81(g) and 40.64(c)(2) and (3), this go to Office level management rather
• Federal Rulemaking Website: Go to final rule removes the erroneous than division level management.
http://www.regulations.gov and search instructions for where to submit a copy
for Docket ID NRC–2018–0183. Address of a followup notification. These III. Rulemaking Procedure
questions about NRC dockets to Carol paragraphs already point to the sections Under section 553(b) of the
Gallagher; telephone: 301–415–3463; that provide the appropriate mailing Administrative Procedure Act (5 U.S.C.
email: Carol.Gallagher@nrc.gov. address and addressee(s). 553(b)), an agency may waive the
• NRC’s Agencywide Documents requirements for publication in the
10 CFR Parts 37, 40, 70, 71, 72, and 73
Access and Management System Federal Register of a notice of proposed
khammond on DSK30JT082PROD with RULES
(ADAMS): You may obtain publicly- Remove Division Title. In §§ 37.77, rulemaking and opportunity for
available documents online in the 40.23(b)(1), 40.66(a) and (b)(5), 40.67(a), comment if it finds, for good cause, that
ADAMS Public Documents Collection at 70.5, 70.20, 71.97, 73.4, 73.37, 73.71, it is impracticable, unnecessary, or
http://www.nrc.gov/reading-rm/ 73.72, 73.73, and 73.74, this final rule contrary to the public interest. As
adams.html. To begin the search, select removes the Division of Security Policy authorized by 5 U.S.C. 553(b)(3)(B), the
‘‘Begin Web-based ADAMS Search.’’ For to ensure that correspondence goes NRC finds good cause to waive notice
problems with ADAMS, please contact directly to the Director, Office of and opportunity for comment on these
VerDate Sep<11>2014 15:51 Nov 20, 2018 Jkt 247001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\21NOR1.SGM 21NOR1](https://thefederalregister.org/doc/83_FR_225/page/7.svg)
Document Created: 2018-10-26 09:27:10
Document Modified: 2018-10-26 09:27:10
| Page and Subject | |
|---|---|
| 83 FR 58757 - Sunshine Act Meeting Notice | |
| 83 FR 58757 - Sunshine Act Meeting | |
| 83 FR 58765 - Board of Visitors, National Defense University; Notice of Federal Advisory Committee Meeting | |
| 83 FR 58767 - Proposed Information Collection Request; Comment Request; Information Collection Request for Reporting Requirements for BEACH Act Grants (Renewal) | |
| 83 FR 58768 - Request for Public Review and Comment: Draft Human Health Toxicity Assessments for Hexafluoropropylene Oxide Dimer Acid and Its Ammonium Salt (GenX Chemicals) and for Perfluorobutane Sulfonic Acid (PFBS) and Related Compound Potassium Perfluorobutane Sulfonate | |
| 83 FR 58762 - Community Bank Advisory Council Meeting | |
| 83 FR 58763 - Consumer Advisory Board Subcommittee Meetings | |
| 83 FR 58762 - Credit Union Advisory Council Meeting | |
| 83 FR 58809 - KET, LLC-Operation Exemption-Lines of Railroad in Benton County, Wash. | |
| 83 FR 58758 - Request for Comments and Notice of Roundtable on Energy, Information and Communication Technology, and Infrastructure in the Indo-Pacific Region | |
| 83 FR 58771 - Logfret, Inc., Complainant v. Kirsha, B.V., Leendert Johanness Bergwerff a/k/a Hans Bergwerff, Linda Sieval, Respondents; Notice of Filing of Complaint and Assignment | |
| 83 FR 58763 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; National Service Criminal History Check Recordkeeping Requirement | |
| 83 FR 58806 - Paul Didelius-Continuance in Control Exemption-KET, LLC | |
| 83 FR 58784 - Notice of Intent To Prepare an Environmental Impact Statement for the Proposed Campo Wind Energy Project, San Diego, California | |
| 83 FR 58783 - Draft Environmental Impact Statement for the Little River Band Trust Acquisition and Casino Project, Township of Fruitport, Muskegon County, Michigan | |
| 83 FR 58760 - Submission for OMB Review; Comment Request; “Patents for Humanity Program” | |
| 83 FR 58761 - Submission for OMB Review; Comment Request; “Patent Review and Derivation Proceedings” | |
| 83 FR 58761 - Submission for OMB Review; Comment Request; “Matters Related to First Inventor to File” | |
| 83 FR 58814 - Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board; Notice of Meetings | |
| 83 FR 58765 - Agency Information Collection Activities; Comment Request; Performance Partnership Pilots Application | |
| 83 FR 58756 - Submission for OMB Review; Comment Request | |
| 83 FR 58755 - Notice of Public Meeting of the Assembly of the Administrative Conference of the United States | |
| 83 FR 58754 - Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Cod by Catcher/Processors Using Trawl Gear in the Central Regulatory Area of the Gulf of Alaska | |
| 83 FR 58782 - Habitat Conservation Plan for Seven Species in the Santa Clara River Watershed; Categorical Exclusion for Foothill Feeder Inspection and Maintenance Activities, Los Angeles County, California | |
| 83 FR 58764 - Proposed Collection; Comment Request | |
| 83 FR 58771 - Notice of Agreement Filed | |
| 83 FR 58807 - CSX Transportation, Inc.-Lease-Western and Atlantic Railroad | |
| 83 FR 58771 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
| 83 FR 58766 - Fusion Energy Sciences Advisory Committee | |
| 83 FR 58757 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Turkey: Affirmative Final Results of Countervailing Duty Administrative Review | |
| 83 FR 58813 - Department of Transportation Advisory Committee on Human Trafficking; Notice of Public Meeting | |
| 83 FR 58745 - Safety Zone; Ohio River, Mile 28.0 to 29.2, Vanport, Pennsylvania | |
| 83 FR 58721 - Miscellaneous Corrections-Organizational Changes | |
| 83 FR 58788 - New Postal Products | |
| 83 FR 58787 - Arts Advisory Panel Meetings | |
| 83 FR 58775 - Administration on Intellectual and Developmental Disabilities, President's Committee for People With Intellectual Disabilities | |
| 83 FR 58777 - Charter Renewal of the Advisory Committee on Blood and Tissue Safety and Availability | |
| 83 FR 58766 - Combined Notice of Filings #1 | |
| 83 FR 58760 - Submission for OMB Review; Comment Request | |
| 83 FR 58787 - Memorandum of Understanding Between the U.S. Nuclear Regulatory Commission and the Wyoming Department of Environmental Quality | |
| 83 FR 58770 - FDIC Systemic Resolution Advisory Committee; Notice of Meeting | |
| 83 FR 58806 - 60-Day Notice of Proposed Information Collection: Overseas Schools Grant Status Report | |
| 83 FR 58811 - Petition for Exemption; Summary of Petition Received; Delta Air Lines, Inc. | |
| 83 FR 58739 - Special Conditions: Garmin International, Textron Aviation Inc. Model 560XL; Airplane Electronic-System Security Protection From Unauthorized Internal Access | |
| 83 FR 58740 - Special Conditions: Garmin International, Textron Aviation Inc. Model 560XL; Airplane Electronic-System Security Protection From Unauthorized External Access | |
| 83 FR 58810 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Certification of Airports | |
| 83 FR 58810 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Pilot Certification and Qualification Requirements for Air Carrier Operations | |
| 83 FR 58812 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Report of Inspections Required by Airworthiness Directives | |
| 83 FR 58800 - Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice of Filing of a Proposed Rule Change Regarding Minor Rule Violations | |
| 83 FR 58805 - Data Collection Available for Public Comments | |
| 83 FR 58779 - Center for Scientific Review; Notice of Closed Meeting | |
| 83 FR 58778 - National Institute of Neurological Disorders and Stroke; Notice of Closed Meetings | |
| 83 FR 58778 - National Heart, Lung, and Blood Institute; Notice of Closed Meeting | |
| 83 FR 58779 - National Heart, Lung, and Blood Institute; Notice of Meetings | |
| 83 FR 58776 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; General Licensing Provisions; Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products | |
| 83 FR 58778 - National Institute on Aging; Notice of Closed Meeting | |
| 83 FR 58724 - Large Financial Institution Rating System; Regulations K and LL | |
| 83 FR 58779 - Fiscal Year (FY) 2019 Funding Opportunity | |
| 83 FR 58775 - Use of the Names of Dairy Foods in the Labeling of Plant-Based Products; Extension of Comment Period | |
| 83 FR 58813 - Notice of OFAC Sanctions Actions | |
| 83 FR 58781 - Agency Information Collection Activities; Revision of a Currently Approved Collection; Application for Naturalization | |
| 83 FR 58789 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the JPMorgan Inflation Managed Bond ETF of the J.P. Morgan Exchange-Traded Fund Trust Under Rule 14.11(i), Managed Fund Shares | |
| 83 FR 58794 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Modify the NYSE American Options Fee Schedule | |
| 83 FR 58798 - Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1, Relating to a New Fee Incentive Scheme | |
| 83 FR 58802 - Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Make Permanent Exchange Rule 11.24, Which Sets Forth the Exchange's Pilot Retail Price Improvement Program | |
| 83 FR 58795 - Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Exchange's Fee Schedule Applicable to its Equities Trading Platform | |
| 83 FR 58771 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB | |
| 83 FR 58773 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB | |
| 83 FR 58785 - Notice of Intent To Prepare an Integrated Activity Plan and Environmental Impact Statement for the National Petroleum Reserve in Alaska | |
| 83 FR 58804 - Data Collection Available for Public Comments | |
| 83 FR 58786 - Supplemental Information Regarding Arizona Capital Counsel Mechanism | |
| 83 FR 58745 - Drawbridge Operation Regulation; Okeechobee Waterway (Caloosahatchee River), LaBelle, FL | |
| 83 FR 58743 - Amendment of Class E Airspace, Mountain City, TN; and Establishment of Class E Airspace; Elizabethton, TN | |
| 83 FR 58742 - Amendment of Class D Airspace and Establishment of Class E Airspace; Tyndall AFB, FL | |
| 83 FR 58747 - Endangered and Threatened Wildlife and Plants; Endangered Species Status for the Candy Darter | |
| 83 FR 59232 - Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for the Candy Darter | |
| 83 FR 58780 - Collection of Information Under Review by Office of Management and Budget; OMB Control Number: 1625-0035 | |
| 83 FR 59182 - Passenger Equipment Safety Standards; Standards for Alternative Compliance and High-Speed Trainsets | |
| 83 FR 58818 - Medicare Program: Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs |
Issue
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Federal Energy Regulatory Commission
Centers for Medicare & Medicaid Services
Community Living Administration
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
U.S. Citizenship and Immigration Services
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
National Endowment for the Arts
Federal Aviation Administration
Federal Railroad Administration
Foreign Assets Control Office
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Nuclear Regulatory Commission.
Final rule.
The U.S. Nuclear Regulatory Commission (NRC) is amending its regulations to make miscellaneous corrections. These changes include removing an office from a list of office recipients, removing an office reference, correcting an office designation and a phone number, removing and correcting division titles, and removing a followup reporting instruction. This document is necessary to inform the public of these non-substantive amendments to the NRC's regulations.
This final rule is effective on December 21, 2018.
Please refer to Docket ID NRC-2018-0183 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
•
•
•
Jill Shepherd-Vladimir, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1230, email:
The NRC is amending its regulations in parts 37, 40, 70, 71, 72, 73, 76, and 95 of title 10 of the
Under section 553(b) of the Administrative Procedure Act (5 U.S.C. 553(b)), an agency may waive the requirements for publication in the
The NRC has determined that this final rule is the type of action described in 10 CFR 51.22(c)(2), which categorically excludes from environmental review rules that are corrective or of a minor, nonpolicy nature and do not substantially modify existing regulations. Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rule.
This final rule does not contain a collection of information as defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.
The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).
The NRC has determined that the corrections in this final rule do not constitute backfitting and are not inconsistent with any of the issue finality provisions in 10 CFR part 52. The amendments are non-substantive in nature, including removing an office from a list of office recipients, removing an office reference, correcting an office designation and a phone number, removing and correcting division titles, and removing a followup reporting instruction. They impose no new requirements and make no substantive changes to the regulations. The corrections do not involve any provisions that would impose backfits as defined in 10 CFR chapter I, or would be inconsistent with the issue finality provisions in 10 CFR part 52. For these reasons, the issuance of the rule in final form would not constitute backfitting or represent a violation of any of the issue finality provisions in 10 CFR part 52. Therefore, the NRC has not prepared any additional documentation for this correction rulemaking addressing backfitting or issue finality.
This final rule is not a rule as defined in the Congressional Review Act (5 U.S.C. 801-808).
Byproduct material, Criminal penalties, Exports, Hazardous materials transportation, Imports, Licensed material, Nuclear materials, Penalties, Radioactive materials, Reporting and recordkeeping requirements, Security measures.
Criminal penalties, Exports, Government contracts, Hazardous materials transportation, Hazardous waste, Nuclear energy, Nuclear materials, Penalties, Reporting and recordkeeping requirements, Source material, Uranium, Whistleblowing.
Classified information, Criminal penalties, Emergency medical services, Hazardous materials transportation, Material control and accounting, Nuclear energy, Nuclear materials, Packaging and containers, Penalties, Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material, Whistleblowing.
Criminal penalties, Hazardous materials transportation, Incorporation by reference, Intergovernmental relations, Nuclear materials, Packaging and containers, Penalties, Radioactive materials, Reporting and recordkeeping requirements.
Administrative practice and procedure, Hazardous waste, Indians, Intergovernmental relations, Nuclear energy, Penalties, Radiation protection, Reporting and recordkeeping requirements, Security measures, Spent fuel, Whistleblowing.
Criminal penalties, Exports, Hazardous materials transportation, Incorporation by reference, Imports, Nuclear energy, Nuclear materials, Nuclear power plants and reactors, Penalties, Reporting and recordkeeping requirements, Security measures.
Certification, Criminal penalties, Nuclear energy, Penalties, Radiation protection, Reporting and recordkeeping requirements, Security measures, Special nuclear material, Uranium, Uranium enrichment by gaseous diffusion.
Classified information, Criminal penalties, Penalties, Reporting and recordkeeping requirements, Security measures.
For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 37, 40, 70, 71, 72, 73, 76, and 95:
Atomic Energy Act of 1954, secs. 11, 53, 81, 103, 104, 147, 148, 149, 161, 182, 183, 223, 234, 274 (42 U.S.C. 2014, 2073, 2111, 2133, 2134, 2167, 2168, 2169, 2201, 2232, 2233, 2273, 2282, 2021); Energy Reorganization Act of 1974, secs. 201, 202 (42 U.S.C. 5841, 5842); 44 U.S.C. 3504 note.
(a) By mail addressed to: ATTN: Document Control Desk; Director, Office of Nuclear Reactor Regulation; Director, Office of New Reactors; or Director, Office of Nuclear Material Safety and Safeguards, as appropriate, U.S. Nuclear
Atomic Energy Act of 1954, secs. 62, 63, 64, 65, 69, 81, 83, 84, 122, 161, 181, 182, 183, 184, 186, 187, 193, 223, 234, 274, 275 (42 U.S.C. 2092, 2093, 2094, 2095, 2099, 2111, 2113, 2114, 2152, 2201, 2231, 2232, 2233, 2234, 2236, 2237, 2243, 2273, 2282, 2021, 2022); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Uranium Mill Tailings Radiation Control Act of 1978, sec. 104 (42 U.S.C. 7914); 44 U.S.C. 3504 note.
Atomic Energy Act of 1954, secs. 51, 53, 57(d), 108, 122, 161, 182, 183, 184, 186, 187, 193, 223, 234, 274, 1701 (42 U.S.C. 2071, 2073, 2077(d), 2138, 2152, 2201, 2232, 2233, 2234, 2236, 2237, 2243, 2273, 2282, 2021, 2297f); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Nuclear Waste Policy Act of 1982, secs. 135, 141 (42 U.S.C. 10155, 10161); 44 U.S.C. 3504 note.
Atomic Energy Act of 1954, secs. 53, 57, 62, 63, 81, 161, 182, 183, 223, 234, 1701 (42 U.S.C. 2073, 2077, 2092, 2093, 2111, 2201, 2232, 2233, 2273, 2282, 2297f); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Nuclear Waste Policy Act of 1982, sec. 180 (42 U.S.C. 10175); 44 U.S.C. 3504 note. Section 71.97 also issued under Sec. 301, Public Law 96-295, 94 Stat. 789 (42 U.S.C. 5841 note).
Atomic Energy Act of 1954, secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 223, 234, 274 (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2210e, 2232, 2233, 2234, 2236, 2237, 2238, 2273, 2282, 2021); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); National Environmental Policy Act of 1969 (42 U.S.C. 4332); Nuclear Waste Policy Act of 1982, secs. 117(a), 132, 133, 134, 135, 137, 141, 145(g), 148, 218(a) (42 U.S.C. 10137(a), 10152, 10153, 10154, 10155, 10157, 10161, 10165(g), 10168, 10198(a)); 44 U.S.C. 3504 note.
Atomic Energy Act of 1954, secs. 53, 147, 149, 161, 170D, 170E, 170H, 170I, 223, 229, 234, 1701 (42 U.S.C. 2073, 2167, 2169, 2201, 2210d, 2210e, 2210h, 2210i, 2273, 2278a, 2282, 2297f); Energy Reorganization Act of 1974, secs. 201, 202 (42 U.S.C. 5841, 5842); Nuclear Waste Policy Act of 1982, secs. 135, 141 (42 U.S.C. 10155, 10161); 44 U.S.C. 3504 note. Section 73.37(b)(2) also issued under Sec. 301, Public Law 96-295, 94 Stat. 789 (42 U.S.C. 5841 note).
Atomic Energy Act of 1954, secs. 122, 161, 193(f), 223, 234, 1701 (42 U.S.C. 2152, 2201, 2243(f), 2273, 2282, 2297f); Energy Reorganization Act of 1974, secs. 201, 206, 211 (42 U.S.C. 5841, 5846, 5851); 44 U.S.C. 3504 note.
Atomic Energy Act of 1954, secs. 145, 161, 223, 234 (42 U.S.C. 2165, 2201, 2273, 2282); Energy Reorganization Act of 1974, sec. 201 (42 U.S.C. 5841); 44 U.S.C. 3504 note; E.O. 10865, as amended, 25 FR 1583, 3 CFR, 1959-1963 Comp., p. 398; E.O. 12829, 58 FR 3479, 3 CFR, 1993 Comp., p. 570; E.O. 12968, 60 FR 40245, 3 CFR, 1995 Comp., p. 391; E.O. 13526, 75 FR 707, 3 CFR, 2009 Comp., p. 298.
For the Nuclear Regulatory Commission.
Board of Governors of the Federal Reserve System (Board).
Final rule.
The Board is adopting a new rating system for large financial institutions in order to align with the Federal Reserve's current supervisory programs and practices for these firms. The final rating system applies to bank holding companies and non-insurance, non-commercial savings and loan holding companies with total consolidated assets of $100 billion or more, and U.S. intermediate holding companies of foreign banking organizations established under Regulation YY with total consolidated assets of $50 billion or more. The rating system will assign component ratings for capital planning and positions, liquidity risk management and positions, and governance and controls, and introduces a new rating scale. The Federal Reserve will assign initial ratings under the new rating system in 2019 for bank holding companies and U.S. intermediate holding companies subject to the Large Institution Supervision Coordinating Committee framework and in 2020 for all other large financial institutions. The Board is revising provisions in Regulations K and LL so they will remain consistent with certain features of the new rating system.
The final rule is effective on February 1, 2019.
Richard Naylor, Associate Director, (202) 728-5854, Molly Mahar, Associate Director, (202) 973-7360, Vaishali Sack, Assistant Director, (202) 452-5221, Christine Graham, Manager, (202) 452-3005, Division of Supervision and Regulation; Laurie Schaffer, Associate General Counsel, (202) 452-2272, Benjamin W. McDonough, Assistant General Counsel, (202) 452-2036, Scott Tkacz, Senior Counsel, (202) 452-2744, Keisha Patrick, Senior Counsel, (202) 452-3559, or Christopher Callanan, Counsel, (202) 452-3594, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869.
The Board is adopting a new supervisory ratings framework for certain large financial institutions that is designed to:
• Align with the Federal Reserve's current supervisory programs and practices;
• Enhance the clarity and consistency of supervisory assessments and communications of supervisory findings and implications; and
• Provide transparency related to the supervisory consequences of a given rating.
The final ratings framework applies to bank holding companies and non-insurance, non-commercial savings and loan holding companies with total consolidated assets of $100 billion or more, and U.S. intermediate holding companies of foreign banking organizations established under Regulation YY with total consolidated assets of $50 billion or more.
In the years following the 2007-2009 financial crisis, the Federal Reserve developed a supervisory program specifically designed to enhance resiliency and address the risks posed by large financial institutions to U.S. financial stability (LFI supervisory program). As set forth in SR letter 12-17/CA letter 12-14, the LFI supervisory program focuses supervisory attention on the core areas that are most likely to threaten the firm's financial and operational strength and resilience (capital, liquidity, and governance and controls).
“Operational strength and resilience” is defined as maintaining effective governance and controls to provide for continuity of the consolidated organization (including its critical operations and banking offices) and to promote compliance with laws and regulations, including those related to consumer protection, through a range of conditions.
Under SR letter 12-17/CA letter 12-14, “banking offices” are defined as U.S. depository institution subsidiaries and the U.S. branches and agencies of foreign banking organizations.
The Federal Reserve coordinates its supervision of firms that pose the greatest risk to U.S. financial stability through the Large Institution Supervision Coordinating Committee (LISCC). The LISCC supervisory program conducts annual horizontal reviews of LISCC firms and firm-specific examination work focused on evaluating those firms' (i) capital adequacy under normal and stressed conditions; (ii) liquidity positions and risk management practices; (iii) recovery and resolution preparedness; and (iv) governance and controls.
Since 2004, the Federal Reserve has used the “RFI/C(D)” rating system (referred to as the “RFI rating system”) to communicate its supervisory assessment of every bank holding company regardless of its asset size, complexity, or systemic importance.
The Federal Reserve adopted to apply the RFI rating system on a fully implemented basis to all savings and loan holding companies (SLHCs) with total consolidated assets of less than $100 billion, excluding SLHCs engaged in significant insurance or commercial activities.
The Federal Reserve has not modified the RFI rating system to reflect the substantial changes to the statutory and regulatory framework relating to large financial institutions, or the Federal Reserve's implementation of the LFI supervisory program in recent years. In light of these changes, the Board is adopting a new rating system applicable to these firms that is more closely aligned with the LFI supervisory program, so that the ratings more directly communicate the results of the Federal Reserve's supervisory assessment.
Because the statutory, regulatory, and supervisory framework for community and regional bank holding companies has not undergone material changes since the financial crisis, the RFI rating system remains a relevant and effective tool for developing and communicating supervisory assessments for those firms. Therefore, the RFI rating system will continue to be used in the supervision of these organizations.
On August 17, 2017, the Board invited public comment on a notice of proposed rulemaking to adopt a new rating system for large financial institutions (proposed LFI rating system).
Under the proposed LFI rating system, each banking organization would have been assigned ratings for three separate components: Capital Planning and Positions; Liquidity Risk Management and Positions; and Governance and Controls. The ratings would have been assigned using a four-point non-numeric scale (Satisfactory/Satisfactory Watch, Deficient-1, and Deficient-2).
The Board received 16 comments on the proposal from supervised firms, trade associations, industry consultants, and individuals. In addition, Federal Reserve staff held several meetings on the proposal with members of the public and obtained supplementary information from certain commenters. Summaries of these meetings are available on the Board's public website.
Most commenters generally supported the proposal to develop a new rating system that would be aligned with the Federal Reserve's LFI supervisory program. However, many commenters also expressed concerns regarding specific aspects of the proposal, including the applicability and implementation of the proposed LFI rating system and its underlying components, the lack of a standalone composite rating, the ratings scale, and the consequences of ratings assigned under the rating system.
Separately, the Board invited comment on two other proposals closely related to the proposed LFI rating system. The first proposal addressed proposed guidance on supervisory expectations for boards of directors, which set forth attributes of an effective board of directors of LFIs,
The final rating system adopts the core elements of the proposed LFI rating system, with certain modifications to address commenter concerns. Consistent with the proposal, a banking organization will be assigned three component ratings: Capital Planning and Positions; Liquidity Risk Management and Positions; and Governance and Controls. In addition, although the final LFI rating system retains a four-category, non-numeric rating scale, it identifies the top two categories as “Broadly Meets Expectations” and Conditionally Meets Expectations” to align with the definitions of those categories.
In the proposal, the LFI rating system would have applied to bank holding companies, non-insurance, non-commercial savings and loan holding companies, and U.S. IHCs of foreign banking organizations with $50 billion or more in total consolidated assets. The Board received several comments regarding the applicability of the LFI rating system. For example, one commenter suggested that the Board should use risk-based factors instead of asset size to determine which firms are subject to the LFI rating system. Another commenter suggested that the $50 billion threshold should be raised.
In addition to the comments received, the Board has taken into consideration that since the proposal, section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amended section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to modify the $50 billion minimum asset threshold for general application of enhanced prudential standards.
The Board issued two statements—one individually, and the other jointly with the FDIC and OCC—that provided information on Board-administered regulations and associated reporting requirements that EGRRCPA immediately affected.
In consideration of the comments received and the statutory changes under EGRRCPA, the final LFI rating system is being adopted for bank holding companies and, non-insurance and non-commercial savings and loan holding companies with total consolidated assets of $100 billion or more, and for U.S. IHCs of foreign banking organizations established under Regulation YY with total consolidated assets of $50 billion or more.
SLHCs are considered to be engaged in significant commercial activities if they derive 50 percent or more of their total consolidated assets or total revenues from activities that are not financial in nature under section 4(k) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1843(k)). SLHCs are considered to be engaged in significant insurance underwriting activities if they are either insurance companies or hold 25 percent or more of their total consolidated assets in subsidiaries that are insurance companies. SLHCs that meet these criteria are excluded from the definition of “covered savings and loan holding company” in § 217.2 of the Board's Regulation Q.
Bank holding companies with total consolidated assets of at least $50 billion but less than $100 billion will continue to be evaluated subject to the RFI rating system. The Board is currently reviewing existing supervisory guidance with respect to these firms to determine whether it is appropriate to make revisions to further distinguish supervisory expectations for firms with total consolidated assets of less than $100 billion.
The proposed LFI rating system would not have applied to SLHCs that are predominantly engaged in insurance or commercial activities. The Board continues to consider the appropriate regulatory regime for these firms. As such, the Board will continue to rate these SLHCs on an indicative basis under the RFI rating system as it considers further the appropriate manner to assign supervisory ratings to such firms on a permanent basis.
Under the proposal, the initial set of LFI ratings would have been assigned starting in 2018. Several commenters provided views regarding the timing and implementation of the final LFI rating system. For instance, commenters suggested that Federal Reserve delay implementation of the LFI rating system for firms with assets of less than $250 billion until the completion of regulatory reforms. Other commenters requested that the Board coordinate the implementation of the final LFI rating system with the related guidance setting forth attributes of effective boards and expectations for the management of business lines and independent risk management and controls, and the Federal Reserve provide more clarity regarding the implementation of the guidance.
In light of the changes to the application of enhanced prudential standards under EGRRCPA, the Board is currently considering ways to tailor the regulatory and supervisory framework for firms that are not in the LISCC portfolio. Accordingly, in order to conduct that review and seek public comment on any proposed revisions to the Board's regulations, the Federal Reserve will continue to use the RFI rating system for ratings in 2019 for holding companies with assets of $100 billion or more and U.S. intermediate holding companies of foreign banking organizations that are not subject to the LISCC framework. The Federal Reserve will assign ratings using the final LFI rating system beginning in early 2020.
For bank holding companies and U.S. IHCs of foreign banking organizations subject to the LISCC framework, the Federal Reserve will begin assigning ratings using the final LFI rating system in early 2019. In early 2019, LISCC firms will receive all three component ratings under the LFI rating system; following the initial rating assignment, updates to individual rating components may be assigned and communicated to the firm on a rolling basis, but at least annually.
The Board believes that it is important to have the LFI rating system become effective soon in order to align the supervisory rating system with the Board's current consolidated supervisory framework for large financial institutions. This alignment will enhance the clarity of the Board's supervisory program, as both the Board's supervisory assessment of a firm and its related assignment of the firm's ratings will directly relate with the three core areas of focus in the consolidated supervisory framework: Capital, liquidity, and governance and controls. For example, supervisory assessments of a firm's capital and liquidity can be prominently reflected in the ratings assigned under the LFI rating system, whereas such assessments are less easily communicated within the structure of the RFI rating system. To ensure that ratings are assigned in a consistent and fair manner, the Federal Reserve is implementing staff training and will undertake a multi-level review and vetting before ratings are assigned.
As noted above, the Board invited comment on two sets of guidance that
Commenters requested that the Federal Reserve rely to a greater extent on the supervisory evaluations conducted by other regulators, including both domestic and foreign supervisors. Coordination with other domestic regulators and foreign supervisory authorities is a critical component of the LFI supervisory program. Federal Reserve staff meets regularly with counterparts at domestic and foreign regulatory agencies that have primary supervisory responsibility with respect to a banking organization or its subsidiaries, or its foreign bank parent, in order to leverage work and ensure effective coordination. In assigning LFI component ratings under the final LFI rating system, the Federal Reserve will continue to rely to the fullest extent possible on applicable information and assessments developed by other relevant supervisors and functional regulators.
The proposed LFI rating system would have applied to U.S. IHCs of foreign banking organizations. Some commenters requested that the Board delay application of the LFI rating system to U.S. IHCs until the Board sought comment on governance and controls guidance designed specifically for U.S. IHCs. Commenters requested clarification on how the assignment of LFI ratings to U.S. IHCs would interact with other ratings assigned to the U.S. operations of foreign banking organizations (the combined U.S. operations assessment) and the ROCA rating for U.S. branches and agencies.
Under the principle of national treatment, the Federal Reserve generally applies standards to the U.S. operations of a foreign banking organization consistent with those that apply to similarly situated U.S. banking organizations. The U.S. operations of a foreign banking organization are subject to regulatory standards set forth in Regulation YY, and expectations related to capital planning and positions, liquidity risk management and positions, and governance and controls, that are parallel to those that apply to a U.S. bank holding company. Applying the final LFI rating system to U.S. IHCs of foreign banking organizations would be consistent with national treatment and the Board's approach to regulating and supervising foreign banking organizations.
As commenters note, the Board did not apply the guidance setting forth attributes of effective boards to U.S. IHCs, in recognition of the fact that a U.S. IHC is a subsidiary of a foreign banking organization. U.S. IHCs will not be subject to examinations solely focused on effectiveness of the U.S. IHC's board of directors.
The Board will continue to evaluate the U.S. branches of foreign banks under the ROCA system, and assign a single component rating to the foreign banking organization's U.S. operations. As noted in the preamble to the proposal, the Board is considering adjustments to the ratings for U.S. branches and the U.S. operations to better align with the LFI framework.
Commenters also requested clarity in how the LFI rating would impact the “well managed” status of a foreign banking organization that is a financial holding company. Under current law, a foreign banking organization that is a financial holding company must be well capitalized and must have a satisfactory composite rating of its U.S. branch and agency operations and a satisfactory rating of its U.S. combined operations, if one is given. As with the rating currently assigned to a U.S. IHC under the RFI system, the LFI rating assigned to the U.S. IHC would be an input into the rating of the combined U.S. operations of a foreign bank.
Under the proposed LFI rating system, the Federal Reserve would have evaluated and assigned ratings for the following three components: Capital Planning and Positions; Liquidity Risk Management and Positions; and Governance and Controls. The final LFI rating system adopts these component categories as proposed.
As proposed, the Capital Planning and Positions rating would have encompassed assessments of (i) the effectiveness of the governance and planning processes used by a firm to determine the amount of capital necessary to cover risks and exposures, and to support activities through a range of conditions; and (ii) the sufficiency of a firm's capital positions to comply with applicable regulatory requirements and to support the firm's ability to continue to serve as a financial intermediary through a range of conditions.
Several commenters sought clarification regarding the relationship between a firm's compliance with regulatory capital requirements and a firm's Capital Planning and Positions rating. In addition, some commenters asserted that receipt of a non-objection
The final LFI rating system adopts the description of the Capital Planning and Positions component rating used in the proposal. A firm's capital rating under the LFI rating system will reflect a broad assessment of the firm's capital planning and positions, based on horizontal reviews and firm-specific supervisory work focused on capital planning and positions. In consolidating supervisory findings into a comprehensive assessment of a firm's capital planning and positions, the Federal Reserve will take into account the materiality of a firm's outstanding and newly identified supervisory issues.
A firm's compliance with minimum regulatory capital requirements will be considered in assigning the firm's Capital Planning and Positions component rating; however, the Federal Reserve may determine that a firm does not meet expectations regarding its capital position in light of its idiosyncratic activities and risks, even if the firm meets minimum regulatory capital requirements. Any findings from supervisory stress testing, such as CCAR or similar activities, will represent inputs into the Capital Planning and Positions component rating. However, with respect to any firm that may be subject to a qualitative review of its capital planning practices, there is no automatic link between the results of that review and the firm's capital rating.
Some commenters argued that the Board should discontinue its practice of publicly objecting or not-objecting to a firm's capital plan. Last year, the Board exempted firms with less than $250 billion in assets and less than $75 billion in nonbank assets from the CCAR qualitative assessment, and in the recent stress capital buffer proposal, the Board sought comments on potential changes to the CCAR qualitative assessment.
In addition, commenters noted that the Board should clarify that the final LFI rating system does not create any new qualitative standards for capital planning, and others requested that the Board separately seek comment on the capital planning expectations included in SR letters 15-18 and 15-19. Consistent with the commenters' request, the Board confirms that the final LFI rating system does not create any new capital planning expectations applicable to LFIs. When the Board adopted SR letters 15-18 and 15-19, it did not seek comment on those letters, as they largely consolidated the Federal Reserve's existing capital planning guidance in one place. To the extent the Board considers adjustments to those letters in the future, the Board will take commenters' views into account.
As proposed, the Liquidity Risk Management and Positions component rating would have encompassed assessments of (i) the effectiveness of a firm's governance and risk management processes used to determine the amount of liquidity necessary to cover risks and exposures, and to support activities through a range of conditions; and (ii) the sufficiency of a firm's liquidity positions to comply with applicable regulatory requirements and to support the firm's ongoing obligations through a range of conditions.
Several commenters requested that the Board clarify how the liquidity rating would be assigned and clarify the linkage between a firm's rating and its compliance with the minimum liquidity requirements. The final ratings system adopts the description of the Liquidity Risk Management and Positions component rating used in the proposal without change. In assessing the liquidity risk management and position of a banking organization, the Federal Reserve evaluates each firm's risk management practices by reviewing the processes that firms use to identify, measure, monitor, and manage liquidity risk and make funding decisions, and evaluating the firm's compliance with the liquidity risk management requirements of Regulation YY. The Federal Reserve evaluates a firm's liquidity positions against applicable regulatory requirements, and assesses the firm's ability to support its obligations through other means, such as its funding concentrations. A firm's liquidity rating will reflect the materiality of issues identified through the supervisory process.
In addition, commenters requested additional detail on the relationship between the Liquidity Risk Management and Positions rating of a LISCC firm and its performance in the Comprehensive Liquidity Assessment Review (CLAR). As for all component ratings, horizontal and firm-specific examination work conducted under the LISCC liquidity program, which is inclusive of the horizontal work covered under the CLAR, will represent a material input into a firm's liquidity rating. Unlike CCAR, the LISCC liquidity program's assessment does not result in an objection or non-objection ; rather, it results in supervisory findings communicated to the firm, which may include “matters requiring attention” and “matters requiring immediate attention,” as applicable.
The proposed Governance and Controls component rating would have evaluated the effectiveness of a firm's (i) board of directors,
There are eight domestic firms in the LISCC portfolio: (1) Bank of America Corporation; (2) Bank of New York Mellon Corporation; (3) Citigroup, Inc.; (4) Goldman Sachs Group, Inc.; (5) JP Morgan Chase & Co.; (6) Morgan Stanley; (7) State Street Corporation; and (8) Wells Fargo & Company.
This component rating would have included consideration of a firm's compliance practices. One commenter suggested that the rating take into account only compliance matters that would have a material impact on a firm's financial and operational strength and resiliency. The Board expects all firms to comply fully with applicable laws and regulations, including those related to consumer protection. In assigning a supervisory rating, the Board will take into account the materiality of outstanding and identified supervisory issues, including the extent to which a matter would have a material impact on a firm's financial and operational strength and resiliency.
The proposed Governance and Controls component rating would have included a consideration of recovery planning for domestic LISCC firms, given the heightened risks that LISCC firms present to financial stability. One commenter suggested that the governance and controls rating not include recovery planning for domestic LISCC firms, because related supervisory expectations are already
The Board requested comment on whether resolution planning should also be a component of, or otherwise factored into, the LFI rating system. Several commenters argued against inclusion of resolution planning, stating, for example, that adding a separate component rating for resolution planning would be duplicative in light the current public deficiency findings under the resolution plan rule. One commenter supported the inclusion of resolution planning in the LFI rating system.
The Board has determined not to include a separate component rating for a firm's resolution planning as part of the final LFI rating system. The Board will continue to consider whether the LFI rating system should be modified in the future to include an assessment of the sufficiency of a firm's resolution planning efforts.
Under the proposed LFI rating system, ratings would have been assigned based on a four-point scale, with the following categories:
A four-category rating scale is intended to increase the usability of the scale—under the RFI rating system, the highest rating of “1” and the lowest rating of “5” were rarely used when rating LFIs. Further, the “Conditionally Meets Expectations” rating category enables the Federal Reserve to identify certain material issues at a firm and provide a firm with notice and the ability to fix those issues before the firm experiences regulatory consequences as a result of the ratings downgrade.
The final LFI rating system adopts a similar four-category scale, but uses different terminology to improve the descriptiveness of the rating categories. Specifically, the final rating categories are:
Several commenters also expressed the need for the use of additional quantitative measures improve transparency and consistency in how ratings are derived. The Federal Reserve will continue to use quantitative measures, together with supervisory judgment, to inform a comprehensive assessment of a firm's Capital, Liquidity, and Governance and Controls.
In the proposal, the highest rating category was “Satisfactory.” A “Satisfactory” rating would have indicated that a firm is considered safe and sound and broadly meets supervisory expectations.
The final LFI rating system renames the rating category as “Broadly Meets Expectations,” to align more closely with the underlying definition of the rating category.
Two commenters suggested that the rating scale should include a higher rating above the “Satisfactory” designation, similar to the “Strong” rating utilized with the RFI, CAMELS, and other supervisory rating systems. The final LFI rating system does not include a “Strong” rating, which may suggest that the Federal Reserve expects firms to exceed, not simply meet, supervisory expectations. In addition, a “Strong” rating would not enhance or clarify supervisory communications, as a “Strong” rating would have no supervisory consequences.
One commenter stated that the rule should clarify the circumstances under which MRAs or MRIAs would trigger a downgrade from the “Satisfactory” rating. As noted above, in consolidating supervisory findings into a comprehensive assessment in each category, the Board will take into account the materiality of a firm's outstanding and newly identified supervisory issues. While a given ratings assessment will depend on the circumstances, the LFI rating scale is designed to clarify the relationship between supervisory issues and deficiencies, and a firm's progress in remediation and mitigation efforts.
In the proposed LFI rating system, the second highest rating category was “Satisfactory Watch.” This rating would have indicated that a firm was generally considered safe and sound; however, certain issues were sufficiently material that, if not resolved in a timely manner in the normal course of business, they would put the firm's prospects for remaining safe and sound through a range of conditions at risk. As noted in the proposal, the “Satisfactory Watch” rating was intended to be consistent with the Federal Reserve's practice of providing notice to firms that they are likely to be downgraded if identified weaknesses are not resolved in a timely manner.
The preamble to the proposal noted that the “Satisfactory Watch” rating was not intended to be used for a prolonged period; rather, firms would have had a specified timeframe to fully resolve issues leading to that rating (as is the case with all supervisory issues), but generally no longer than 18 months. Several commenters noted that many supervisory issues take longer than 18 months to resolve, and that resolution of certain issues requires substantial infrastructure investment and changes in processes and controls. As such, these commenters argued that the specified remediation timeframes in the “Satisfactory Watch” rating should be based on the specific facts and circumstances of the supervisory issue(s) in question, rather than limited to an 18-month period. These commenters also argued that a firm should not be downgraded provided the firm makes good faith efforts to remediate the issues and progress is made.
As in the proposal, the final ratings framework states that the Federal Reserve does not intend for a firm to be rated “Conditionally Meets Expectations” for a prolonged period. However, unlike the proposal, the final ratings framework does not establish a fixed timeline for how long a firm can be rated “Conditionally Meets Expectations.” Instead, the final ratings framework reflects an understanding that timelines will be issues-specific, noting that the Federal Reserve will work with the firm to develop an
One commenter recommended that the “Satisfactory Watch” rating should be permanent, rather than temporary, while another argued that the “Satisfactory Watch” rating should be used infrequently. The final LFI rating system acknowledges there are circumstances when a firm may be rated “Conditionally Meets Expectations” for a longer period of time if, for instance, the firm is close to completing resolution of the supervisory issues leading to the “Conditionally Meets Expectations” rating, but new issues may be identified that, taken alone, would be consistent with a “Conditionally Meets Expectations” rating. In this event, the firm may continue to be rated “Conditionally Meets Expectations,” provided the new issues do not reflect a pattern of deeper or prolonged capital planning or position weaknesses consistent with a “Deficient” rating.
The proposal would have provided that “Satisfactory Watch” would be appropriate when a firm could resolve the issue in a timely manner in the normal course of business. Commenters requested clarification on expectations regarding “normal course of business.” The final LFI rating system clarifies that “normal course of business” means that a firm has the ability to resolve these issues through measures that do not require a material change to the firm's business model or financial profile, or its governance, risk management, or internal control structures or practices.
Several commenters also argued that a firm rated “Deficient” should be upgraded to the “Satisfactory Watch” rating if the firm has remediated identified deficiencies but a validation process had not yet been completed. As indicated in the Deficient-1 section below, the final LFI framework indicates that a firm previously rated “Deficient” may be upgraded to “Conditionally Meets Expectations” if the firm's remediation and mitigation activities are sufficiently advanced so that its prospects for remaining safe and sound are no longer at significant risk, even if the firm has outstanding supervisory issues or is subject to an active enforcement action.
In the proposal, the third rating category was “Deficient-1,” which would have indicated that, although the firm's current condition is not considered to be materially threatened, there were financial and/or operational deficiencies that put its prospects for remaining safe and sound through a range of conditions at significant risk. The final ratings framework maintains the name of the third rating category.
Under the proposed LFI rating system, a firm that received a rating of “Deficient-1” or “Deficient-2” in any component rating would not be considered “well managed” for purposes of the Bank Holding Company Act (BHC Act).
Conditioning a firm's “well managed” status on all three rating categories reflects the judgment that a banking organization is not in satisfactory condition overall unless it is considered sound in each of the key areas of capital, liquidity, and governance and controls. Each rating category includes assessments of key aspects of a firm's practices and capabilities, including management, that are necessary to operate in a safe-and-sound manner. A “Deficient” rating in any of the components reflects the supervisory conclusion that financial or operational deficiencies have placed the firm's safety and soundness at significant risk, which would not warrant a firm being deemed “well managed.” Accordingly, the final LFI rating system maintains the proposed approach to determining whether a firm is “well managed.”
Under current law, a firm must receive a “Satisfactory” risk management and composite rating in order to qualify as “well managed.” Several commenters argued that the proposed rating scale would introduce a more rigid standard compared with the RFI rating system, potentially making LFIs less likely to be considered “well managed.” In the Board's view, any rigidity is balanced by the introduction of the “Conditionally Meets Expectations” rating, which provides notice to firms that they are likely to be downgraded if identified weaknesses are not resolved in a timely manner.
The proposal noted that a “Deficient-1” component rating would often be an indication that the firm should be subject to either an informal or formal enforcement action, and may also result in the designation of the firm as being in “troubled condition.”
Consistent with commenters' views, the final LFI rating system reflects that there is no presumption that a firm rated “Deficient-1” would be deemed to be in “troubled condition.” Whether a firm rated “Deficient-1” receives a “troubled condition” designation will be determined by the facts and circumstances at that firm. However, firms rated “Deficient-1” due to financial weaknesses in either capital or liquidity would be more likely to be deemed in “troubled condition” than firms rated “Deficient-1” due solely to issues of governance or controls.
While a commenter asked that a “Deficient-1” rating be an automatic bar to new or expansionary activity, others suggested that firms rated “Deficient-1” not be subject to any restrictions on growth. Consistent with the proposal, receiving a “Deficient-1” rating under the final LFI rating system would result in automatic consequences for a firm's “well managed” status, which would limit the firm's ability to engage in new or expansionary nonbanking activities. Further, as with the proposal, a “Deficient-1” rating in the final LFI rating system could be a barrier for a firm seeking the Federal Reserve's approval of a proposal to engage in new or expansionary activities, unless the firm can demonstrate that (i) it is making meaningful, sustained progress in resolving identified deficiencies and
A “Deficient-2” rating indicates that financial and/or operational deficiencies materially threaten the firm's safety and soundness, or have already put the firm in an unsafe and unsound condition. The proposal noted that a firm with a “Deficient-2” component rating would be required to immediately (i) implement comprehensive corrective measures sufficient to restore and maintain appropriate capital planning capabilities and adequate capital positions; and (ii) demonstrate the sufficiency, credibility and readiness of contingency planning in the event of further deterioration of the firm's financial or operational strength or resiliency. It also noted that there is a strong presumption that a firm rated “Deficient-2” will be subject to a formal enforcement action by the Federal Reserve, and that the Federal Reserve would be unlikely to approve a proposal from a firm to engage in new or expansionary activities.
The final LFI rating system adopts the “Deficient-2” ratings category without change.
The proposed LFI rating system described the areas of assessment under each component rating, but would not have assigned separate subcomponents for each area of assessment. A few commenters recommended that each of the three component ratings include subcomponent ratings, as used in the RFI rating system. These commenters argued that subcomponent ratings aid supervisory staff to consistently apply the component rating across institutions, and allow firms to more easily identify, communicate, and correct deficiencies across the organization.
Communicating a single rating in each component is intended to reinforce the Board's view that the strength of a firm's capital and liquidity position is integrated with the effectiveness the firm's capital planning and liquidity risk management, respectively, and the strength of a firm's risk management depends on the effectiveness of the board oversight. In developing the rating, the Federal Reserve will rely on firm-specific and horizontal examination work. Throughout the year, and in connection with its rating, firms will receive feedback relating to the supervisory activities that inform the ratings, which will provide firms with specific feedback relating to the elements of the rating.
Several commenters asserted that the LFI rating system should include a separate, standalone composite rating in addition to the three component ratings. These commenters asserted that a composite rating would provide a fuller view of the health of each institution.
Unlike other supervisory rating systems, including the RFI rating system, the Federal Reserve will not assign a standalone composite rating under the LFI rating system. As noted in the proposal, assigning a standalone composite rating is not necessary because the three component ratings are designed to clearly communicate supervisory assessments and associated consequences for each of the core areas (capital, liquidity, and governance and controls). Further, the components identify those core areas that are necessary and critical to a firm's strength and resilience. It is unlikely that the assignment of a standalone composite rating would convey new or additional information regarding these supervisory assessments not already communicated by the three component ratings, and a standalone composite rating could dilute the clarity and impact of the component ratings. As such, the final LFI rating system does not include a separate standalone composite rating.
In accordance with the Federal Reserve's regulations governing confidential supervisory information,
In addition, some commenters indicated that there should be a more effective process for firms to challenge and seek review of supervisory findings, such as additional opportunities to respond to adverse findings by examiners, and meetings with the Federal Reserve. The Federal Reserve is committed to engaging in ongoing dialogue with banking organizations regarding supervisory findings to ensure that firms understand supervisory expectations and that the Federal Reserve understands the way that firms think about their business and risks. The Board also is committed to maintaining an effective independent appellate process to allow institutions to seek review of material supervisory determinations. The Board recently issued a proposal that is out for comment and is currently considering comments on that proposal.
References to holding company ratings are included in a number of the Federal Reserve's existing regulations. In certain cases, the regulations are narrowly constructed such that they contemplate only the assignment of a standalone composite rating using a numerical rating scale. This is consistent with the current RFI rating system but is not compatible with the LFI rating system. Three provisions in the Federal Reserve's existing regulations are written in this manner, including two in Regulation K and one in Regulation LL.
In Regulation K, § 211.2(z) includes a definition of “well managed” which, in part, requires a bank holding company to have received a composite rating of 1 or 2 at its most recent examination or review; and § 211.9(a)(2) requires an investor (which by definition can be a bank holding company) to have received a composite rating of at least 2 at its most recent examination in order to make investments under the general consent or limited general consent procedures contained in § 211.9(b) and (c).
In Regulation LL, § 238.54(a)(1) restricts savings and loan holding companies from commencing certain activities without the Federal Reserve's
To ensure that the Federal Reserve's regulations are consistent and compatible with all aspects of both the RFI rating system as well as the LFI rating system, the Federal Reserve is amending those three regulatory provisions so that they will apply to entities which receive numerical composite ratings as well as to entities which do not receive numerical composite ratings (including firms subject to the LFI rating system).
As compared to the RFI rating system, the proposed LFI rating system did not include an explicit assessment of a banking organization's ability to protect depository institutions from the activities of non-depository or capital market subsidiaries. The commenter suggested the Board revise the proposal to recognize the importance of this concept.
In response to the commenter, the final LFI rating system acknowledges that a banking organization is expected to ensure that the consolidated organization, including its critical operations and banking offices, remains safe and sound through a range of potentially stressful conditions.
The final LFI rating system includes several structural changes from the RFI rating system. The following table provides a broad comparison between the two rating systems.
There is no collection of information required by this proposal that would be subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
The RFA requires an agency to prepare a final regulatory flexibility analysis (FRFA) unless the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. The FRFA must contain: (1) A statement of the need for, and objectives of, the rule; (2) a statement of the significant issues raised by the public comments in response to the IRFA, a statement of the agency's assessment of such issues, and a statement of any changes made in the proposed rule as a result of such comments; (3) the response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, and a detailed statement of any changes made to the proposed rule in the final rule as a result of the comments; (4) a description of an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available; (5) a description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and type of professional skills necessary for preparation of the report or record; and (6) a description of the steps the agency has taken to minimize the economic impact on small entities, including a statement for selecting or rejecting the other significant alternatives to the rule considered by the agency.
The final rule adopts a new holding company rating system for large financial institutions, and amend the Board's Regulations K and LL to ensure the Board's regulations are compatible with all aspects of the LFI rating system, but will not change the operation of those regulations for any entity that is not subject to the LFI rating system. Commenters did not raise any issues in response to the IRFA. In addition, the Chief Counsel for Advocacy of the Small Business Administration did not file any comments in response to the proposed rule.
Under regulations issued by the Small Business Administration (SBA), a “small entity” includes a depository institution, bank holding company, or savings and loan holding company with assets of $550 million or less (small banking organizations). As discussed in the
Companies that are subject to the final rule therefore substantially exceed the $550 million asset threshold at which a banking entity is considered a “small entity” under SBA regulations. Because the final rule does not apply to any company with assets of $550 million or less, the final rule would not apply to any “small entity” for purposes of the RFA.
There are no projected reporting, recordkeeping, or other compliance requirements associated with the final rule. As discussed above, the final rule does not apply to small entities.
The Board does not believe that the final rule duplicates, overlaps, or conflicts with any other Federal Rules. In addition, the Board does not believe there are significant alternatives to the final rule that have less economic impact on small entities. In light of the foregoing, the Board does not believe the final rule will have a significant economic impact on a substantial number of small entities.
Section 722 of the Gramm-Leach-Bliley Act requires the Board to use plain language in all proposed and final rules published after January 1, 2000. The Board received no comments on these matters and believes that the final rule is written plainly and clearly.
Exports, Federal Reserve System, Foreign banking, Holding companies, Investments, Reporting and recordkeeping requirements.
Administrative practice and procedure, Banks, Banking, Federal Reserve System, Holding companies, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Board amends 12 CFR parts 211 and 238 as follows:
12 U.S.C. 221
(z)
(a) * * *
(2)
5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464, 1467, 1467a, 1468, 1813, 1817, 1829e, 1831i, 1972; 15 U.S.C. 78
(a) * * *
(1) The holding company received a rating of satisfactory or above prior to January 1, 2008, or thereafter, either received a composite rating of “1” or “2” or be considered satisfactory under the applicable rating system in its most recent examination, and is not in a troubled condition as defined in § 238.72, and the holding company does not propose to commence the activity by an acquisition (in whole or in part) of a going concern; or
The following appendix will not appear in the Code of Federal Regulations.
Each large financial institution (LFI) is expected to ensure that the consolidated organization (or the combined U.S. operations in the case of foreign banking organizations), including its critical operations and banking offices, remain safe and sound and in compliance with laws and regulations, including those related to consumer protection.
Hereinafter, when “safe and sound” or “safety and soundness” is used in this framework, related expectations apply to the consolidated organization and the firm's critical operations and banking offices.
“Critical operations” are a firm's operations, including associated services, functions and support, the failure or discontinuance of which, in the view of the firm or the Federal Reserve, would pose a threat to the financial stability of the United States.
“Banking offices” are defined as U.S. depository institution subsidiaries, as well as the U.S. branches and agencies of foreign banking organizations.
“Operational strength and resilience” is defined as maintaining effective governance and controls to provide for the continuity of the consolidated organization (including its critical operations and banking offices) and to promote compliance with laws and regulations, including those related to consumer protection, through a range of conditions.
References to “financial or operational” weaknesses or deficiencies implicate a firm's financial or operational strength and resilience.
The LFI rating system is designed to:
• Fully align with the Federal Reserve's current supervisory programs and practices, which are based upon the LFI supervision framework's core objectives of reducing the probability of LFIs failing or experiencing material distress and reducing the risk to U.S. financial stability;
• Enhance the clarity and consistency of supervisory assessments and communications of supervisory findings and implications; and
• Provide transparency related to the supervisory consequences of a given rating.
The LFI rating system is comprised of three components:
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At this time, recovery planning expectations only apply to domestic bank holding companies subject to the Federal Reserve's LISCC supervisory framework. Should the Federal Reserve expand the scope of recovery planning expectations to encompass additional firms, this rating will reflect such expectations for the broader set of firms.
Each LFI component rating is assigned along a four-level scale:
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The Federal Reserve does not intend for a firm to be assigned a “Conditionally Meets Expectations” rating for a prolonged period, and will work with the firm to develop an appropriate timeframe to fully resolve the issues leading to the rating assignment and merit upgrade to a “Broadly Meets Expectations” rating.
A firm is assigned a “Conditionally Meets Expectations” rating—as opposed to a “Deficient” rating—when it has the ability to resolve these issues through measures that do not require a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices. Failure to resolve the issues in a timely manner would most likely result in the firm's downgrade to a “Deficient” rating, since the inability to resolve the issues would indicate that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
It is recognized that completion and validation of remediation activities for select supervisory issues—such as those involving information technology modifications—may require an extended time horizon. In all instances, appropriate and effective risk mitigation techniques must be utilized in the interim to maintain safe-and-sound operations under a range of conditions until remediation activities are completed, validated, and fully operational.
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A firm's failure to resolve the issues in a timely manner that gave rise to a “Conditionally Meets Expectations” rating would most likely result in its downgrade to a “Deficient” rating.
A firm with a “Deficient-1” rating is required to take timely corrective action to correct financial or operational deficiencies and to restore and maintain its safety and soundness and compliance with laws and regulations, including those related to consumer protection. There is a strong presumption that a firm with a “Deficient-1” rating will be subject to an informal or formal enforcement action, and this rating assignment could be a barrier for a firm seeking Federal Reserve approval to engage in new or expansionary activities.
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A firm with a “Deficient-2” rating is required to immediately implement comprehensive corrective measures, and demonstrate the sufficiency of contingency planning in the event of further deterioration. There is a strong presumption that a firm with a “Deficient-2” rating will be subject to a formal enforcement action, and the Federal Reserve would be unlikely to approve any proposal from a firm with this rating to engage in new or expansionary activities.
The Federal Reserve will take into account a number of individual elements of a firm's practices, capabilities and performance when making each component rating assignment. The weighting of an individual element in assigning a component rating will depend on its impact on the firm's safety, soundness and resilience as provided for in the LFI rating system definitions. For example, for purposes of the Governance and Controls rating, a limited number of significant deficiencies—or even just one significant deficiency—noted for management of a single material business line could be viewed as sufficiently important to warrant a “Deficient-1” for the Governance and Controls component rating, even if the firm meets supervisory expectations under the Governance and Controls component in all other respects.
Under the LFI rating system, a firm must be rated “Broadly Meets Expectations” or “Conditionally Meets Expectations” for each of the three component ratings (Capital, Liquidity, Governance and Controls) to be considered “well managed” in accordance with various statutes and regulations.
The LFI rating system is comprised of three component ratings:
The Capital Planning and Positions component rating evaluates (i) the effectiveness of a firm's governance and planning processes used to determine the amount of capital necessary to cover risks and exposures, and to support activities through a range of conditions; and (ii) the sufficiency of a firm's capital positions to comply with applicable regulatory requirements and to support the firm's ability to continue to serve as a financial intermediary through a range of conditions.
In developing this rating, the Federal Reserve evaluates:
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A firm's capital planning and positions broadly meet supervisory expectations and support maintenance of safe-and-sound operations. Specifically:
• The firm is capable of producing sound assessments of capital adequacy through a range of conditions;
• The firm's current and projected capital positions comply with regulatory requirements, and support its ability to absorb current and potential losses, to meet obligations, and to continue to serve as a financial intermediary through a range of conditions.
A firm rated “Broadly Meets Expectations” may be subject to identified supervisory issues requiring corrective action. However, these issues are unlikely to present a threat to the firm's ability to maintain safe-and-sound operations through a range of potentially stressful conditions.
A firm that does not meet the capital planning and position expectations associated with a “Broadly Meets Expectations” rating will be rated “Conditionally Meets Expectations,” “Deficient-1,” or “Deficient-2,” and subject to potential consequences as outlined below.
Certain, material financial or operational weaknesses in a firm's capital planning or positions may place the firm's prospects for remaining safe and sound through a range of conditions at risk if not resolved in a timely manner during the normal course of business.
Specifically, if left unresolved, these weaknesses:
• May threaten the firm's ability to produce sound assessments of capital adequacy through a range of conditions; and/or
• May result in the firm's projected capital positions being insufficient to absorb potential losses, comply with regulatory requirements, and support the firm's ability to meet current and prospective obligations and to continue to serve as a financial intermediary through a range of conditions.
The Federal Reserve does not intend for a firm to be rated “Conditionally Meets Expectations” for a prolonged period. The firm has the ability to resolve these issues through measures that do not require a material change to the firm's business model or financial profile, or its governance, risk management, or internal control structures or practices. The Federal Reserve will work with the firm to develop an appropriate timeframe during which the firm would be required to resolve each supervisory issue leading to the “Conditionally Meets Expectations” rating.
The Federal Reserve will closely monitor the firm's remediation and mitigation activities; in most instances, the firm will either:
(i) Resolve the issues in a timely manner and, if no new material supervisory issues arise, be upgraded to a “Broadly Meets Expectations” rating because the firm's capital planning practices and related positions would broadly meet supervisory expectations; or
(ii) Fail to resolve the issues in a timely manner and be downgraded to a “Deficient-1” rating, because the inability to resolve the issues would indicate that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
It is possible that a firm may be close to completing resolution of the supervisory issues leading to the “Conditionally Meets Expectations” rating, but new issues are identified that, taken alone, would be consistent with a “Conditionally Meets Expectations” rating. In this event, the firm may continue to be rated “Conditionally Meets Expectations,” provided the new issues do not reflect a pattern of deeper or prolonged capital planning or position weaknesses consistent with a “Deficient” rating.
A “Conditionally Meets Expectations” rating may be assigned to a firm that meets the above definition regardless of its prior rating. A firm previously rated “Deficient-1” may be upgraded to “Conditionally Meets Expectations” if the firm's remediation and mitigation activities are sufficiently advanced so that the firm's prospects for remaining safe and sound are no longer at significant risk, even if the firm has outstanding supervisory issues or is subject to an active enforcement action.
Financial or operational deficiencies in a firm's capital planning or positions put the firm's prospects for remaining safe and sound through a range of conditions at significant risk. The firm is unable to remediate these deficiencies in the normal course of business, and remediation would typically require a material change to the firm's business model or financial profile, or its capital planning practices.
Specifically, although the firm's current condition is not considered to be materially threatened:
• Deficiencies in the firm's capital planning processes are not effectively mitigated. These deficiencies limit the firm's ability to effectively assess capital adequacy through a range of conditions; and/or
• The firm's projected capital positions may be insufficient to absorb potential losses and to support its ability to meet current and prospective obligations and serve as a financial intermediary through a range of conditions.
Supervisory issues that place the firm's safety and soundness at significant risk, and where resolution is likely to require steps that clearly go beyond the normal course of business—such as issues requiring a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices—would generally warrant assignment of a “Deficient-1” rating.
A “Deficient-1” rating may be assigned to a firm regardless of its prior rating. A firm previously rated “Broadly Meets Expectations” may be downgraded to “Deficient-1” when supervisory issues are identified that place the firm's prospects for maintaining safe-and-sound operations through a range of potentially stressful conditions at significant risk. A firm previously rated “Conditionally Meets Expectations” may be downgraded to “Deficient-1” when the firm's inability to resolve supervisory issues in a timely manner indicates that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
To address these financial or operational deficiencies, the firm is required to take timely corrective action to restore and maintain its capital planning and positions consistent with supervisory expectations. There is a strong presumption that a firm rated “Deficient-1” will be subject to an informal or formal enforcement action by the Federal Reserve.
A firm rated “Deficient-1” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. A “Deficient-1” rating could be a barrier for a firm seeking Federal Reserve approval of a proposal to engage in new or expansionary activities, unless the firm can demonstrate that (i) it is making meaningful, sustained progress in resolving identified deficiencies and issues; (ii) the proposed new or expansionary activities would not present a risk of exacerbating current deficiencies or issues or lead to new concerns; and (iii) the proposed activities would not distract the firm from remediating current deficiencies or issues.
Financial or operational deficiencies in a firm's capital planning or positions present a threat to the firm's safety and soundness, or have already put the firm in an unsafe and unsound condition.
Specifically, as a result of these deficiencies:
• The firm's capital planning processes are insufficient to effectively assess the firm's capital adequacy through a range of conditions; and/or
• The firm's current or projected capital positions are insufficient to absorb current or potential losses, and to support the firm's ability to meet current and prospective obligations and serve as a financial intermediary through a range of conditions.
To address these deficiencies, the firm is required to immediately (i) implement comprehensive corrective measures sufficient to restore and maintain appropriate capital planning capabilities and adequate capital positions; and (ii) demonstrate the sufficiency, credibility and readiness of contingency planning in the event of further deterioration of the firm's financial or operational strength or resiliency. There is a strong presumption that a firm rated “Deficient-2” will be subject to a formal enforcement action by the Federal Reserve.
A firm rated “Deficient-2” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. The Federal Reserve would be unlikely to approve any proposal from a firm rated “Deficient-2” to engage in new or expansionary activities.
The Liquidity Risk Management and Positions component rating evaluates (i) the effectiveness of a firm's governance and risk management processes used to determine the amount of liquidity necessary to cover risks and exposures, and to support activities through a range of conditions; and (ii) the sufficiency of a firm's liquidity positions to comply with applicable regulatory requirements and to support the firm's ongoing obligations through a range of conditions.
In developing this rating, the Federal Reserve evaluates:
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A firm's liquidity risk management and positions broadly meet supervisory expectations and support maintenance of safe-and-sound operations. Specifically:
• The firm is capable of producing sound assessments of liquidity adequacy through a range of conditions;
• The firm's current and projected liquidity positions comply with regulatory requirements, and support its ability to meet current and prospective obligations and to continue to serve as a financial intermediary through a range of conditions.
A firm rated “Broadly Meets Expectations” may be subject to identified supervisory issues requiring corrective action. However, these issues are unlikely to present a threat to the firm's ability to maintain safe-and-sound operations through a range of potentially stressful conditions.
A firm that does not meet the liquidity risk management and position expectations associated with a “Broadly Meets Expectations” rating will be rated “Conditionally Meets Expectations,” “Deficient-1,” or “Deficient-2,” and subject to potential consequences as outlined below.
Certain, material financial or operational weaknesses in a firm's liquidity risk management or positions may place the firm's prospects for remaining safe and sound through a range of conditions at risk if not resolved in a timely manner during the normal course of business.
Specifically, if left unresolved, these weaknesses:
• May threaten the firm's ability to produce sound assessments of liquidity adequacy through a range of conditions; and/or
• May result in the firm's projected liquidity positions being insufficient to comply with regulatory requirements, and support its ability to meet current and prospective obligations and to continue to serve as a financial intermediary through a range of conditions.
The Federal Reserve does not intend for a firm to be rated “Conditionally Meets Expectations” for a prolonged period. The firm has the ability to resolve these issues through measures that do not require a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices. The Federal Reserve will work with the firm to develop an appropriate timeframe during which the firm would be required to resolve each supervisory issue leading to the “Conditionally Meets Expectations” rating.
The Federal Reserve will closely monitor the firm's remediation and mitigation activities; in most instances, the firm will either:
(i) Resolve the issues in a timely manner and, if no new material supervisory issues arise, and be upgraded to a “Broadly Meets Expectations” rating because the firm's liquidity risk management practices and related positions would broadly meet supervisory expectations; or
(ii) Fail to resolve the issues in a timely manner and be downgraded to a “Deficient-1” rating, because the firm's inability to resolve those issues would indicate that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
It is possible that a firm may be close to completing resolution of the supervisory issues leading to the “Conditionally Meets Expectations” rating, but new issues are identified that, taken alone, would be consistent with a “Conditionally Meets Expectations” rating. In this event, the firm may continue to be rated “Conditionally Meets Expectations,” provided the new issues do not reflect a pattern of deeper or prolonged capital planning or position weaknesses consistent with a “Deficient” rating.
A “Conditionally Meets Expectations” rating may be assigned to a firm that meets the above definition regardless of its prior rating. A firm previously rated “Deficient-1” may be upgraded to “Conditionally Meets Expectations” if the firm's remediation and mitigation activities are sufficiently advanced so that the firm's prospects for remaining safe and sound are no longer at significant risk, even if the firm has outstanding supervisory issues or is subject to an active enforcement action.
Financial or operational deficiencies in a firm's liquidity risk management or positions put the firm's prospects for remaining safe and sound through a range of conditions at significant risk. The firm is unable to remediate these deficiencies in the normal course of business, and remediation would typically require a material change to the firm's business model or financial profile, or its liquidity risk management practices.
Specifically, although the firm's current condition is not considered to be materially threatened:
• Deficiencies in the firm's liquidity risk management processes are not effectively mitigated. These deficiencies limit the firm's ability to effectively assess liquidity adequacy through a range of conditions; and/or
• The firm's projected liquidity positions may be insufficient to support its ability to meet prospective obligations and serve as a financial intermediary through a range of conditions.
Supervisory issues that place the firm's safety and soundness at significant risk, and where resolution is likely to require steps that clearly go beyond the normal course of business—such as issues requiring a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices—would generally warrant assignment of a “Deficient-1” rating.
A “Deficient-1” rating may be assigned to a firm regardless of its prior rating. A firm previously rated “Broadly Meets Expectations” may be downgraded to “Deficient-1” when supervisory issues are identified that place the firm's prospects for maintaining safe-and-sound operations through a range of potentially stressful conditions at significant risk. A firm previously rated “Conditionally Meets Expectations” may be downgraded to “Deficient-1” when the firm's inability to resolve supervisory issues in a timely manner indicates that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
To address these financial or operational deficiencies, the firm is required to take timely corrective action to restore and maintain its liquidity risk management and positions consistent with supervisory expectations. There is a strong presumption that a firm rated “Deficient-1” will be subject to an informal or formal enforcement action by the Federal Reserve.
A firm rated “Deficient-1” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. A “Deficient-1” rating could be a barrier for a firm seeking Federal Reserve approval of a proposal to engage in new or expansionary activities, unless the firm can demonstrate that (i) it is making meaningful, sustained progress in resolving identified deficiencies and issues; (ii) the proposed new or expansionary activities would not present a risk of exacerbating current deficiencies or issues or lead to new concerns; and (iii) the proposed activities would not distract the firm from remediating current deficiencies or issues.
Financial or operational deficiencies in a firm's liquidity risk management or positions present a threat to the firm's safety and soundness, or have already put the firm in an unsafe and unsound condition.
Specifically, as a result of these deficiencies:
• The firm's liquidity risk management processes are insufficient to effectively assess the firm's liquidity adequacy through a range of conditions; and/or
• The firm's current or projected liquidity positions are insufficient to support the firm's ability to meet current and prospective obligations and serve as a financial intermediary through a range of conditions.
To address these deficiencies, the firm is required to immediately (i) implement comprehensive corrective measures sufficient to restore and maintain appropriate liquidity risk management capabilities and adequate liquidity positions; and (ii) demonstrate the sufficiency, credibility and readiness of contingency planning in the event of further deterioration of the firm's financial or operational strength or resiliency. There is a strong presumption that a firm rated “Deficient-2” will be subject to a formal enforcement action by the Federal Reserve.
A firm rated “Deficient-2” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. The Federal Reserve would be unlikely to approve any proposal
The Governance and Controls component rating evaluates the effectiveness of a firm's (i) board of directors, (ii) management of business lines and independent risk management and controls, and (iii) recovery planning (for domestic LISCC firms only). This rating assesses a firm's effectiveness in aligning strategic business objectives with the firm's risk appetite and risk management capabilities; maintaining effective and independent risk management and control functions, including internal audit; promoting compliance with laws and regulations, including those related to consumer protection; and otherwise providing for the ongoing resiliency of the firm.
In developing this rating, the Federal Reserve evaluates:
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The extent to which:
○ Senior management effectively and prudently manages the day-to-day operations of the firm and provides for ongoing resiliency; implements the firm's strategy and risk appetite; maintains an effective risk management framework and system of internal controls; and promotes prudent risk taking behaviors and business practices, including compliance with laws and regulations, including those related to consumer protection.
○ Business line management executes business line activities consistent with the firm's strategy and risk appetite; identifies and manages risks; and ensures an effective system of internal controls for its operations.
○ Independent risk management effectively evaluates whether the firm's risk appetite appropriately captures material risks and is consistent with the firm's risk management capacity; establishes and monitors risk limits that are consistent with the firm's risk appetite; identifies and measures the firm's risks; and aggregates, assesses and reports on the firm's risk profile and positions. Additionally, the firm demonstrates that its internal controls are appropriate and tested for effectiveness. Finally, internal audit effectively and independently assesses the firm's risk management framework and internal control systems, and reports findings to senior management and the firm's audit committee.
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A firm's governance and controls broadly meet supervisory expectations and support maintenance of safe-and-sound operations.
Specifically, the firm's practices and capabilities are sufficient to align strategic business objectives with its risk appetite and risk management capabilities,
A firm rated “Broadly Meets Expectations” may be subject to identified supervisory issues requiring corrective action. However, these issues are unlikely to present a threat to the firm's ability to maintain safe-and-sound operations through a range of potentially stressful conditions.
A firm that does not meet supervisory expectations associated with a “Broadly Meets Expectations” rating will be rated “Conditionally Meets Expectations,” “Deficient-1,” or “Deficient-2,” and subject to potential consequences, as outlined below.
Certain, material financial or operational weaknesses in a firm's governance and controls practices may place the firm's prospects for remaining safe and sound through a range of conditions at risk if not resolved in a timely manner during the normal course of business.
Specifically, if left unresolved, these weaknesses may threaten the firm's ability to align strategic business objectives with the firm's risk appetite and risk management capabilities; maintain effective and independent risk management and control functions, including internal audit; promote compliance with laws and regulations (including those related to consumer protection); or otherwise provide for the firm's ongoing resiliency through a range of conditions.
The Federal Reserve does not intend for a firm to be rated “Conditionally Meets Expectations” for a prolonged period. The firm has the ability to resolve these issues through measures that do not require a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices. The Federal Reserve will work with the firm to develop an appropriate timeframe during which the firm would be required to resolve each supervisory issue leading to the “Conditionally Meets Expectations” rating.
The Federal Reserve will closely monitor the firm's remediation and mitigation activities; in most instances, the firm will either:
(i) Resolve the issues in a timely manner and, if no new material supervisory issues arise, and be upgraded to a “Broadly Meets Expectations” rating because the firm's governance and controls would broadly meet supervisory expectations; or
(ii) Fail to resolve the issues in a timely manner and be downgraded to a “Deficient-1” rating, because the firm's inability to resolve those issues would indicate that the firm does not possess sufficient financial or operational capabilities to maintain its safety and soundness through a range of conditions.
It is possible that a firm may be close to completing resolution of the supervisory issues leading to the “Conditionally Meets Expectations” rating, but new issues are identified that, taken alone, would be consistent with a “Conditionally Meets Expectations” rating. In this event, the firm may continue to be rated “Conditionally Meets Expectations,” provided the new issues do not reflect a pattern of deeper or prolonged capital planning or position weaknesses consistent with a “Deficient” rating.
A “Conditionally Meets Expectations” rating may be assigned to a firm that meets the above definition regardless of its prior rating. A firm previously rated “Deficient” may be upgraded to “Conditionally Meets Expectations” if the firm's remediation and mitigation activities are sufficiently advanced so that the firm's prospects for remaining safe and sound are no longer at significant risk, even if the firm has outstanding supervisory issues or is subject to an active enforcement action.
Financial or operational deficiencies in a firm's governance and controls put the firm's prospects for remaining safe and sound through a range of conditions at significant risk. The firm is unable to remediate these deficiencies in the normal course of business, and remediation would typically require a material change to the firm's business model or financial profile, or its governance, risk management or internal control structures or practices.
Specifically, although the firm's current condition is not considered to be materially threatened, these deficiencies limit the firm's ability to align strategic business objectives with its risk appetite and risk management capabilities; maintain effective and independent risk management and control functions, including internal audit; promote compliance with laws and regulations (including those related to consumer protection); or otherwise provide for the firm's ongoing resiliency through a range of conditions.
A “Deficient-1” rating may be assigned to a firm regardless of its prior rating. A firm previously rated “Broadly Meets Expectations” may be downgraded to “Deficient-1” when supervisory issues are identified that place the firm's prospects for maintaining safe-and-sound operations through a range of potentially stressful conditions at significant risk. A firm
To address these financial or operational deficiencies, the firm is required to take timely corrective action to restore and maintain its governance and controls consistent with supervisory expectations. There is a strong presumption that a firm rated “Deficient-1” will be subject to an informal or formal enforcement action by the Federal Reserve.
A firm rated “Deficient-1” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. A “Deficient-1” rating could be a barrier for a firm seeking Federal Reserve approval of a proposal to engage in new or expansionary activities, unless the firm can demonstrate that (i) it is making meaningful, sustained progress in resolving identified deficiencies and issues; (ii) the proposed new or expansionary activities would not present a risk of exacerbating current deficiencies or issues or lead to new concerns; and (iii) the proposed activities would not distract the firm from remediating current deficiencies or issues.
Financial or operational deficiencies in governance or controls present a threat to the firm's safety and soundness, or have already put the firm in an unsafe and unsound condition. Specifically, as a result of these deficiencies, the firm is unable to align strategic business objectives with its risk appetite and risk management capabilities; maintain effective and independent risk management and control functions, including internal audit; promote compliance with laws and regulations (including those related to consumer protection); or otherwise provide for the firm's ongoing resiliency.
To address these deficiencies, the firm is required to immediately (i) implement comprehensive corrective measures sufficient to restore and maintain appropriate governance and control capabilities; and (ii) demonstrate the sufficiency, credibility, and readiness of contingency planning in the event of further deterioration of the firm's financial or operational strength or resiliency. There is a strong presumption that a firm rated “Deficient-2” will be subject to a formal enforcement action by the Federal Reserve.
A firm rated “Deficient-2” for any rating component would not be considered “well managed,” which would subject the firm to various consequences. The Federal Reserve would be unlikely to approve any proposal from a firm rated “Deficient-2” to engage in new or expansionary activities.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Textron Aviation Inc. (Textron) Model 560XL, formerly known as, prior to July 29, 2015, the Cessna Model 560XL. This airplane, as modified by Garmin International (Garmin), will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. This design feature is Garmin G5000 avionics that allow internal connection to previously isolated data networks, which are connected to systems that perform functions required for the safe operation of the airplane. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Garmin on November 21, 2018. Send comments on or before January 7, 2019.
Send comments identified by docket no. FAA-2018-0782 using any of the following methods:
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Varun Khanna, Airplane and Flightcrew Interface Section, AIR-671, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone and fax 206-231-3159; email
The substance of these special conditions has been published in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On March 21, 2017, Garmin applied for a supplemental type certificate to install Garmin G5000 avionics connected to the aircraft-control domain and airline information-services domain
Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Garmin must show that the Textron Model 560XL airplane, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. A22CE, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Textron Model 560XL airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Textron Model 560XL airplane, as modified by Garmin, will incorporate the following novel or unusual design features:
Garmin G5000 avionics that allow internal connection to previously isolated data networks, which are connected to systems that perform functions required for the safe operation of the airplane.
The Textron Model 560XL airplane architecture is novel or unusual for commercial transport airplanes because it allows connection to previously isolated data networks connected to systems that perform functions required for the safe operation of the airplane. This data network and design integration creates a potential for unauthorized persons to access the aircraft-control domain and airline information-services domain, and presents security vulnerabilities related to the introduction of computer viruses and worms, user errors, and intentional sabotage of airplane electronic assets (networks, systems, and databases) critical to the safety and maintenance of the airplane.
The existing regulations and guidance material did not anticipate this type of system architecture or electronic access to airplane systems. Furthermore, 14 CFR regulations and the current system-safety assessment policy and techniques do not address potential security vulnerabilities, which could be exploited by unauthorized access to airplane networks and servers. Therefore, these special conditions ensure that the security of airplane systems and networks is not compromised by unauthorized wired or wireless internal access.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Textron Model 560XL airplane. Should Garmin apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A22CE to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of the features on the airplane.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Textron Model 560XL airplanes as modified by Garmin, for airplane electronic-system security protection from unauthorized internal access.
1. The applicant must ensure that the design provides isolation from, or airplane electronic-system security protection against, access by unauthorized sources internal to the airplane. The design must prevent inadvertent and malicious changes to, and all adverse impacts upon, airplane equipment, systems, networks, or other assets required for safe flight and operations.
2. The applicant must establish appropriate procedures to allow the operator to ensure that continued airworthiness of the airplane is maintained, including all post-type-certification modifications that may have an impact on the approved electronic-system security safeguards.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Textron Aviation (Textron) Model 560XL, formerly known as, prior to July 29, 2015, the Cessna Model 560XL. This airplane, as modified by Garmin International (Garmin), will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. This design feature is Garmin G5000 avionics that allow external connection to previously isolated data networks, which are connected to systems that perform
This action is effective on Garmin on November 21, 2018. Send comments on or before January 7, 2019.
Send comments identified by docket no. FAA-2018-0781 using any of the following methods:
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Varun Khanna, Airplane and Flightcrew Interface Section, AIR-671, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone and fax 206-231-3159; email
The substance of these special conditions has been published in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On March 21, 2017, Garmin applied for a supplemental type certificate to install Garmin G5000 avionics connected to the aircraft-control domain and airline information-services domain in Textron Model 560XL airplanes. This is a twin-engine, turbofan airplane with seating for 12 passengers and two crew members, and a maximum takeoff weight of 20,200 pounds.
Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Garmin must show that the Textron Model 560XL airplane, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. A22CE, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Textron Model 560XL airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Textron Model 560XL airplane, as modified by Garmin, will incorporate the following novel or unusual design features:
Garmin G5000 avionics that allow external connection to previously isolated data networks, which are connected to systems that perform functions required for the safe operation of the airplane.
The Textron Model 560XL airplane architecture and network configuration may allow increased connectivity to and access from external network sources and airline operations and maintenance networks to the airplane control domain and airline information services domain. The airplane control domain and airline information-services domain perform functions required for the safe operation and maintenance of the airplane. Previously, these domains had very limited connectivity with external network sources. This data network and design integration creates a potential for unauthorized persons to access the aircraft-control domain and airline information-services domain, and presents security vulnerabilities related to the introduction of computer viruses and worms, user errors, and intentional sabotage of airplane electronic assets (networks, systems, and databases) critical to the safety and maintenance of the airplane.
The existing regulations and guidance material did not anticipate these types of airplane system architectures. Furthermore, 14 CFR regulations and the current system safety assessment policy and techniques do not address
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Textron Model 560XL airplane. Should Garmin apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A22CE to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of the features on the airplane.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Textron Model 560XL airplanes, as modified by Garmin, for airplane electronic-system security protection from unauthorized external access.
1. The applicant must ensure airplane electronic-system security protection from access by unauthorized sources external to the airplane, including those possibly caused by maintenance activity.
2. The applicant must ensure that electronic-system security threats are identified and assessed, and that effective electronic-system security protection strategies are implemented to protect the airplane from all adverse impacts on safety, functionality, and continued airworthiness.
3. The applicant must establish appropriate procedures to allow the operator to ensure that continued airworthiness of the airplane is maintained, including all post-type-certification modifications that may have an impact on the approved electronic-system security safeguards.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E surface airspace at Tyndall Air Force Base, (AFB), FL, for the safety of aircraft landing and departing the airport when the air traffic control tower is closed. Also, this action amends Class D airspace by updating the geographic coordinates of this airport, as well as replacing the outdated term “Airport/Facility Directory” with “Chart Supplement”. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at this airport.
Effective 0901 UTC, January 3, 2019. The Director of the Federal Register approves this incorporation by reference action under Title 1 Code of Federal Regulations part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11C, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave, College Park, GA 30337; telephone (404) 305-6364.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E surface airspace and amends Class D airspace at Tyndall AFB, FL, to support IFR operations at this airport.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One comment supporting the action was received. After the comment period closed, two additional comments were received that did not clearly indicate a position in support of the proposal, or in opposition to the proposal.
Class D and E airspace designations are published in Paragraphs 5000 and 6002, respectively, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR part 71.1. The Class D and Class E
This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the
This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 establishes Class E surface airspace within a 5.4-mile radius of Tyndall AFB, FL, for the safety of aircraft landing and departing the airport when the air traffic control tower is closed.
In addition, the geographic coordinates of the airport in Class D airspace are updated to coincide with the FAA's database.
Finally, the outdated term `Airport/Facility Directory' is replaced with `Chart Supplement' under the Class D description.
These changes are necessary for continued safety and management of IFR operations at this airport.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from the surface to and including 2,500 feet MSL within a 5.4-mile radius of Tyndall AFB. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Chart Supplement.
That airspace extending upward from the surface within a 5.4-mile radius of Tyndall AFB. This Class E airspace is effective during specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Chart Supplement.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends Class E airspace extending upward from 700 feet above the surface in Mountain City, TN, to accommodate new area navigation (RNAV) global positioning system (GPS) standard instrument approach procedures serving Johnson County Airport. In addition, Class E airspace extending upward from 700 feet above the surface is established in Elizabethton, TN, to accommodate area navigation (RNAV) global positioning system (GPS) standard instrument approach procedures at Elizabethton Municipal Airport. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at these airports.
Effective 0901 UTC, January 3, 2019. The Director of the Federal Register approves this incorporation by reference action under Title 1 Code of Federal Regulations part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11C, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace at Johnson County Airport, Mountain City, TN, and establishes Class E airspace at Elizabethton Municipal, Elizabethton, TN, to support IFR operations at these airports.
The FAA published a notice of proposed rulemaking in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.
Class E airspace designations are published in paragraph 6005, of FAA Order 7400.11C dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the
This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 will amend Class E airspace extending upward from 700 feet or more above the surface at Johnson County Airport, Mountain City, TN, by increasing the northeast extension to 14.4 miles (from 10.9 miles), and creating a 14-mile extension southwest of the airport, to accommodate new area navigation (RNAV) global positioning system (GPS) standard instrument approach procedures at the airport.
Additionally, Class E airspace extending upward from 700 feet above the surface is established at Elizabethton Municipal Airport, Elizabethton, TN, within a 9.5-mile radius of the airport, and within 4-miles each side of the 243° bearing from the airport, extending from the 9.5-mile radius to 15-miles southwest of the airport to accommodate RNAV (GPS) standard instrument approach procedures for IFR operations at these airports.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.7 -mile radius of the Johnson County Airport, and within 3.2 miles each side of the 066° bearing from the airport, extending from the 6.7-mile radius to 14.4 miles northeast of the airport, and within 3.2 miles each side of the 251° bearing from the airport, extending from the 6.7-mile radius to 14-miles southwest of the airport.
That airspace extending upward from 700 feet above the surface within a 9.5-mile radius of Elizabethton Municipal Airport, and within 4-miles each side of the 243° bearing from the airport, extending from the 9.5-mile radius to 15-miles southwest of the airport.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Caloosahatchee River (SR 29/LaBelle) Bridge across the Okeechobee Waterway (Caloosahatchee River), mile 103, at LaBelle, FL. The deviation is necessary to accommodate repairs to the bridge.
This deviation is effective without actual notice from November 21, 2018 through 6 a.m. on December 31, 2018. For the purposes of enforcement, actual notice will be used from 6 a.m. on August 13, 2018, until November 21, 2018.
The docket for this deviation, USCG-2018-0825 is available at
If you have questions on this temporary deviation, call or email MST1 Deborah A. Schneller, Coast Guard Sector Saint Petersburg Waterways Management Division; telephone (813) 228-2194 x 8133, email
Seacoast Inc., on behalf of the bridge owner, Florida Department of Transportation (FDOT), has requested a temporary deviation from the current operating regulation that governs the Caloosahatchee River (SR29/LaBelle) Bridge across the Okeechobee Waterway (Caloosahatchee River), mile 103, at LaBelle, FL. The deviation is necessary to facilitate necessary repairs to the structural integrity of the bridge. The existing bridge is a double-leaf bascule bridge with at vertical clearance in the closed to navigation position of 28 feet under normal water level conditions on the Okeechobee Waterway.
The current operating schedule is set out in 33 CFR 117.317(i)(j). Under this temporary deviation, the bridge will provide single-leaf openings utilizing the current operating schedule. Request for a double-leaf opening requires advance notice by contacting the bridge tender at (813) 228-2191 at least four hours in advance. The vertical clearance of the bridge will be reduced to 26 feet under normal water level conditions on the Okeechobee Waterway to allow for post tensioning of the existing steel floor beams. The Okeechobee Waterway (Caloosahatchee River) is used by a variety of vessels including U.S. government vessels, small commercial vessels, recreational vessels and tugs and barge traffic. The Coast Guard has carefully considered the restrictions with waterway users in publishing this temporary deviation.
Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will not be able to provide a double-leaf opening for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for all navigable waters of the Ohio River from mile 28.0 to mile 29.2. This action is necessary to protect persons, vessels, and the marine environment from potential hazards associated with power line work across the river. Entry of persons or vessels into this zone is prohibited unless authorized by the Captain of the Port Marine Safety Unit Pittsburgh or a designated representative.
This rule is effective without actual notice from November 21, 2018 through December 31, 2018. For the purposes of enforcement, actual notice will be used from 6 a.m. on November 16, 2018 through November 21, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Jennifer Haggins, Marine Safety Unit Pittsburgh, U.S. Coast Guard; telephone 412-221-0807, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. This safety zone must be established by November 16, 2018 and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule. The NPRM process would delay the establishment of the safety zone until after the date of the power line pulls and compromise public safety.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Marine Safety Unit Pittsburgh (COTP) has determined that potential hazards associated with power line pulls across the Ohio River will be a safety hazard for anyone within a 1.2 mile stretch of the Ohio River. The rule is needed to protect people from power line work which could pose a risk to the operation and waterways users if the normal vessel traffic were to interfere with the work. Possible hazards include risks of injury or death from near or actual contact among working vessels and mariners traversing through the safety zone.
This rule establishes a temporary safety zone from 6 a.m. through 8 p.m. on November 16, 2018 through December 31, 2018. The safety zone will cover all navigable waters of the Ohio River, from mile 28.0 to mile 29.2. The duration of the zone is intended to protect persons, vessels, and the marine environment on these navigable waters before, during, and after the power line pulls. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of USCG Marine Safety Unit Pittsburgh. Persons and vessels seeking entry into this safety zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM Channel 16 or by telephone at (412) 221-0807. Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful instructions of the COTP or a designated representative. The COTP or a designated representative will inform the public of the enforcement period for the safety zone as well as any changes in the schedule through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 13563 (“Improving Regulation and Regulatory Review”) and 12866 (“Regulatory Planning and Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”
The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. As this rule is not a significant regulatory action, this rule is exempt from the requirements of Executive Order 13771. See OMB's Memorandum “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs'” (April 5, 2017).
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the temporary safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 13 hours on each day that will prohibit entry on a 1.2 mile stretch of the Ohio River. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
(2) Persons and vessels seeking entry into this safety zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM Channel 16 or by telephone at (412) 221-0807.
(3) Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful instructions of the COTP or a designated representative.
(e)
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), determine endangered species status under the Endangered Species Act of 1973 (Act), as amended, for the candy darter (
This rule is effective December 21, 2018.
This final rule is available on the internet at
John Schmidt, Field Supervisor, West Virginia Ecological Services Field Office, 694 Beverly Pike, Elkins, WV 26241-9475; telephone 304-636-6586. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service at 800-877-8339.
Please refer to our October 4, 2017, proposed rule (82 FR 46197) for a detailed description of previous Federal actions concerning the candy darter. Elsewhere in today's
Please refer to our October 4, 2017, proposed rule (82 FR 46197) for a summary of species information available to the Service at the time that it was published. Based on information we received during the proposed rule's public comment period, we updated the current condition discussion in the species status assessment (SSA) report to more accurately reflect the current spread level of hybridization, which is the primary threat to the species, in the candy darter's range (Service 2018). The candy darter's current condition is more degraded than we understood when we published the October 4, 2017, proposed listing rule. Consequently, because the species' current condition (
We also received information during the public comment period that demonstrates a stronger genetic separation between candy darters in the Greenbrier watershed and the Gauley watershed. All the information was incorporated into an updated version of the SSA report, which is available online at
The Act directs us to determine whether any species is an endangered species or a threatened species because of any factors affecting its continued existence. We completed a comprehensive assessment of the biological status of the candy darter and prepared a report of the assessment (SSA report), which provides a thorough account of the species' overall viability using the conservation biology principles of resiliency, redundancy, and representation (collectively, the “3Rs”). We have used the SSA report's assessment of the candy darter's current and potential future status, based on the factors influencing the species, framed in the context of the 3Rs, and information provided during the public comment period on the October 4, 2017, proposed listing rule to inform our determination of whether the candy darter meets the definition of an endangered or a threatened species (see Determination, below).
Because we have included information below about the candy darter's 3Rs, we further define those terms here. Resiliency means having sufficiently large populations for the species to withstand stochastic events (arising from random factors). We can measure resiliency based on metrics of population health; for example, birth versus death rates and population size, if that information exists. Resilient populations are better able to withstand disturbances such as random fluctuations in birth rates (demographic stochasticity), variations in rainfall (environmental stochasticity), or the effects of human activities. Redundancy means having a sufficient number of populations for the species to withstand catastrophic events (such as a rare destructive natural event or episode involving many populations). Redundancy is about spreading the risk and can be measured through the duplication and distribution of populations across the range of the species. Generally, the greater the number of populations a species has distributed over a larger landscape, the better it can withstand catastrophic events. Representation means having the breadth of genetic makeup for the species to adapt to changing environmental conditions. Representation can be measured through the genetic diversity within and among populations and the ecological diversity (also called environmental variation or diversity) of populations across the species' range. The more representation, or diversity, a species has, the more it is capable of adapting to changes (natural or human caused) in its environment.
In the absence of species-specific genetic and ecological diversity information, we evaluate representation based on the extent and variability of habitat characteristics within the geographical range. We define viability here as the ability of the species to persist in the wild over time and, conversely, to avoid extinction.
Below, we summarize the conclusions of the candy darter's SSA analysis (Service 2018, entire), which can be accessed at Docket FWS-R5-ES-2017-0056 on
Historically, the candy darter consisted 35 populations in Virginia and West Virginia distributed across 7 metapopulations in the Bluestone, Lower New River, Upper Gauley, Lower Gauley, and Middle New watersheds in the Appalachian Plateaus physiographic province and the Upper New River and Greenbrier watersheds in the Valley and Ridge physiographic province. See Chapter 3 of the SSA report for more details (Service 2018, pp. 30-31).
Within these two physiographic provinces, the candy darter has been extirpated from almost half of its historical range (17 of 35 (49 percent) known populations, and 2 of 7 (29 percent) known metapopulations), with the extirpations representing a complete loss of resiliency in those populations (or metapopulations). We qualitatively assessed the remaining (extant) populations, placing them in “low,” “moderate,” or “high” categories that represent the populations' potential to rebound after stochastic events. These categories were based on a combination of eight physical habitat, nonnative
This loss of these candy darter populations, which represent the species' genetic, ecological, and niche diversity within its historical range, as well as the fragmentation of extant populations, has compromised the species' ability to repatriate those areas or avoid species-level effects of a catastrophic event. Based on the species' distribution and condition within each of the seven historical metapopulations (one with moderate to high internal redundancy, one with moderate internal redundancy, one with low internal redundancy, two with no internal redundancy, and two that have been extirpated), we conclude, based on the best available data, that the candy darter's current redundancy is low (Service 2018, pp. 26-28, 49-50).
While the candy darter currently maintains representation in both the Appalachian Plateaus and Valley and Ridge physiographic provinces, only a single metapopulation in each province has a moderate to high resiliency score. As related to the species' occupation in a diversity of environmental settings, candy darters have lost representation from lower mainstem rivers and tributaries. While researchers have noted differences in the genetic, physical, behavioral, or developmental characteristics of some stream fish species based on the species' longitudinal position in the watershed (
The candy darter is currently distributed in five of the historical seven metapopulations. The populations within those metapopulations generally have moderate to low resiliency and redundancy scores. While the candy darter is present in the two physiographic provinces from which it is historically known, the species is not found in lower mainstem rivers and tributaries in which it once existed (Service 2018, Chapter 3). This fact leads us to conclude the candy darter's representation is also moderate to low. Therefore, our analysis under the 3Rs leads us to conclude that the current condition of the candy darter is currently moderate to low.
Based on the candy darter's life history and habitat needs, and in consultation with species' experts from Virginia and West Virginia State and Federal agencies and academic institutions, we identified the potential stressors (negative influences), the contributing sources of those stressors, and conservation measures to address those stressors that are likely to affect the species' current condition and viability (Service 2018, pp. 32-43). We evaluated how these stressors may be currently affecting the species and whether, and to what extent, they would affect the species in the future (Service 2018, pp. 52-66). Water temperature, excessive sedimentation, habitat fragmentation, water chemistry, water flow, and nonnative competition likely influenced the species in the past and contributed to its current condition, and may continue to affect some populations in the future (Service 2018, pp. 44, 46, 52-67). However, habitat stressors are not considered to be a primary source of risk to candy darter viability in the future. Hybridization with the closely related variegate darter (
As mentioned above, the primary stressor to the candy darter is hybridization with the variegate darter (Service 2018, pp. 32-37), a species that is native to the Kanawha River basin below the Kanawha Falls in Fayette County, West Virginia. The Kanawha Falls serve as a natural barrier to fish dispersal from the lower Kanawha River basin (and greater Ohio River basin) upstream into the range of the candy darter in the upper Kanawha River basin. However, in the late 20th century, the variegate darter was introduced, likely by “bait bucket transfer,” into the upper Kanawha basin. Since they were first observed in the upper Kanawha basin in 1982 and 2002, variegate darters have expanded their range approximately 3 to 9 stream miles per year over the course of the last 20 or more years within the range of the candy darter. Genetic studies have demonstrated that where variegate and candy darter ranges now overlap, the two species will hybridize, and consistent, repeated contact will quickly result in “genetic swamping” (the homogenization or replacement of native genotypes) of the endemic candy darter population and eventually its complete replacement by variegate darters or hybrids (Service 2018, pp. 32-37).
We modeled five scenarios to assess the potential viability of the candy darter at a point up to 25 years in the future (Service 2018, pp. 52-66). Two scenarios were focused on habitat change (one positive and the other negative), and three scenarios were focused on variegate darter invasion. However, the habitat change scenarios, by themselves, are not plausible scenarios because variegate darter hybridization is ongoing and highly likely to continue (see chapter 4 and appendix B of the SSA report for
Under the three most plausible scenarios, those that include the variegate darter invasion, the predicted rate of variegate darter expansion and hybridization remains the same, and at the end of 25 years, the candy darter will likely occur in four isolated populations and maintain little resilience, redundancy, or representation. The effects of significant positive or negative habitat changes do not alter this outcome; however, because variegate darters may be more tolerant of a wider range of habitat conditions, negative habitat changes could selectively benefit variegate darters and increase the rate at which candy darters are extirpated (Service 2018, p. 64).
The candy darter SSA report (Service 2018, entire) contains a more detailed discussion of our evaluation of the biological status of the candy darter and the influences that may affect its continued existence. Our conclusions are based upon the best available scientific and commercial data, including the expert opinion of the species' experts (fishery biologists, aquatic ecologists, and geneticists from State and Federal agencies and academic institutions) and the SSA team members. Please see the SSA report for a complete list of the species experts and peer reviewers and their affiliations.
We received information during the public comment period that concluded we had inaccurately described the current condition of some populations of the candy darter. The current condition of the candy darter populations in five streams in the Upper Gauley watershed is more degraded than we had understood when we proposed the candy darter for listing. We inaccurately stated that “[v]ariegate darters have not yet been detected in the remainder of the candy darter's range (
Additionally, we received information during the public comment period that demonstrated that there is greater genetic differentiation between candy darter in the Greenbrier watershed and candy darter in the Gauley watershed (see Summary of Comments and Recommendations, below). We incorporated this information into an updated version of the SSA report (Service 2018).
We reassessed our analysis (after reviewing all public comments), updated the SSA report, and, after evaluating the best available information and the Act's regulation and policies, determined that the candy darter meets the definition of an endangered species, and such designation is more appropriate than that of a threatened species as originally proposed.
In the proposed rule published on October 4, 2017 (82 FR 46197), we requested that all interested parties submit written comments on the proposal by December 4, 2017. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. A newspaper notification inviting general public comment was published in the USA Today on October 10, 2017. We did not receive any requests for a public hearing. All substantive information provided during the comment period has either been incorporated directly into this final determination or is addressed below, as appropriate.
In accordance with our joint policy on peer review published in the
Section 4 of the Act (16 U.S.C. 1533), and its implementing regulations at 50 CFR part 424, set forth the procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, we may list a species based on (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence.
We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the candy darter. Our analysis of this information indicates that, at the species level, hybridization with variegate darters (Factor E) is the most influential factor affecting the candy darter now and into the future. Excessive sedimentation and increased water temperatures degraded once-suitable habitat (Factor A) and likely caused historical declines of the candy darter. We also analyzed existing regulatory mechanisms (such as the Federal Clean Water Act of 1977 (33 U.S.C. 1251
Active hybridization with variegate darters has occurred or is currently occurring in multiple streams within the Lower New, Lower Gauley, and Greenbrier River watersheds in West Virginia (Service 2018, p. 37). Although variegate darter individuals have not yet been detected in the remainder of the candy darter's range (
The Act defines an endangered species as any species that is “in danger of extinction throughout all or a significant portion of its range” and a threatened species as any species “that is likely to become endangered throughout all or a significant portion of its range within the foreseeable future.” We find that the candy darter is presently in danger of extinction throughout its entire range based on the severity and immediacy of threats currently affecting the species. The overall range has been significantly reduced, and the remaining populations are threatened by hybridization and, to a lesser extent, a combination of other threats, reducing the overall viability of the species. The risk of extinction is high because the remaining populations are isolated and the threat of hybridization is ongoing and increasing. Therefore, on the basis of the best available scientific and commercial data, we are listing the candy darter as endangered in accordance with sections 3(6) and 4(a)(1) of the Act. We find that a threatened species status is not appropriate for the candy darter because of the reasons previously outlined and because the threats, which occur throughout the species' range, are expected to continue to increase, putting the species at risk of extinction now.
Under the Act and our implementing regulations, a species may warrant listing if it is endangered or threatened throughout all or a significant portion of its range. Because we have determined that the candy darter is in danger of extinction throughout its range, we find it unnecessary to proceed to an
Conservation measures provided to species listed as endangered or threatened species under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and conservation by Federal, state, Tribal, and local agencies; private organizations; and individuals. The Act encourages cooperation with the States and requires that recovery actions be carried out for all listed species. The protection required by Federal agencies and the prohibitions against certain activities are discussed, in part, below.
The primary purpose of the Act is the conservation of endangered and threatened species and the ecosystems upon which they depend. The ultimate goal of such conservation efforts is the recovery of these listed species, so that they no longer need the protective measures of the Act. Subsection 4(f) of the Act requires the Service to develop and implement recovery plans for the conservation of endangered and threatened species. The recovery planning process involves the identification of actions that are necessary to halt or reverse the species' decline by addressing the threats to its survival and recovery. The goal of this process is to restore listed species to a point where they are secure, self-sustaining, and functioning components of their ecosystems.
Recovery planning includes the development of a recovery outline shortly after a species is listed and preparation of a draft and final recovery plan. The recovery outline guides the immediate implementation of urgent recovery actions and describes the process to be used to develop a recovery plan. As part of our conservation strategy for the candy darter, which will inform the forthcoming recovery outline and informs the proposed critical habitat rule published elsewhere in today's
The recovery plan identifies site-specific management actions that set a trigger for review of whether a species remains endangered or may be reclassified from endangered to threatened (“downlisted”) or removed from the Lists of Endangered and Threatened Wildlife and Plants (“delisted”), and methods for monitoring recovery progress. Recovery plans also establish a framework for agencies to coordinate their recovery efforts and provide estimates of the cost of implementing recovery tasks. Recovery teams (composed of species experts, Federal and State agencies, nongovernmental organizations, and stakeholders) are often established to develop recovery plans. When completed, the recovery outline, draft recovery plan, and the final recovery plan will be available on our website (
Implementation of recovery actions generally requires the participation of a broad range of partners, including other Federal agencies, states, Tribes, nongovernmental organizations, businesses, and private landowners. Examples of recovery actions include habitat restoration (
Following publication of this final listing rule, funding for recovery actions will be available from a variety of sources, including Federal budgets, state programs, and cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations. In addition, pursuant to section 6 of the Act, the States of Virginia and West Virginia will be eligible for Federal funds to implement management actions that promote the recovery of the candy darter. Information on our grant programs that are available to aid species recovery can be found at:
Please let us know if you are interested in participating in recovery efforts for the candy darter. Additionally, we invite you to submit any new information on this species whenever it becomes available and any information you may have for recovery planning purposes (see
Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is listed as an endangered or threatened species and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of any endangered or threatened species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into consultation with the Service.
Federal agency actions within the species' habitat that may require consultation as described in the preceding paragraph include, but are not limited to, management (
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to endangered wildlife. The prohibitions of section 9(a)(1) of the Act, codified at 50 CFR 17.21, make it illegal for any person subject to the jurisdiction of the United States to take (which includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect; or to attempt any of these) endangered wildlife within the United States or on the high seas. In addition, it is unlawful to import; export; deliver, receive, carry, transport, or ship in interstate or foreign commerce in the course of commercial activity; or sell or offer for sale in interstate or foreign commerce any listed species. It is also illegal to possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken illegally. Certain exceptions apply to employees of the Service, the National Marine Fisheries Service, other Federal land management agencies, and State conservation agencies.
We may issue permits to carry out otherwise prohibited activities involving endangered wildlife under certain circumstances. Regulations governing permits are codified at 50 CFR 17.22. With regard to endangered wildlife, a permit may be issued for the following purposes: For scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities. There are also certain statutory exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.
It is our policy, as published in the
• Normal agricultural practices, including herbicide and pesticide use, carried out in accordance with any existing regulations and with permit and label requirements.
Based on the best available information, the following activities may potentially result in a violation of section 9 the Act; this list is not comprehensive:
(1) Introduction of variegate darters into suitable candy darter habitat;
(2) Stocking of nonnative species into suitable candy darter habitat;
(3) Destruction or alteration of the habitat of the candy darter (
(4) Discharges or dumping of toxic chemicals or other pollutants into waters supporting the candy darter that kills or injures individuals, or otherwise impairs essential life-sustaining behaviors such as breeding, feeding, or finding shelter.
Questions regarding whether specific activities would constitute a violation of section 9 of the Act should be directed, as follows:
• In West Virginia, to the West Virginia Ecological Services Field Office (see
• In Virginia, to the Southwestern Virginia Field Office (330 Cummings Street, Abingdon, VA 24210-3208; telephone 276-623-1233).
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes. The candy darter does not occur on federally recognized Tribal or Tribal interest lands.
A complete list of references cited in this rulemaking is available on the internet at
The primary authors of this final rule are the staff members of the Services' Species Assessment Team, the West Virginia Ecological Services Field Office, and the Southwestern Virginia Ecological Services Field Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as follows:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(h) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting retention of Pacific cod by catcher/processors using trawl gear in the Central Regulatory Area of the Gulf of Alaska (GOA). This action is necessary because the 2018 Pacific cod apportionment for catcher/processors using trawl gear in the Central Regulatory Area of the GOA has been reached.
Effective 1200 hours, Alaska local time (A.l.t.), November 19, 2018, through 2400 hours, A.l.t., December 31, 2018.
Josh Keaton, 907-586-7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The 2018 Pacific cod apportionment for catcher/processors using trawl gear in the Central Regulatory Area of the GOA is 253 metric tons (mt) as established by the final 2018 and 2019 harvest specifications for groundfish of the GOA (83 FR 8768, March 1, 2018).
In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS, has determined that the 2018 Pacific cod apportionment for catcher/processors using trawl gear in the Central Regulatory Area of the GOA will be reached. Therefore, NMFS is requiring that Pacific cod by catcher/processors using trawl gear in the Central Regulatory Area of the GOA be treated as prohibited species in accordance with § 679.21(b).
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay prohibiting the retention of Pacific cod by catcher/processors using trawl gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of November 15, 2018.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and § 679.21 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Administrative Conference of the United States.
Notice.
Pursuant to the Federal Advisory Committee Act, the Assembly of the Administrative Conference of the United States will hold a meeting to consider five proposed recommendations and to conduct other business. This meeting will be open to the public.
The meeting will take place on Thursday, December 13, 2018, 1:00 p.m. to 5:15 p.m., and Friday, December 14, 2018, 9:00 a.m. to 11:45 a.m. The meeting may adjourn early if all business is finished.
The meeting will be held at the George Washington University Law School, Jacob Burns Moot Court Room, 2000 H Street NW, Washington, DC 20052.
Shawne McGibbon, General Counsel (Designated Federal Officer), Administrative Conference of the United States, Suite 706 South, 1120 20th Street NW, Washington, DC 20036; Telephone 202-480-2080; email
The Administrative Conference of the United States makes recommendations to federal agencies, the President, Congress, and the Judicial Conference of the United States regarding the improvement of administrative procedures (5 U.S.C. 594). The membership of the Conference, when meeting in plenary session, constitutes the Assembly of the Conference (5 U.S.C. 595).
Additional information about the proposed recommendations and the order of the agenda, as well as other materials related to the meeting, can be found at the 70th Plenary Session page on the Conference's website:
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by December 21, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725-17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by December 21, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
10 a.m. CST, December 12, 2018.
University of Wisconsin—Superior, Yellowjacket Union located at Belknap and Union Ave.
Open to the public.
The Chemical Safety and Hazard Investigation Board (CSB) will convene a public town hall meeting on Wednesday December 12, 2018, starting at 10:00 a.m. CST in the Yellowjacket Union located at Belknap and Union Ave at the University of Wisconsin—Superior. CSB investigative staff will present a factual update on the Husky Refinery fire which occurred on April 28, 2018. Staff presentations are preliminary and are intended to allow the Board to consider in a public forum the issues and factors involved in this case. The Board will provide an opportunity for public comment.
The meeting is free and open to the public. If you require a translator or interpreter, please notify the individual listed below as the
The CSB is an independent Federal agency charged with investigating accidents and hazards that result, or may result, in the catastrophic release of extremely hazardous substances. The agency's Board Members are appointed by the President and confirmed by the Senate. CSB investigations look into all aspects of chemical accidents and hazards, including physical causes such as equipment failure as well as inadequacies in regulations, industry standards, and safety management systems.
The time provided for public statements will depend upon the number of people who wish to speak. The public comments will be directed towards the board and facilitated by the Interim Executive. Speakers should assume that their presentations will be limited to three minutes or less, but commenters may submit written statements for the record.
Hillary Cohen, Communication Manager, at
United States Commission on Civil Rights.
Notice of Commission Telephonic Business Meeting.
Tuesday, November 27, 2018, at 11:00 a.m. ET.
Meeting to take place by telephone.
Brian Walch, (202) 376-8371,
This business meeting is open to the public by telephone only.
Public call-in information will be available in advance of the meeting at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce determines that Ozdemir Boru Profil San. Ve Tic. Ltd. Sti. (Ozdemir), an exporter/producer of heavy walled rectangular welded carbon steel pipes and tubes (HWR pipes and tubes) from the Republic of Turkey (Turkey), received countervailable subsidies during the period of review (POR) December 28, 2015, through April 25, 2016, and September 12, 2016, through December 31, 2016.
Applicable November 21, 2018.
Brian Smith or Janae Martin, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1766 or (202) 482-0238, respectively.
On August 14, 2018, Commerce published the
The products covered by the order are shipments of certain heavy walled rectangular welded steel pipes and tubes of rectangular (including square) cross section, having a nominal wall thickness of not less than 4 mm. The merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A-500, grade B specifications, or comparable domestic or foreign specifications.
Included products are those in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements below exceed the quantity, by weight, respectively indicated:
The subject merchandise is currently provided for in item 7306.61.1000 of the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may also enter under HTSUS 7306.61.3000. While the HTSUS subheadings and ASTM specification are provided for convenience and customs purposes, the written description of the scope of this order is dispositive.
As no parties submitted comments on the
In accordance with section 777A(e)(1) of the Act and 19 CFR 351.221(b)(5), we determine the following countervailable subsidy rate during the period December 28, 2015, through April 25, 2016, and September 12, 2016, through December 31, 2016:
In accordance with 19 CFR 351.212(b)(2), Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, countervailing duties on all appropriate entries covered by this review. We intend to issue assessment instructions to CBP 15 days after the date of publication of the final results of this review.
Pursuant to section 751(a)(2)(C) of the Act, Commerce also intends to instruct CBP to collect cash deposits of estimated countervailing duties, in the amount shown above, on shipments of subject merchandise by Ozdemir entered, or withdrawn from warehouse, for consumption on or after the date of publication of these final results. For all non-reviewed firms, we will instruct CBP to continue to collect cash deposits at the most-recent company-specific or all-others rate applicable to the company, as appropriate. These cash deposit requirements, when imposed, shall remain in effect until further notice.
This notice also serves as a final reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
These final results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(5).
Global Markets, International Trade Administration, U.S. Department of Commerce.
Request for public comments and notice of a roundtable discussion on energy, information and communication technology (ICT), and infrastructure in the Indo-Pacific region.
As part of the commitment to a free and open Indo-Pacific, the Global Markets unit of the International Trade Administration of the Department of Commerce (GM) seeks individual comments from industry on government programs to inform the catalyzation of U.S. private sector participation in commercial opportunities in the Indo-Pacific region in energy, ICT and infrastructure. Through this notice, GM announces a request for written public comments and announces a roundtable to facilitate a discussion with industry representatives and U.S. government staff. This notice serves as an initial step in improving GM's understanding of private sector interests and programmatic and policy needs in energy, ICT, and infrastructure sectors in the Indo-Pacific region. This notice further sets forth topics for discussion and comment.
For alternatives to online or mail submissions, please contact Stephanie Smedile, Indo-Pacific Commercial Coordinator, GM, at (202) 482-0333.
On July 30, 2018 the Trump Administration announced new economic initiatives in the Indo-Pacific region to advance a free and open Indo-Pacific region (
(1) Digital Connectivity and Cybersecurity Partnership (DCCP)—a new global initiative to promote access to an open, interoperable, reliable, and secure internet, with an initial focus on the Indo-Pacific region. Through this program, the United States will support communications infrastructure development through public-private partnerships, promote regulatory and policy reforms, promote exports of U.S. information and communications technology (ICT) goods and services, and build the cybersecurity capacity of our partners to address shared threats.
(2) Infrastructure Transaction and Assistance Network (ITAN)—The ITAN will prioritize support for strategically important infrastructure and catalyze opportunities for U.S. business; establish a new Indo-Pacific Transaction Advisory Fund to provide independent legal support for negotiations; and coordinate capacity-building programs to improve partner countries' project evaluation processes, regulatory and procurement environments, and project preparation and financing capabilities.
(3) Enhancing Development and Growth through Energy, or Asia EDGE, is a U.S. whole of government effort to grow sustainable and secure energy markets throughout the Indo-Pacific. Asia EDGE seeks to strengthen energy security, increase energy diversification and trade, and expand energy access across the Indo-Pacific.
The Department seeks input at the December 12th roundtable on the following topics:
• What are the principal U.S. and/or foreign policy and regulatory barriers to growing sales and exports to the Indo-Pacific region? How would you prioritize these barriers for USG engagement?
• What are the principal barriers (U.S. and/or foreign) to investment in infrastructure (ICT networks, energy, transportation, other) in countries in the Indo-Pacific?
• Have you worked with USG agencies—such as State, Commerce, USTDA, EXIM, OPIC, USAID—in doing business in the Indo-Pacific? What is your assessment of the strengths and weaknesses of the U.S. government tools to promote U.S. businesses in this sector?
• What proactive solutions or actions could the U.S. government pursue that would have an impact on catalyzing U.S. private sector participation in commercial opportunities in the Indo-Pacific region?
To attend, participants should submit the below information to
Applicants are encouraged to send representatives at a sufficiently senior level to be knowledgeable about their organization's capabilities, interests and challenges in the Indo-Pacific region. Please see the following hyperlink for a definition of the Indo-Pacific region:
Registrations should include the following information in their registration email:
• Name of attendee and short bio.
• Organization and brief organization description.
• The initiative discussion in which the registrant prefers to participate (DCCP, ITAN, or Asia EDGE). Registrants cannot register for all three as the break-outs happen concurrently. Registrants may indicate a second choice if the preferred choice is filled.
• A statement self-certifying how the organization meets each of the following criteria:
1. Is not majority owned or controlled by a foreign government entity (or foreign government entities).
2. Its existing products or services are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have demonstrable U.S. content as a percentage of the value of the finished product or service AND/OR it is a major investor in projects in the Indo-Pacific in which companies with such products may compete.
3. It has already exported from the United States to or invested in the Indo-Pacific region.
4. In the case of a trade association, academic or research institution, the applicant will only be representing companies during the Roundtable that satisfy each of the criteria above.
Selection will be based on the following criteria:
• Suitability of the company's (or in the case of another organization, represented companies' or constituents') existing products or services to energy, ICT, and infrastructure commercial opportunities in the Indo-Pacific.
• Suitability of the company's (or in the case of another organization, represented companies' or constituents') experience pursuing commercial opportunities in the Indo-Pacific.
• Suitability of the representative's position and biography to be able to engage in the conversation.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
On March 28, 2003, the National Marine Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service (Services) announced a final policy on the criteria the Services will use to evaluate conservation efforts by states and other non-Federal entities (68 FR 15100). The Services take these efforts into account when making decisions on whether to list a species as threatened or endangered under the Endangered Species Act. The efforts usually involve the development of a conservation plan or agreement, procedures for monitoring the effectiveness of the plan or agreement, and an annual report.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The United States Patent and Trademark Office (USPTO) will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Applicants who are ultimately awarded a Humanitarian Award Certificate may wish to extend the redemption period of that certificate. In the event that an applicant wishes to extend that time period, they must complete a Petition to Extend the Redemption Period of the Humanitarian Awards Certificate. The petition is a one-page document which allows the applicant to request a 12-month extension of their certificate's redemption period based on criteria outlined on the form (
Once submitted, the request will be publically available in electronic format through
Further information can be obtained by:
•
•
Written comments and recommendations for the proposed information collection should be sent on or before December 21, 2018 to Nicholas A. Fraser, OMB Desk Officer, via email to
The United States Patent and Trademark Office (USPTO) will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
The Board disseminated information that it collections (unless filed under seal) through various publications and databases. This information collection includes the filings of the parties and decisions and orders by the Board in trials and derivation proceedings.
Opinions authored by the Board have varying degrees of authority attached to them. There are precedential opinions which, when published, are binding and provide the criteria and authority that the Board will use to decide all other factually similar cases (until the opinion is overruled or changed by statute). There are informative opinions, which are non-precedential and illustrate the norms of Board decision-making for the public. There are representative opinions, which are non-precedential and are publicly available opinions that are not designed as precedential or informative. Since public policy favors a widespread publication of opinions, the Board publishes all publicly available opinions, even if the opinions are not binding precedent upon the Board.
Once submitted, the request will be publically available in electronic format through
Further information can be obtained by:
•
•
Written comments and recommendations for the proposed information collection should be sent on or before December 21, 2018 to Nicholas A. Fraser, OMB Desk Officer, via email to
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
The USPTO will use the statement that a nonprovisional application filed on or after March 16, 2013, other than a nonprovisional international design application, that claims the benefit of, or priority to, the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013, and contains, or contained at any time, a claim to a claimed invention that has an effective filing date (as defined in 37 CFR 1.109) on or after March 16, 2013, (or lack of such a statement) to readily determine whether the nonprovisional application is subject to the changes to 35 U.S.C. 102 and 103 in the AIA. The USPTO will use the identification of the inventorship and ownership or obligation to assign ownership when it is necessary to determine whether a U.S. patent or U.S. patent application publication resulting from another nonprovisional application qualifies as prior art under 35 U.S.C. 102(a)(2) or pre-AIA 35 U.S.C. 102(e). The USPTO will use information concerning whether a disclosure was by the inventor or joint inventor, or was by a party who obtained the subject matter from the inventor or a joint inventor, or that there was a prior public disclosure by the inventor or a joint inventor, or by a party who obtained the subject matter
Once submitted, the request will be publicly available in electronic format through
Further information can be obtained by:
•
•
Written comments and recommendations for the proposed information collection should be sent on or before December 21, 2018 to Nicholas A. Fraser, OMB Desk Officer, via email to
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Credit Union Advisory Council (CUAC or Council) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Council.
The meeting date is Thursday, December 6, 2018, from approximately 1 p.m. to 3:45 p.m. eastern daylight time. The meeting will take place via conference call.
Crystal Dully, Outreach and Engagement Associate, Consumer Advisory Board and Councils Office, External Affairs, at 202-435-9588,
Section 2 of the CUAC Charter provides that pursuant to the executive and administrative powers conferred on the Bureau of Consumer Financial Protection by section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Director established the Credit Union Advisory Council under agency authority.
Section 3 of the CUAC Charter states: “The purpose of the Advisory Council is to advise the Bureau in the exercise of its functions under the federal consumer financial laws as they pertain to community banks with total assets of $10 billion or less.”
The Credit Union Advisory Council will discuss artificial intelligence in consumer financial services and consumer access to financial records.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
Individuals who wish to join the Credit Union Advisory Council must RSVP via this link
The Council's agenda will be made available to the public on Wednesday November 21, 2018, via
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Community Bank Advisory Council (CBAC or Council) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Council.
The meeting date is Thursday, December 6, 2018, from approximately 1 p.m. to 3:45 p.m. eastern daylight time. The meeting will take place via conference call.
Crystal Dully, Outreach and Engagement Associate, Consumer Advisory Board and Councils Office, External Affairs, at 202-435-9588,
Section 2 of the CBAC Charter provides that pursuant to the executive and administrative powers conferred on the Bureau of Consumer Financial Protection by section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Director established the Community
Section 3 of the CBAC Charter states: “The purpose of the Advisory Council is to advise the Bureau in the exercise of its functions under the federal consumer financial laws as they pertain to community banks with total assets of $10 billion or less.”
The Community Bank Advisory Council will discuss artificial intelligence in consumer financial services and consumer access to financial records.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
Individuals who wish to join the Community Bank Advisory Council must RSVP via this link
The Council's agenda will be made available to the public on Wednesday November 21, 2018, via
Bureau of Consumer Financial Protection.
Notice of public meeting.
Under the Federal Advisory Committee Act (FACA), this notice sets forth the announcement of a public meeting of the Consumer Advisory Board (CAB or Board) of the Bureau of Consumer Financial Protection (Bureau). The notice also describes the functions of the Board.
The meeting date is Thursday, December 6, 2018, from approximately 1 p.m. to 3:45 p.m. eastern daylight time. The meeting will take place via conference call.
Crystal Dully, Outreach and Engagement Associate, Advisory Board and Councils Office, External Affairs, at 202-435-9588,
Section 3 of the Charter of the Consumer Advisory Board states that:
The purpose of the Board is outlined in section 1014(a) of the Dodd-Frank Act, which states that the Board shall “advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws” and “provide information on emerging practices in the consumer financial products or services industry, including regional trends, concerns, and other relevant information.”
To carry out the Board's purpose, the scope of its activities shall include providing information, analysis, and recommendations to the Bureau. The Board will generally serve as a vehicle for market intelligence and expertise for the Bureau. Its objectives will include identifying and assessing the impact on consumers and other market participants of new, emerging, and changing products, practices, or services.
The Consumer Advisory Board will discuss artificial intelligence in consumer financial services and consumer access to financial records.
Persons who need a reasonable accommodation to participate should contact
Written comments will be accepted from interested members of the public and should be sent to
The Board's agenda will be made available to the public on Wednesday November 21, 2018, via
Corporation for National and Community Service (CNCS).
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, CNCS is proposing to renew an information collection related to the National Service Criminal History Check.
Written comments must be submitted to the individual and office listed in the
You may submit comments, identified by the title of the information collection activity, by any of the following methods:
(1)
(2) By hand delivery or by courier to the CNCS mailroom at the mail address given in paragraph (1) above, between 9:00 a.m. and 4:00 p.m. Eastern Time, Monday through Friday, except federal holidays.
(3) Electronically through
Individuals who use a telecommunications device for the deaf (TTY-TDD) may call 1-800-833-3722 between 8:00 a.m. and 8:00 p.m. Eastern Time, Monday through Friday.
Comments submitted in response to this notice may be made available to the public through
Aaron Olszewski, 202-606-6670, or by email at
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; to develop, acquire, install and utilize technology and systems for the purpose of collecting, validating and verifying information, processing and maintaining information, and disclosing and providing information; to train personnel and to be able to respond to a collection of information, to search data sources, to complete and review the collection of information; and to transmit or otherwise disclose the information. All written comments will be available for public inspection on
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)), Federal Voting Assistance Program (FVAP), DoD.
Information collection notice.
In compliance with the
Consideration will be given to all comments received by January 22, 2019.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Federal Voting Assistance Program, ATTN: Sarah Gooch, 4800 Mark Center Drive, Mailbox 10, Alexandria, VA 22350-5000 or call 703-588-1584.
The authority for the States to collect personal information comes from UOCAVA. The burden for collecting this information resides in the States. The Federal government neither collects nor retains any personal information associated with these forms. The collected information will be used by election officials to process uniformed service members, spouses and overseas citizens who submit their information to register to vote, receive an absentee ballot or cast a write-in ballot. The collected information will be retained by election officials to provide election materials, including absentee ballots, to the uniformed services, their eligible family members and overseas voters during the form's eligibility period provided by State law. No information from the Federal Write-In Absentee Ballot (FWAB) is collected or retained by the Federal government. The applicant is required to update and resubmit the information annually, whenever they change their mailing address or as otherwise required by State law. If the information is not submitted annually or whenever they change their mailing address, the applicant may not receive ballots for elections for Federal office in that calendar year.
Office of the Chairman Joint Chiefs of Staff, Department of Defense.
Notice of Federal Advisory Committee meeting.
The Department of Defense (DoD) is publishing this notice to announce that the following Federal Advisory Committee meeting of the Board of Visitors, National Defense University will take place.
Thursday, December 6, 2018 from 12:30 p.m. to 5:15 p.m. and Friday, December 7, 2018 from 10:30 a.m. to 12:15 p.m.
Marshall Hall, Building 62, Room 155A/B (Thursday), Lincoln Hall, Building 64, Room 1107 (Friday), the National Defense University, 300 5th Avenue SW, Fort McNair, Washington, DC 20319-5066.
Dr. Brian R. Shaw, (202) 685-4685 (Voice), (202) 685-3920 (Facsimile),
This meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.140 and 102-3.150. Pursuant to 5 U.S.C. 552b and 41 CFR 102-3.140 through 102-3.165, and the availability of space, this meeting is open to the public.
Office of Career, Technical, and Adult Education (OCTAE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before January 22, 2019.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Braden Goetz, 202-245-7405.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Science, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Fusion Energy Sciences Advisory Committee. The Federal Advisory Committee Act requires that public notice of these meetings be announced in the
December 6, 2018—8:30 a.m. to 5:00 p.m.; December 7, 2018—8:30 a.m. to 12:00 noon.
Canopy by Hilton, 940 Rose Avenue, North Bethesda, MD 20852.
Dr. Samuel J. Barish, Acting Designated Federal Officer, Office of Fusion Energy Sciences (FES); U.S. Department of Energy; Office of Science; 1000 Independence Avenue SW, Washington, DC 20585; Telephone: (301) 903-2917.
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is planning to submit an information collection request (ICR), “Information Collection Request for Reporting Requirements for BEACH Act Grants” (EPA ICR No. 2048.06, OMB Control No. 2040-0244) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. Before doing so, the EPA is soliciting public comments on specific aspects of the proposed information collection as described below. This is a proposed extension of the ICR, which is currently approved through July 31, 2019. An Agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
Additional comments must be submitted on or before January 22, 2019.
Submit your comments, referencing Docket ID Number EPA-HQ-OW-2015-0641 to the EPA (1) online using
The EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Tracy Bone, OW, 4305T, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: 202-564-5257; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, the EPA is soliciting comments and information to enable it to: (i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
Environmental Protection Agency (EPA).
Notice of public comment period.
The Environmental Protection Agency (EPA) is announcing a 60-day public comment period associated with the release of two draft toxicity assessments for public comment:
• Draft Human Health Toxicity Values for Hexafluoropropylene Oxide (HFPO) Dimer Acid and its Ammonium Salt (GenX Chemicals).
• Draft Human Health Toxicity Values for Perfluorobutane Sulfonic Acid (PFBS) and Related Compound Potassium Perfluorobutane Sulfonate.
The EPA developed the draft assessments to provide the health effects information available for GenX chemicals and PFBS and describe how that information was used to derive draft toxicity values. These draft toxicity assessments underwent independent, external expert peer review in June-July 2018. Following closure of this 60-day public comment period, the EPA will consider the comments, revise the draft documents, and consider the need for additional peer review, as appropriate, and then publish final toxicity assessments. The toxicity assessments for GenX chemicals and PFBS are scientific and technical reports that include toxicity values associated with potential noncancer health effects following oral exposure (in this case, oral reference doses [RfDs]). These assessments evaluate human health hazards. The toxicity assessments and the values contained within are not risk assessments as they do not include exposure assessments or provide a risk characterization. Further, the toxicity assessments do not address the legal, political, social, economic, or technical considerations involved in risk management. When issued, the toxicity assessments can be used by the EPA, states, tribes, and local communities, along with specific exposure and other relevant information, to determine, under the appropriate regulations and statutes, if and when it is necessary to
Comments must be received on or before January 22, 2019.
Submit your comments, identified by Docket ID No. EPA-HQ-OW-2018-0614, to the public docket at:
Supporting documents are available in the public docket for this ICR (under Docket ID number EPA-HQ-OW-2018-0614. The docket can be viewed online at
This request for public comment will not impose any requirements on anyone. Instead, this action notifies interested parties of the availability of draft toxicity assessments for GenX Chemicals and PFBS for public comment. It should be noted that when final these toxicity assessments may be used by the EPA, states, tribes, and local communities, along with specific exposure and other relevant information, to determine, under the appropriate regulations and statutes, if and when it is necessary to take action to address potential risk associated with human exposures to these PFAS chemicals.
1. Submit your comments, identified by Docket ID No. EPA-HQ-OW-2018-0614, at
GenX chemicals and PFBS are man-made, fluorinated organic chemicals that are part of a larger group of manmade chemicals referred to as per- and polyfluoroalkyl substances (PFAS). PFAS are used in many applications because of their unique physical properties such as resistance to high and low temperatures, resistance to degradation, and nonstick characteristics. GenX is a trade name for a processing aid technology used to make high-performance fluoropolymers without the use of perfluorooctanoic acid (PFOA). Hexafluoropropylene oxide (HFPO) dimer acid and its ammonium salt are the major chemicals associated with the GenX processing aid technology and the focus of the draft assessment. PFBS is a four-carbon PFAS that was developed as a replacement for longer-chain PFAS, which have demonstrated environmental persistence, long half-lives and bioaccumulation in humans. PFBS has been integrated into various consumer products and applications.
The EPA's draft toxicity assessments for GenX Chemicals and PFBS provide information on hazard identification and dose-response, including draft subchronic and chronic oral reference doses (RfDs) for each chemical. Overall, the available oral toxicity studies demonstrate that the liver is particularly sensitive to GenX chemicals, and the thyroid and kidney are sensitive to PFBS. The draft toxicity assessments underwent independent, external peer review in June and July 2018 and were revised accordingly.
In the risk assessment/risk management paradigm, a toxicity assessment is on the risk assessment side of the paradigm. The draft toxicity assessments for GenX chemicals and PFBS address the first two steps (Step 1. Hazard Identification and Step 2. Dose-Response) of the four-step risk assessment process described by the National Academy of Science in 1983 as “the characterization of the potential adverse health effects of human exposures to environmental hazards.”
When issued, the toxicity values for GenX chemicals and PFBS can be combined with specific exposure information (Step 3. Exposure Assessment) by government and private entities to help characterize (Step 4. Risk Characterization) potential public health risks associated with exposure to these chemicals. Thus, once the GenX chemicals and PFBS assessments are issued, the EPA will work with our state, tribal, and local partners to provide technical assistance, including information about appropriate regulations and statutes, as they begin considering the final values in relevant exposure scenarios. It is the risk management part of the risk assessment/risk management paradigm where the supporting science, as well as statutory and legal considerations, risk management options, public health considerations, cost/benefit considerations, economic factors, social factors, and other considerations are weighed.
The EPA recognizes that humans have the potential to be exposed to complex mixtures of PFAS and other chemicals and pathogens through drinking water and other exposure sources. The EPA's draft assessments for GenX chemicals and PFBS focus solely on the potential human health effects associated with oral exposure to each chemical; they do not consider potential cumulative (mixture) effects of GenX chemicals and PFBS or their possible interactions with other PFAS and/or other chemicals. This would involve a more complex assessment that would need to consider and evaluate mechanisms of action and endpoints of concern for each of the chemicals in the mixture.
The EPA is issuing the draft toxicity assessments for PFBS and GenX chemicals for public comment to give interested stakeholders and the public an opportunity to provide input to the Agency. The public will have 60 days after publication in the
During the 60-day comment period, the EPA is soliciting public comments regarding the science and technical approaches used in the derivation of the draft toxicity assessments for GenX chemicals and PFBS.
In the PFBS assessment, due to the lack of epidemiological studies demonstrating adverse effects in humans, the EPA derived candidate subchronic RfDs (see Section 6.1.1 of the toxicity assessment) and candidate chronic RfDs (see Section 6.1.2 of the toxicity assessment) for both thyroid effects and kidney effects in rodent toxicity studies. In light of the consistent observation of the thyroid effects across life stages and the greater dose-response sensitivity, relative to the kidney effects, the EPA is proposing to base the overall subchronic and chronic RfDs on the thyroid effects and is requesting public review and comment on this proposal in addition to the approaches and conclusions in the PFBS assessment. Additionally, as described in Section 6.1 of the PFBS toxicity assessment, decreased serum total T4 (thyroxine) in newborn mice was used as the basis for the thyroid-related candidate RfDs. Peer reviewers provided comments on thyroid effects and this choice of endpoint. See pages 15-25 and 31-32 in the
These draft assessments are not final as described in the EPA's information quality guidelines, and do not represent Agency policy or views. The EPA will consider all public comments submitted in response to this notice when revising these documents.
Federal Deposit Insurance Corporation (FDIC).
Notice of open meeting.
In accordance with the Federal Advisory Committee Act, notice is hereby given of a meeting of the FDIC Systemic Resolution Advisory Committee, which will be held in Washington, DC. The Advisory Committee will provide advice and recommendations on a broad range of policy issues regarding the resolution of systemically important financial companies.
Thursday, December 6, 2018, from 9:00 a.m. to 4:00 p.m.
The meeting will be held in the FDIC Board Room on the sixth floor of the FDIC Building located at 550 17th Street NW, Washington, DC.
Requests for further information concerning the meeting may be directed to Mr. Robert E. Feldman, Committee Management Officer of the FDIC, at (202) 898-7043.
The Commission hereby gives notice of the filing of the following agreement under the Shipping Act of 1984. Interested parties may submit comments on the agreement to the Secretary by email at
Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by Logfret, Inc., hereinafter “Complainant”, against Kirsha, B.V., Leendert Johanness Bergwerff a/k/a Hans Bergwerff, and Linda Sieval, hereinafter “Respondents”. Complainant states that it “. . . provides transport, logistics and related shipping services to customers in the United States and worldwide” and is licensed by the Commission. Complainant states that it “. . . is an affiliate of Logfret, B.V. . . . ” Complainant states that “. . . Respondent Kirsha, B.V. is a corporation organized and existing under the laws of the Netherlands. . . .” Complainant states that “Respondent Ms. Linda Sieval, a Dutch national, was a sales manager for Logfret B.V. until the termination of her employment on March 1, 2018. Complainant states that Respondent Mr. Hans Bergwerff, is “. . . a Dutch national, who exercises signatory authority and direct control over Kirsha, B.V.”
Complainant alleges that Respondents, in the course of their management of Logret B.V., violated 46 U.S.C. 41103(a) by unlawfully routing shipments to a competitor, and improper use of Complainant's bill of lading.
Complainant seeks reparations in the amount of $2,000,000 and other relief. The full text of the complaint can be found in the Commission's Electronic Reading Room at
This proceeding has been assigned to Office of Administrative Law Judges. The initial decision of the presiding office in this proceeding shall be issued by November 18, 2019, and the final decision of the Commission shall be issued by June 1, 2020.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than December 7, 2018.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414:
1.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to revise for three years, without extension, the Capital Assessments and Stress Testing (FR Y-14A/Q/M; OMB No. 7100-0341). The revisions are applicable with the reports as of December 31, 2018.
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Board may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
• The semi-annual FR Y-14A, which collects quantitative projections of balance sheet, income, losses, and capital across a range of macroeconomic scenarios, and qualitative information on methodologies used to develop internal projections of capital across scenarios.
• The quarterly FR Y-14Q, which collects granular data on various asset classes, including loans, securities, trading assets, and pre-provision net revenue (PPNR) for the reporting period.
• The monthly FR Y-14M, which is comprised of three retail portfolio- and loan-level schedules, and one detailed address matching schedule to supplement two of the portfolio- and loan-level schedules.
Respondent firms are currently required to submit up to 18 filings each year: 2 semi-annual FR Y-14A filings, 4 quarterly FR Y-14Q filings, and 12 monthly FR Y-14M filings.
The information collected in these reports is collected as part of the Board's supervisory process, and therefore is afforded confidential treatment pursuant to exemption 8 of the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, individual respondents may request that certain data be afforded confidential treatment pursuant to exemption 4 of FOIA if the data has not previously been publically disclosed and the release of the data would likely cause substantial harm to the competitive position of the respondent (5 U.S.C. 552(b)(4)). Determinations of confidentiality based on exemption 4 of FOIA would be made on a case-by-case basis.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revision, the Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/Application Register (LAR) required by Regulation C (FR HMDA LAR, OMB No. 7100-0247).
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503 or by fax to (202) 395-6974.
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Board may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
The final rules generally will require covered institutions to collect and report any mortgage loan secured by a dwelling, including open-end lines of credit, regardless of the loan's purpose. However, the final rules exclude unsecured home-improvement loans (which historically were required to be reported), dwelling-secured loans that are made principally for a commercial or business purpose, agricultural-purpose loans, and other specifically excluded loans.
The final rules also will require collection of additional data points. For covered institutions that are otherwise not eligible for the partial exemption under section 104(a) of EGRRCPA, as discussed further below, these additional data points will be reported in 2019. These new fields include
In addition, the Bureau's final rules amend several existing requirements, including the requirements for collection and reporting of information regarding an applicant's or borrower's ethnicity, race and sex.
Effective May 24, 2018, an institution that is eligible for the partial exemption under section 104(a) of EGRRCPA will only need to report a subset of the data points required under HMDA if it originates fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.
The Bureau will collect the HMDA/LAR data on behalf of the applicable Federal supervisory agency, and the data will be combined and aggregated for each Metropolitan Statistical Area (MSA). Certain aggregated data will continue to be publicly available, though the Bureau has yet to determine what the information collected in the new data fields will be disclosed once the final rules are fully effective. The comment period for this notice expired on October 29, 2018. The Board did not receive any comments. The revisions will be implemented as proposed.
Administration for Community Living, HHS.
Notice.
The President's Committee for People with Intellectual Disabilities (PCPID) will host a webinar/conference call for its members to discuss the potential topics of the Committee's 2019 Report to the President. All the PCPID meetings, in any format, are open to the public. This virtual meeting will be conducted in a discussion format.
Ms. Allison Cruz, Director, Office of Innovation, 330 C Street SW, Switzer Building, Room 1114, Washington, DC 20201. Telephone: 202-795-7334. Fax: 202-795-7334. Email:
The purpose of this virtual meeting is to discuss the Committee's preparation of the PCPID 2019 Report to the President, including its content and format, and related data collection and analysis required to complete the writing of the Report.
Food and Drug Administration, HHS.
Notice; extension of comment period.
The Food and Drug Administration (FDA or we) is extending the comment period for the notice that appeared in the
FDA is extending the comment period on the notice published in the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before January 28, 2019. The
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two
Mabel Lee, Center Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2371.
In the
We have received requests for a 120-day extension of the comment period for the notice. The requests conveyed concern that the current 60-day comment period does not allow sufficient time to develop meaningful or thoughtful responses to the questions that appeared in the notice requesting data and other evidence in support of answers.
We have considered the requests and are extending the comment period for another 60 days, until January 28, 2019. We believe that a 60-day extension allows adequate time for interested persons to submit comments without significantly delaying any potential further action on these important issues.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by December 21, 2018.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
JonnaLynn Capezzuto, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-3794,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
FDA's regulations governing the content and format of labeling for human prescription drug and biological products were revised in the
Currently, § 201.56 (21 CFR 201.56) requires that prescription drug labeling contain certain information in the format specified in either § 201.57 (21 CFR 201.57) or § 201.80 (21 CFR 201.80), depending on when the drug was approved for marketing. Section 201.56(a) sets forth general labeling requirements applicable to all prescription drugs. Section 201.56(b) specifies the categories of new and more recently approved prescription drugs subject to the revised content and format requirements in §§ 201.56(d) and 201.57. Section 201.56(c) sets forth the schedule for implementing these revised content and format requirements. Section 201.56(e) specifies the sections and subsections, required and optional, for the labeling of older prescription drugs not subject to the revised format and content requirements.
Section 201.57(a) requires that prescription drug labeling for new and more recently approved prescription drug products include a “Highlights of Prescribing Information” section. The “Highlights” section provides a concise extract of the most important information required under § 201.57(c) (the Full Prescribing Information (FPI)), as well as certain additional information important to prescribers. Section 201.57(b) requires a table of contents to
Older drugs not subject to the revised labeling content and format requirements in § 201.57 are subject to labeling requirements at § 201.80. Section 201.80(f)(2) requires that, within 1 year, any FDA-approved patient labeling be referenced in the “Precautions” section of the labeling of older products and either accompany or be reprinted immediately following the labeling.
New drug product applicants must: (1) Design and create prescription drug labeling containing “Highlights,” “Contents,” and FPI; (2) test the designed labeling (
In the
Our estimate of the burden for the information collection is as follows:
Our estimated burden for the information collection reflects an overall increase of 602,503 hours and a corresponding increase of 345 records. We attribute this adjustment to an increase in the number of submissions we received over the last few years.
Office of HIV/AIDS and Infectious Disease Policy, Office of the Assistant Secretary for Health, Office of the Secretary, Department of Health and Human Services.
Notice.
The Department of Health and Human Services is hereby giving notice that the charter for the Advisory Committee on Blood and Tissue Safety and Availability (ACBTSA) has been renewed.
Mr. James Berger, Designated Federal Officer for the ACBTSA, Senior Advisor for Blood and Tissue Policy, Office of the Assistant Secretary for Health, Department of Health and Human Services, Mary E. Switzer Building, 330 C Street SW, Suite L100, Washington, DC 20024. Phone: (202) 795-7697; Fax: (202) 691-2102; Email:
ACBTSA is a non-discretionary Federal advisory committee. ACBTSA is authorized under 42 U.S.C. 217a, Section 222 of the Public Health Service (PHS) Act, as amended. The Committee is governed by the provisions of the Federal Advisory Committee Act (FACA), Public Law 92-463, as amended (5 U.S.C. App), which sets forth standards for the formation and use of advisory committees.
The ACBTSA advises, assists, consults with, and makes policy recommendations to the Secretary, through the Assistant Secretary for Health, regarding these broad responsibilities related to the safety of blood, blood products, tissues, and organs. For solid organs and blood stem cells, the Committee's work is limited to policy issues related to donor derived infectious disease complications of transplantation.
To carry out its mission, the ACBTSA provides advice to the Secretary through the Assistant Secretary for Health on a range of policy issues to include: (1) Identification of public health issues through surveillance of blood and tissue safety issues with national biovigilance data tools; (2) identification of public health issues that affect availability of blood, blood products, and tissues; (3) broad public health, ethical, and legal issues related to the safety of blood, blood products, and tissues; (4) the impact of various economic factors (
On September 25, 2018, the Secretary approved for the ACBTSA charter to be renewed. The new charter was effected and filed with the appropriate Congressional committees and the Library of Congress on October 9, 2018. Renewal of the Committee's charter gives authorization for the Committee to continue to operate until October 9, 2020.
A copy of the ACBTSA charter is available on the Committee's website at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Substance Abuse and Mental Health Services Administration, HHS.
Notice of intent to award a single source grant to the Community Anti-Drug Coalitions of America (CADCA).
This notice is to inform the public that the Substance Abuse and Mental Health Services Administration (SAMHSA) intends to award $500,000
Eligibility for this award is limited to CADCA. The purpose of this grant to provide training and workforce development for thousands of members of community coalitions dedicated to preventing substance abuse through a national leadership workforce development and training event. CADCA is the only national organization that has special expertise and unique broad, national-level experience in working with community anti-drug coalitions. For more than 22 years, coalitions and coalition leadership have turned to CADCA to obtain the assistance they need to implement, operate, and sustain effective local community anti-drug strategies. CADCA will take advantage of the resources of multiple agencies located throughout the federal, state and
Coast Guard, DHS.
Thirty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995 the U.S. Coast Guard is forwarding an Information Collection Request (ICR), to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for a collection of information regarding: 1625-0035, Title 46 CFR Subchapter Q: Lifesaving, Electrical, Engineering and Navigation Equipment, Construction and Materials & Marine Sanitation Devices (33 CFR part 159); without change. Our ICR describes the information we seek to collect from the public. Review and comments by OIRA ensure we only impose paperwork burdens commensurate with our performance of duties.
Comments must reach the Coast Guard and OIRA on or before December 21, 2018.
You may submit comments identified by Coast Guard docket number [USCG-2018-0792] to the Coast Guard using the Federal eRulemaking Portal at
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A copy of the ICR is available through the docket on the internet at
Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
In compliance with the Paperwork Reduction Act of 1995 the U.S. Coast Guard is forwarding an ICR to OMB, OIRA, requesting an extension of its approval for a collection of the following information: 1625-0035, Title 46 CFR Subchapter Q Lifesaving, Electrical, Engineering and Navigation Equipment, Construction and Materials & Marine Sanitation Devices (33 CFR part 159) without change.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. These comments will help OIRA determine whether to approve the ICR referred to in this Notice.
We encourage you to respond to this request by submitting comments and related materials. Comments to Coast Guard or OIRA must contain the OMB Control Number of the ICR. They must also contain the docket number of this request, [USCG-2018-0792], and must be received by December 21, 2018
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
OIRA posts its decisions on ICRs online at
This request provides a 30-day comment period required by OIRA. The Coast Guard published the 60-day notice (83 FR 45267, September 6, 2018) required by 44 U.S.C. 3506(c)(2). That notice elicited no comments. Accordingly, no changes have been made to the Collections.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended.
U.S. Citizenship and Immigration Services, Department of Homeland Security.
60-Day notice.
The Department of Homeland Security (DHS), U.S. Citizenship and Immigration
(USCIS) invites the general public and other Federal agencies to comment upon this proposed revision of a currently approved collection of information or new collection of information. In accordance with the Paperwork Reduction Act (PRA) of 1995, the information collection notice is published in the
Comments are encouraged and will be accepted for 60 days until January 22, 2019.
All submissions received must include the OMB Control Number 1615-0052 in the body of the letter, the agency name and Docket ID USCIS-2008-0025. To avoid duplicate submissions, please use only
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USCIS, Office of Policy and Strategy, Regulatory Coordination Division, Samantha Deshommes, Chief, 20 Massachusetts Avenue NW, Washington, DC 20529-2140, telephone number 202-272-8377 (This is not a toll-free number. Comments are not accepted via telephone message). Please note contact information provided here is solely for questions regarding this notice. It is not for individual case status inquiries. Applicants seeking information about the status of their individual cases can check Case Status Online, available at the USCIS website at
You may access the information collection instrument with instructions, or additional information by visiting the Federal eRulemaking Portal site at:
Written comments and suggestions from the public and affected agencies should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service (Service), have received an application from Metropolitan Water District of Southern California for an incidental take permit under the Endangered Species Act. The permit would authorize take of the federally endangered unarmored threespine stickleback, arroyo toad, the federally threatened California red-legged frog, and non-listed Santa Ana sucker, western spadefoot, two-striped garter snake, and western pond turtle incidental to otherwise lawful activities associated with the inspection and maintenance of the Foothill Feeder water conveyance pipeline in the draft habitat conservation plan prepared for the project. We invite public comment.
Written comments should be received on or before December 21, 2018.
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Chris Dellith, Fish and Wildlife Biologist, 805-677-3308 (phone), or at the Ventura address in
We have received an application for an incidental take permit (ITP) pursuant to section 10(a)(1)(B) of the Endangered Species Act, as amended (ESA; 16 U.S.C. 1531
The unarmored threespine stickleback was listed by the Service as endangered on October 13, 1970 (35 FR 16047). The arroyo toad was listed by the Service as endangered on December 16, 1994 (59 FR 64859). The California red-legged frog was listed by the Service as threatened on May 23, 1996 (61 FR 25813). The Santa Ana sucker was listed by the Service as threatened, outside of the area covered by the draft HCP, on April 12, 2000 (65 FR 19686). The western spadefoot is currently under the Service's review for listing pursuant to the ESA (80 FR 37568). The two-striped garter snake is not federally listed, nor is it being considered for listing pursuant to the ESA at this time. The western pond turtle is currently under the Service's review for listing pursuant to the ESA (80 FR 19259). Section 9 of the ESA and its implementing regulations prohibit the take of fish or wildlife species listed as endangered or threatened. “Take” is defined under the ESA to include the following activities: “[T]o harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct” (16 U.S.C. 1532); however, under section 10(a)(1)(B) of the ESA, we may issue permits to authorize incidental take of listed species. “Incidental take” is defined by the ESA as take that is incidental to, and not the purpose of, carrying out of an otherwise lawful activity. Regulations governing incidental take permits for threatened and endangered species are in the Code of Federal Regulations (CFR) at 50 CFR 17.32 and 17.22, respectively. Under the ESA, protections for federally listed plants differ from the protections afforded to federally listed animals. Issuance of an incidental take permit also must not jeopardize the existence of federally listed fish, wildlife, or plant species. The permittees would receive assurances under our “No Surprises” regulations ((50 CFR 17.22(b)(5) and 17.32(b)(5)) regarding conservation activities for the unarmored threespine stickleback, arroyo toad, California red-legged frog, Santa Ana sucker, western spadefoot, two-striped garter snake, and western pond turtle.
The applicant has applied for a permit for incidental take of the unarmored threespine stickleback, arroyo toad, California red-legged frog, Santa Ana sucker, western spadefoot, two-striped garter snake, and western pond turtle. Take is likely to occur in association with activities necessary to inspect and maintain the Foothill Feeder water
The Service made a preliminary determination that issuance of the incidental take permit is neither a major Federal action that will significantly affect the quality of the human environment within the meaning of section 102(2)(C) of NEPA (42 U.S.C. 4321
If you wish to comment on the permit application, draft HCP, and associated documents, you may submit comments by one of the methods in
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public view, we cannot guarantee that we will be able to do so.
We provide this notice under section 10 of the ESA (16 U.S.C. 1531
Bureau of Indian Affairs, Interior.
Notice of availability.
This notice advises the public that the Bureau of Indian Affairs (BIA) as lead agency, with the Township of Fruitport, County of Muskegon, Little River Band of Ottawa Indians (Tribe), Federal Highway Administration, and the U.S. Environmental Protection Agency (EPA), serving as cooperating agencies, intends to file a Draft Environmental Impact Statement (DEIS) with the EPA in connection with the Tribe's application for transfer into trust by the United States of approximately 60 acres for gaming and other purposes to be located the Township of Fruitport, Muskegon County, Michigan. This notice also announces that the DEIS is now available for public review and that a public hearing will be held to receive comments on the DEIS.
Written comments on the DEIS must arrive within 45 days after EPA publishes its Notice of Availability in the
You may mail or hand-deliver written comments to Mr. Timothy LaPointe, Midwest Regional Director, Bureau of Indian Affairs, Midwest Region, Norman Pointe II Building, 5600 West American Boulevard, Suite 500, Bloomington, Minnesota 55347. Please include your name, return address, and the caption: “DEIS Comments, Little River Band Trust Acquisition and Casino Project,” on the first page of your written comments. See the
Mr. Felix Kitto, Regional Environmental Protection Specialist, Division of Environmental, Facilities, Safety and Cultural Resource Management (DEFSCRM), Bureau of Indian Affairs, Midwest Region, Norman Pointe II Building, 5600 West American Boulevard, Suite 500, Bloomington, Minnesota 55347; phone: (612) 725-4597; email:
Public review of the DEIS is part of the administrative process for the evaluation of the Tribe's application to the BIA for the Federal trust acquisition of approximately 60 acres in the Township of Fruitport, Muskegon County, Michigan, upon which the Tribe proposes to develop a casino, hotel, parking, and other supporting facilities. A Notice of Intent was published in the
The following alternatives are considered in the DEIS: (1) Proposed Project; (2) Reduced Intensity Alternative; (3) Non-Gaming Alternative; (4) Custer Site Alternative and (5) No Action/No Development. Environmental issues addressed in the DEIS include geology and soils, water resources, air quality, biological resources, cultural and paleontological resources, socioeconomic conditions (including environmental justice), transportation and circulation, land use, public services, noise, hazardous materials, aesthetics, cumulative effects, and indirect and growth-inducing effects.
This notice is published pursuant to Sec. 1503.1 of the Council of Environmental Quality Regulations (40 CFR parts 1500 through 1508) and Sec. 46.305 of the Department of the Interior Regulations (43 CFR part 46), implementing the procedural requirements of the NEPA of l969, as amended (42 U.S.C. 4371,
Bureau of Indian Affairs, Interior.
Notice of intent.
This notice advises the public that the Bureau of Indian Affairs (BIA), as lead agency, with the Campo Band of Diegueno Mission Indians of the Campo Indian Reservation (Tribe) as a cooperating agency, intends to gather information necessary for preparing an Environmental Impact Statement (EIS) for the proposed Campo Wind Project, located on the Campo Indian Reservation (Reservation) in southeastern San Diego County, approximately 60 miles east of San Diego, California. Construction of the Campo Wind Project is subject to BIA approval of a lease and sublease, which, as proposed, is a major Federal action under the National Environmental Policy Act of 1969 (NEPA), as amended. A brief description of the proposed action is provided below in the
Written comments on the scope and implementation of this proposal must arrive by 11:59 p.m. on December 21, 2018. The date and location of the public hearing on the EIS will be announced at least 15 days in advance through a notice to be published in local newspapers (The San Diego Union Tribune and The San Diego Business Journal) and online at:
The public may mail or hand-carry written comments to Ms. Amy Dutschke, Regional Director, Bureau of Indian Affairs, 2800 Cottage Way, Sacramento, California 95825. You may also submit comments through email to Mr. Dan (Harold) Hall, Acting Chief, Division of Environmental, Cultural Resource Management and Safety, Bureau of Indian Affairs, at
Please include the commenter's name, title, return address, and “EIS Scoping Comments, Campo Wind Project, San Diego County, California,” on the first page of the written comments. The scoping meeting will be held at Campo Indian Reservation Tribal Hall, 36190 Church Road (BIA Road 10), Campo, California 91906.
Mr. Dan (Harold) Hall Acting Chief, Division of Environmental, Cultural Resource Management and Safety, Bureau of Indian Affairs, by telephone at (916) 978-6041, or by email at
BIA approval is required for a lease and sublease to build and operate a commercial wind power generation facility capable of generating up to 252 megawatts (MW) of electricity.
The project would include the generation of up to 252 MW consisting of up to 60 turbines. The project study area covers approximately 2,200 acres on the Campo Indian Reservation. The total area that would be disturbed by the project would be substantially less. The turbines proposed for the project would range from 2.5 MW to 4.2 MW in maximum output rating per turbine, tubular steel towers, with a rotor diameter of approximately 450 feet, a hub height of approximately 361 feet, and a total height of turbine (highest point) of approximately 586 feet. Each turbine would be set on a concrete foundation. Turbines would be connected by an underground electrical collection system to a project collector substation. The collector substation would be sited on approximately 2 acres and would consist of a graveled, fenced area containing transformer and switching equipment and an area for vehicle parking. A new 230 kV overhead generation transmission line would be constructed, on the Campo Indian Reservation and partially outside on private lands, from the project collector substation on the Reservation to a San Diego Gas & Electric (SDG&E) substation/switchyard that would be constructed on private lands adjacent to the Sunrise Powerlink northeast of the Reservation. The SDG&E substation/switchyard and related transmission line improvements will be subject to approval by the County of San Diego,
The EIS will analyze the potential environmental impacts of the construction and operation of a proposed wind generation facility, including access roads, a collector substation, as well as a substation/switchyard and transmission facilities. The EIS will be prepared in accordance with NEPA (42 U.S.C. 4321
During the public scoping meetings, the public may submit written and verbal comments. Verbal comments given at the scoping meetings will have the same merit as written comments and will be addressed equally. The public may mail or hand-carry written comments to Ms. Amy Dutschke, Regional Director, Bureau of Indian Affairs, 2800 Cottage Way, Sacramento, California 95825. Please include the commenter's name, title, return address and “EIS Scoping Comments, Campo Wind Project, San Diego County, California,” on the first page of the written comments.
Comments, including names and addresses of respondents, will be available for public review at the BIA address shown in the
This notice is published in accordance with sections 1501.7 (Scoping), 1506.6 (Public involvement), and 1508.22 (Notice of Intent) of the CEQ Regulations (40 CFR parts 1500 through 1508) and section 46.305 of the Department of the Interior Regulations (43 CFR part 46), implementing the procedural requirements of NEPA, as amended (42 U.S.C. 4321
Bureau of Land Management, Interior.
Notice of intent.
In accordance with the Naval Petroleum Reserves Production Act of 1976, as amended, the Bureau of Land Management (BLM) Alaska State Office, Anchorage, Alaska, intends to prepare a new Integrated Activity Plan and Environmental Impact Statement (IAP/EIS) for BLM-managed lands within the National Petroleum Reserve in Alaska (NPR-A). By this notice, the BLM is announcing the beginning of the Environmental Impact Statement (EIS) scoping process to solicit public comments and identify issues.
Comments on relevant issues that will influence the scope of the EIS for the NPR-A IAP/EIS project may be submitted in writing until January 7, 2019. The BLM will also provide opportunities for public participation during scoping meetings with appropriate public notice. The date(s) and location(s) of scoping meetings will be announced in advance through local media, newspapers, and the BLM website at:
In order to be considered for the Draft IAP/EIS, all comments must be received prior to the close of the 45-day scoping period. Federal, State or local agencies, or tribes who are interested in serving as a cooperating agency for the development of the IAP/EIS are asked to submit such requests to the BLM.
You may submit comments on issues related to the proposed NPR-A IAP/EIS project by any of the following methods:
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The 2013 IAP/EIS ROD can be downloaded from the BLM's website at
Stephanie Rice; Planning and Environmental Coordinator, 907-271-3202,
This notice initiates the public scoping process for the EIS. Comments regarding management decisions, resources to be addressed, and issues for analysis will assist the BLM in defining the proposed actions and alternatives for the NPR-A IAP/EIS.
The Naval Petroleum Reserves Production Act (42 U.S.C. 6501), as amended, excludes the NPR-A from the application of Section 202 of the Federal Land Policy and Management Act (43 U.S.C. 1701), as amended, which is the
The BLM is developing a new IAP/EIS to determine the appropriate management of all BLM-managed lands in the NPR-A in a manner consistent with existing statutory direction and Secretarial Order 3352. Secretarial Order 3352 directs the development of a schedule to “effectuate the lawful review and development of an IAP for the NPR-A that strikes an appropriate balance of promoting development while protecting surface resources.” The Naval Petroleum Reserves Production Act, as amended, and its implementing regulations require oil and gas leasing in the NPR-A and the protection of surface values consistent with exploration, development and transportation of oil and gas.
The BLM will be preparing a new IAP/EIS, which is intended to supersede the 2013 IAP/EIS ROD and, depending on the alternative selected, may supersede the 2008 Colville River Special Area Management Plan, as amended by the 2013 IAP/EIS ROD.
The BLM is the lead agency for the IAP/EIS. The BLM has extended invitations to participate as cooperating agencies to the U.S. Fish and Wildlife Service, the National Marine Fisheries Service, the State of Alaska, the North Slope Borough, the National Park Service, the Bureau of Ocean Energy Management, and the U.S. Geological Survey.
The Secretary of the Interior is the responsible official.
Consistent with the Naval Petroleum Reserves Production Act, the IAP/EIS will address a narrower range of multiple use management than a resource management plan (
This notice of intent initiates the scoping process, which guides the development of the IAP/EIS. The purpose of the public scoping process is to determine the management decisions and resources to be addressed and the issues for analysis. The BLM will work collaboratively with interested parties to identify the management decisions best suited to local, regional, and national needs and concerns.
The BLM must receive all comments by the end of the scoping comment period to be included in the scoping report. The most useful comments are substantive comments that address the following topics: Areas available for leasing, special area boundaries, lease stipulations and best management practices, and resource issues to be analyzed.
You may submit written comments on management decisions, resources to be addressed, and issues for analysis to the BLM at any of the public scoping meetings, or you may use any of the methods listed in the
40 CFR 1501.7.
Department of Justice.
Notice.
This notice advises the public that the State of Arizona has provided additional information about its capital counsel mechanism, and solicits public comment on that supplemental information.
Written and electronic comments must be submitted on or before January 7, 2019. Comments received by mail will be considered timely if they are postmarked on or before that date. The electronic Federal Docket Management System (FDMS) will accept comments until Midnight Eastern Time at the end of that day.
To ensure proper handling of comments, please reference “Docket No. OLP 168” on all electronic and written correspondence. The Department encourages that all comments be submitted electronically through
Laurence Rothenberg, Deputy Assistant Attorney General, Office of Legal Policy, U.S. Department of Justice, 950 Pennsylvania Avenue NW, Washington, DC 20530; telephone (202) 532-4465.
Chapter 154 of title 28, United States Code, provides special procedures for federal habeas corpus review of cases brought by prisoners in State custody who are subject to capital sentences. The special procedures may be available to a State only if the Attorney General of the United States has certified that the State has established a qualifying mechanism for the appointment, compensation, and payment of reasonable litigation expenses of competent counsel in State postconviction proceedings for indigent capital prisoners. 28 U.S.C. 2261, 2265; 28 CFR part 26.
On November 16, 2017, the Department of Justice, Office of Legal Policy published a notice in the
Following the receipt of public comments, the Department sent a letter dated June 29, 2018, to Arizona requesting that the State provide answers to a number of questions that had arisen during the Department's review of the comments, and inviting response to any other matters raised in the comments. This notice advises the public that the State of Arizona submitted additional information in response, in a letter dated October 16, 2018, and solicits public comment on that supplemental information. The correspondence with Arizona, including its letter of October 16, 2018, may be viewed at
Following the Department's transmission of its letter of June 29, 2018 to Arizona, and again following Arizona's transmission of its responsive letter of October 16, 2018 to the Department, a commenter on Arizona's request for certification requested that the Department provide an opportunity for additional public comment to allow response to the new information in Arizona's letter. This notice provides an opportunity for such public comment.
National Endowment for the Arts
Notice of meetings.
Pursuant to the Federal Advisory Committee Act, as amended, notice is hereby given that 6 meetings of the Arts Advisory Panel to the National Council on the Arts will be held by teleconference.
See the
National Endowment for the Arts, Constitution Center, 400 7th St. SW, Washington, DC 20506.
Further information with reference to these meetings can be obtained from Ms. Sherry Hale, Office of Guidelines & Panel Operations, National Endowment for the Arts, Washington, DC 20506;
The closed portions of meetings are for the purpose of Panel review, discussion, evaluation, and recommendations on financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including information given in confidence to the agency. In accordance with the determination of the Chairman of July 5, 2016, these sessions will be closed to the public pursuant to subsection (c)(6) of section 552b of title 5, United States Code.
The upcoming meetings are:
Nuclear Regulatory Commission.
Memorandum of understanding; issuance.
This notice is announcing that, effective on September 30, 2018, the U.S. Nuclear Regulatory Commission (NRC or Commission) and the State of Wyoming, Department of Environmental Quality (WYDEQ), entered into a Memorandum of Understanding (MOU) for the purpose of establishing a regulatory process for the completion of decommissioning of five uranium mill tailing sites and the termination of the associated uranium mill licenses located within the State of Wyoming.
The MOU was issued on September 30, 2018.
Please refer to Docket ID NRC-2018-0236 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
• Federal Rulemaking website: Go to
• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly available documents online in the ADAMS Public Document collection at
• NRC's Public Document Room (PDR): The public may examine and purchase copies of public documents at the NRC's PDR, Room O1 F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
Stephen Poy, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone 301-415-7135; email:
Effective September 30, 2018, the NRC and the WYDEQ (collectively referred to as the Agencies) entered into a MOU for the purpose of establishing a regulatory process for the completion of decommissioning of five uranium mill tailing sites and the termination of the associated uranium mill licenses located within the State of Wyoming. This MOU pertains to the Agencies' roles in the decommissioning and eventual termination of the license for the following five uranium mill sites:
The five licenses were transferred to the State of Wyoming on September 30, 2018, when the NRC discontinued, and the State of Wyoming assumed, regulatory authority over the management and disposal of byproduct material as defined in 11e.(2) of the Atomic Energy Act of 1954, as amended (the Act), and a subcategory of source material or ores involved in the extraction or concentration of uranium or thorium milling in the State in accordance with the agreement authorized by Section 274b. of the Act (83 FR 48905; September 28, 2018). The MOU documents completed NRC actions related to the decommissioning process for each of the sites and delineates specific actions, on a site-by-site basis, that the NRC and the State of Wyoming will take to verify completion of the decommissioning and license termination for these sites. The MOU stipulates that any decision made by the NRC for the five uranium mill sites prior to the discontinuation of the NRC's regulatory authority in Wyoming will be appropriately recognized by the NRC as meeting all applicable standards and requirements when reviewing the Completion Review Report. A Completion Review Report is required to be submitted by the State of Wyoming to the NRC, prior to license termination of a uranium mill site, for review and approval to adequately ensure public health and safety. Upon termination of each license, the site may be transferred, customarily, to the U.S. Department of Energy for long-term care and surveillance.
The NRC and WYDEQ will cooperate fully with each other to carry out this MOU and its intent of ensuring protection of public health, safety, and the environment in accordance with all governing laws and regulations.
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
This Notice will be published in the
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange filed a proposal to list and trade shares of the JPMorgan Inflation Managed Bond ETF (the “Fund”) of the J.P. Morgan Exchange-Traded Fund Trust (the “Trust” or the “Issuer”) under Rule 14.11(i) (“Managed Fund Shares”). The shares of the Fund are referred to herein as the “Shares.”
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade the Shares under Rule 14.11(i), which governs the listing and trading of Managed Fund Shares on the Exchange.
The Fund will be an actively managed fund. The Shares will be offered by the Trust, which was established as a Delaware statutory trust. J.P Morgan Investment Management, Inc. is the investment adviser (the “Adviser”) and the administrator (“Administrator”) to the Fund. JPMorgan Chase Bank, N.A. is the custodian and transfer agent (“Custodian” and “Transfer Agent,” respectively) for the Trust. JPMorgan Distribution Services, Inc. serves as the distributor (“Distributor”) for the Trust. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Fund on Form N-1A (“Registration Statement”) with the Commission.
Rule 14.11(i)(7) provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect and maintain a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
According to the Registration Statement, the Fund will be an actively managed exchange-traded fund that will seek to maximize inflation protected total return. The Fund is designed to protect the total return generated by its fixed income holdings from inflation risk. Total return includes income and capital appreciation. The Fund seeks to achieve its investment objective by investing, under Normal Market Conditions,
The Fund will attempt to mitigate the inflation risk of the Fund's exposure to Bonds primarily through the use of either OTC or listed inflation swaps (“Inflation Swaps”),
The Fund's investments, including derivatives, will be consistent with the 1940 Act and the Fund's investment objective and policies and will not be used to enhance leverage (although certain derivatives and other investments may result in leverage).
Under Normal Market Conditions, the Fund may also invest up to 20% of its net assets in the following: One or more ETFs,
The Exchange represents that, except for the exceptions to BZX Rule 14.11(i)(4)(C) described above, the Fund's proposed investments will satisfy, on an initial and continued listing basis, all of the generic listing standards under BZX Rule 14.11(i)(4)(C) (the “Generic Listing Rules”) and all other applicable requirements for Managed Fund Shares under Rule 14.11(i). The Trust is required to comply with Rule 10A-3 under the Act for the initial and continued listing of the Shares of the Fund. In addition, the Exchange represents that the Shares of the Fund will comply with all other requirements applicable to Managed Fund Shares including, but not limited to, requirements relating to the dissemination of key information such as the Disclosed Portfolio, net asset value (“NAV”), and the Intraday Indicative Value, rules governing the trading of equity securities, trading hours, trading halts, surveillance, firewalls, and the information circular, as set forth in Exchange rules applicable to Managed Fund Shares and the orders approving such rules. At least 100,000 Shares will be outstanding upon the commencement of trading.
Moreover, all of the ETFs, futures contracts, and listed options contracts, and certain of the Equity Holdings held by the Fund will trade on markets that are a member of ISG or affiliated with a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
As noted above, the Fund will comply with the requirements for Managed Fund Shares related to Disclosed Portfolio, Net Asset Value, and the Intraday Indicative Value. Additionally, the intra-day, closing and settlement prices of exchange-traded portfolio assets, including common stock, preferred stock, warrants, rights, exchange-listed Equity Holdings, ETFs, options, and futures, will be readily available from the securities exchanges and futures exchanges trading such securities and futures, as the case may be, automated quotation systems, published or other public sources, or online information services such as Bloomberg or Reuters. Intraday price quotations on both listed and OTC swaps, TIPS, 20% OTC Instruments, and fixed income instruments are
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) BZX Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (3) how information regarding the Intraday Indicative Value and the Disclosed Portfolio is disseminated; (4) the risks involved in trading the Shares during the Pre-Opening
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Fund. Members purchasing Shares from the Fund for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
In addition, the Information Circular will reference that the Fund is subject to various fees and expenses described in the Registration Statement. The Information Circular will also disclose the trading hours of the Shares of the Fund and the applicable NAV calculation time for the Shares. The Information Circular will disclose that information about the Shares of the Fund will be publicly available on the Fund's website.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest in that the Shares will meet each of the initial and continued listing criteria in BZX Rule 14.11(i) except that the Fund may not comply with Rules 14.11(i)(4)(C)(iv)(a),
As it relates to addressing the policy concerns that Rule 14.11(i)(4)(C)(v) is intended to address, which provides that the notional value of OTC derivatives shall not exceed 20% of the weight of the portfolio (including gross notional exposures), in an effort to minimize exposure to potentially illiquid and manipulable derivatives contracts, the Exchange notes that the inflation swap market,
As it relates to the requirement in Rule 14.11(i)(4)(C)(iv)(a) that at least 90% of the weight of the listed derivatives portion of the portfolio be in listed derivatives for which the Exchange may obtain information via ISG or for which the principal market is a market with which the Exchange has a comprehensive surveillance sharing agreement, the Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Additionally, all of the listed instruments that would not meet this requirement would nevertheless have a primary market that is a swap execution facility that is registered with and under the regulatory oversight of the CFTC.
Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Managed Fund Shares. All of the futures contracts, listed options, ETFs, and certain of the listed Inflation Swaps, listed credit default swaps, Equity Holdings, and listed interest rate swaps held by the Fund will trade on markets that are a member of ISG or affiliated with a member of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Exchange, FINRA, on behalf of the Exchange, or both will communicate regarding trading in the Shares and the underlying futures contracts, listed options, ETFs, and certain of the listed Inflation Swaps, credit default swaps, Equity Holdings, and listed interest rate swaps held by the Fund with the ISG, other markets or entities who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
The Exchange notes that the Fund will meet and be subject to all other requirements of the Generic Listing Rules and other applicable continued listing requirements for Managed Fund Shares under Rule 14.11(i), including those requirements regarding the Disclosed Portfolio and the requirement that the Disclosed Portfolio and the NAV will be made available to all market participants at the same time,
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change, rather will facilitate the listing and trading of an additional actively-managed exchange-traded product that will enhance competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to modify the NYSE American Options Fee Schedule (“Fee Schedule”). The Exchange proposes to implement the fee change effective November 8, 2018. The proposed change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The purpose of this filing is to modify the Fee Schedule, effective November 8, 2018, to eliminate obsolete charges. Specifically, the Exchange proposes to remove now obsolete references to fees for Mini Options and Binary Return Derivatives (“ByRDS”), and to modify its Royalty Fees to remove products that the Exchange is no longer licensed to trade.
The Exchange adopted fees for Mini Options in 2013, when Mini Options were first listed.
The Exchange listed ByRDs for trading in 2016,
Section I.K. of the Fee Schedule contains a table that sets forth the Royalty Fees that the Exchange charges market participant for trades in proprietary products for which the Exchange has a license, namely: Mini Nasdaq 100 Index (NDX), Nasdaq 100 Index (MNX), the Russell Index (RUT), and KBW Bank Index (BKX). The Exchange proposes to delete the table and to instead reference a $0.10 per contract Royalty Fee for BKX, as this product continues to be licensed to the Exchange.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed modifications to the Fee
In accordance with Section 6(b)(8) of the Act,
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe EDGA Exchange, Inc. (“EDGA” or the “Exchange”) is filing with the Securities and Exchange Commission (the “Commission”) a proposed rule change to amend the Exchange's fee schedule applicable to its equities trading platform.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed
The Exchange proposes to amend its fee schedule, effective November 1, 2018, to (i) amend transaction fee rates, (ii) amend the definition for fee code MT, (iii) adopt new Add and Remove Volume Tiers, (iv) amend the threshold under the RMPT/RMPL Tier, and (v) adopt a new Routing Tier.
In securities priced at or above $1.00, the Exchange currently charges a fee of $0.00080 per share for Displayed and Non-Displayed orders that add liquidity. All Displayed and Non-Displayed orders in securities priced below $1.00 that add liquidity are free. The Exchange first proposes to increase this transaction fee and assess a standard rate of $0.0030 per share for Displayed and Non-Displayed orders that add liquidity for securities at or above $1.00 that are appended with fee codes B, V, Y, 3, 4, RP, HA, DA, and DM. The Exchange notes that it is not proposing to increase the fee for Non-Displayed orders that add liquidity using Mid-Point Peg, which orders yield fee code MM. All Displayed and Non-Displayed orders in securities priced below $1.00 that add liquidity would continue to be free.
In securities priced at or above $1.00, the Exchange currently provides a rebate of $0.00040 per share for Displayed orders that remove liquidity (
With respect to Displayed orders priced at or above $1.00 that remove liquidity, the Exchange proposes to increase the per share rebate from $0.00040 to $0.0024 (
With respect to Non-Displayed orders priced at or above $1.00 that remove liquidity, the Exchange proposes to offer a $0.0024 per share rebate for Non-Displayed orders that remove liquidity using MidPoint Discretionary order not within discretionary range (
With respect to the Non-Displayed orders priced below $1.00 that remove liquidity (
The Exchange also proposes to modify the definition of fee code MT. Currently, fee code MT is appended to all Non-Displayed orders that remove liquidity using Mid Point Peg order type.
The Exchange next proposes to adopt an Add Volume Tier, Tier 1 and Remove Volume Tier, Tier 1 (under new footnote 7). Particularly, proposed Add Volume Tier 1 would provide a reduced fee of $0.0026 per share for members that add an ADAV of greater than or equal to 0.10% of the TCV
The Exchange proposes to adopt Remove Volume Tier 1, which would provide an enhanced rebate of $0.0026 per share for members that (1) has an ADAV of greater than or equal to 0.20% of the TCV and (2) has a remove ADV
The Exchange believes the proposed volume requirements under both Add and Remove Volume Tiers 1 are commensurate with the level of the incentives provided.
The Exchange currently offers a tier under footnote 1, the RMPT/RMPL Tier under which a Member receives a discounted fee of $0.0008 per share for orders yielding fee code PX where that Member meets certain required criteria.
The Exchange proposes to also adopt a new routing tier for orders routed using the ROUT strategy
The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act, which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities.
The Exchange believes its proposal to increase rates for Non-Displayed and Displayed orders that add liquidity (other than orders that yield fee code MM) is reasonable because the Exchange must balance the cost of rebates for orders that remove liquidity (and as described above, the Exchange is increasing the rebates provided for orders that remove liquidity). Additionally, the Exchange notes that the proposed fee is similar to, and in line with, transaction fees assessed on other Exchanges.
The Exchange believes the proposed increased rebate for Displayed orders that remove liquidity is reasonable, equitable and not unfairly discriminatory because it provides a higher rebate to members and is designed to further incentivize members to bring additional liquidity to the Exchange, thereby promoting price discovery and enhancing order execution opportunities for members. The Exchange believes the proposed changes are equitable and not unfairly discriminatory because they apply equally to all members. Furthermore, the Exchange's inverted fee structure would continue to incentivize liquidity takers since orders that remove liquidity would remain eligible for better pricing—including increased rebates for displayed orders and free executions for non-displayed orders—than orders that add liquidity and are charged a fee.
The Exchange believes the proposal to adopt a rebate for orders that remove liquidity using MidPoint Discretionary Orders not within discretionary range (
The Exchange believes the proposal to provide free executions for orders priced below $1.00 and yielding fee codes HR and MT is reasonable, because members will no longer be assessed any fees for these particular transactions. The Exchange also notes the proposed change results in all Non-Displayed orders in securities priced below $1.00 being treated the same (
The Exchange believes the proposed change to the definition for fee code MT is reasonable because orders that currently yield fee code MT (
The Exchange believes the proposal to adopt an Add and Remove Volume Tier, along with a ROUT Tier, is reasonable because it provides members an opportunity to receive a reduced fee or enhanced rebate, depending on the Tier. The Exchange additionally notes that volume-based discounts have been widely adopted by exchanges and are equitable and non-discriminatory because they are open to all members on an equal basis and provide additional benefits or discounts that are reasonably related to (i) the value of an exchange's market quality; (ii) associated with higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns; and (iii) introduction of higher volumes of orders into the price and volume discovery processes. The proposed required criteria of the Volume Tiers are intended to incentivize Members to send additional orders to the Exchange in an effort to qualify for the reduce fee and enhanced rebate made available by the respective tiers. The Exchange also notes that increased volume on the Exchange provides greater trading opportunities for all market participants. As noted previously, the Exchange also believes the proposed required criteria under the Add and Remove Volume Tiers 1 and ROUT Tier are commensurate with the level of the incentives provided.
The Exchange believe that the amendment to the RMPL/RMPT Tier is reasonable and equitable because the amount of the discounted fee is not changing and because the amendment to the required criteria is designed to make it easier for market participants to
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Particularly, the proposed rates and rebates would apply uniformly to all members, and members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing venues to maintain their competitive standing in the financial markets. Further, excessive fees would serve to impair an exchange's ability to compete for order flow and members rather than burdening competition. Moreover, the proposed fee changes are designed to incentivize liquidity, which the Exchange believes will benefit all market participants by encouraging a transparent and competitive market. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The proposed rule change will introduce a new fee incentive scheme
In its filing with the Commission, LCH SA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. LCH SA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is for LCH SA to introduce and specify a clearing fees incentive scheme for clients of CDSClear members, including volume based discounts, in order to encourage the growth of the CDSClear client clearing franchise.
Currently, CDSClear clearing members are charged a fee on their client clearing flows per EUR/USD million of gross notional cleared defined as follows:
The proposed incentive scheme defines a fee rebate based on volumes in order to make it more attractive for new buy side clients to select CDSClear services and/or CDSClear existing clients to clear more by reducing the marginal cost of clearing past pre-defined volumes thresholds as detailed hereinafter and below in Exhibit 5.
The thresholds apply to quarterly notional cleared and the potential resulting rebate will be applied on the bill for the last month of the quarter.
The first quarterly notionals to be reviewed will be the Q4 2018 ones.
The proposed fee discount scheme will be effective until 31st December 2020.
Finally, the proposed incentive scheme will also exempt from clearing fees the registration of clients' positions at CDSClear resulting from the transfer of such positions from another CCP.
Section 17A(b)(3)(D) of the Act requires that the rules of a clearing agency provide for the equitable allocation of reasonable dues, fees, and other charges.
LCH SA has determined that the proposed fees are reasonable and appropriate to charge to offer and maintain CDSClear client clearing services.
In particular, LCH SA believes that the volume-based discounts for CDSClear client clearing activities have been set up at an appropriate level given the costs and expenses to LCH SA in providing such services.
LCH SA believes that imposing such clearing fees is consistent with the requirements of Section 17A of the Act
Section 17A(b)(3)(I) of the Act requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
As noted above, LCH SA believes that the fees and related discounts have been set up at an appropriate level given the costs and expenses to LCH SA in offering and maintaining the relevant client clearing services.
Additionally, the fees and related discounts will apply equally to all clients of all clearing members of CDSClear.
Further, LCH SA does not believe that the proposed rule change would have a burden on competition because it does not adversely affect the ability of such Clearing Members or other market participants generally to engage in cleared transactions or to access clearing services.
Written comments relating to the proposed rule change have not been solicited or received. LCH SA will notify the Commission of any written comments received by LCH SA.
The foregoing proposed rule change has become effective upon filing pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-LCH SA-2018-005 and should be submitted on or before December
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its rules regarding the processing of minor rule violations. The scope of this filing is limited solely to the application of the proposed rule amendments to security futures that may be traded on CFE. Although no security futures are currently listed for trading on CFE, CFE may list security futures for trading in the future. The text of the proposed rule change is attached as Exhibit 4 to the filing but is not attached to the publication of this notice.
In its filing with the Commission, CFE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CFE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
CFE Rule 714 (Imposition of Fines for Minor Rule Violations) provides for the issuance of letters of caution or summary fines for specified types of minor CFE rule violations instead of addressing these violations through formal disciplinary proceedings. Each violation type under Rule 714 has a summary fine schedule that includes increasing monetary fines for subsequent violations by a party during a specified rolling time period and a referral of that party to the CFE Business Conduct Committee once that party has committed a certain number of violations within that rolling time period. The referral to the BCC is so that a panel of the BCC (“BCC Panel”) may determine whether or not to authorize the issuance of a statement of charges against the party and proceed with a formal disciplinary proceeding with regard to the matter.
CFE is making amendments to Rule 714 in conjunction with other rule amendments being made by CFE to its disciplinary rules, including to Rule 714, that are not required to be submitted to the Commission pursuant
Since BCC Panels will no longer be determining whether to issue statements of charges, the proposed rule change deletes referral to the BCC from each of the summary fine schedules under Rule 714 that addresses violations of CFE rule provisions related to recordkeeping and reporting requirements. These summary fine schedules include the summary fine schedules under the following subparagraphs of Rule 714(f) which have the following titles and relate back to the following CFE rule provisions referenced in those titles:
(i) Rule 714(f)(i) relating to Failure to Include an Order Entry Operator ID with Order that is Submitted to the CFE System (CFE Rule 303A(a)), Improper Use of Order Entry Operator IDs (Rules 303A(b) and 303A(c)), and Failure to Comply with Issuance, Recordkeeping, and Reporting Requirements Related to Order Entry Operator IDs (Rule 303A(d));
(ii) Rule 714(f)(ii) relating to Failure to Identify Correct Customer Type Indicator Code in Order (CFE Rule 403(a)(x));
(iii) Rule 714(f)(iii) relating to Failure to Provide Correct Account Designation in Order (Rule 403(a)(xii));
(iv) Rule 714(f)(iv) relating to Failure to Comply with Order Form Preparation and Recordkeeping Requirements Relating to Orders Which Cannot Be Immediately Entered into the CFE System (Rule 403(b)) and Failure to Maintain Front-End Audit Trail Information for All Electronic Orders Entered into the CFE System, Including Order Modifications and Cancellations (Rule 403(c));
(v) Rule 714(f)(vi) relating to Failure to Comply with Notice Provisions for Position Accountability (CFE Rules 412A(c) and 412A(d));
(vi) Rule 714(f)(vii) relating to Failure to Comply with Reporting Requirements for Ownership and Control Reports and Reportable Positions (CFE Rules 412B(a), 412B(b), and 412B(c));
(vii) Rule 714(f)(viii) relating to Failure to Comply with Order Marking Requirement for Exchange of Contract for Related Position Transactions (CFE Rule 414(g)) and Failure to Comply with Recordkeeping Requirement for Exchange of Contract for Related Position Transactions (Rule 414(h));
(viii) Rule 714(f)(ix) relating to Failure to Comply with Exchange of Contract for Related Position Transaction Rule Provisions Relating to Authorized Reporter (Rule 414(i));
(ix) Rule 714(f)(x) relating to Failure to Comply with Exchange of Contract for Related Position Transaction Reporting Requirements (Rules 414(k) and 414(l));
(x) Rule 714(f)(xi) relating to Failure to Comply with Order Marking Requirement for Block Trades (CFE Rule 415(a)(i)(A)) and Failure to Comply with Recordkeeping Requirements for Block Trades (Rule 415(e));
(xi) Rule 714(f)(xiii) relating to Failure to Comply with Block Trade Rule Provisions Relating to Authorized Reporter (Rule 415(f));
(xii) Rule 714(f)(xiv) relating to Failure to Comply with Block Trade Reporting Requirements (Rules 415(h) and 415(i)); and
(xiii) Rule 714(f)(xv) relating to Failure to Provide Books and Records Within Designated Time Frame (CFE Rule 502 and Other CFE Rules Allowing CFE to Request Books and Records).
Regulatory staff already has the ability to proceed with a formal disciplinary proceeding whenever regulatory staff determines that any violation covered by Rule 714 is intentional, egregious, or otherwise not minor in nature. The proposed rule change also amends Rule 714(f) to clarify that regulatory staff may also proceed with a formal disciplinary proceeding if the number of recurring violations of a particular type covered by Rule 714 within the rolling time period for that type of violation warrants a formal disciplinary proceeding. Accordingly, with the proposed rule change, there will not be a need for a referral after a certain number of violations within the applicable rolling time period since regulatory staff may initiate a formal disciplinary proceeding for any violation covered by Rule 714 when circumstances warrant no matter the number of previous violations of that type.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
• To prevent fraudulent and manipulative acts and practices;
• to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest;
• to have rules that provide that Exchange members and persons associated with Exchange members shall be appropriately disciplined for violation of the Act, the rules and regulations thereunder, or the rules of the Exchange, by expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a member, or any other fitting sanction; and
• to provide a fair procedure for the disciplining of members and persons associated with members.
The proposed rule change is consistent with these provisions in that CFE believes that the proposed rule change provides an effective and efficient means of disciplining parties for certain types of minor rule violations that do not warrant formal disciplinary proceedings while also permitting regulatory staff to initiate formal disciplinary proceedings for these types violations when circumstances warrant.
CFE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act in that the proposed rule change will improve the efficiency and functioning of CFE's disciplinary process by providing greater flexibility to regulatory staff to determine when to initiate a formal disciplinary proceeding for any violation covered by Rule 714. Additionally, CFE believes that the proposed amendments are equitable and not unfairly discriminatory because the changes will apply equally to all market participants.
No written comments were solicited or received with respect to the proposed rule change.
The proposed rule change will become operative on November 15, 2018. At any time within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 30, 2018, Cboe BYX Exchange, Inc. (“BYX” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend Exchange Rule 11.24 to make permanent the Retail Price Improvement Program (the “Program”), which sets forth the rules and procedures governing the program and is currently offered on a pilot basis.
Under the Program, a class of market participant called a Retail Member Organization (“RMO”) is eligible to submit certain retail order flow (“Retail Orders”) to the Exchange. A User
To qualify as an RMO, a member organization must conduct a retail business or route retail orders on behalf of another broker-dealer.
Under the Program, there are two types of Retail Orders. A Type 1 Retail Order will interact with only available contra-side RPI Orders and other price improving contra-side interest.
The Program provides that RPI Orders will be ranked and allocated according to price-time priority. Executions occur in price time priority. Any remaining unexecuted RPI interest remains available to interact with other incoming Retail Orders if such interest is at an eligible price.
A more detailed description of how the program operates, including but not limited to how a member organization may qualify an apply to become a RMO; the different types of Retail Orders; and priority and order allocation of RPI Orders is more fully set forth in the Notice.
As part of the RPI Approval Order, the Exchange agreed to provide the Commission with a significant amount of data to assist the Commission's evaluation of the Program.
In the Notice, the Exchange states that it believes that it has achieved its goal of attracting retail order flow to the Exchange.
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Program was intended to create additional price improvement opportunities for retail investors by segmenting retail order flow on the Exchange.
Under the Commission's Rules of Practice, the “burden to demonstrate that a proposed rule change is consistent with the [Act] and the rules and regulations issued thereunder . . .
The Commission questions whether the information and analysis provided by the Exchange support the Exchange's conclusions that the Program has achieved its goals, including whether the Program has not had a significant impact on broader market quality. The Commission seeks additional information and analysis concerning the Program's impact on the broader market; for example, additional information to support the view that the Program has not had a material adverse impact on market quality. The Commission believes it is appropriate to institute proceedings to allow for additional consideration and comment on the issues raised herein, any potential response to comments or supplemental information provided by the Exchange, and any additional independent analysis by the Commission. The Commission believes that these issues raise questions as to whether the Exchange has met its burden to demonstrate, based on the data and analysis provided, that permanent approval of the Program is consistent with the Act, and specifically, with its requirements that the Program be designed to perfect the mechanism of a free and open market and the national market system, protect investors and the public interest, and not be unfairly discriminatory; or not impose an unnecessary or inappropriate burden on competition.
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Sections 6(b)(5) and 6(b)(8), or any other provision of the Exchange Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by December 12, 2018. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by December 26, 2018.
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
60-Day notice and request for comments.
The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) requires federal agencies to publish a notice in the
Submit comments on or before January 22, 2019.
Send all comments to Daniel Upham, Chief, Microenterprise
Daniel Upham, Chief, Microenterprise Development Division, Office of Capital Access,
Information collection is needed to ensure that Microloan Program activity meets the statutory goals of assisting mandated target market. The information is used by the reporting participants and the SBA to assist with portfolio management, risk management, loan servicing, oversight and compliance, data management and understanding of short and long term trends and development of outcome measures.
SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information.
60-Day notice and request for comments.
The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) requires federal agencies to publish a notice in the
Submit comments on or before January 22, 2019.
Send all comments to Cynthia Pitts, Director, Office of Disaster Assistance, Small Business Administration, 409 3rd Street, 6th Floor, Washington, DC 20416.
Cynthia Pitts, Director, Office of Disaster Assistance,
Prior to Small Business Administration (SBA) approval of subsequent loan disbursement, disaster loan borrowers are required to submit information to demonstrate that they used loan proceeds for authorized purposes only and to make certain certification regarding current financial condition and previously reported compensation paid in connection with the loan.
SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information.
60-Day notice and request for comments.
The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) requires federal agencies to publish a notice in the
Submit comments on or before January 22, 2019.
Send all comments to Cynthia Pitts, Director, Office of Disaster Assistance, Small Business Administration, 409 3rd Street, 6th Floor, Washington, DC 20416.
Cynthia Pitts, Director, Office of Disaster Assistance,
A team of Quality Assurance staff at the Disaster Assistance Center (DASC) will conduct a brief telephone survey of customers to determine their satisfaction with the services received from the (DASC) and the Field Operations Centers. The result will help the Agency to improve where necessary, the delivery of critical financial assistance to disaster victims.
SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information.
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to January 22, 2019.
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Thomas Shearer, Department of State, Office of Overseas Schools, A/OPR/OS, Room H328, SA-1, Washington, DC 20522-0132, who may be reached on 202-261-8200 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
The Office of Overseas Schools of the Department of State (A/OPR/OS) is responsible for determining that adequate educational opportunities exist at Foreign Service Posts for dependents of U.S. Government personnel stationed abroad, and for assisting American-sponsored overseas schools to demonstrate U.S. educational philosophy and practice. The information gathered provides the technical and professional staff of A/OPR/OS the means by which obligations, expenditures and reimbursements of the grant funds are monitored to ensure the grantee is in compliance with the terms of the grant.
Information is collected via electronic and paper submission.
Paul Didelius (Didelius), an individual and noncarrier,
This transaction is related to a concurrently filed verified notice of exemption in
The transaction may be consummated on or after December 5, 2018, the effective date of the exemption (30 days after the verified notice of exemption was filed).
Didelius represents that: (1) The rail properties that will be operated and controlled by Didelius, namely LRY, YCR, CCET, WRL, CWW, and KET, do not physically connect; (2) there are no plans to acquire additional rail lines for the purpose of making a connection; and (3) each of the carriers involved in the continuance in control transaction is a Class III carrier. Therefore, the transaction is exempt from the prior approval requirements of 49 U.S.C. 11323.
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Section 11326(c), however, does not provide for labor protection for transactions under §§ 11324 and 11325 that involve only Class III rail carriers. Accordingly, the Board may not impose labor protective conditions here, because all of the carriers involved are Class III carriers.
If the verified notice contains false or misleading information, the exemption
An original and 10 copies of all pleadings, referring to Docket No. FD 36245, must be filed with the Surface Transportation Board, 395 E Street SW, Washington, DC 20423-0001. In addition, one copy of each pleading must be served on James H.M. Savage, 22 Rockingham Court, Germantown, MD 20874.
Board decisions and notices are available on our website at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Surface Transportation Board.
Decision No. 1 in FD 36220; Notice of Acceptance of Application; Issuance of Procedural Schedule.
This decision accepts for consideration the application by CSX Transportation, Inc. to continue to lease approximately 137.33 miles of rail line of the Western and Atlantic Railroad from the State of Georgia. The Board determines that this is a minor transaction as defined by the Board's regulations and adopts a procedural schedule.
The effective date of this decision is November 21, 2018. Any person who wishes to participate in this proceeding as a party of record (POR) must file a notice of intent to participate no later than December 5, 2018. All comments, protests, requests for conditions, and any other evidence and argument in opposition to the application, including filings by the U.S. Department of Justice (DOJ) and the U.S. Department of Transportation (DOT), must be filed by January 4, 2019. Responses to comments, protests, requests for conditions, and other opposition on the transportation merits of the Lease, and rebuttal in support of the application must be filed by February 1, 2019.
The Board expects to issue its final decision by April 19, 2019, and to make the decision effective by May 19, 2019. For further information respecting dates, see the procedural schedule below.
Any filing submitted on the transportation merits in this proceeding must be submitted either via the Board's e-filing format or in the traditional paper format. Any person using e-filing should attach a document and otherwise comply with the instructions found on the Board's website at
Lisa Novins, (202) 245-0389. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.
The Surface Transportation Board (Board) is accepting for consideration the application submitted on October 22, 2018, by CSX Transportation, Inc. (CSXT). CSXT seeks Board approval under 49 U.S.C. 11323 to continue to lease from the State of Georgia (Georgia) approximately 137.33 miles of rail line of the Western and Atlantic Railroad (W&A), a non-operating carrier owned by Georgia, acting by and through the State Properties Commission, between milepost 0 at Central Avenue in the City of Atlanta, Ga., and milepost 137.28 at the centerline of Interstate 24 in the City of Chattanooga, Tenn. (the Line). On November 2, 2018, Georgia, acting by and through the State Properties Commission, filed a letter in support of CSXT's application.
The Board finds that the proposed transaction (the Lease) is a “minor transaction” under 49 CFR 1180.2(c) and that the application is complete. The Board adopts a procedural schedule for consideration of the application, under which the Board's final decision would be expected to be issued by April 19, 2019, and would become effective by May 19, 2019.
As a condition to the Lease, CSXT states that it has agreed to seek authority to abandon two lines that are not part of the Line in order to allow Georgia to expand its Silver Comet recreational trail: (1) A 2.32-mile long railroad line between milepost S.G. 579.29 and milepost S.G. 581.61 in Cobb County, Ga.,
CSXT is a Class I railroad and W&A is a non-operating Class III railroad that is owned by Georgia, acting by and through the State Properties Commission. (Appl. 3, 5.) According to CSXT, it and its predecessors have been the only railroads operating the Line since 1890. (
According to CSXT, the Lease will maintain the status quo of the transportation services to rail customers now served by CSXT, as CSXT will continue to serve shippers as it does today. (Appl. 10.) CSXT states that it will continue to provide essential transportation services as it and its predecessors have done since 1890, and that essential services provided by other carriers will not be affected by the Lease. (
CSXT states that, under the Lease, Georgia has reserved rights that may require the relocation of track, but CSXT is confident that its ability to provide adequate transportation service is protected by the terms of the Lease, which states that any track relocation will not “unreasonably interfere with the use by [CSXT] of the Leased Property, or unreasonably reduce [CSXT's] operating capacity.” (Appl. 10, citing
Based on a review of the application, the Board finds that the proposed Lease would be a “minor transaction” under 49 CFR 1180.2(c). Nothing in the record thus far suggests that the Lease would have anticompetitive effects, because the Lease proposes to generally maintain the status quo by allowing CSXT to continue operating over the Line as it and its predecessors have done since 1890. The application indicates that, not only would CSXT continue to operate over the Line, but NSR and GNRR would “retain their existing rights.” (Appl. 6.) It does not appear, under the terms of the proposed Lease, that any shipper would have fewer competitive rail alternatives as a result of the transaction.
The Board's finding regarding competitive impact is preliminary. The Board will give careful consideration to any claims that any potential anticompetitive effects of the Lease would not be outweighed by its potential benefits.
The Board accepts the application for consideration because it is in substantial compliance with the applicable regulations governing “minor transactions.”
If a request is made in the notice of intent to participate to have more than one name added to the service list as a POR representing a particular entity, the extra name will be added to the service list as a “non-party.” The list will reflect the Board's policy of allowing only one official representative per party to be placed on the service list, as specified in Press Release No. 97-68 dated August 18, 1997, announcing the implementation of the Board's “One Party-One Representative” policy for service lists. Any person designated as a non-party will receive copies of Board decisions, orders, and notices but not copies of official filings. Persons seeking to change their status must accompany that request with a written certification that he or she has complied with the service requirements set forth at 49 CFR 1180.4, and any other requirements set forth in this decision.
1. The application in FD 36220 is accepted for consideration.
2. The parties to this proceeding must comply with the procedural schedule adopted by the Board in this proceeding as shown in the procedural schedule above and must comply with the procedural requirements described in this decision.
3. This decision is effective on its service date.
By the Board, Board Members Begeman and Miller.
KET, LLC (KET), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to operate two industrial spurs
(1) The Kennewick track includes the following: A main industrial spur in the City of Kennewick originating at the connection with the Union Pacific Railroad Company (UP) “City Lead” (connecting at its west end to UP's Kalan Industrial Lead) from the east edge of Washington St., running along the line of Bruneau Ave. extending in an easterly direction and terminating east of the intersection of Bruneau Ave. and Kingwood St. This main industrial rail spur also connects with BNSF Railway Company (BNSF) along Bruneau Ave. west of the intersection with N Elm St. The main industrial rail spur is 3,694 feet (approximately 0.7 miles) in length. A branch spur (Ash Grove Spur) diverges from the main industrial rail spur along the line extending east on Bruneau Ave., east of its intersection with N. Gum St. and proceeding in a northeasterly direction, terminating on the property of the Ash Grove Cement Co. at 633 N Ivy Street in Kennewick. The branch spur is 1,476 feet (approximately 0.28 miles) in length.
(2) The Hedges track originates at the connection with UP and runs southeast to the property line of Nutrien Chemical Company, a distance of approximately 1,600 feet (0.30 miles).
This transaction is related to a concurrently filed verified notice of exemption in
KET certifies that the projected annual revenues as a result of this transaction will remain less than $5 million dollars annually. KET states that no interchange commitments are contemplated for this transaction.
The transaction may be consummated on or after December 5, 2018, the effective date of the exemption (30 days after the verified notice of exemption was filed). If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 CFR 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions to stay must be filed by November 28, 2018 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings referring to Docket No. FD 36244 must be filed with the Surface Transportation Board, 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on applicant's representative, James H.M. Savage, 22 Rockingham Court, Germantown, MD 20874.
According to KET, this action is categorically excluded from environmental review under 49 CFR 1105.6(c).
Board decisions and notices are available on our website at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
Written comments should be submitted by December 21, 2018.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Barbara Hall at (940) 594-5913, or by email at:
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
These records allow the FAA to verify compliance with regulation safety and operational requirements to ensure that the airports meet the minimum safety requirements, which in turn enhances the safety of the flying public.
Written comments should be submitted by December 21, 2018.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Barbara Hall at (940) 594-5913, or by email at:
T
Operators of certificated airports are required to complete FAA Form 5280—1 and develop, and comply with, a written document, an Airport Certification Manual (ACM), that details how an airport will comply with the requirements of part 139. The ACM shows the means and procedures whereby the airport will be operated in compliance with part 139, plus other instructions and procedures to help personnel concerned with operation of the airport to perform their duties and responsibilities.
When an airport satisfactorily complies with such requirements, the FAA issues to that facility an airport operating certificate (AOC) that permits an airport to serve air carriers. The FAA periodically inspects these airports to ensure continued compliance with part 139 safety requirements, including the maintenance of specified records. Both the application for an AOC and annual compliance inspections require operators of certificated airports to collect and report certain operational information. The AOC remains in effect as long as the need exists and the operator complies with the terms of the AOC and the ACM.
The likely respondents to new information requests are those civilian U.S. airport certificate holders who operate airports that serve scheduled and unscheduled operations of air carrier aircraft with more than 30 passenger seats (approximately 530 airports). These airport operators already hold an AOC and comply with all current information collection requirements.
Operators of certificated airports are permitted to choose the methodology to report information and can design their own recordkeeping system. As airports vary in size, operations and complexities, the FAA has determined this method of information collection allows airport operators greater flexibility and convenience to comply with reporting and recordkeeping requirements. 100% of the information may be submitted electronically.
The FAA has an automated system, the Certification and Compliance Management Information System (CCMIS), which allows FAA airport safety and certification inspectors to enter into a national database airport inspection information. This information is monitored to detect trends and developing safety issues, to allocate inspection resources, and generally, to be more responsive to the needs of regulated airports.
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's
Comments on this petition must identify the petition docket number and must be received on or before December 11, 2018.
Send comments identified by docket number FAA-2018-0948 using any of the following methods:
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Maria G. Delgado, AIR-673, Federal Aviation Administration, 2200 South 216th Street, Des Moines, WA 98198, phone 206-231-3178, email
This notice is published pursuant to 14 CFR 11.85.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
Written comments should be submitted by December 21, 2018.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Barbara Hall at (940) 594-5913, or by email at:
The FAA issues ADs when an unsafe condition is discovered on a specific aircraft type. Specific information may be required from aircraft owners/operators if an unsafe condition requires more information to develop corrective action. If it is necessary for the aircraft manufacturer or airworthiness authority to evaluate the information, owners/operators will be instructed to send the information to them.
Office of the Secretary of Transportation, Department of Transportation.
Notice of public meeting.
This notice announces a meeting of the Department of Transportation Advisory Committee on Human Trafficking.
The meeting will be held on December 6, 2018, from 9:30 a.m. to 5:00 p.m. EDT.
The meeting will be held at the U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590. Individuals wishing for audio participation and any person requiring accessibility accommodations should contact the Official listed in the next section.
David Short, Designated Federal Officer, U.S. Department of Transportation, at
ACHT was created in accordance with Section 5 of the
At the December 6, 2018, meeting, the agenda will cover the following topics:
A final agenda will be posted on the ACHT internet website at
The meeting will be open to the public on a first-come, first served basis, as space is limited. Members of the public who wish to attend in-person are asked to register, including name and affiliation, to
There will be 30 minutes allotted for oral comments from members of the public joining the meeting. To accommodate as many speakers as possible, the time for public comments may be limited. Individuals wishing to reserve speaking time during the meeting must submit a request at the time of registration, as well as the name, address, and organizational affiliation of the proposed speaker. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the Office of the Secretary may conduct a lottery to determine the speakers. Speakers are requested to submit a written copy of their prepared remarks by 5:00 p.m. EDT on November 26, 2018, for inclusion in the meeting records and for circulation to ACHT members. Written comments timely submitted from those not selected to speak will nonetheless be accepted and considered as part of the record.
Persons who wish to submit written comments for consideration by ACHT during the meeting must submit them no later than 5:00 p.m. EDT on November 26, 2018, to ensure transmission to ACHT prior to the meeting. Comments received after that date and time will be distributed to the members but may not be reviewed prior to the meeting.
Copies of the meeting minutes will be available on the ACHT internet website at
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See Supplementary Information section.
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On November 15, 2018, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
1. ABAHUSSAIN, Mansour Othman M. (a.k.a. ABAHUSEYIN, Mansur Othman M; a.k.a. HUSSEIN, Mansour Othman Aba); DOB 11 Aug 1972; alt. DOB 10 Aug 1972; POB Majmaa, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport S059033 (Saudi Arabia) issued 22 Feb 2016 expires 28 Dec 2020 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of Executive Order 13818 (E.O. 13818) of December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption,” for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
2. ALARIFI, Naif Hassan S. (a.k.a. AL-ARIFI, Nayif Hasan Saad); DOB 28 Feb 1986; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport M644150 (Saudi Arabia) issued 15 Jan 2014 expires 22 Nov 2018 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
3. ALBALAWI, Fahad Shabib A.; DOB 24 Jan 1985; POB Arar, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport N163990 (Saudi Arabia) issued 24 May 2015 expires 30 Mar 2020 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
4. ALBOSTANI, Meshal Saad M. (a.k.a. ALBOST, Meshal Saad M; a.k.a. AL-BOSTANI, Meshal Saad); DOB 27 Mar 1987; nationality Saudi Arabia; Gender Male; Passport R339037 (Saudi Arabia) expires 09 Jun 2020 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
5. ALHARBI, Thaar Ghaleb T.; DOB 01 Aug 1979; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport P723557 (Saudi Arabia) issued 05 Feb 2015 expires 13 Dec 2019 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
6. ALHAWSAWI, Abdulaziz Mohammed M.; DOB 20 Jul 1987; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport P051811 (Saudi Arabia) issued 15 May 2014 expires 23 Mar 2019; National ID No. 1044087474 (Saudi Arabia) (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
7. ALMADANI, Mustafa Mohammed M. (a.k.a. AL-MADANI, Mustafa); DOB 08 Dec 1961; POB Riyadh, Saudi Arabia; alt. POB Makkah, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport P797794 (Saudi Arabia) issued 16 Mar 2015 expires 20 Jan 2020; National ID No. 1011123229 (Saudi Arabia) (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
8. ALOTAIBI, Khalid Aedh G. (a.k.a. ALTAIBI, Khaled Aedh G); DOB 28 Jun 1988; POB Afif, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport P139681 (Saudi Arabia) issued 27 May 2014 expires 04 Apr 2019; National ID No. 1053629885 (Saudi Arabia) (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
9. ALOTAIBI, Badr Lafi M. (a.k.a. AL OTAIBI, Badr Lafi M.); DOB 06 Jul 1973; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport P667604 (Saudi Arabia) issued 07 Jan 2015 expires 13 Nov 2019 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
10. AL-OTAIBI, Mohammad (a.k.a. ALOTAIBI, Mohammed I.); DOB 06 Nov 1964; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
11. ALQAHTANI, Saif Saad Q.; DOB 1973; nationality Saudi Arabia; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
12. ALSEHRI, Waleed Abdullah M. (a.k.a. ALSHEHRI, Waleed Abdullah M.); DOB 05 Nov 1980; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport R120404 (Saudi Arabia) issued 31 May 2015 expires 06 Apr 2020 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
13. ALSEHRI, Turki Muserref M. (a.k.a. ALSEHRI, Turki Musharraf M); DOB 1982; nationality Saudi Arabia; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
14. ALZAHRANI, Mohammed Saad H.; DOB 08 Mar 1988; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport T233763 (Saudi Arabia) issued 16 Jun 2016 expires 23 Apr 2021; National ID No. 1060613203 (Saudi Arabia) (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
15. MUTREB, Maher Abdulaziz M.; DOB 23 May 1971; POB Makkah, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport D088677 (Saudi Arabia) issued 16 Aug 2017 expires 23 Jun 2022 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
16. AL-QAHTANI, Saud (a.k.a. ALQAHTANI, Saud Abdullah S), Riyadh, Saudi Arabia; DOB 07 Jul 1978; POB Riyadh, Saudi Arabia; nationality Saudi Arabia; Gender Male; Passport D079021 (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
17. TUBAIGY, Salah Muhammed A. (a.k.a. AL-TUBAIQI, Salah); DOB 20 Aug 1971; POB Jazan, Saudi Arabia; nationality Saudi Arabia; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(A) of E.O. 13818 for being responsible for or complicit in, or having directly or indirectly engaged in, serious human rights abuse.
The Department of Veterans Affairs (VA) gives notice under Federal Advisory Committee Act that the subcommittees of the Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board (JBL/CS SMRB) will meet from 8:00 a.m. to 5:00 p.m. on the dates indicated below (unless otherwise listed):
The purpose of the subcommittees is to provide advice on the scientific quality, budget, safety and mission relevance of investigator-initiated research proposals submitted for VA merit review evaluation. Proposals submitted for review include various medical specialties within the general areas of biomedical, behavioral and clinical science research.
These subcommittee meetings will be closed to the public for the review, discussion, and evaluation of initial and renewal research proposals, which involve reference to staff and consultant critiques of research proposals. Discussions will deal with scientific merit of each proposal and qualifications of personnel conducting the studies, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. Additionally, premature disclosure of research information could significantly obstruct implementation of proposed agency action regarding the research proposals. As provided by subsection 10(d) of Public Law 92-463, as amended by Public Law 94-409, closing the subcommittee meetings is in accordance with Title 5 U.S.C. 552b(c)(6) and (9)(B).
Those who would like to obtain a copy of the minutes from the closed subcommittee meetings and rosters of the subcommittee members should contact Holly Krull, Ph.D., Manager, Merit Review Program (10P9B), Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, at (202) 632-8522 or email at
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule with comment period.
This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2019 to implement changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. In addition, we are updating the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure under the Hospital Inpatient Quality Reporting (IQR) Program by removing the Communication about Pain questions; and retaining two measures that were proposed for removal, the Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure and Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure, in the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program beginning with the FY 2021 program year.
In commenting, please refer to file code CMS-1695-FC when commenting on the issues in this final rule with comment period. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY:
b. For delivery in Baltimore, MD—
For information on viewing public comments, we refer readers to the beginning of the
340B Drug Payment Policy to Nonexcepted Off-Campus Departments of a Hospital, contact Juan Cortes via email
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at
Ambulatory Surgical Center (ASC) Payment System, contact Scott Talaga via email
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Vinitha Meyyur via email
Blood and Blood Products, contact Josh McFeeters via email
Cancer Hospital Payments, contact Scott Talaga via email
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email
CPT Codes, contact Marjorie Baldo via email
Collecting Data on Services Furnished in Off-Campus Provider-Based Emergency Departments, contact Twi Jackson via email
Control for Unnecessary Increases in Volume of Outpatient Services, contact Elise Barringer via email
Composite APCs (Low Dose Brachytherapy and Multiple Imaging), contact Elise Barringer via email
Comprehensive APCs (C-APCs), contact Lela Strong-Holloway via email
Expansion of Clinical Families of Services at Excepted Off-Campus Departments of a Provider, contact Juan Cortes via email
Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email
Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Vinitha Meyyur via email
Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Twi Jackson via email
Inpatient Only (IPO) Procedures List, contact Lela Strong-Holloway via email
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email
No Cost/Full Credit and Partial Credit Devices, contact Twi Jackson via email
OPPS Brachytherapy, contact Scott Talaga via email
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier Payments, and Wage Index), contact Erick Chuang via email
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email
OPPS New Technology Procedures/Services, contact the New Technology APC email at
OPPS Exceptions to the 2 Times Rule, contact Marjorie Baldo via email
OPPS Packaged Items/Services, contact Lela Strong-Holloway via email
OPPS Pass-Through Devices, contact the Device Pass-Through email at
OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email
Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program measures, contact Nekeshia McInnis via email
Rural Hospital Payments, contact Josh McFeeters via email
Skin Substitutes, contact Josh McFeeters via email
All Other Issues Related to Hospital Outpatient and Ambulatory Surgical Center Payments Not Previously Identified, contact Marjorie Baldo via email
This
In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the
Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2018 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply.
In this final rule with comment period, we are updating the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs), beginning January 1, 2019. Section 1833(t) of the Social Security Act (the Act) requires us to annually review and update the payment rates for services payable under the Hospital Outpatient Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) of the Act requires the Secretary to review certain components of the OPPS not less often than annually, and to revise the groups, relative payment weights, and the wage and other adjustments that take into account changes in medical practices, changes in technologies, and the addition of new services, new cost data, and other relevant information and factors. In addition, under section 1833(i) of the Act, we annually review and update the ASC payment rates. This final rule with comment period also includes additional policy changes made in accordance with our experience with the OPPS and the ASC payment system. We describe these and various other statutory authorities in the relevant sections of this final rule with comment period. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.
In this final rule with comment period, two quality reporting policies that impact inpatient hospitals are updated due to their time sensitivity. In the Hospital IQR Program, we are updating the HCAHPS Survey measure by removing the Communication about Pain questions from the HCAHPS Survey, which are used to assess patients' experiences of care, effective with October 2019 discharges for the FY 2021 payment determination and subsequent years. This policy addresses public health concerns about opioid overprescribing through patient pain management questions that were recommended for removal in the President's Commission on Combating Drug Addiction and the Opioid Crisis report. In addition, we are finalizing that we will not publicly report any data collected from the Communication Abut Pain questions—a modification from what we proposed. We also are retaining two measures that we proposed for removal in the PCHQR Program beginning with the FY 2021 program year, the Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure and Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure. This policy impacts infection measurement and public reporting for PPS-exempt cancer hospitals and was deferred to this rule from the CY 2019 IPPS/LTCH PPS final rule published in August 2018.
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.
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;
• 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 table below.
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.
We received numerous comments from stakeholders regarding the Meaningful Measures Initiative and the impact of its implementation in CMS' quality programs. Many of these comments pertained to specific program proposals, and are discussed in the appropriate program-specific sections of this final rule with comment period. However, commenters also provided insights and recommendations for the ongoing development of the Meaningful Measures Initiative generally, including: ensuring transparency in public reporting and usability of publicly reported data; evaluating the benefit of individual measures to patients via use in quality programs weighed against the burden to providers of collecting and
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We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements, by applying a reporting factor of 0.980 to the OPPS payments and copayments for all applicable services.
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Based on this update, we estimate that total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2019 will be approximately $4.85 billion, an increase of approximately $200 million compared to estimated CY 2018 Medicare payments to ASCs. We note that the CY 2019 ASC payment update, under our prior policy, would have been 1.8 percent, based on a projectedCPI-U update of 2.6 percent minus a MFP adjustment required by the Affordable Care Act of 0.8 percentage point. In addition, we will continue to assess the feasibility of collaborating with stakeholders to collect ASC cost data in a minimally burdensome manner for future policy development.
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Beginning with CY 2019, we are updating the frequency with which we will release a Hospital OQR Program Specifications Manual, such that it will occur every 12 months—a modification from what we proposed.
For the CY 2020 payment determination and subsequent years, we are updating the participation status requirements by removing the Notice of Participation (NOP) form; extending the reporting period for the OP-32: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy measure to 3 years; and removing the OP-27: Influenza Vaccination Coverage Among Healthcare Personnel measure.
Beginning with the CY 2021 payment determination and subsequent years, we are removing the following seven measures: OP-5: Median Time to ECG; OP-9: Mammography Follow-up Rates; OP-11: Thorax CT Use of Contrast Material; OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT; OP-17: Tracking Clinical Results between Visits; and OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. We are not finalizing our proposals to remove the OP-29 or OP-31 measures.
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Beginning with the CY 2020 payment determination and subsequent years, we are extending the reporting period for the ASC-12: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy measure to 3 years; and removing the ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel measure.
Beginning with the CY 2021 payment determination and subsequent years, we are removing the ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use measure. We are not finalizing our proposals to remove the following measures: ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients and ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. We also are not finalizing our proposals to remove the following measures: ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and ASC-4: All-Cause Hospital Transfer/Admission, but are retaining these measures in the ASCQR Program and suspending data collection for them until further action in rulemaking with the goal of revising the measures.
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In sections XXI. and XXII. of this CY 2019 OPPS/ASC final rule with comment period, we set forth a detailed analysis of the regulatory and Federalism impacts that the changes will have on affected entities and beneficiaries. Key estimated impacts are described below.
Table 62 in section XXI. of this final rule with comment period displays the distributional impact of all the OPPS changes on various groups of hospitals and CMHCs for CY 2019 compared to all estimated OPPS payments in CY 2018. We estimate that the policies in this final rule with comment period will result in a 0.6 percent overall increase in OPPS payments to providers. We estimate that total OPPS payments for CY 2019, including beneficiary cost-sharing, to the approximately 3,840 facilities paid under the OPPS (including general acute care hospitals, children's hospitals, cancer hospitals, and CMHCs) will increase by approximately $360 million compared to CY 2018 payments, excluding our estimated changes in enrollment, utilization, and case-mix.
We estimated the isolated impact of our OPPS policies on CMHCs because CMHCs are only paid for partial hospitalization services under the OPPS. Continuing the provider-specific structure we adopted beginning in CY 2011, and basing payment fully on the type of provider furnishing the service, we estimate a 15.1 percent decrease in CY 2019 payments to CMHCs relative to their CY 2018 payments.
We estimate that our update of the wage indexes based on the FY 2019 IPPS final rule wage indexes will result in no estimated payment change for urban hospitals under the OPPS and an estimated decrease of 0.2 percent for rural hospitals. These wage indexes include the continued implementation of the OMB labor market area delineations based on 2010 Decennial Census data, with updates, as discussed in section II.C. of this final rule with comment period.
There are no significant impacts of our CY 2019 payment policies for hospitals that are eligible for the rural adjustment or for the cancer hospital payment adjustment. We are not making any change in policies for determining the rural hospital payment adjustments. While we are implementing the required reduction to the cancer hospital payment adjustment required by section 16002 of the 21st Century Cures Act for CY 2019, the target payment-to-cost ratio (PCR) for CY 2019 remains the same as in CY 2018 and therefore does not impact the budget neutrality adjustments.
For the CY 2019 OPPS/ASC, we are establishing an OPD fee schedule increase factor of 1.35 percent and applying that increase factor to the conversion factor for CY 2019. As a result of the OPD fee schedule increase factor and other budget neutrality adjustments, we estimate that rural and urban hospitals will experience an increase of approximately 1.4 percent for urban hospitals and 1.3 percent for rural hospitals. Classifying hospitals by teaching status, we estimate nonteaching hospitals will experience an increase of 1.4 percent, minor teaching hospitals will experience an increase of 1.3 percent, and major teaching hospitals will experience an increase of 1.5 percent. We also classified hospitals by the type of ownership. We estimate that hospitals with voluntary ownership, hospitals with proprietary ownership, and hospitals with government ownership will all experience an increase of 1.4 percent in payments.
In section X.B. of this CY 2019 OPPS/ASC final rule with comment period, we discuss our CY 2019 proposal and finalized policies to control for unnecessary increases in the volume of outpatient service by paying for clinic visits furnished at an off-campus PBD of a hospital at a PFS-equivalent rate under the OPPS rather than at the standard OPPS rate. As a result of this finalized policy, we estimated decreases of 0.6 percent to urban hospitals, and estimated decreases of 0.6 percent to rural hospitals, with the estimated effect for individual groups of hospitals depending on the volume of clinic visits provided at the hospitals' off-campus PBDs.
For impact purposes, the surgical procedures on the ASC list of covered procedures are aggregated into surgical specialty groups using CPT and HCPCS code range definitions. The percentage change in estimated total payments by specialty groups under the CY 2019 payment rates, compared to estimated CY 2018 payment rates, generally ranges between an increase of 1 and 3 percent, depending on the service, with some exceptions. We estimate the impact of applying the hospital market basket update to ASC payment rates will increase payments by $80 million under the ASC payment system in CY 2019,
Across 3,300 hospitals participating in the Hospital OQR Program, we estimate that our requirements will result in the following changes to costs and burdens related to information collection for the Hospital OQR Program compared to previously adopted requirements: (1) No change in the total collection of information burden or costs for the CY 2020 payment determination; (2) a total collection of information burden reduction of 681,735 hours and a total collection of information cost reduction of approximately $24.9 million for the CY 2021 payment determination due to the removal of four measures: OP-5, OP-12, OP-17, and OP-30.
Further, we anticipate that the removal of a total of eight measures will 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.
Across 3,937 ASCs participating in the ASCQR Program, we estimate that our requirements will result in the following changes to costs and burdens related to information collection for the ASCQR Program, compared to previously adopted requirements: (1) No change in the total collection of information burden or costs for the CY 2020 payment determination; (2) a total collection of information burden reduction of 62,008 hours and a total collection of information cost reduction of approximately $2,268,244 for the CY 2021 payment determination due to the removal of ASC-10.
Further, we anticipate that the removal of ASC-10 will 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, 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.
When Title XVIII of the Social Security Act was enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section 1833(t) to the Act, authorizing implementation of a PPS for hospital outpatient services. The OPPS was first implemented for services furnished on or after August 1, 2000. Implementing regulations for the OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. The following Acts made additional changes to the OPPS: the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 2006; the Medicare Improvements and Extension Act under Division B of Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) (Pub. L. 109-432), enacted on December 20, 2006; the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), enacted on December 29, 2007; the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July 15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-148), enacted on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on March 30, 2010 (these two public laws are collectively known as the Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010 (MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L. 112-96), enacted on February 22, 2012; the American Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-255), enacted on December 13, 2016, the Consolidated Appropriations Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018, and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271), enacted on October 24, 2018.
Under the OPPS, we generally pay for hospital Part B services on a rate-per-service basis that varies according to the APC group to which the service is assigned. We use the Healthcare Common Procedure Coding System (HCPCS) (which includes certain Current Procedural Terminology (CPT) codes) to identify and group the services within each APC. The OPPS includes payment for most hospital outpatient services, except those identified in section I.C. of this final rule with comment period. Section 1833(t)(1)(B) of the Act provides for payment under the OPPS for hospital outpatient services designated by the Secretary (which includes partial hospitalization services furnished by CMHCs), and certain inpatient hospital services that are paid under Medicare Part B.
The OPPS rate is an unadjusted national payment amount that includes the Medicare payment and the beneficiary copayment. This rate is divided into a labor-related amount and a nonlabor-related amount. The labor-related amount is adjusted for area wage differences using the hospital inpatient wage index value for the locality in which the hospital or CMHC is located.
All services and items within an APC group are comparable clinically and with respect to resource use (section 1833(t)(2)(B) of the Act). In accordance with section 1833(t)(2)(B) of the Act, subject to certain exceptions, items and services within an APC group cannot be considered comparable with respect to
For new technology items and services, special payments under the OPPS may be made in one of two ways. Section 1833(t)(6) of the Act provides for temporary additional payments, which we refer to as “transitional pass-through payments,” for at least 2 but not more than 3 years for certain drugs, biological agents, brachytherapy devices used for the treatment of cancer, and categories of other medical devices. For new technology services that are not eligible for transitional pass-through payments, and for which we lack sufficient clinical information and cost data to appropriately assign them to a clinical APC group, we have established special APC groups based on costs, which we refer to as New Technology APCs. These New Technology APCs are designated by cost bands which allow us to provide appropriate and consistent payment for designated new procedures that are not yet reflected in our claims data. Similar to pass-through payments, an assignment to a New Technology APC is temporary; that is, we retain a service within a New Technology APC until we acquire sufficient data to assign it to a clinically appropriate APC group.
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to designate the hospital outpatient services that are paid under the OPPS. While most hospital outpatient services are payable under the OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule. It also excludes screening mammography, diagnostic mammography, and effective January 1, 2011, an annual wellness visit providing personalized prevention plan services. The Secretary exercises the authority granted under the statute to also exclude from the OPPS certain services that are paid under fee schedules or other payment systems. Such excluded services include, for example, the professional services of physicians and nonphysician practitioners paid under the Medicare Physician Fee Schedule (MPFS); certain laboratory services paid under the Clinical Laboratory Fee Schedule (CLFS); services for beneficiaries with end-stage renal disease (ESRD) that are paid under the ESRD prospective payment system; and services and procedures that require an inpatient stay that are paid under the hospital IPPS. In addition, section 1833(t)(1)(B)(v) of the Act does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017 by an off-campus outpatient department of a provider (as defined in subparagraph (B) of paragraph (21). We set forth the services that are excluded from payment under the OPPS in regulations at 42 CFR 419.22.
Under § 419.20(b) of the regulations, we specify the types of hospitals that are excluded from payment under the OPPS. These excluded hospitals include:
• Critical access hospitals (CAHs);
• Hospitals located in Maryland and paid under the Maryland All-Payer Model;
• Hospitals located outside of the 50 States, the District of Columbia, and Puerto Rico; and
• Indian Health Service (IHS) hospitals.
On April 7, 2000, we published in the
Since initially implementing the OPPS, we have published final rules in the
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of Pub. L. 106-113, and redesignated by section 202(a)(2) of Pub. L. 106-113, requires that we consult with an external advisory panel of experts to annually review the clinical integrity of the payment groups and their weights under the OPPS. In CY 2000, based on section 1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel on Ambulatory Payment Classification Groups (APC Panel) to fulfill this requirement. In CY 2011, based on section 222 of the Public Health Service Act, which gives discretionary authority to the Secretary to convene advisory councils and committees, the Secretary expanded the panel's scope to include the supervision of hospital outpatient therapeutic services in addition to the APC groups and weights. To reflect this new role of the panel, the Secretary changed the panel's name to the Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not restricted to using data compiled by CMS, and in conducting its review, it may use data collected or developed by organizations outside the Department.
On November 21, 2000, the Secretary signed the initial charter establishing the Panel, and, at that time, named the APC Panel. This expert panel is composed of appropriate representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) who review clinical data and advise CMS about the clinical integrity of the APC groups and their payment weights. Since CY 2012, the Panel also is charged with advising the Secretary on the appropriate level of supervision for individual hospital outpatient therapeutic services. The Panel is technical in nature, and it is governed by the provisions of the Federal Advisory Committee Act (FACA). The current charter specifies, among other requirements, that the Panel—
• May advise on the clinical integrity of Ambulatory Payment Classification (APC) groups and their associated weights;
• May advise on the appropriate supervision level for hospital outpatient services;
• Continues to be technical in nature;
• Is governed by the provisions of the FACA;
• Has a Designated Federal Official (DFO); and
• Is chaired by a Federal Official designated by the Secretary.
The Panel's charter was amended on November 15, 2011, renaming the Panel and expanding the Panel's authority to include supervision of hospital outpatient therapeutic services and to add critical access hospital (CAH) representation to its membership. The Panel's charter was also amended on November 6, 2014 (80 FR 23009), and the number of members was revised from up to 19 to up to 15 members. The Panel's current charter was approved on November 21, 2016, for a 2-year period (81 FR 94378).
The current Panel membership and other information pertaining to the Panel, including its charter,
The Panel has held many meetings, with the last meeting taking place on August 20, 2018. Prior to each meeting, we publish a notice in the
In addition, the Panel has established an operational structure that, in part, currently includes the use of three subcommittees to facilitate its required review process. The three current subcommittees include the following:
• APC Groups and Status Indicator Assignments Subcommittee, which advises the Panel on the appropriate status indicators to be assigned to HCPCS codes, including but not limited to whether a HCPCS code or a category of codes should be packaged or separately paid, as well as the appropriate APC assignment of HCPCS codes regarding services for which separate payment is made;
• Data Subcommittee, which is responsible for studying the data issues confronting the Panel and for recommending options for resolving them; and
• Visits and Observation Subcommittee, which reviews and makes recommendations to the Panel on all technical issues pertaining to observation services and hospital outpatient visits paid under the OPPS.
Each of these subcommittees was established by a majority vote from the full Panel during a scheduled Panel meeting, and the Panel recommended at the August 20, 2018 meeting that the subcommittees continue. We accepted this recommendation.
Discussions of the other recommendations made by the Panel at the August 20, 2018 Panel meeting, namely CPT codes and a comprehensive APC for autologous hematopoietic stem cell transplantation, OPPS payment for outpatient clinic visits and restrictions to service line expansions, and packaging policies, were discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37138 through 37143) or are included in the sections of this final rule with comment period that are specific to each recommendation. For discussions of earlier Panel meetings and recommendations, we refer readers to previously published OPPS/ASC proposed and final rules, the CMS website mentioned earlier in this section, and the FACA database at
We received over 2,990 timely pieces of correspondence on the CY 2019 OPPS/ASC proposed rule that appeared in the
We received over 125 timely pieces of correspondence on the CY 2018 OPPS/ASC final rule with comment period that appeared in the
Section 1833(t)(9)(A) of the Act requires that the Secretary review not less often than annually and revise the relative payment weights for APCs. In the April 7, 2000 OPPS final rule with comment period (65 FR 18482), we explained in detail how we calculated the relative payment weights that were implemented on August 1, 2000 for each APC group.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37055), for CY 2019, we proposed to recalibrate the APC relative payment weights for services furnished on or after January 1, 2019, and before January 1, 2020 (CY 2019), using the same basic methodology that we described in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52367 through 52370), using updated CY 2017 claims data. That is, as we proposed, we recalibrate the relative payment weights for each APC based on claims and cost report data for hospital outpatient department (HOPD) services, using the most recent available data to construct a database for calculating APC group weights.
For the purpose of recalibrating the APC relative payment weights for CY 2019, we began with approximately 163 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2017, and before January 1, 2018, before applying our exclusionary criteria and other methodological adjustments. After the application of those data processing changes, we used approximately 86 million final action claims to develop the proposed CY 2019 OPPS payment weights. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for the CY 2019 OPPS/ASC proposed rule on the CMS website at:
Addendum N to the proposed rule (which is available via the internet on the CMS website) included the proposed list of bypass codes for CY 2019. The proposed list of bypass codes contained codes that were reported on claims for services in CY 2017 and, therefore, included codes that were in effect in CY 2017 and used for billing, but were deleted for CY 2018. We retained these deleted bypass codes on the proposed CY 2019 bypass list because these codes existed in CY 2017 and were covered OPD services in that period, and CY 2017 claims data were used to calculate CY 2019 payment rates. Keeping these deleted bypass codes on the bypass list potentially allows us to create more “pseudo” single procedure claims for ratesetting purposes. “Overlap bypass codes” that are members of the proposed multiple imaging composite APCs were identified by asterisks (*) in the third column of Addendum N to the proposed rule. HCPCS codes that we proposed to add for CY 2019 were identified by asterisks (*) in the fourth column of Addendum N.
In the CY 2019 OPPS/ASC proposed rule, we did not propose to remove any codes from the CY 2019 bypass list.
We did not receive any public comments on our general proposal to recalibrate the relative payment weights for each APC based on claims and cost report data for HOPD services or on our proposed bypass code process. Therefore, we are adopting as final the proposed “pseudo” single claims process and the final CY 2019 bypass list of 169 HCPCS codes, as displayed in Addendum N to this final rule with comment period (which is available via the internet on the CMS website). For this final rule with comment period, for purposes of recalibrating the final APC relative payment weights for CY 2019, we used approximately 91 million final action claims (claims for which all disputes and adjustments have been resolved and payment has been made) for HOPD services furnished on or after January 1, 2017 and before January 1, 2018. For exact numbers of claims used and additional details on the claims accounting process, we refer readers to the claims accounting narrative under supporting documentation for this CY 2019 OPPS/ASC final rule with comment period on the CMS website at:
For CY 2019, in the CY 2019 OPPS/ASC proposed rule (83 FR 37055), we proposed to continue to use the hospital-specific overall ancillary and departmental cost-to-charge ratios (CCRs) to convert charges to estimated costs through application of a revenue code-to-cost center crosswalk. To calculate the APC costs on which the CY 2019 APC payment rates are based, we calculated hospital-specific overall ancillary CCRs and hospital-specific departmental CCRs for each hospital for which we had CY 2017 claims data by comparing these claims data to the most recently available hospital cost reports, which, in most cases, are from CY 2016. For the proposed CY 2019 OPPS payment rates, we used the set of claims processed during CY 2017. We applied the hospital-specific CCR to the hospital's charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code. That crosswalk is available for review and continuous comment on the CMS website at:
To ensure the completeness of the revenue code-to-cost center crosswalk, we reviewed changes to the list of revenue codes for CY 2017 (the year of claims data we used to calculate the proposed CY 2019 OPPS payment rates) and found that the National Uniform Billing Committee (NUBC) did not add any new revenue codes to the NUBC 2017 Data Specifications Manual.
In accordance with our longstanding policy, we calculate CCRs for the standard and nonstandard cost centers accepted by the electronic cost report database. In general, the most detailed level at which we calculate CCRs is the hospital-specific departmental level. For a discussion of the hospital-specific overall ancillary CCR calculation, we refer readers to the CY 2007 OPPS/ASC final rule with comment period (71 FR 67983 through 67985). The calculation of blood costs is a longstanding exception (since the CY 2005 OPPS) to this general methodology for calculation of CCRs used for converting charges to costs on each claim. This exception is discussed in detail in the CY 2007 OPPS/ASC final rule with comment period and discussed further in section II.A.2.a.(1) of the proposed rule and this final rule with comment period.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840 through 74847), we finalized our policy of creating new cost centers and distinct CCRs for implantable devices, magnetic resonance imaging (MRIs), computed tomography (CT) scans, and cardiac catheterization. However, in response to the CY 2014 OPPS/ASC proposed rule, commenters reported that some hospitals currently use an imprecise “square feet” allocation methodology for the costs of large moveable equipment like CT scan and MRI machines. They indicated that while CMS recommended using two alternative allocation methods, “direct assignment” or “dollar value,” as a more accurate methodology for directly assigning equipment costs, industry analysis suggested that approximately only half of the reported cost centers for CT scans and MRIs rely on these preferred methodologies. In response to concerns from commenters, we finalized a policy for the CY 2014 OPPS to remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs associated with the APCs for CT and MRI (78 FR 74847). Further, we finalized a transitional policy to estimate the imaging APC relative payment weights using only CT and MRI cost data from providers that do not use “square feet” as the cost allocation statistic. We provided that this finalized policy would sunset in 4 years to provide a sufficient time for hospitals to transition to a more accurate cost allocation method and for the related data to be available for ratesetting purposes (78 FR 74847). Therefore, beginning CY 2018, with the sunset of the transition policy, we would estimate the imaging APC relative payment weights using cost data from all providers, regardless of the cost allocation statistic employed. However, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228 and 59229), we finalized a policy to extend the transition policy for 1 additional year and continued to remove claims from providers that use a cost allocation method of “square feet” to calculate CT and MRI CCRs for the CY 2018 OPPS.
As we discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228), some stakeholders have raised concerns regarding using claims from all providers to calculate CT and MRI CCRs, regardless of the cost allocations statistic employed (78 FR 74840 through 74847). Stakeholders noted that providers continue to use the “square feet” cost allocation method and that including claims from such providers would cause significant
Table 1 below demonstrates the relative effect on imaging APC payments after removing cost data for providers that report CT and MRI standard cost centers using “square feet” as the cost allocation method by extracting HCRIS data on Worksheet B-1. Table 2 below provides statistical values based on the CT and MRI standard cost center CCRs using the different cost allocation methods.
Our analysis shows that since the CY 2014 OPPS in which we established the transition policy, the number of valid MRI CCRs has increased by 17.5 percent to 2,177 providers and the number of valid CT CCRs has increased by 15.1 percent to 2,251 providers. However, as shown in Table 1 above, nearly all imaging APCs would see an increase in payment rates for CY 2019 if claims from providers that report using the “square feet” cost allocation method were removed. This can be attributed to the generally lower CCR values from providers that use a cost allocation method of “square feet” as shown in Table 2 above.
In response to provider concerns and to provide added flexibility for hospitals to improve their cost allocation methods, for the CY 2019 OPPS, in the CY 2019 OPPS/ASC proposed rule (83 FR 37056), we proposed to extend our transition policy and remove claims from providers that use a cost allocation method of “square feet” to calculate CCRs used to estimate costs with the APCs for CT and MRI identified in Table 2 above. We stated in the proposed rule that this proposed extension would mean that CMS would now be providing 6 years for providers to transition from a “square feet” cost allocation method to another cost allocation method. We stated in the proposed rule that we do not believe
Further, the commenter noted that a significant number of CT and MRI CCRs are close to zero. The commenter suggested that this probably reflects that the costs of the equipment and dedicated space for these services are likely spread across to other departments of hospitals. The commenter also suggested that hospitals have standard accounting practices for high-cost moveable equipment and that it would be burdensome and inconsistent to apply a different standard for costs associated with CT and MRI.
Table 3 and Table 4 below display the largest and smallest CT and MRI CCRs based on the cost allocation method, respectively. Specifically, Tables 3 and 4 display the minimum, 5th percentile, 10th percentile, 90th percentile, 95th percentile, and maximum CCRs based on the cost allocation method. While we note that there are differences in CT and MRI CCR values by the cost allocation method, we also note that the CT CCR distributions and MRI CCR distributions are largely similar across the cost allocation method. As stated in past rulemaking, we also note that our current trimming methodology excludes CCRs that are +/−3 standard deviations from the geometric mean. While we acknowledge the commenter's concern that a number of CCRs, particular those CT CCRs from hospitals that use a cost allocation method of “square feet,” are below 0.0100, we do not believe it would be appropriate to modify our standard trimming methodology because it is not our general policy to judge the accuracy of hospital charging and hospital cost reporting practices for purposes of ratesetting.
In addition, as we stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74845), we have noted the potential impact the CT and MRI CCRs may have on other payment systems. We understand that payment reductions for imaging services under the OPPS could have significant payment impacts under the Physician Fee Schedule where the technical component payment for many imaging services is capped at the OPPS payment amount. We will continue to monitor OPPS imaging payments in the future and consider the potential impacts of payment changes to other payment systems.
Over the past several years, we have encouraged hospitals to use more precise cost reporting methods through cost reporting instructions and communication with Medicare contractors regarding the approval of hospitals' request to switch from the square feet statistical allocation method. While we have not seen a substantial decline in the number of hospitals that use the square feet cost allocation method, and we acknowledge that there are costs and challenges with transitioning to a different accounting method for CT and MRI costs, we continue to believe that adopting CT and MRI cost center CCRs fosters more specific cost reporting and improves the data contained in the electronic cost report data files and, therefore, the accuracy of our cost estimation process for the OPPS relative weights. Therefore, for CY 2019, after consideration of the public comments we received, for CY 2019, we are finalizing our proposal to extend our transition policy for 1 additional year and continue to remove claims from providers that use a “square feet” cost allocation method to calculate CT and MRI CCRs for the CY 2019 OPPS.
In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment rates for CY 2019. The Hospital OPPS page on the CMS website on which this final rule is posted (
Previously, the OPPS established the scaled relative weights, on which payments are based using APC median costs, a process described in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). However, as discussed in more detail in section II.A.2.f. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we finalized the use of geometric mean costs to calculate the relative weights on which the CY 2013 OPPS payment rates were based. While this policy changed the cost metric on which the relative payments are based, the data process in general remained the same, under the methodologies that we used to obtain appropriate claims data and accurate cost information in determining estimated service cost. In the CY 2019 OPPS/ASC proposed rule (83 FR 37057), we proposed to continue to use geometric mean costs to calculate the relative weights on which the CY 2019 OPPS payment rates are based.
After consideration of the public comment on the proposed process we received, we are adding revenue code 0815 to the packaged revenue code list and are finalizing our proposed methodology for calculating geometric mean costs for purposes of creating relative payment weights and subsequent APC payment rates for the CY 2019 OPPS. For more information
We note that this is the first year in which claims data containing lines with the modifier “PN” are available, which indicate nonexcepted items and services furnished and billed by off-campus provider-based departments (PBDs) of hospitals. Because nonexcepted services are not paid under the OPPS, in the CY 2019 OPPS/ASC proposed rule (83 FR 37057), we proposed to remove those claim lines reported with modifier “PN” from the claims data used in ratesetting for the CY 2019 OPPS and subsequent years.
After consideration of the public comment we received, we are finalizing the policy of removing lines with the “PN” modifier as proposed.
For details of the claims process used in this final rule with comment period, we refer readers to the claims accounting narrative under supporting documentation for this CY 2019 OPPS/ASC final rule with comment period on the CMS website at:
Since the implementation of the OPPS in August 2000, we have made separate payments for blood and blood products through APCs rather than packaging payment for them into payments for the procedures with which they are administered. Hospital payments for the costs of blood and blood products, as well as for the costs of collecting, processing, and storing blood and blood products, are made through the OPPS payments for specific blood product APCs.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37057 through 37058), we proposed to continue to establish payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. This methodology has been our standard ratesetting methodology for blood and blood products since CY 2005. It was developed in response to data analysis indicating that there was a significant difference in CCRs for those hospitals with and without blood-specific cost centers, and past public comments indicating that the former OPPS policy of defaulting to the overall hospital CCR for hospitals not reporting a blood-specific cost center often resulted in an underestimation of the true hospital costs for blood and blood products. Specifically, in order to address the differences in CCRs and to better reflect hospitals' costs, we proposed to continue to simulate blood CCRs for each hospital that does not report a blood cost center by calculating the ratio of the blood-specific CCRs to hospitals' overall CCRs for those hospitals that do report costs and charges for blood cost centers. We also proposed to apply this mean ratio to the overall CCRs of hospitals not reporting costs and charges for blood cost centers on their cost reports in order to simulate blood-specific CCRs for those hospitals. We proposed to calculate the costs upon which the proposed CY 2019 payment rates for blood and blood products are based using the actual blood-specific CCR for hospitals that reported costs and charges for a blood cost center and a hospital-specific, simulated blood-specific CCR for hospitals that did not report costs and charges for a blood cost center.
We continue to believe that the hospital-specific, simulated blood-specific, CCR methodology better responds to the absence of a blood-specific CCR for a hospital than alternative methodologies, such as defaulting to the overall hospital CCR or applying an average blood-specific CCR across hospitals. Because this methodology takes into account the unique charging and cost accounting structure of each hospital, we believe that it yields more accurate estimated costs for these products. We stated in the proposed rule that we continue to believe that this methodology in CY 2019 would result in costs for blood and blood products that appropriately reflect the relative estimated costs of these products for hospitals without blood cost centers and, therefore, for these blood products in general.
We note that, as discussed in section II.A.2.b. of the CY 2018 OPPS/ASC final rule with comment period (82 FR 59234 through 59239), we defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. Under this policy, we include the costs of blood and blood products when calculating the overall costs of these C-APCs. In the CY 2019 OPPS/ASC proposed rule (83 FR 37057 through 37058), we proposed to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs. Because the costs of blood and blood products would be reflected in the overall costs of the C-APCs (and, as a result, in the payment rates of the C-APCs), we proposed to not make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)).
We also referred readers to Addendum B to the CY 2019 OPPS/ASC proposed rule (which is available via the internet on the CMS website) for the proposed CY 2019 payment rates for blood and blood products (which are identified with status indicator “R”). For a more detailed discussion of the blood-specific CCR methodology, we refer readers to the CY 2005 OPPS proposed rule (69 FR 50524 through
We did not receive any public comments for these proposals. Therefore, we are finalizing our proposals, without modification, to continue to apply the blood-specific CCR methodology described in this section when calculating the costs of the blood and blood products that appear on claims with services assigned to the C-APCs and to not make separate payments for blood and blood products when they appear on the same claims as services assigned to the C-APCs for CY 2019.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70322 through 70323), we reiterated that we calculate payment rates for blood and blood products using our blood-specific CCR methodology, which utilizes actual or simulated CCRs from the most recently available hospital cost reports to convert hospital charges for blood and blood products to costs. Because HCPCS code P9072 (Platelets, pheresis, pathogen reduced or rapid bacterial tested, each unit), the predecessor code to HCPCS code P9073 (Platelets, pheresis, pathogen-reduced, each unit), was new for CY 2016, there were no claims data available on the charges and costs for this blood product upon which to apply our blood-specific CCR methodology. Therefore, we established an interim payment rate for HCPCS code P9072 based on a crosswalk to existing blood product HCPCS code P9037 (Platelets, pheresis, leukocytes reduced, irradiated, each unit), which we believed provided the best proxy for the costs of the new blood product. In addition, we stated that once we had claims data for HCPCS code P9072, we would calculate its payment rate using the claims data that should be available for the code beginning in CY 2018, which is our practice for other blood product HCPCS codes for which claims data have been available for 2 years.
We stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59232) that, although our standard practice for new codes involves using claims data to set payment rates once claims data become available, we were concerned that there may have been confusion among the provider community about the services that HCPCS code P9072 described. That is, as early as 2016, there were discussions about changing the descriptor for HCPCS code P9072 to include the phrase “or rapid bacterial tested”, which is a less costly technology than pathogen reduction. In addition, effective January 2017, the code descriptor for HCPCS code P9072 was changed to describe rapid bacterial testing of platelets and, effective July 1, 2017, the descriptor for the temporary successor code for HCPCS code P9072 (HCPCS code Q9988) was changed again back to the original descriptor for HCPCS code P9072 that was in place for 2016.
Based on the ongoing discussions involving changes to the original HCPCS code P9072 established in CY 2016, we believed that claims from CY 2016 for pathogen reduced platelets may have potentially reflected certain claims for rapid bacterial testing of platelets. Therefore, we decided to continue to crosswalk the payment amount for services described by HCPCS code P9073 to the payment amount for services described by HCPCS P9037 for CY 2018 (82 FR 59232), as had been done previously, to determine the payment rate for services described by HCPCS code P9072. In the CY 2019 OPPS/ASC proposed rule (83 FR 37058), for CY 2019, we discussed that we had reviewed the CY 2017 claims data for the two predecessor codes to HCPCS code P9073 (HCPCS codes P9072 and Q9988), along with the claims data for the CY 2017 temporary code for pathogen test for platelets (HCPCS code Q9987), which describes rapid bacterial testing of platelets.
We found that there were over 2,200 claims billed with either HCPCS code P9072 or Q9988. Accordingly, we believe that there are a sufficient number of claims to use to calculate a payment rate for HCPCS code P9073 for CY 2019. We also performed checks to estimate the share of claims that may have been billed for rapid bacterial testing of platelets as compared to the share of claims that may have been billed for pathogen-reduced, pheresis platelets (based on when HCPCS code P9072 was an active procedure code from January 1, 2017 to June 30, 2017). First, we found that the geometric mean cost for pathogen-reduced, pheresis platelets, as reported by HCPCS code Q9988 when billed separately from rapid bacterial testing of platelets, was $453.87, and that over 1,200 claims were billed for services described by HCPCS code Q9988. Next, we found that the geometric mean cost for rapid bacterial testing of platelets, as reported by HCPCS code Q9987 on claims, was $33.44, and there were 59 claims reported for services described by HCPCS code Q9987, of which 3 were separately paid.
These findings imply that almost all of the claims billed for services reported with HCPCS code P9072 were for pathogen-reduced, pheresis platelets. In addition, the geometric mean cost for services described by HCPCS code P9072, which may contain rapid bacterial testing of platelets claims, was $468.11, which is higher than the geometric mean cost for services described by HCPCS code Q9988 of $453.87, which should not have contained claims for rapid bacterial testing of platelets. Because the geometric mean for services described by HCPCS code Q9987 is only $33.44, it would be expected that if a significant share of claims billed for services described by HCPCS code P9072 were for the rapid bacterial testing of platelets, the geometric mean cost for services described by HCPCS code P9072 would be lower than the geometric mean cost for services described by HCPCS code Q9988. Instead, we found that the geometric mean cost for services described by HCPCS code Q9988 is higher than the geometric mean cost for services described by HCPCS code P9072.
Based on our analysis of claims data, we stated in the CY 2019 OPPS/ASC proposed rule that we believed there were sufficient claims available to establish a payment rate for pathogen-reduced pheresis platelets without using a crosswalk. Therefore, we proposed to calculate the payment rate for services described by HCPCS code P9073 in CY 2019 and in subsequent years using claims payment history, which is the standard methodology used by the OPPS for HCPCS and CPT codes with at least 2 years of claims history. We referred readers to Addendum B of the proposed rule for the proposed payment rate for services described by HCPCS code P9073 reportable under the OPPS. Addendum B is available via the internet on the CMS website.
After consideration of the public comments we received, we are not finalizing our proposal to calculate the payment rate for services described by HCPCS code P9073 in CY 2019 using claims payment history. Instead, for CY 2019 (that is, for one more year), we are establishing the payment rate for services described by HCPCS code P9073 by performing a crosswalk from the payment amount for services described by HCPCS code P9073 to the payment amount for services described by HCPCS P9037. We refer readers to Addendum B to this final rule with comment period for the final payment rate for services described by HCPCS code P9073 reportable under the OPPS. Addendum B is available via the internet on the CMS website.
Section 1833(t)(2)(H) of the Act mandates the creation of additional groups of covered OPD services that classify devices of brachytherapy consisting of a seed or seeds (or radioactive source) (“brachytherapy sources”) separately from other services or groups of services. The statute provides certain criteria for the additional groups. For the history of OPPS payment for brachytherapy sources, we refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC final rule with comment period (77 FR 68240 through 68241). As we have stated in prior OPPS updates, we believe that adopting the general OPPS prospective payment methodology for brachytherapy sources is appropriate for a number of reasons (77 FR 68240). The general OPPS methodology uses costs based on claims data to set the relative payment weights for hospital outpatient services. This payment methodology results in more consistent, predictable, and equitable payment amounts per source across hospitals by averaging the extremely high and low values, in contrast to payment based on hospitals' charges adjusted to costs. We believe that the OPPS methodology, as opposed to payment based on hospitals' charges adjusted to cost, also would provide hospitals with incentives for efficiency in the provision of brachytherapy services to Medicare beneficiaries. Moreover, this approach is consistent with our payment methodology for the vast majority of items and services paid under the OPPS. We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 through 70325) for further discussion of the history of OPPS payment for brachytherapy sources.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37059), for CY 2019, we proposed to use the costs derived from CY 2017 claims data to set the proposed CY 2019 payment rates for brachytherapy sources because CY 2017 is the same year of data we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2019 OPPS. We proposed to base the payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology that we proposed for other items and services paid under the OPPS, as discussed in section II.A.2. of the proposed rule. We also proposed to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We proposed to pay for the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not otherwise specified, per source) and C2699 (Brachytherapy source, non-stranded, not otherwise specified, per source), at a rate equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, on a per source basis (as opposed to, for example, a per mCi), which is based on the policy we established in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). We also proposed to continue the policy we first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537) regarding payment for new brachytherapy sources for which we have no claims data, based on the same reasons we discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66786; which was delayed until January 1, 2010 by section 142 of Pub. L. 110-275). Specifically, this policy is intended to enable us to assign new HCPCS codes for new brachytherapy sources to their own APCs, with prospective payment rates set based on our consideration of external data and other relevant information regarding the expected costs of the sources to hospitals. The proposed CY 2019 payment rates for brachytherapy sources were included in Addendum B to the proposed rule (which is available via the internet on the CMS website) and were identified with status indicator “U”. For CY 2019, we proposed to continue to assign status indicator “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and to use external data (invoice prices) and other relevant information to establish the proposed APC payment rate for HCPCS code C2645. Specifically, we proposed to set the payment rate at $4.69 per mm
We note that, for CY 2019, we proposed to assign status indicator “E2” (Items and Services for Which Pricing Information and Claims Data Are Not Available) to HCPCS code C2644 (Brachytherapy cesium-131 chloride) because this code was not reported on CY 2017 claims. Therefore, we were unable to calculate a proposed payment rate based on the general OPPS ratesetting methodology described earlier. Although HCPCS code C2644 became effective July 1, 2014, there are no CY 2017 claims reporting this code. Therefore, we proposed to assign new proposed status indicator “E2” to HCPCS code C2644 in the CY 2019 OPPS.
After consideration of the public comments we received, we are finalizing our proposal to continue to set the payment rates for brachytherapy sources using our established prospective payment methodology. We also are finalizing our proposal to assign status indicator “U” (Brachytherapy Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 (Brachytherapy planar source, palladium-103, per square millimeter) and to use external data (invoice prices) and other relevant information to establish the APC payment rate for HCPCS code C2645 for CY 2019.
Lastly, because we were unable to calculate a payment rate for HCPCS code C2644 (Brachytherapy cesium-131 chloride) based on the general OPPS ratesetting methodology, we are finalizing our proposal to assign HCPCS code C2644 status indicator “E2” (Items and Services for Which Pricing Information and Claims Data Are Not Available) for CY 2019.
The final CY 2019 payment rates for brachytherapy sources are included in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) and are identified with status indicator “U”.
We continue to invite hospitals and other parties to submit recommendations to us for new codes to describe new brachytherapy sources. Such recommendations should be
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. The policy was finalized in CY 2014, but the effective date was delayed until January 1, 2015, to allow additional time for further analysis, opportunity for public comment, and systems preparation. The comprehensive APC (C-APC) policy was implemented effective January 1, 2015, with modifications and clarifications in response to public comments received regarding specific provisions of the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established C-APCs as a category broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 (79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70332), we finalized 10 additional C-APCs to be paid under the existing C-APC payment policy and added one additional level to both the Orthopedic Surgery and Vascular Procedures clinical families, which increased the total number of C-APCs to 37 for CY 2016. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 through 79585), we finalized another 25 C-APCs for a total of 62 C-APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did not change the total number of C-APCs from 62.
Under this policy, we designate a service described by a HCPCS code assigned to a C-APC as the primary service when the service is identified by OPPS status indicator “J1”. When such a primary service is reported on a hospital outpatient claim, taking into consideration the few exceptions that are discussed below, we make payment for all other items and services reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services. This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level.
Services excluded from the C-APC policy under the OPPS include services that are not covered OPD services, services that cannot by statute be paid for under the OPPS, and services that are required by statute to be separately paid. This includes certain mammography and ambulance services that are not covered OPD services in accordance with section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also are required by statute to receive separate payment under section 1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which also require separate payment under section 1833(t)(6) of the Act; self-administered drugs (SADs) that are not otherwise packaged as supplies because they are not covered under Medicare Part B under section 1861(s)(2)(B) of the Act; and certain preventive services (78 FR 74865 and 79 FR 66800 through 66801). A list of services excluded from the C-APC policy is included in Addendum J to this final rule with comment period (which is available via the internet on the CMS website).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/ASC final rule with comment period for the C-APCs and modified and implemented beginning in CY 2015 is summarized as follows (78 FR 74887 and 79 FR 66800):
In the CY 2016 OPPS/ASC final rule with comment period, we expanded the C-APC payment methodology to qualifying extended assessment and management encounters through the “Comprehensive Observation Services” C-APC (C-APC 8011). Services within this APC are assigned status indicator “J2”. Specifically, we make a payment through C-APC 8011 for a claim that:
• Does not contain a procedure described by a HCPCS code to which we have assigned status indicator “T” that is reported with a date of service on the same day or 1 day earlier than the date of service associated with services described by HCPCS code G0378;
• Contains 8 or more units of services described by HCPCS code G0378 (Hospital observation services, per hour);
• Contains services provided on the same date of service or 1 day before the date of service for HCPCS code G0378 that are described by one of the following codes: HCPCS code G0379 (Direct admission of patient for hospital observation care) on the same date of service as HCPCS code G0378; CPT code 99281 (Emergency department visit for the evaluation and management of a patient (Level 1)); CPT code 99282 (Emergency department visit for the evaluation and management of a patient (Level 2)); CPT code 99283 (Emergency department visit for the evaluation and management of a patient (Level 3)); CPT code 99284 (Emergency department visit for the evaluation and management of a patient (Level 4)); CPT code 99285 (Emergency department visit for the evaluation and management of a patient (Level 5)) or HCPCS code G0380 (Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B emergency department visit (Level 2)); HCPCS code G0382 (Type B emergency department visit (Level 3)); HCPCS code G0383 (Type B emergency department visit (Level 4)); HCPCS code G0384 (Type B emergency department visit (Level 5)); CPT code 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient); and
• Does not contain services described by a HCPCS code to which we have assigned status indicator “J1”.
The assignment of status indicator “J2” to a specific combination of services performed in combination with each other allows for all other OPPS payable services and items reported on the claim (excluding services that are
Services included under the C-APC payment packaging policy, that is, services that are typically adjunctive to the primary service and provided during the delivery of the comprehensive service, include diagnostic procedures, laboratory tests, and other diagnostic tests and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; uncoded services and supplies used during the service; durable medical equipment as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other components reported by HCPCS codes that represent services that are provided during the complete comprehensive service (78 FR 74865 and 79 FR 66800).
In addition, payment for hospital outpatient department services that are similar to therapy services and delivered either by therapists or nontherapists is included as part of the payment for the packaged complete comprehensive service. These services that are provided during the perioperative period are adjunctive services and are deemed not to be therapy services as described in section 1834(k) of the Act, regardless of whether the services are delivered by therapists or other nontherapist health care workers. We have previously noted that therapy services are those provided by therapists under a plan of care in accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the Act and are paid for under section 1834(k) of the Act, subject to annual therapy caps as applicable (78 FR 74867 and 79 FR 66800). However, certain other services similar to therapy services are considered and paid for as hospital outpatient department services. Payment for these nontherapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are hospital outpatient department services and not therapy services. Therefore, the requirement for functional reporting under the regulations at 42 CFR 410.59(a)(4) and 42 CFR 410.60(a)(4) does not apply. We refer readers to the July 2016 OPPS Change Request 9658 (Transmittal 3523) for further instructions on reporting these services in the context of a C-APC service.
Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of a single primary service assigned to status indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801). Line item charges for services included on the C-APC claim are converted to line item costs, which are then summed to develop the estimated APC costs. These claims are then assigned one unit of the service with status indicator “J1” and later used to develop the geometric mean costs for the C-APC relative payment weights. (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all of the items and services included in the C-APC service payment bundle.) Charges for services that would otherwise be separately payable are added to the charges for the primary service. This process differs from our traditional cost accounting methodology only in that all such services on the claim are packaged (except certain services as described above). We apply our standard data trims, which exclude claims with extremely high primary units or extreme costs.
The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity.
• Frequency of 25 or more claims reporting the code combination (frequency threshold); and
• Violation of the 2 times rule in the originating C-APC (cost threshold).
These criteria identify paired code combinations that occur commonly and exhibit materially greater resource requirements than the primary service. The CY 2017 OPPS/ASC final rule with comment period (81 FR 79582) included a revision to the complexity adjustment eligibility criteria. Specifically, we finalized a policy to discontinue the requirement that a code combination (that qualifies for a complexity adjustment by satisfying the frequency and cost criteria thresholds described above) also not create a 2 times rule violation in the higher level or receiving APC.
After designating a single primary service for a claim, we evaluate that service in combination with each of the other procedure codes reported on the claim assigned to status indicator “J1” (or certain add-on codes) to determine if
Once we have determined that a particular code combination of “J1” services (or combinations of “J1” services reported in conjunction with certain add-on codes) represents a complex version of the primary service because it is sufficiently costly, frequent, and a subset of the primary comprehensive service overall according to the criteria described above, we promote the claim including the complex version of the primary service as described by the code combination to the next higher cost C-APC within the clinical family, unless the primary service is already assigned to the highest cost APC within the C-APC clinical family or assigned to the only C-APC in a clinical family. We do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. Therefore, the highest payment for any claim including a code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802).
We package payment for all add-on codes into the payment for the C-APC. However, certain primary service add-on combinations may qualify for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70331), all add-on codes that can be appropriately reported in combination with a base code that describes a primary “J1” service are evaluated for a complexity adjustment.
To determine which combinations of primary service codes reported in conjunction with an add-on code may qualify for a complexity adjustment for CY 2019, in the CY 2019 OPPS/ASC proposed rule (83 FR 37061), we proposed to apply the frequency and cost criteria thresholds discussed above, testing claims reporting one unit of a single primary service assigned to status indicator “J1” and any number of units of a single add-on code for the primary “J1” service. If the frequency and cost criteria thresholds for a complexity adjustment are met and reassignment to the next higher cost APC in the clinical family is appropriate (based on meeting the criteria outlined above), we make a complexity adjustment for the code combination; that is, we reassign the primary service code reported in conjunction with the add-on code to the next higher cost C-APC within the same clinical family of C-APCs. As previously stated, we package payment for add-on codes into the C-APC payment rate. If any add-on code reported in conjunction with the “J1” primary service code does not qualify for a complexity adjustment, payment for the add-on service continues to be packaged into the payment for the primary service and is not reassigned to the next higher cost C-APC. We listed the complexity adjustments proposed for “J1” and add-on code combinations for CY 2019, along with all of the other proposed complexity adjustments, in Addendum J to the CY 2019 OPPS/ASC proposed rule (which is available via the internet on the CMS website).
Addendum J to the proposed rule included the cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to the proposed rule also contained summary cost statistics for each of the paired code combinations that describe a complex code combination that would qualify for a complexity adjustment and were proposed to be reassigned to the next higher cost C-APC within the clinical family. The combined statistics for all proposed reassigned complex code combinations were represented by an alphanumeric code with the first 4 digits of the designated primary service followed by a letter. For example, the proposed geometric mean cost listed in Addendum J for the code combination described by complexity adjustment assignment 3320R, which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar Procedures), includes all paired code combinations that were proposed to be reassigned to C-APC 5224 when CPT code 33208 is the primary code. Providing the information contained in Addendum J to the proposed rule allowed stakeholders the opportunity to better assess the impact associated with the proposed reassignment of claims with each of the paired code combinations eligible for a complexity adjustment.
In terms of payment for complexity adjustments, one commenter requested that CMS promote the qualifying code combination to two APC levels higher than the originating APC rather than to the next higher paying C-APC. Another commenter suggested that CMS pay the geometric mean cost of the highest ranking procedure in the qualifying code combination at 100 percent, and then each secondary procedure at 50 percent of the geometric mean cost of the secondary procedure.
Other commenters also requested an explanation of how the geometric mean costs of the code combinations evaluated for complexity adjustments are calculated, stating that the geometric mean cost of certain code combinations represented in Addendum J were lower than the geometric mean costs of the primary service when the service is billed without an additional “J1” or “J1” add-on procedure. Commenters also requested that CMS establish complexity adjustments for the specific code combinations listed in Table 6 below.
With regard to the specific complexity adjustments requested by commenters listed in Table 6 above, we note that we did not propose that claims with these code combinations would receive complexity adjustments because they did not meet the cost and frequency criteria for the adjustment. Therefore, we do not believe it is appropriate to change the complexity adjustment criteria at this time, and because the suggested code combinations do not meet the existing criteria, we do not believe it is appropriate to establish complexity adjustments for these code combinations at this time.
Regarding the request for a code combination that qualified for a complexity adjustment in a year to continue to qualify for the adjustment for the next 2 years for a total period of 3 years, we note that we evaluate code combinations each year against our complexity adjustment criteria using the latest available data. At this time, we do not believe it is necessary to expand the ability for code combinations to meet the complexity adjustment criteria in this manner because we believe that the existing criteria that were already established sufficiently reflect those combinations of procedures that are commonly billed together and are costly enough to merit a complexity adjustment. Further, we believe that code combinations should be evaluated each year to determine if they meet the criteria based on the latest hospital billing and utilization data. We also do not believe that it is necessary to provide payment for claims including qualifying code combinations at two APC levels higher than the originating APC or for CMS to pay based on the geometric mean cost of the highest ranking procedure in the qualifying code combination at 100 percent, and then each secondary procedure based on 50 percent of the geometric mean cost of the secondary procedure. We believe that payment at the next higher paying C-APC is adequate for code combinations that exhibit materially greater resource requirements than the primary service and that, in many cases, paying the rate assigned to two levels higher may lead to a significant overpayment. As mentioned previously, we do not create new APCs with a comprehensive geometric mean cost that is higher than the highest geometric mean cost (or only) C-APC in a clinical family just to accommodate potential complexity adjustments. The highest payment for any claim including a code combination for services assigned to a C-APC would be the highest paying C-APC in the clinical family (79 FR 66802). Therefore, a policy to pay for claims with qualifying code combinations at two C-APC levels higher than the originating APC is not always feasible. Likewise, while paying 100 percent of the highest ranking procedure and paying 50 percent of the
In response to the request for an explanation of the cost statistics for the paired “J1” code combinations or paired code combinations of “J1” services and certain add-on codes evaluated for complexity adjustments, the geometric mean costs of these code combinations shown in Addendum J are calculated using only claims that include these code pairings. As stated previously, the cost of the code combination must exceed twice the cost of the lowest cost-significant procedure within the APC in order for the combination to qualify for a complexity adjustment.
Lastly, as stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59238), we do not believe that it is necessary to adjust the complexity adjustment criteria to allow claims that include a drug or device code, more than two “J1” procedures, or procedures performed at certain hospitals to qualify for a complexity adjustment. As mentioned earlier, we believe the current criteria are adequate to determine if a combination of procedures represents a complex, costly subset of the primary service.
After consideration of the public comments we received on the proposed complexity adjustment policy, we are finalizing the C-APC complexity adjustment policy for CY 2019, as proposed, without modification.
For CY 2019 and subsequent years, in the CY 2019 OPPS/ASC proposed rule (83 FR 37062), we proposed to continue to apply the C-APC payment policy methodology made effective in CY 2015 and updated with the implementation of status indicator “J2” in CY 2016. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79583) for a discussion of the C-APC payment policy methodology and revisions.
Each year, in accordance with section 1833(t)(9)(A) of the Act, we review and revise the services within each APC group and the APC assignments under the OPPS. As a result of our annual review of the services and the APC assignments under the OPPS, in the proposed rule (83 FR 37062), we proposed to add three C-APCs under the existing C-APC payment policy beginning in CY 2019: Proposed C-APC 5163 (Level 3 ENT Procedures); proposed C-APC 5183 (Level 3 Vascular Procedures); and proposed C-APC 5184 (Level 4 Vascular Procedures). These APCs were selected to be included in this proposal because, similar to other C-APCs, these APCs include primary, comprehensive services, such as major surgical procedures, that are typically reported with other ancillary and adjunctive services. Also, similar to other APCs that have been converted to C-APCs, there are higher APC levels within the clinical family or related clinical family of these APCs that have previously been assigned to a C-APC. Table 3 of the proposed rule listed the proposed C-APCs for CY 2019. All C-APCs were displayed in Addendum J to the proposed rule (which is available via the internet on the CMS website). Addendum J to the proposed rule also contained all of the data related to the C-APC payment policy methodology, including the list of proposed complexity adjustments and other information.
After consideration of the public comments we received, we are finalizing the proposed C-APCs for CY 2019. Table 7 below lists the final C-APCs for CY 2019. All C-APCs are displayed in Addendum J to this final rule with comment period (which is available via the internet on the CMS website). Addendum J to this final rule with comment period also contains all of the data related to the C-APC payment policy methodology, including the list of complexity adjustments and other information for CY 2019.
Services that are assigned to New Technology APCs are typically new procedures that do not have sufficient claims history to establish an accurate payment for the procedures. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level. When a procedure assigned to a New Technology APC is included on the claim with a primary procedure, identified by OPPS status indicator “J1”, payment for the new technology service is typically packaged into the payment for the primary procedure. Because the new technology service is not separately paid in this scenario, the overall number of single claims available to determine an appropriate clinical APC for the new service is reduced. This is contrary to the objective of the New Technology APC payment policy, which is to gather sufficient claims data to enable us to assign the service to an appropriate clinical APC.
For example, for CY 2017, there were seven claims generated for HCPCS code 0100T (Placement of a subconjunctival retinal prosthesis receiver and pulse generator, and implantation of intraocular retinal electrode array, with vitrectomy), which involves the use of the Argus® II Retinal Prosthesis System. However, several of these claims were not available for ratesetting because HCPCS code 0100T was reported with a “J1” procedure and, therefore, payment was packaged into the associated C-APC payment. If these services had been separately paid under the OPPS, there would be at least two additional single claims available for ratesetting. As mentioned previously, the purpose of the new technology APC policy is to ensure that there are sufficient claims data for new services, which is particularly important for services with a low volume such as procedures described by HCPCS code 0100T. Another concern is the costs reported for the claims when payment is not packaged for a new technology procedure may not be representative of all of the services included on a claim that is generated, which may also affect our ability to assign the new service to the most appropriate clinical APC.
To address this issue and help ensure that there is sufficient claims data for services assigned to New Technology APCs, in the CY 2019 OPPS/ASC proposed rule (83 FR 37063), we proposed to exclude payment for any procedure that is assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged when included on a claim with a “J1” service assigned to a C-APC. This issue is also addressed in section III.C.3.b. of the proposed rule and this final rule with comment period.
After consideration of the public comments we received, we are finalizing the proposal, without modification, to exclude payment for any procedure that is assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged when included on a claim with a “J1” service assigned to a C-APC.
As discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66613), we believe it is important that the OPPS enhance incentives for hospitals to provide necessary, high quality care as efficiently as possible. For CY 2008, we developed composite APCs to provide a single payment for groups of services that are typically performed together during a single clinical encounter and that result in the provision of a complete service. Combining payment for multiple, independent services into a single OPPS payment in this way enables hospitals to manage their resources with maximum flexibility by monitoring and adjusting the volume and efficiency of services themselves. An additional advantage to the composite APC model is that we can use data from correctly coded multiple procedure claims to
In the CY 2019 OPPS/ASC proposed rule (83 FR 37064), for CY 2019 and subsequent years, we proposed to continue our composite APC payment policies for mental health services and multiple imaging services, as discussed below. In addition, as discussed in section II.A.2.b.(3) and II.A.2.c. of the CY 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33577 through 33578 and 59241 through 59242 and 59246, respectively), in the CY 2019 proposed rule, we proposed to continue to assign CPT code 55875 (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy) to status indicator “J1” and to continue to assign the services described by CPT code 55875 to C-APC 5375 (Level 5 Urology and Related Services) for CY 2019. We did not receive any public comments on these proposed assignments. Therefore, for CY 2019, we are continuing to assign CPT code 55875 to status indicator “J1” and to assign services described by CPT code 55875 to C-APC 5375.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37064), we proposed to continue our longstanding policy of limiting the aggregate payment for specified less resource-intensive mental health services furnished on the same date to the payment for a day of partial hospitalization services provided by a hospital, which we consider to be the most resource intensive of all outpatient mental health services. We refer readers to the April 7, 2000 OPPS final rule with comment period (65 FR 18452 through 18455) for the initial discussion of this longstanding policy and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74168) for more recent background.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588 through 79589), we finalized a policy to combine the existing Level 1 and Level 2 hospital-based PHP APCs into a single hospital-based PHP APC, and thereby discontinue APCs 5861 (Level 1 Partial Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level 2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs) and replace them with APC 5863 (Partial Hospitalization (3 or more services per day)).
In the CY 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33580 through 33581 and 59246 through 59247, respectively), we proposed and finalized the policy for CY 2018 and subsequent years that, when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services will be paid through composite APC 8010 (Mental Health Services Composite). In addition, we set the payment rate for composite APC 8010 for CY 2018 at the same payment rate that will be paid for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and finalized a policy that the hospital will continue to be paid the payment rate for composite APC 8010. Under this policy, the I/OCE will continue to determine whether to pay for these specified mental health services individually, or to make a single payment at the same payment rate established for APC 5863 for all of the specified mental health services furnished by the hospital on that single date of service. We continue to believe that the costs associated with administering a partial hospitalization program at a hospital represent the most resource intensive of all outpatient mental health services. Therefore, we do not believe that we should pay more for mental health services under the OPPS than the highest partial hospitalization per diem payment rate for hospitals.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37064), for CY 2019, we proposed that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be paid through composite APC 8010 for CY 2019. In addition, we proposed to set the proposed payment rate for composite APC 8010 at the same payment rate that we proposed for APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the proposed payment rate for composite APC 8010.
After consideration of the public comment we received, we are finalizing our CY 2019 proposal, without modification, that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on a single date of service, based on the payment rates associated with the APCs for the individual services, exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services will be paid through composite APC 8010 for CY 2019. In addition, we are finalizing our CY 2019 proposal, without modification, to set the payment rate for composite APC 8010 at the same payment rate as APC 5863, which is the maximum partial hospitalization per diem payment rate for a hospital, and that the hospital continue to be paid the payment rate for composite APC 8010.
Effective January 1, 2009, we provide a single payment each time a hospital submits a claim for more than one imaging procedure within an imaging family on the same date of service, in order to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session (73 FR 41448 through 41450). We utilize three imaging families based on imaging modality for purposes of this methodology: (1) Ultrasound; (2) computed tomography (CT) and computed tomographic angiography (CTA); and (3) magnetic resonance
While there are three imaging families, there are five multiple imaging composite APCs due to the statutory requirement under section 1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging services provided with and without contrast. While the ultrasound procedures included under the policy do not involve contrast, both CT/CTA and MRI/MRA scans can be provided either with or without contrast. The five multiple imaging composite APCs established in CY 2009 are:
• APC 8004 (Ultrasound Composite);
• APC 8005 (CT and CTA without Contrast Composite);
• APC 8006 (CT and CTA with Contrast Composite);
• APC 8007 (MRI and MRA without Contrast Composite); and
• APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the “with contrast” composite APCs as having at least one or more imaging procedures from the same family performed with contrast on the same date of service. For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC.
We make a single payment for those imaging procedures that qualify for payment based on the composite APC payment rate, which includes any packaged services furnished on the same date of service. The standard (noncomposite) APC assignments continue to apply for single imaging procedures and multiple imaging procedures performed across families. For a full discussion of the development of the multiple imaging composite APC methodology, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37065), we proposed, for CY 2019 and subsequent years, to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology. We stated that we continue to believe that this policy would reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.
The proposed CY 2019 payment rates for the five multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) were based on proposed geometric mean costs calculated from a partial year of CY 2017 claims available for the CY 2019 OPPS/ASC proposed rule that qualified for composite payment under the current policy (that is, those claims reporting more than one procedure within the same family on a single date of service). To calculate the proposed geometric mean costs, we used the same methodology that we have used to calculate the geometric mean costs for these composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The imaging HCPCS codes referred to as “overlap bypass codes” that we removed from the bypass list for purposes of calculating the proposed multiple imaging composite APC geometric mean costs, in accordance with our established methodology as stated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74918), were identified by asterisks in Addendum N to the CY 2019 OPPS/ASC proposed rule (which is available via the internet on the CMS website) and were discussed in more detail in section II.A.1.b. of the CY 2019 OPPS/ASC proposed rule.
For the CY 2019 OPPS/ASC proposed rule, we were able to identify approximately 638,902 “single session” claims out of an estimated 1.7 million potential claims for payment through composite APCs from our ratesetting claims data, which represents approximately 37 percent of all eligible claims, to calculate the proposed CY 2019 geometric mean costs for the multiple imaging composite APCs. Table 4 of the CY 2019 OPPS/ASC proposed rule listed the proposed HCPCS codes that would be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC proposed geometric mean costs for CY 2019.
We did not receive any public comments on these proposals. However, in the CY 2019 OPPS/ASC proposed rule (83 FR 37065), we inadvertently omitted the new CPT codes that will be effective January 1, 2019 from Table 4. We did include these codes in Addendum M to the proposed rule (which was available via the internet on the CMS website). Therefore, new Category I CPT codes that will be effective January 1, 2019 are flagged with comment indicator “NI” in Addendum M to this CY 2019 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim APC assignment for CY 2019. We are inviting public comments in this CY 2019 OPPS/ASC final rule with comment period on the interim APC assignments and payment rates for the new codes in Addendum M that will be finalized in the CY 2020 OPPS/ASC final rule with comment period.
Table 8 below lists the HCPCS codes that will be subject to the multiple imaging composite APC policy and their respective families and approximate composite APC final geometric mean costs for CY 2019.
Like other prospective payment systems, the OPPS relies on the concept of averaging to establish a payment rate for services. The payment may be more or less than the estimated cost of providing a specific service or a bundle of specific services for a particular patient. The OPPS packages payments
Packaging also encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements, thereby encouraging the most economical health care delivery. Similarly, packaging encourages hospitals to establish protocols that ensure that necessary services are furnished, while scrutinizing the services ordered by practitioners to maximize the efficient use of hospital resources. Packaging payments into larger payment bundles promotes the predictability and accuracy of payment for services over time. Finally, packaging may reduce the importance of refining service-specific payment because packaged payments include costs associated with higher cost cases requiring many ancillary items and services and lower cost cases requiring fewer ancillary items and services. Because packaging encourages efficiency and is an essential component of a prospective payment system, packaging payments for items and services that are typically integral, ancillary, supportive, dependent, or adjunctive to a primary service has been a fundamental part of the OPPS since its implementation in August 2000. For an extensive discussion of the history and background of the OPPS packaging policy, we refer readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79592), and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59250). As we continue to develop larger payment groups that more broadly reflect services provided in an encounter or episode of care, we have expanded the OPPS packaging policies. Most, but not necessarily all, categories of items and services currently packaged in the OPPS are listed in 42 CFR 419.2(b). Our overarching goal is to make payments for all services under the OPPS more consistent with those of a prospective payment system and less like those of a per-service fee schedule, which pays separately for each coded item. As a part of this effort, we have continued to examine the payment for items and services provided under the OPPS to determine which OPPS services can be packaged to further achieve the objective of advancing the OPPS toward a more prospective payment system.
For CY 2019, we examined the items and services currently provided under the OPPS, reviewing categories of integral, ancillary, supportive, dependent, or adjunctive items and services for which we believe payment would be appropriately packaged into payment of the primary service that they support. Specifically, we examined the HCPCS code definitions (including CPT code descriptors) and outpatient hospital billing patterns to determine whether there were categories of codes for which packaging would be appropriate according to existing OPPS packaging policies or a logical expansion of those existing OPPS packaging policies. In the CY 2019 OPPS/ASC proposed rule (83 37067 through 37071), for CY 2019, we proposed to conditionally package the costs of selected newly identified ancillary services into payment with a primary service where we believe that the packaged item or service is integral, ancillary, supportive, dependent, or adjunctive to the provision of care that was reported by the primary service HCPCS code. Below we discuss the proposed and finalized changes to the packaging policies beginning in CY 2019.
In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the framework of existing packaging categories, such as drugs that function as supplies in a surgical procedure or diagnostic test or procedure, we requested stakeholder feedback on common clinical scenarios involving currently packaged items and services described by HCPCS codes that stakeholders believe should not be packaged under the OPPS. We also expressed interest in stakeholder feedback on common clinical scenarios involving separately payable HCPCS codes for which payment would be most appropriately packaged under the OPPS. Commenters expressed a variety of views on packaging under the OPPS. In the CY 2018 OPPS/ASC final rule with comment period, we summarized the comments received in response to our request (82 FR 59255). The comments ranged from requests to unpackage most items and services that are either conditionally or unconditionally packaged under the OPPS, including drugs and devices, to specific requests for separate payment for a specific drug or device. We stated in the CY 2018 OPPS/ASC final rule with comment period that CMS would continue to explore and evaluate packaging policies under the OPPS and consider these policies in future rulemaking.
In addition to stakeholder feedback regarding OPPS packaging policies, the President's Commission on Combating Drug Addiction and the Opioid Crisis (the Commission) recently recommended that CMS examine payment policies for certain drugs that function as a supply, specifically non-opioid pain management treatments. The Commission was established in 2017 to study ways to combat and treat drug abuse, addiction, and the opioid crisis. The Commission's report
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37068 through 37071), in response to stakeholder comments on the CY 2018 OPPS/ASC proposed rule and in light of the recommendations regarding payment policies for certain drugs, we recently evaluated the impact of our packaging policy for drugs that function as a supply when used in a surgical procedure on the utilization of these drugs in both the hospital outpatient department and the ASC setting. Currently, as noted above, drugs that function as a supply are packaged under the OPPS and the ASC payment system, regardless of the costs of the drugs. The costs associated with packaged drugs that function as a supply are included in the ratesetting methodology for the surgical procedures with which they are billed and the payment rate for the associated procedure reflects the costs of the packaged drugs and other packaged items and services to the extent they are billed with the procedure. In our evaluation, we used currently available data to analyze the utilization patterns associated with specific drugs that function as a supply over a 5-year time period (CYs 2013 through 2017) to determine whether this packaging policy has reduced the use of these drugs. If the packaging policy discouraged the use of drugs that function as a supply or impeded access to these products, we would expect to see a significant decline in utilization of these drugs over time, although we note that a decline in utilization could also reflect other factors, such as the availability of alternative products. We did not observe significant declines in the total number of units used in the hospital outpatient department for a majority of the drugs included in our analysis.
In fact, under the OPPS, we observed the opposite effect for several drugs that function as a supply, including Exparel (HCPCS code C9290). Exparel is a liposome injection of bupivacaine, an amide local anesthetic, indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. In 2011, Exparel was approved by the FDA for administration into the postsurgical site to provide postsurgical analgesia.
From CYs 2013 through 2017, there was an overall increase in the OPPS Medicare utilization of Exparel of approximately 229 percent (from 2.3 million units to 7.7 million units) during this 5-year time period. The total number of claims reporting Exparel increased by 222 percent (from 10,609 claims to 34,183 claims) over this time period. This increase in utilization continued, even after the 3-year drug pass-through payment period ended for this product in 2014, with 18 percent overall growth in the total number of units used from CYs 2015 through 2017 (from 6.5 million units to 7.7 million units). The number of claims reporting Exparel increased by 21 percent during this time period (from 28,166 claims to 34,183 claims).
Thus, we have not found evidence to support the notion that the OPPS packaging policy has had an unintended consequence of discouraging the use of non-opioid treatment for postsurgical pain management in the hospital outpatient department. Therefore, based on this data analysis, we stated in the CY 2019 OPPS/ASC proposed rule that we did not believe that changes were necessary under the OPPS for the packaged drug policy for drugs that function as a surgical supply when used in a surgical procedure in this setting at this time.
In terms of Exparel in particular, we have received several requests to pay separately for the drug rather than packaging payment for it as a surgical supply. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66874 and 66875), in response to comments from stakeholders requesting separate payment for Exparel, we stated that we considered Exparel to be a drug that functions as a surgical supply because it is indicated for the alleviation of postoperative pain. We also stated that we consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59345), we reiterated our position with regard to payment for Exparel, stating that we believed that payment for this drug is appropriately packaged with the primary surgical procedure. In addition, we have reviewed recently available literature with respect to Exparel, including a briefing document
In addition, higher use in the hospital outpatient setting not only supports the notion that the packaged payment for Exparel is not causing an access to care issue, but also that the payment rate for primary procedures in the HOPD using Exparel adequately reflects the cost of the drug. That is, because Exparel is commonly used and billed under the OPPS, the APC rates for the primary procedures reflect such utilization. Therefore, the higher utilization in the OPPS setting should mitigate the need for separate payment. We remind readers that the OPPS is a prospective payment system, not a cost-based system and, by design, is based on a system of averages whereby payment for certain cases may exceed the costs incurred, while for others, it may not. As stated earlier in this section, the OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility. Our packaging policies support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. We will continue to analyze the evidence and monitor utilization of non-opioid alternatives in the OPD and ASC settings for potential future rulemaking.
We also stated in the proposed rule that, although we found increases in utilization for Exparel when it is paid under the OPPS, we did notice different effects on Exparel utilization when examining the effects of our packaging policy under the ASC payment system. In particular, during the same 5-year period of CYs 2013 through 2017, the total number of units of Exparel used in the ASC setting decreased by 25 percent (from 98,160 total units to 73,595 total units) and the total number of claims reporting Exparel decreased by 16 percent (from 527 claims to 441 claims). In the ASC setting, after the pass-through payment period ended for Exparel at the end of CY 2014, the total number of units of Exparel used decreased by 70 percent (from 244,757 units to 73,595 units) between CYs 2015 and 2017. The total number of claims reporting Exparel also decreased during this time period by 62 percent (from 1,190 claims to 441 claims). However, there was an increase of 238 percent (from 98,160 total units to 331,348 total units) in the total number of units of Exparel used in the ASC setting during the time period of CYs 2013 and 2014 when the drug received pass-through payments, indicating that the payment rate of ASP+6 percent for Exparel may have had an impact on its usage in the ASC setting. The total number of claims reporting Exparel also increased during this time period from 527 total claims to 1,540 total claims, an increase of 192 percent.
While several variables may contribute to this difference in utilization and claims reporting between the hospital outpatient department and the ASC setting, one potential explanation is that, in comparison to hospital outpatient departments, ASCs tend to provide specialized care and a more limited range of services. Also, ASCs are paid, in aggregate, approximately 55 percent of the OPPS rate. Therefore, fluctuations in payment rates for specific services may impact these providers more acutely than hospital outpatient departments, and therefore, ASCs may be less likely to choose to furnish non-opioid postsurgical pain management treatments, which are typically more expensive than opioids, as a result. Another possible contributing factor is that ASCs do not typically report packaged items and services and, accordingly, our analysis may be undercounting the number of Exparel units utilized in the ASC setting.
In light of the results of our evaluation of packaging policies under the OPPS and the ASC payment system, which showed decreased utilization for certain drugs that function as a supply in the ASC setting in comparison to the hospital outpatient department setting, as well as the Commission's recommendation to examine payment policies for non-opioid pain management drugs that function as a supply, we stated in the proposed rule that we believe a change in how we pay for non-opioid pain management drugs that function as surgical supplies may be warranted. In particular, we stated that we believe it may be appropriate to pay separately for evidence-based non-opioid pain management drugs that function as a supply in a surgical procedure in the ASC setting to address the decreased utilization of these drugs and to encourage use of these types of drugs rather than prescription opioids. Therefore, we proposed in section XII.D.3. of the CY 2019 OPPS/ASC
We have stated previously (82 FR 59250) that our packaging policies are designed to support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. The packaging policies established under the OPPS also typically apply when services are provided in the ASC setting, and the policies have the same strategic goals in both settings. While the CY 2019 proposal is a departure from our current ASC packaging policy for drugs (specifically, non-opioid pain management drugs) that function as a supply when used in a surgical procedure, we stated in the proposed rule that we believe that the proposed change will incentivize the use of non-opioid pain management drugs and is responsive to the Commission's recommendation to examine payment policies for non-opioid pain management drugs that function as a supply, with the overall goal of combating the current opioid addiction crisis. As previously noted, a discussion of the CY 2019 proposal for payment of non-opioid pain management drugs in the ASC setting was presented in further detail in section XII.D.3. of the proposed rule, and we refer readers to section XII.D.3. of this CY 2019 OPPS/ASC final rule with comment period for further discussion of the final policy for CY 2019. We also stated in the CY 2019 OPPS/ASC proposed rule that we were interested in peer-reviewed evidence that demonstrates that use of non-opioid alternatives, such as Exparel, furnished in the outpatient setting actually does lead to a decrease in prescription opioid use and addiction and invited public comments containing evidence that demonstrate whether and how such non-opioid alternatives affect prescription opioid use during or after an outpatient visit or procedure.
Other commenters, including MedPAC, did not support this proposal and stated that the policy was counter to the OPPS packaging policies created to encourage efficiencies and could set a precedent for unpackaging services. One commenter stated that Exparel is more costly, but not more effective than bupivacaine, a less costly non-opioid alternative. Other commenters expressed concerns that the proposal may have the unintended consequence of limiting access to opioid prescriptions for beneficiaries for whom an opioid prescription would be appropriate. The commenters noted that some non-opioid pain management treatments may pose other risks for patients and patient safety.
In addition, as noted in section XII.D.3. of the proposed rule (83 FR 37065 through 37068), we sought comments on whether the proposed policy would decrease the dose, duration, and/or number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure (especially for beneficiaries at high-risk for opioid addiction) as well as whether there are other non-opioid pain management alternatives that would have similar effects and may warrant separate payment. For example, we stated we were interested in identifying whether single post-surgical analgesic injections, such as Exparel, or other non-opioid drugs or devices that are used during an outpatient visit or procedure are associated with decreased opioid prescriptions and/or reduced cases of associated opioid addiction following such an outpatient visit or procedure. We also requested comments that provide evidence (such as published peer-reviewed literature) we could use to determine whether these products help to deter or avoid prescription opioid use and addiction as well as evidence that the current packaged payment for such non-opioid alternatives presents a barrier to access to care and, therefore, warrants separate payment under either or both the OPPS and the ASC payment system. We stated that any evidence demonstrating the reduction or avoidance of prescription opioids would be the criterion we use to determine whether separate payment is warranted for CY 2019. We also stated that if evidence changes over time, we would consider whether a reexamination of any policy adopted in the final rule would be necessary.
Several commenters identified other non-opioid pain management drugs that they believe decrease the dose, duration, and/or number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure (especially for beneficiaries at high-risk for opioid addiction) and may warrant separate payment for CY 2019. Commenters from the makers of other packaged non-opioid pain management drugs, including a non-opioid intrathecal infusion drug indicated for the management of severe chronic pain, submitted supporting studies which claimed that the drug reduced opioid use in patients with chronic pain.
Several commenters, from hospitals, hospital associations, and clinical specialty organizations, requested separate payment for IV acetaminophen, IV ibuprofen, and epidural steroid injections. In addition, one commenter, the manufacturer of a non-opioid analgesic containing bupivacaine hcl not currently approved by FDA, requested clarification regarding whether the proposal would also apply to this drug once it receives FDA approval. Several commenters requested separate payment for a drug that treats postoperative pain after cataract surgery, currently has drug pass-through payment status, and therefore is not packaged under the OPPS or the ASC payment system. The commenters requested that CMS explicitly state that this drug will also be paid for separately in the ASC setting after pass-through
As noted above, we stated in the proposed rule that we were interested in comments regarding other non-opioid treatments besides Exparel that might be affected by our OPPS and ASC packaging policies, including alternative, non-opioid pain management treatments, such as devices or therapy services that are not currently separable payable. We stated that we were specifically interested in comments regarding whether CMS should consider separate payment for items and services for which payment is currently packaged under the OPPS and the ASC payment system that are effective non-opioid alternatives as well as evidence that demonstrates such items and services lead to a decrease in prescription opioid use and/or addiction during or after an outpatient visit or procedure in order to determine whether separate payment may be warranted. As previously stated, we intended to examine the evidence submitted to determine whether to adopt a final policy in this final rule with comment period that incentivizes use of non-opioid alternative items and services that have evidence to demonstrate an associated decrease in prescription opioid use and/or addiction following an outpatient visit or procedure. We stated that some examples of evidence that may be relevant could include an indication on the product's FDA label or studies published in peer-reviewed literature that such product aids in the management of acute or chronic pain and is an evidence-based non-opioid alternative for acute and/or chronic pain management. We indicated in the proposed rule that we also were interested in evidence relating to products that have shown clinical improvement over other alternatives, such as a device that has been shown to provide a substantial clinical benefit over the standard of care for pain management. We stated that this could include, for example, spinal cord stimulators used to treat chronic pain, such as the devices described by HCPCS codes C1822 (Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system), C1820 (Generator, neurostimulator (implantable), with rechargeable battery and charging system), and C1767 (Generator, neurostimulator (implantable), nonrechargeable) which are primarily assigned to APCs 5463 and 5464 (Levels 3 and 4 Neurostimulator and Related Procedures) with proposed CY 2019 payment rates of $18,718 and $27,662, respectively, that have received pass-through payment status as well as other similar devices.
Currently, all devices are packaged under the OPPS and the ASC payment system unless they have pass-through payment status. However, we stated in the proposed rule that, in light of the Commission's recommendation to review and modify ratesetting policies that discourage the use of non-opioid treatments for pain, we were interested in comments from stakeholders regarding whether, similar to the goals of the proposed payment policy for non-opioid pain management drugs that function as a supply when used in a surgical procedure, a policy of providing separate payment (rather than packaged payment) for these products, indefinitely or for a specified period of time, would also incentivize the use of alternative non-opioid pain management treatments and improve access to non-opioid alternatives, particularly for innovative and low-volume items and services.
We also stated that we were interested in comments regarding whether we should provide separate payment for non-opioid pain management treatments or products using a mechanism such as an equitable payment adjustment under our authority at section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments. For example, we stated in the proposed rule that we were considering whether an equitable payment adjustment in the form of an add-on payment for APCs that use a non-opioid pain management drug, device, or service would be appropriate. We indicated that, to the extent that commenters provided evidence to support this approach, we would consider adopting a final policy in this final rule with comment period, which could include regulatory changes that would allow for an exception to the packaging of certain nonpass-through devices that represent non-opioid alternatives for acute or chronic pain that have evidence to demonstrate that their use leads to a decrease in opioid prescriptions and/or opioid abuse or misuse during or after an outpatient visit or procedure to effectuate such change.
Commenters representing various stakeholders requested separate payments for various non-opioid pain management treatments, such as
Commenters suggested various mechanisms through which separate payment or a higher-paying APC assignment for the primary service could be made. Commenters offered reports, studies, and anecdotal evidence of varying degrees to support why the items or services about which they were writing offered an alternative to or reduction of the need for opioid prescriptions.
After reviewing the non-opioid pain management alternatives suggested by the commenters as well as the studies and other data provided to support the request for separate payment, we have not determined that separate payment is warranted at this time for any of the non-opioid pain management alternatives discussed above.
We also invited public comments on whether a reorganization of the APC structure for procedures involving non-opioid products or establishing more granular APC groupings for specific procedure and device combinations to ensure that the payment rate for such services is aligned with the resources associated with procedures involving specific devices would better achieve our goal of incentivizing increased use of non-opioid alternatives, with the aim of reducing opioid use and subsequent addiction. For example, we stated we would consider finalizing a policy to establish new APCs for procedures involving non-opioid pain management packaged items or services if such APCs would better recognize the resources involved in furnishing such items and services and decrease or eliminate the need for prescription opioids. In addition, given the general desire to encourage provider efficiency through creating larger bundles of care and packaging items and services that are integral, ancillary, supportive, dependent, or adjunctive to a primary service, we also invited comments on how such alternative payment structures would continue to balance the goals of incentivizing provider efficiencies with encouraging the use of non-opioid alternatives to pain management.
Furthermore, because patients may receive opioid prescriptions following receipt of a non-opioid drug or implantation of a device, we stated that we were interested in identifying any cost implications for the patient and the Medicare program caused by this potential change in policy. We also stated that the implications of incentivizing use of non-opioid pain management drugs available for postsurgical acute pain relief during or after an outpatient visit or procedure are of interest. The goal is to encourage appropriate use of such non-opioid alternatives. As previously stated, this comment solicitation is also discussed in section XII.D.3. of this final rule with comment period relating to the ASC payment system.
In addition, in the proposed rule, we invited the public to submit ideas on regulatory, subregulatory, policy, practice, and procedural changes to help prevent opioid use disorders and improve access to treatment under the Medicare program. We stated that we were interested in identifying barriers that may inhibit access to non-opioid alternatives for pain treatment and management or access to opioid use disorder treatment, including those barriers related to payment methodologies or coverage. In addition, consistent with our “Patients Over
After consideration of the public comments that we received, we are finalizing the proposed policy, without modification, to unpackage and pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2019. We will continue to analyze the issue of access to non-opioid alternatives in the OPD and the ASC settings as we implement section 6082 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271 enacted on October 24, 2018. This policy is also discussed in section XII.D.3 of this final rule with comment period.
We established a policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68283) of using geometric mean-based APC costs to calculate relative payment weights under the OPPS. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59255 through 59256), we applied this policy and calculated the relative payment weights for each APC for CY 2018 that were shown in Addenda A and B to that final rule with comment period (which were made available via the internet on the CMS website) using the APC costs discussed in sections II.A.1. and II.A.2. of that final rule with comment period. For CY 2019, as we did for CY 2018, in the CY 2019 OPPS/ASC proposed rule (83 FR 37071), we proposed to continue to apply the policy established in CY 2013 and calculate relative payment weights for each APC for CY 2019 using geometric mean-based APC costs.
For CY 2012 and CY 2013, outpatient clinic visits were assigned to one of five levels of clinic visit APCs, with APC 0606 representing a mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75036 through 75043), we finalized a policy that created alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), representing any and all clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634 (Hospital Clinic Visits). We also finalized a policy to use CY 2012 claims data to develop the CY 2014 OPPS payment rates for HCPCS code G0463 based on the total geometric mean cost of the levels one through five CPT E/M codes for clinic visits previously recognized under the OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In addition, we finalized a policy to no longer recognize a distinction between new and established patient clinic visits.
For CY 2016, we deleted APC 0634 and reassigned the outpatient clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and Related Services) (80 FR 70372). For CY 2019, as we did for CY 2018, we proposed to continue to standardize all of the relative payment weights to APC 5012. We believe that standardizing relative payment weights to the geometric mean of the APC to which HCPCS code G0463 is assigned maintains consistency in calculating unscaled weights that represent the cost of some of the most frequently provided OPPS services. For CY 2019, as we did for CY 2018, we proposed to assign APC 5012 a relative payment weight of 1.00 and to divide the geometric mean cost of each APC by the geometric mean cost for APC 5012 to derive the unscaled relative payment weight for each APC. The choice of the APC on which to standardize the relative payment weights does not affect payments made under the OPPS because we scale the weights for budget neutrality.
We did not receive any public comments on our proposal to continue to use the geometric mean cost of APC 5012 to standardize relative payment weights for CY 2019. Therefore, we are finalizing our proposal and assigning APC 5012 the relative payment weight of 1.00, and using the relative payment weight for APC 5012 to derive the unscaled relative payment weight for each APC for CY 2019.
We note that, in section X.B. of the OPPS/ASC proposed rule (83 FR 37137 through 37138) and of this final rule with comment period, we discuss our CY 2019 proposal and established final policy to control for unnecessary increases in the volume of covered outpatient department services by paying for clinic visits furnished at excepted off-campus provider-based department (PBD) at an amount of 70 percent of the OPPS rate for a clinic visit service in CY 2019, rather than at the standard OPPS rate. While the volume associated with these visits is included in the impact model, and thus used in calculating the weight scalar, the proposal and final policy have only a negligible effect on the scalar. Specifically, under the proposed and final policy, there is no change to the relativity of the OPPS payment weights because the adjustment is made at the payment level rather than in the cost modeling. Further, under our proposed and final policy, the savings that will result from the change in payments for these clinic visits will not be budget neutral. Therefore, the impact of the proposed and final policy will generally not be reflected in the budget neutrality adjustments, whether the adjustment is to the OPPS relative weights or to the OPPS conversion factor. We refer readers to section X.B. of this CY 2019 OPPS/ASC final rule with comment period for further discussion of this final policy.
Section 1833(t)(9)(B) of the Act requires that APC reclassification and recalibration changes, wage index changes, and other adjustments be made in a budget neutral manner. Budget neutrality ensures that the estimated aggregate weight under the OPPS for CY 2019 is neither greater than nor less than the estimated aggregate weight that would have been made without the changes. To comply with this requirement concerning the APC changes, in the CY 2019 OPPS/ASC proposed rule (83 FR 37071 through 37072), we proposed to compare the estimated aggregate weight using the CY 2018 scaled relative payment weights to the estimated aggregate weight using the proposed CY 2019 unscaled relative payment weights.
For CY 2018, we multiplied the CY 2018 scaled APC relative payment weight applicable to a service paid under the OPPS by the volume of that service from CY 2017 claims to calculate the total relative payment weight for
For a detailed discussion of the weight scalar calculation, we refer readers to the OPPS claims accounting document available on the CMS website at:
We proposed to compare the estimated unscaled relative payment weights in CY 2019 to the estimated total relative payment weights in CY 2018 using CY 2017 claims data, holding all other components of the payment system constant to isolate changes in total weight. Based on this comparison, we proposed to adjust the calculated CY 2019 unscaled relative payment weights for purposes of budget neutrality. We proposed to adjust the estimated CY 2019 unscaled relative payment weights by multiplying them by a proposed weight scalar of 1.4553 to ensure that the proposed CY 2019 relative payment weights are scaled to be budget neutral. The proposed CY 2019 relative payment weights listed in Addenda A and B to the proposed rule (which are available via the internet on the CMS website) were scaled and incorporated the recalibration adjustments discussed in sections II.A.1. and II.A.2. of the proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for certain SCODs. Section 1833(t)(14)(H) of the Act provides that additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion factor, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years. Therefore, the cost of those SCODs (as discussed in section V.B.2. of this final rule with comment period) is included in the budget neutrality calculations for the CY 2019 OPPS.
We did not receive any public comments on the proposed weight scalar calculation. Therefore, we are finalizing our proposal to use the calculation process described in the proposed rule, without modification, for CY 2019. Using updated final rule claims data, we are updating the estimated CY 2019 unscaled relative payment weights by multiplying them by a weight scalar of 1.4574 to ensure that the final CY 2019 relative payment weights are scaled to be budget neutral.
The final CY 2019 relative payments weights listed in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website) were scaled and incorporate the recalibration adjustments discussed in sections II.A.1. and II.A.2. of this final rule with comment period.
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to update the conversion factor used to determine the payment rates under the OPPS on an annual basis by applying the OPD fee schedule increase factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee schedule increase factor is equal to the hospital inpatient market basket percentage increase applicable to hospital discharges under section 1886(b)(3)(B)(iii) of the Act. As stated in the CY 2019 OPPS/ASC proposed rule, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20381), consistent with current law, based on IHS Global, Inc.'s fourth quarter 2017 forecast of the FY 2019 market basket increase, the proposed FY 2019 IPPS market basket update was 2.8 percent. However, sections 1833(t)(3)(F) and 1833(t)(3)(G)(v) of the Act, as added by section 3401(i) of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148) and as amended by section 10319(g) of that law and further amended by section 1105(e) of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), provide adjustments to the OPD fee schedule increase factor for CY 2019.
Specifically, section 1833(t)(3)(F)(i) of the Act requires that, for 2012 and subsequent years, the OPD fee schedule increase factor under subparagraph (C)(iv) be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the “MFP adjustment”). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through 51692), we finalized our methodology for calculating and applying the MFP adjustment, and then revised this methodology as discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the CY 2019 OPPS/ASC proposed rule (83 FR 37072), the proposed MFP adjustment for FY 2019 was 0.8 percentage point.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37072), we proposed that if more recent data became subsequently available after the publication of the proposed rule (for example, a more recent estimate of the market basket increase and the MFP adjustment), we would use such updated data, if appropriate, to determine the CY 2019 market basket update and the MFP adjustment, which are components in calculating the OPD fee schedule increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of the Act, in this CY 2019 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(3)(F)(ii) of the Act requires that, for each of years 2010 through 2019, the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act be reduced by the adjustment described in section 1833(t)(3)(G) of the Act. For CY 2019, section 1833(t)(3)(G)(v) of the Act provides a 0.75 percentage point reduction to the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act. Therefore, in accordance with sections 1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of the Act, in the CY 2019 OPPS/ASC proposed rule, we proposed to apply a 0.75 percentage point reduction to the OPD fee schedule increase factor for CY 2019.
We note that section 1833(t)(3)(F) of the Act provides that application of this subparagraph may result in the OPD fee schedule increase factor under section 1833(t)(3)(C)(iv) of the Act being less than 0.0 percent for a year, and may result in OPPS payment rates being less than rates for the preceding year. As described in further detail below, we are applying an OPD fee schedule increase factor of 1.35 percent for the CY 2019 OPPS (which is 2.9 percent, the final estimate of the hospital inpatient market basket percentage increase, less the final 0.8 percentage point MFP adjustment, and less the 0.75 percentage point additional adjustment).
Hospitals that fail to meet the Hospital OQR Program reporting requirements are subject to an additional reduction of 2.0 percentage points from the OPD fee schedule increase factor adjustment to the conversion factor that would be used to
In the CY 2019 OPPS/ASC proposed rule, we proposed to amend 42 CFR 419.32(b)(1)(iv)(B) by adding a new paragraph (
To set the OPPS conversion factor for the CY 2019 OPPS/ASC proposed rule, we proposed to increase the CY 2018 conversion factor of $78.636 by 1.25 percent (83 FR 37073). In accordance with section 1833(t)(9)(B) of the Act, we proposed further to adjust the conversion factor for CY 2019 to ensure that any revisions made to the wage index and rural adjustment were made on a budget neutral basis. We proposed to calculate an overall budget neutrality factor of 1.0004 for wage index changes by comparing proposed total estimated payments from our simulation model using the proposed FY 2019 IPPS wage indexes to those payments using the FY 2018 IPPS wage indexes, as adopted on a calendar year basis for the OPPS.
For the CY 2019 OPPS/ASC proposed rule, we proposed to maintain the current rural adjustment policy, as discussed in section II.E. of the proposed rule and this final rule with comment period. Therefore, the proposed budget neutrality factor for the rural adjustment was 1.0000.
For the CY 2019 OPPS/ASC proposed rule, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act, as discussed in section II.F. of the proposed rule and this final rule with comment period. We proposed to calculate a CY 2019 budget neutrality adjustment factor for the cancer hospital payment adjustment by comparing estimated total CY 2019 payments under section 1833(t) of the Act, including the proposed CY 2019 cancer hospital payment adjustment, to estimated CY 2019 total payments using the CY 2018 final cancer hospital payment adjustment as required under section 1833(t)(18)(B) of the Act. The CY 2019 proposed estimated payments applying the proposed CY 2019 cancer hospital payment adjustment were the same as estimated payments applying the CY 2018 final cancer hospital payment adjustment. Therefore, we proposed to apply a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment. In accordance with section 16002(b) of the 21st Century Cures Act, we stated in the proposed rule that we are applying a budget neutrality factor calculated as if the proposed cancer hospital adjustment target payment-to-cost ratio was 0.89, not the 0.88 target payment-to-cost ratio we are applying as stated in section II.F. of the proposed rule.
For the CY 2019 OPPS/ASC proposed rule, we estimated that proposed pass-through spending for drugs, biologicals, and devices for CY 2019 would equal approximately $126.7 million, which represented 0.17 percent of total projected CY 2019 OPPS spending. Therefore, the proposed conversion factor would be adjusted by the difference between the 0.04 percent estimate of pass-through spending for CY 2018 and the 0.17 percent estimate of proposed pass-through spending for CY 2019, resulting in a proposed decrease for CY 2019 of 0.13 percent. Proposed estimated payments for outliers would remain at 1.0 percent of total OPPS payments for CY 2019. We estimated for the proposed rule that outlier payments would be 1.02 percent of total OPPS payments in CY 2018; the 1.00 percent for proposed outlier payments in CY 2019 would constitute a 0.02 percent increase in payment in CY 2019 relative to CY 2018.
For the CY 2019 OPPS/ASC proposed rule, we also proposed that hospitals that fail to meet the reporting requirements of the Hospital OQR Program would continue to be subject to a further reduction of 2.0 percentage points to the OPD fee schedule increase factor. For hospitals that fail to meet the requirements of the Hospital OQR Program, we proposed to make all other adjustments discussed above, but use a reduced OPD fee schedule update factor of -0.75 percent (that is, the proposed OPD fee schedule increase factor of 1.25 percent further reduced by 2.0 percentage points). This would result in a proposed reduced conversion factor for CY 2019 of $77.955 for hospitals that fail to meet the Hospital OQR Program requirements (a difference of -1.591 in the conversion factor relative to hospitals that met the requirements).
In summary, for CY 2019, we proposed to amend § 419.32(b)(1)(iv)(B) by adding a new paragraph (
For CY 2019, we proposed to use a conversion factor of $79.546 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the proposed OPD fee schedule increase factor of 1.25 percent for CY 2019, the required proposed wage index budget neutrality adjustment of approximately 1.0004, the proposed cancer hospital payment adjustment of 1.0000, and the proposed adjustment of -0.13 percentage point of projected OPPS spending for the difference in pass-through spending that resulted in a proposed conversion factor for CY 2019 of $79.546.
We invited public comments on these proposals. However, we did not receive any public comments. Therefore, we are finalizing these proposals without modification. For CY 2019, we proposed to continue previously established policies for implementing the cancer hospital payment adjustment described in section 1833(t)(18) of the Act (discussed in section II.F. of this final rule with comment period). Based on the final rule updated data used in calculating the cancer hospital payment adjustment in section II.F. of this final rule with comment period, the target payment-to-cost ratio for the cancer hospital payment adjustment, which was 0.88 for CY 2018, is 0.88 for CY 2019. As a result, we are applying a budget neutrality adjustment factor of 1.0000 to the conversion factor for the cancer hospital payment adjustment.
As a result of these finalized policies, the OPD fee schedule increase factor for the CY 2019 OPPS is 1.35 percent (which reflects the 2.9 percent final estimate of the hospital inpatient market basket percentage increase, less the final 0.8 percentage point MFP adjustment, and less the 0.75 percentage point additional adjustment). For CY 2019, we are using a conversion factor of $79.490 in the calculation of the national unadjusted payment rates for those items and services for which payment rates are calculated using geometric mean costs; that is, the OPD fee schedule increase factor of 1.35 percent for CY 2019, the required wage index budget neutrality adjustment of
Section 1833(t)(2)(D) of the Act requires the Secretary to determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion of the OPPS payment rate is called the OPPS labor-related share. Budget neutrality is discussed in section II.B. of this final rule with comment period.
The OPPS labor-related share is 60 percent of the national OPPS payment. This labor-related share is based on a regression analysis that determined that, for all hospitals, approximately 60 percent of the costs of services paid under the OPPS were attributable to wage costs. We confirmed that this labor-related share for outpatient services is appropriate during our regression analysis for the payment adjustment for rural hospitals in the CY 2006 OPPS final rule with comment period (70 FR 68553). In the CY 2019 OPPS/ASC proposed rule (83 FR 37073), we proposed to continue this policy for the CY 2019 OPPS. We refer readers to section II.H. of this final rule with comment period for a description and an example of how the wage index for a particular hospital is used to determine payment for the hospital.
We did not receive any public comments on this proposal. Therefore, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37073), we are finalizing our proposal, without modification, to continue this policy as discussed above for the CY 2019 OPPS.
As discussed in the claims accounting narrative included with the supporting documentation for this final rule with comment period (which is available via the internet on the CMS website), for estimating APC costs, we standardize 60 percent of estimated claims costs for geographic area wage variation using the same FY 2019 pre-reclassified wage index that the IPPS uses to standardize costs. This standardization process removes the effects of differences in area wage levels from the determination of a national unadjusted OPPS payment rate and copayment amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS April 7, 2000 final rule with comment period (65 FR 18495 and 18545)), the OPPS adopted the final fiscal year IPPS post-reclassified wage index as the calendar year wage index for adjusting the OPPS standard payment amounts for labor market differences. Therefore, the wage index that applies to a particular acute care, short-stay hospital under the IPPS also applies to that hospital under the OPPS. As initially explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we believe that using the IPPS wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually.
The Affordable Care Act contained several provisions affecting the wage index. These provisions were discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74191). Section 10324 of the Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, which defines a frontier State and amended section 1833(t) of the Act to add paragraph (19), which requires a frontier State wage index floor of 1.00 in certain cases, and states that the frontier State floor shall not be applied in a budget neutral manner. We codified these requirements at § 419.43(c)(2) and (c)(3) of our regulations. For the CY 2019 OPPS, we proposed to implement this provision in the same manner as we have since CY 2011. Under this policy, the frontier State hospitals would receive a wage index of 1.00 if the otherwise applicable wage index (including reclassification, the rural floor, and rural floor budget neutrality) is less than 1.00 (as discussed below and in the CY 2019 OPPS/ASC proposed rule (83 FR 37074 through 37076), we proposed not to extend the imputed floor under the OPPS for CY 2019 and subsequent years, consistent with our proposal in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20362 and 20363) not to extend the imputed floor under the IPPS for FY 2019 and subsequent fiscal years). Because the HOPD receives a wage index based on the geographic location of the specific inpatient hospital with which it is associated, we stated that the frontier State wage index adjustment applicable for the inpatient hospital also would apply for any associated HOPD. In the CY 2019 OPPS/ASC proposed rule (83 FR 37074), we referred readers to the FY 2011 through FY 2018 IPPS/LTCH PPS final rules for discussions regarding this provision, including our methodology for identifying which areas meet the definition of “frontier States” as provided for in section 1886(d)(3)(E)(iii)(II) of the Act: For FY 2011, 75 FR 50160 through 50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR 53369 through 53370; for FY 2014, 78 FR 50590 through 50591; for FY 2015, 79 FR 49971; for FY 2016, 80 FR 49498; for FY 2017, 81 FR 56922; and for FY 2018, 82 FR 38142.
We did not receive any public comments on this proposal. Therefore, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37074), we are finalizing our proposal to implement the frontier State floor under the OPPS in the same manner as we have since CY 2011.
In addition to the changes required by the Affordable Care Act, we note that the FY 2019 IPPS wage indexes continue to reflect a number of adjustments implemented over the past few years, including, but not limited to, reclassification of hospitals to different geographic areas, the rural floor provisions, an adjustment for occupational mix, and an adjustment to the wage index based on commuting patterns of employees (the out-migration adjustment). We refer readers to the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20353 through 20377) and final rule (83 FR 41362 through 41390) for a detailed discussion of all proposed and final changes to the FY 2019 IPPS wage indexes. We note that, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20362 through 20363), we proposed not to apply the imputed floor to the IPPS wage index computations for FY 2019 and subsequent fiscal years. Consistent with this, we proposed in the CY 2019 OPPS/ASC proposed rule (83 FR 37074) not to extend the imputed floor policy under the OPPS beyond December 31, 2018 (the date the imputed floor policy is set to expire under the OPPS). In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41376 through 41380), we finalized our proposal to not extend the imputed floor policy under the IPPS. We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41376 through 41380) for a detailed discussion of our rationale for discontinuing the imputed floor under the IPPS.
Summarized below are the comments we received regarding our proposal to discontinue the imputed floor under the OPPS, along with our response.
After consideration of the public comments we received, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37074), consistent with the FY 2019 IPPS/LTCH PPS final rule, we are finalizing our proposal not to extend the imputed floor policy under the OPPS beyond December 31, 2018.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963) and in each subsequent IPPS/LTCH PPS final rule, including the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362 through 41363), the Office of Management and Budget (OMB) issued revisions to the labor market area delineations on February 28, 2013 (based on 2010 Decennial Census data), that included a number of significant changes such as new Core Based Statistical Areas (CBSAs), urban counties that became rural, rural counties that became urban, and existing CBSAs that were split apart (OMB Bulletin 13-01). This bulletin can be found at:
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 the 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 No. 17-01 is available on the OMB website at
In the CY 2019 OPPS/ASC proposed rule (83 FR 37075), we provided the proposed FY 2019 IPPS unadjusted and occupational mix adjusted national average hourly wages and the estimated CBSA average hourly wages. Taking the estimated average hourly wage of new CBSA 46300 and dividing by the proposed national average hourly wage resulted in the estimated wage indexes shown in the table in the proposed rule (83 FR 37075), which is also provided below.
As we stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41363), for the FY 2019 IPPS wage indexes, we used 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, and incorporated the revision from OMB Bulletin No. 17-01 in the final FY 2019 IPPS wage index, ratesetting, and tables. Similarly, in the CY 2019 OPPS/ASC proposed rule (82 FR 37075), for the proposed CY 2019 OPPS wage indexes, we proposed to use the OMB
We did not receive any public comments on our proposals. Accordingly, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37074 through 37075), we are finalizing the proposal, without modification, to use the OMB delineations that were adopted beginning with CY 2015 to calculate the area wage indexes, with updates as reflected in OMB Bulletin Nos. 13-01, 15-01, and 17-01, and have incorporated the revision from OMB Bulletin No. 17-01 in the final CY 2019 OPPS wage index, ratesetting, and tables.
CBSAs are made up of one or more constituent counties. Each CBSA and constituent county has its own unique identifying codes. The FY 2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different lists of codes to identify counties: Social Security Administration (SSA) codes and Federal Information Processing Standard (FIPS) codes. Historically, CMS listed and used SSA and FIPS county codes to identify and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS wage indexes. However, the SSA county codes are no longer being maintained and updated, although the FIPS codes continue to be maintained by the U.S. Census Bureau. 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. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking counties to CBSAs for the IPPS wage index, we finalized our proposal to discontinue the use of the SSA county codes and begin using only the FIPS county codes. Similarly, for the purposes of crosswalking counties to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59260), we finalized our proposal to discontinue the use of SSA county codes and begin using only the FIPS county codes for the purposes of crosswalking counties to CBSAs for the OPPS wage index.
The Census Bureau maintains a complete list of changes to counties or county equivalent entities on the website at:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37075), we proposed to use the FY 2019 hospital IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount for CY 2019. Therefore, we stated in the proposed rule that any adjustments for the FY 2019 IPPS post-reclassified wage index would be reflected in the final CY 2019 OPPS wage index. (We refer readers to the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20353 through 20377) and final rule (83 FR 41362 through 41390), and the proposed and final FY 2019 hospital wage index files posted on the CMS website.) We stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37075) that we believe that using the IPPS wage index as the source of an adjustment factor for the OPPS is reasonable and logical, given the inseparable, subordinate status of the HOPD within the hospital overall.
Summarized below are the comments we received regarding this proposal, along with our response.
After consideration of the public comments we received, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37075), we are finalizing our proposal, without modification, to use the FY 2019 hospital IPPS post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount for CY 2019. Therefore, any adjustments for the FY 2019 IPPS post-reclassified wage index are reflected in the final CY 2019 OPPS wage index. As stated earlier, we continue to believe that using the final fiscal year IPPS post-reclassified wage index, inclusive of any adjustments, as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount is reasonable and logical, given the
Hospitals that are paid under the OPPS, but not under the IPPS, do not have an assigned hospital wage index under the IPPS. Therefore, for non-IPPS hospitals paid under the OPPS, it is our longstanding policy to assign the wage index that would be applicable if the hospital were paid under the IPPS, based on its geographic location and any applicable wage index adjustments. In the CY 2019 OPPS/ASC proposed rule (83 FR 37075), we proposed to continue this policy for CY 2019, and included a brief summary of the major proposed FY 2019 IPPS wage index policies and adjustments that we proposed to apply to these hospitals under the OPPS for CY 2019, which we have summarized below. We invited public comments on these proposals. We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362 through 41390) for a detailed discussion of the changes to the FY 2019 IPPS wage indexes.
It has been our longstanding policy to allow non-IPPS hospitals paid under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration county (section 505 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)). Applying this adjustment is consistent with our policy of adopting IPPS wage index policies for hospitals paid under the OPPS. We note that, because non-IPPS hospitals cannot reclassify, they are eligible for the out-migration wage adjustment if they are located in a section 505 out-migration county. This is the same out-migration adjustment policy that applies if the hospital were paid under the IPPS. For CY 2019, we proposed to continue our policy of allowing non-IPPS hospitals paid under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration county (section 505 of the MMA).
We did not receive any public comments on these proposals. Therefore, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37075 through 37076), we are finalizing these proposals without modification.
As stated earlier, in the FY 2015 IPPS/LTCH PPS final rule, we adopted the OMB labor market area delineations issued by OMB in OMB Bulletin No. 13-01 on February 28, 2013, based on standards published on June 28, 2010 (75 FR 37246 through 37252) and the 2010 Census data to delineate labor market areas for purposes of the IPPS wage index. For IPPS wage index purposes, for hospitals that were located in urban CBSAs in FY 2014 but were designated as rural under these revised OMB labor market area delineations, we generally assigned them the urban wage index value of the CBSA in which they were physically located for FY 2014 for a period of 3 fiscal years (79 FR 49957 through 49960). To be consistent, we applied the same policy to hospitals paid under the OPPS but not under the IPPS so that such hospitals maintained the wage index of the CBSA in which they were physically located for FY 2014 for 3 calendar years (until December 31, 2017). Because this 3-year transition ended at the end of CY 2017, it was not applied beginning in CY 2018.
In addition, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20362 through 20363), we proposed not to extend the imputed floor policy under the IPPS for FY 2019 and subsequent fiscal years, and in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41376 through 41380), we finalized this proposal. Similarly, in the CY 2019 OPPS/ASC proposed rule, we proposed not to extend the imputed floor policy under the OPPS beyond December 31, 2018 (the date the policy is set to expire). The comments we received on this proposal, along with our response, are summarized above. As discussed earlier, consistent with the FY 2019 IPPS/LTCH PPS final rule, in this CY 2019 OPPS/ASC final rule with comment period, we are finalizing our proposal not to extend the imputed floor policy under the OPPS beyond December 31, 2018.
For CMHCs, for CY 2019, we proposed to continue to calculate the wage index by using the post-reclassification IPPS wage index based on the CBSA where the CMHC is located. As with OPPS hospitals and for the same reasons, for CMHCs previously located in urban CBSAs that were designated as rural under the revised OMB labor market area delineations in OMB Bulletin No. 13-01, we finalized a policy to maintain the urban wage index value of the CBSA in which they were physically located for CY 2014 for 3 calendar years (until December 31, 2017). Because this 3-year transition ended at the end of CY 2017, it was not applied beginning in CY 2018. We proposed that the wage index that would apply to CMHCs for CY 2019 would include the rural floor adjustment, but would not include the imputed floor adjustment because, as discussed above, we proposed to not extend the imputed floor policy beyond December 31, 2018. Also, we proposed that the wage index that would apply to CMHCs would not include the out-migration adjustment because that adjustment only applies to hospitals.
We did not receive any public comments on these proposals. Therefore, for the reasons discussed above and in the CY 2019 OPPS/ASC proposed rule (83 FR 37076), we are finalizing these proposals without modification.
Table 2 associated with the FY 2019 IPPS/LTCH PPS final rule (available via the internet on the CMS website at:
In addition to using CCRs to estimate costs from charges on claims for ratesetting, CMS uses overall hospital-specific CCRs calculated from the hospital's most recent cost report to determine outlier payments, payments for pass-through devices, and monthly interim transitional corridor payments under the OPPS during the PPS year. MACs cannot calculate a CCR for some hospitals because there is no cost report available. For these hospitals, CMS uses the statewide average default CCRs to determine the payments mentioned earlier until a hospital's MAC is able to calculate the hospital's actual CCR from its most recently submitted Medicare cost report. These hospitals include, but are not limited to, hospitals that are new, hospitals that have not accepted assignment of an existing hospital's provider agreement, and hospitals that have not yet submitted a cost report. CMS also uses the statewide average default CCRs to determine payments for hospitals that appear to have a biased CCR (that is, the CCR falls outside the predetermined ceiling threshold for a valid CCR) or for hospitals in which the most recent cost report reflects an all-
In the CY 2019 OPPS/ASC proposed rule (83 FR 37076), we proposed to update the default ratios for CY 2019 using the most recent cost report data. We discussed our policy for using default CCRs, including setting the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599) in the context of our adoption of an outlier reconciliation policy for cost reports beginning on or after January 1, 2009. For detail on our process for calculating the statewide average CCRs, we referred readers to the CY 2019 OPPS proposed rule Claims Accounting Narrative that is posted on the CMS website. Table 5 published in the proposed rule (83 FR 37076 through 37078) listed the proposed statewide average default CCRs for OPPS services furnished on or after January 1, 2019, based on proposed rule data.
We did not receive any public comments on our proposal to use statewide average default CCRs if a MAC cannot calculate a CCR for a hospital and to use these CCRs to adjust charges to costs on claims data for setting the final CY 2019 OPPS relative payment weights. Therefore, we are finalizing our proposal without modification.
Table 9 below lists the statewide average default CCRs for OPPS services furnished on or after January 1, 2019, based on final rule data.
In the CY 2006 OPPS final rule with comment period (70 FR 68556), we finalized a payment increase for rural sole community hospitals (SCHs) of 7.1 percent for all services and procedures paid under the OPPS, excluding drugs, biologicals, brachytherapy sources, and devices paid under the pass-through payment policy, in accordance with section 1833(t)(13)(B) of the Act, as added by section 411 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173). Section 1833(t)(13) of the Act provided the Secretary the authority to make an adjustment to OPPS payments for rural hospitals, effective January 1, 2006, if justified by a study of the difference in costs by APC between hospitals in rural areas and hospitals in urban areas. Our analysis
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010 and 68227), for purposes of receiving this rural adjustment, we revised § 419.43(g) of the regulations to clarify that essential access community hospitals (EACHs) also are eligible to receive the rural SCH adjustment, assuming these entities otherwise meet the rural adjustment criteria. Currently, two hospitals are classified as EACHs, and as of CY 1998, under section 4201(c) of Pub. L. 105-33, a hospital can no longer become newly classified as an EACH.
This adjustment for rural SCHs is budget neutral and applied before calculating outlier payments and copayments. We stated in the CY 2006 OPPS final rule with comment period (70 FR 68560) that we would not reestablish the adjustment amount on an annual basis, but we may review the adjustment in the future and, if appropriate, would revise the adjustment. We provided the same 7.1 percent adjustment to rural SCHs, including EACHs, again in CYs 2008 through 2018. Further, in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated the regulations at § 419.43(g)(4) to specify, in general terms, that items paid at charges adjusted to costs by application of a hospital-specific CCR are excluded from the 7.1 percent payment adjustment.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37078), for the CY 2019 OPPS, we proposed to continue the current policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs. We invited public comment on our proposal.
In addition, we proposed to maintain this 7.1 percent payment adjustment for the years after CY 2019 until we identify data in the future that would support a change to this payment adjustment. We invited public comments on our proposal.
After consideration of the public comments we received, we are implementing our proposals, without modification, to continue the current policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs. In addition, we will maintain this 7.1 percent payment adjustment for the years after CY 2019 until our data support a change to this payment adjustment.
Since the inception of the OPPS, which was authorized by the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid the 11 hospitals that meet the criteria for cancer hospitals identified in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered outpatient hospital services. These cancer hospitals are exempted from payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), Congress established section 1833(t)(7) of the Act, “Transitional Adjustment to Limit Decline in Payment,” to determine OPPS payments to cancer and children's hospitals based on their pre-BBA payment amount (often referred to as “held harmless”).
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer hospital receives the full amount of the difference between payments for covered outpatient services under the OPPS and a “pre-BBA amount.” That is, cancer hospitals are permanently held harmless to their “pre-BBA amount,”
Section 3138 of the Affordable Care Act amended section 1833(t) of the Act by adding a new paragraph (18), which instructs the Secretary to conduct a study to determine if, under the OPPS, outpatient costs incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of the Act with respect to APC groups exceed outpatient costs incurred by other hospitals furnishing services under section 1833(t) of the Act, as determined appropriate by the Secretary. Section 1833(t)(18)(A) of the Act requires the Secretary to take into consideration the cost of drugs and biologicals incurred by cancer hospitals and other hospitals. Section 1833(t)(18)(B) of the Act provides that, if the Secretary determines that cancer hospitals' costs are higher than those of other hospitals, the Secretary shall provide an appropriate adjustment under section 1833(t)(2)(E) of the Act to reflect these higher costs. In 2011, after conducting the study required by section 1833(t)(18)(A) of the Act, we determined that outpatient costs incurred by the 11 specified cancer hospitals were greater than the costs incurred by other OPPS hospitals. For a complete discussion regarding the cancer hospital cost study, we refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment adjustment to the 11 specified cancer hospitals that reflects their higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74202 through 74206). Specifically, we adopted a policy to provide additional payments to the cancer hospitals so that each cancer hospital's final PCR for services provided in a given calendar year is equal to the weighted average PCR (which we refer to as the “target PCR”) for other hospitals paid under the OPPS. The target PCR is set in advance of the calendar year and is calculated using the most recently submitted or settled cost report data that are available at the time of final rulemaking for the calendar year. The amount of the payment adjustment is made on an aggregate basis at cost report settlement. We note that the changes made by section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs are assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period. For CYs 2012 and 2013, the target PCR for purposes of the cancer hospital payment adjustment was 0.91. For CY 2014, the target PCR for purposes of the cancer hospital payment adjustment was 0.89. For CY 2015, the target PCR was 0.90. For CY 2016, the target PCR was 0.92, as discussed in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70362 through 70363). For CY 2017, the target PCR was 0.91, as discussed in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79603 through 79604). For CY 2018, the target PCR was 0.88, as discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59265 through 59266).
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255) amended section 1833(t)(18) of the Act by adding subparagraph (C), which requires that in applying 42 CFR 419.43(i) (that is, the payment adjustment for certain cancer hospitals) for services furnished on or after January 1, 2018, the target PCR adjustment be reduced by 1.0 percentage point less than what would otherwise apply. Section 16002(b) also provides that, in addition to the percentage reduction, the Secretary may consider making an additional percentage point reduction to the target PCR that takes into account payment rates for applicable items and services described under section 1833(t)(21)(C) of the Act for hospitals that are not cancer hospitals described under section 1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality adjustment under section 1833(t) of the Act, the Secretary shall not take into account the reduced expenditures that result from application of section 1833(t)(18)(C) of the Act.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37079), for CY 2019, we proposed to provide additional payments to the 11 specified cancer hospitals so that each cancer hospital's final PCR is equal to the weighted average PCR (or “target PCR”) for the other OPPS hospitals using the most recent submitted or settled cost report data that were available at the time of the development of the proposed rule, reduced by 1.0 percentage point, to comply with section 16002(b) of the 21st Century Cures Act. We invited public comment on our proposal.
We did not propose an additional reduction beyond the 1.0 percentage point reduction required by section 16002(b) for CY 2019. To calculate the proposed CY 2019 target PCR, we used the same extract of cost report data from HCRIS, as discussed in section II.A. of the proposed rule and this final rule with comment period, used to estimate costs for the CY 2019 OPPS. Using these cost report data, we included data from Worksheet E, Part B, for each hospital, using data from each hospital's most recent cost report, whether as submitted or settled.
We then limited the dataset to the hospitals with CY 2017 claims data that we used to model the impact of the proposed CY 2019 APC relative payment weights (3,676 hospitals) because it is appropriate to use the same set of hospitals that are being used to calibrate the modeled CY 2019 OPPS. The cost report data for the hospitals in this dataset were from cost report periods with fiscal year ends ranging from 2014 to 2017. We then removed the cost report data of the 43 hospitals located in Puerto Rico from our dataset because we did not believe their cost structure reflected the costs of most hospitals paid under the OPPS, and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 18 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to a proposed analytic file of 3,615 hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated that, on average, the OPPS payments to other hospitals furnishing services under the OPPS were approximately 89 percent of reasonable cost (weighted average PCR of 0.89). Therefore, after applying the
We did not receive any public comments on our proposals. Therefore, we are finalizing our proposed cancer hospital payment adjustment methodology without modification. For this final rule with comment period, we are using the most recent cost report data through June 30, 2018 to update the adjustment. This update yields a target PCR of 0.89. We limited the dataset to the hospitals with CY 2017 claims data that we used to model the impact of the CY 2019 APC relative payment weights (3,696 hospitals) because it is appropriate to use the same set of hospitals that we are using to calibrate the modeled CY 2019 OPPS. The cost report data for the hospitals in the dataset were from cost report periods with fiscal year ends ranging from 2010 to 2018. We then removed the cost report data of the 46 hospitals located in Puerto Rico from our dataset because we do not believe that their cost structure reflects the costs of most hospitals paid under the OPPS and, therefore, their inclusion may bias the calculation of hospital-weighted statistics. We also removed the cost report data of 22 hospitals because these hospitals had cost report data that were not complete (missing aggregate OPPS payments, missing aggregate cost data, or missing both), so that all cost reports in the study would have both the payment and cost data necessary to calculate a PCR for each hospital, leading to an analytic file of 3,628 hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated a target PCR of 0.89. Therefore, after applying the 1.0 percentage point reduction as required by section 16002(b) of the 21st Century Cures Act, we are finalizing that the payment amount associated with the cancer hospital payment adjustment to be determined at cost report settlement will be the additional payment needed to result in a PCR equal to 0.88 for each cancer hospital. Table 10 below shows the estimated percentage increase in OPPS payments to each cancer hospital for CY 2019, due to the cancer hospital payment adjustment policy. The actual amount of the CY 2019 cancer hospital payment adjustment for each cancer hospital will be determined at cost report settlement and will depend on each hospital's CY 2019 payments and costs. We note that the requirements contained in section 1833(t)(18) of the Act do not affect the existing statutory provisions that provide for TOPs for cancer hospitals. The TOPs will be assessed, as usual, after all payments, including the cancer hospital payment adjustment, have been made for a cost reporting period.
The OPPS provides outlier payments to hospitals to help mitigate the financial risk associated with high-cost and complex procedures, where a very costly service could present a hospital with significant financial loss. As explained in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66832 through 66834), we set our projected target for aggregate outlier payments at 1.0 percent of the estimated aggregate total payments under the OPPS for the prospective year. Outlier payments are provided on a service-by-service basis when the cost of a service exceeds the APC payment amount multiplier threshold (the APC payment amount multiplied by a certain amount) as well as the APC payment amount plus a fixed-dollar amount threshold (the APC payment plus a certain amount of dollars). In CY 2018, the outlier threshold was met when the hospital's cost of furnishing a service exceeded 1.75 times (the multiplier threshold) the APC payment amount and exceeded the APC payment amount plus $4,150 (the fixed-dollar amount threshold) (82 FR 59267 through 59268). If the cost of a service exceeds both the multiplier threshold and the fixed-dollar threshold, the outlier payment is calculated as 50 percent of the amount by which the cost of furnishing the service exceeds 1.75 times the APC payment amount. Beginning with CY 2009 payments, outlier payments are subject to a reconciliation process similar to the IPPS outlier reconciliation process for cost reports, as discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599).
It has been our policy to report the actual amount of outlier payments as a percent of total spending in the claims being used to model the OPPS. Our estimate of total outlier payments as a percent of total CY 2017 OPPS payments, using CY 2017 claims available for the CY 2019 OPPS/ASC proposed rule (83 FR 37080 through 37081), was approximately 1.0 percent of the total aggregated OPPS payments. Therefore, for CY 2017, we estimated that we paid the outlier target of 1.0 percent of total aggregated OPPS payments. Using an updated claims dataset for this CY 2019 OPPS final rule with comment period, we estimate that we paid approximately 1.12 percent of the total aggregated OPPS payments in outliers for CY 2017.
For the CY 2019 OPPS/ASC proposed rule, using CY 2017 claims data and CY 2018 payment rates, we estimate that the aggregate outlier payments for CY 2018 would be approximately 1.02 percent of the total CY 2018 OPPS payments. We provided estimated CY 2019 outlier payments for hospitals and CMHCs with claims included in the claims data that we used to model impacts in the Hospital-Specific Impacts—Provider-Specific Data file on the CMS website at:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37080 through 37081), for CY 2019, we proposed to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS. We proposed that a portion of that 1.0 percent, an amount equal to less than 0.01 percent of outlier payments (or 0.0001 percent of total OPPS payments), would be allocated to CMHCs for PHP outlier payments. This is the amount of estimated outlier payments that would result from the proposed CMHC outlier threshold as a proportion of total estimated OPPS outlier payments. As discussed in section VIII.C. of the CY 2019 OPPS/ASC proposed rule (83 FR 37134 through 37136), we proposed to continue our longstanding policy that if a CMHC's cost for partial hospitalization services, paid under APC 5853 (Partial Hospitalization for CMHCs), exceeds 3.40 times the payment rate for proposed APC 5853, the outlier payment would be calculated as 50 percent of the amount by which the cost exceeds 3.40 times the proposed APC 5853 payment rate.
For further discussion of CMHC outlier payments, we refer readers to section VIII.C. of the proposed rule and this final rule with comment period.
To ensure that the estimated CY 2019 aggregate outlier payments would equal 1.0 percent of estimated aggregate total payments under the OPPS, we proposed that the hospital outlier threshold be set so that outlier payments would be triggered when a hospital's cost of furnishing a service exceeds 1.75 times the APC payment amount and exceeds the APC payment amount plus $4,600.
We calculated the proposed fixed-dollar threshold of $4,600 using the standard methodology most recently used for CY 2018 (82 FR 59267 through 59268). For purposes of estimating outlier payments for the proposed rule, we used the hospital-specific overall ancillary CCRs available in the April 2018 update to the Outpatient Provider-Specific File (OPSF). The OPSF contains provider-specific data, such as the most current CCRs, which are maintained by the MACs and used by the OPPS Pricer to pay claims. The claims that we use to model each OPPS update lag by 2 years.
In order to estimate the CY 2019 hospital outlier payments for the proposed rule, we inflated the charges on the CY 2017 claims using the same inflation factor of 1.085868 that we used to estimate the IPPS fixed-dollar outlier threshold for the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20581). We used an inflation factor of 1.04205 to estimate CY 2018 charges from the CY 2017 charges reported on CY 2017 claims. The methodology for determining this charge inflation factor is discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 20581). As we stated in the CY 2005 OPPS final rule with comment period (69 FR 65845), we believe that the use of these charge inflation factors is appropriate for the OPPS because, with the exception of the inpatient routine service cost centers, hospitals use the same ancillary and outpatient cost centers to capture costs and charges for inpatient and outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68011), we are concerned that we could systematically overestimate the OPPS hospital outlier threshold if we did not apply a CCR inflation adjustment factor. Therefore, we proposed to apply the same CCR inflation adjustment factor that we proposed to apply for the FY 2019 IPPS outlier calculation to the CCRs used to simulate the proposed CY 2019 OPPS outlier payments to determine the fixed-dollar threshold. Specifically, for CY 2019, we proposed to apply an adjustment factor of 0.987842 to the CCRs that were in the April 2018 OPSF to trend them forward from CY 2018 to CY 2019. The methodology for calculating the proposed adjustment is discussed in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20582).
To model hospital outlier payments for the proposed rule, we applied the overall CCRs from the April 2018 OPSF after adjustment (using the proposed CCR inflation adjustment factor of 0.987842 to approximate CY 2019 CCRs) to charges on CY 2017 claims that were adjusted (using the proposed charge inflation factor of 1.085868 to approximate CY 2019 charges). We simulated aggregated CY 2019 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiplier threshold
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to report data required for the quality measures selected by the Secretary, in the form and manner required by the Secretary under section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point reduction to their OPD fee schedule increase factor; that is, the annual payment update factor. The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that will apply to certain outpatient items and services furnished by hospitals that are required to report outpatient quality data and that fail to meet the Hospital OQR Program requirements. For hospitals that fail to meet the Hospital OQR Program requirements, as we proposed, we are continuing the policy that we implemented in CY 2010 that the hospitals' costs will be compared to the reduced payments for purposes of outlier eligibility and payment calculation. For more information on the Hospital OQR Program, we referred readers to section XIII. of this final rule with comment period.
We do not believe that it is appropriate to transition towards implementation of the CY 2019 OPPS fixed-dollar outlier threshold in the manner described by the commenter. The fixed-dollar outlier threshold is specifically developed in order to best estimate aggregate outlier payments of 1 percent of the OPPS. In addition, transitioning in this suggested manner would remove the consideration of updated data, which is critical in best estimating the fixed-dollar threshold that would result in total OPPS outliers being 1 percent of aggregate OPPS payments. Finally, we note that the increase in the fixed-dollar outlier threshold does not necessarily result in a decrease in aggregate OPPS outlier payments. Rather, it ensures that the aggregate pool remains at 1 percent and that outlier payments are directed towards the high cost and complex procedures associated with potential financial risk.
After consideration of the public comment we received, we are finalizing our proposal, without modification, to continue our policy of estimating outlier payments to be 1.0 percent of the estimated aggregate total payments under the OPPS and to use our established methodology to set the OPPS outlier fixed-dollar loss threshold for CY 2019.
Consistent with historical practice, we used updated data for this final rule with comment period for outlier calculations. For CY 2019, we are applying the overall CCRs from the October 2018 OPSF file after adjustment (using the CCR inflation adjustment factor of 0.9813 to approximate CY 2019 CCRs) to charges on CY 2017 claims that were adjusted using a charge inflation factor of 1.0434 to approximate CY 2019 charges. These are the same CCR adjustment and charge inflation factors that were used to set the IPPS fixed-dollar thresholds for the FY 2019 IPPS/LTCH PPS final rule (83 FR 41722). We simulated aggregated CY 2019 hospital outlier payments using these costs for several different fixed-dollar thresholds, holding the 1.75 multiple-threshold constant and assuming that outlier payments will continue to be made at 50 percent of the amount by which the cost of furnishing the service would exceed 1.75 times the APC payment amount, until the total outlier payment equaled 1.0 percent of aggregated estimated total CY 2019 OPPS payments. We estimate that a fixed-dollar threshold of $4,825 combined with the multiple threshold of 1.75 times the APC payment rate, will allocated the 1.0 percent of aggregated total OPPS payments to outlier payments.
For CMHCs, if a CMHC's cost for partial hospitalization services, paid under PAC 5853, exceeds 3.40 times the payment rate the outlier payment will be calculated as 50 percent of the amount by which the cost exceeds 3.40 times APC 5853.
The basic methodology for determining prospective payment rates for HOPD services under the OPPS is set forth in existing regulations at 42 CFR part 419, subparts C and D. For this CY 2019 OPPS/ASC final rule with comment period, the payment rate for most services and procedures for which payment is made under the OPPS is the product of the conversion factor calculated in accordance with section II.B. of this final rule with comment period and the relative payment weight determined under section II.A. of this final rule with comment period. Therefore, the national unadjusted payment rate for most APCs contained in Addendum A to this final rule with comment period (which is available via the internet on the CMS website) and for most HCPCS codes to which separate payment under the OPPS has been assigned in Addendum B to this final rule with comment period (which is available via the internet on the CMS website) was calculated by multiplying the CY 2019 scaled weight for the APC by the CY 2019 conversion factor.
We note that section 1833(t)(17) of the Act, which applies to hospitals as defined under section 1886(d)(1)(B) of the Act, requires that hospitals that fail to submit data required to be submitted on quality measures selected by the Secretary, in the form and manner and at a time specified by the Secretary, incur a reduction of 2.0 percentage
In the CY 2019 OPPS/ASC proposed rule (83 FR 37082), we demonstrated the steps to determine the APC payments that will be made in a calendar year under the OPPS to a hospital that fulfills the Hospital OQR Program requirements and to a hospital that fails to meet the Hospital OQR Program requirements for a service that has any of the following status indicator assignments: “J1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “Q4”, “R”, “S”, “T”, “U”, or “V” (as defined in Addendum D1 to the proposed rule, which is available via the internet on the CMS website), in a circumstance in which the multiple procedure discount does not apply, the procedure is not bilateral, and conditionally packaged services (status indicator of “Q1” and “Q2”) qualify for separate payment. We noted that, although blood and blood products with status indicator “R” and brachytherapy sources with status indicator “U” are not subject to wage adjustment, they are subject to reduced payments when a hospital fails to meet the Hospital OQR Program requirements.
We did not receive any public comments specific to the steps under the methodology that we included in the proposed rule to determine the APC payments for CY 2019. Therefore, we are finalizing use of the steps in the methodology specified below, as we proposed, to demonstrate the calculation of the final CY 2019 OPPS payments using the same parameters.
Individual providers interested in calculating the payment amount that they will receive for a specific service from the national unadjusted payment rates presented in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website) should follow the formulas presented in the following steps. For purposes of the payment calculations below, we refer to the national unadjusted payment rate for hospitals that meet the requirements of the Hospital OQR Program as the “full” national unadjusted payment rate. We refer to the national unadjusted payment rate for hospitals that fail to meet the requirements of the Hospital OQR Program as the “reduced” national unadjusted payment rate. The reduced national unadjusted payment rate is calculated by multiplying the reporting ratio of 0.980 times the “full” national unadjusted payment rate. The national unadjusted payment rate used in the calculations below is either the full national unadjusted payment rate or the reduced national unadjusted payment rate, depending on whether the hospital met its Hospital OQR Program requirements in order to receive the full CY 2019 OPPS fee schedule increase factor.
The formula below is a mathematical representation of Step 1 and identifies the labor-related portion of a specific payment rate for a specific service.
The formula below is a mathematical representation of Step 4 and adjusts the labor-related portion of the national unadjusted payment rate for the specific service by the wage index.
The formula below is a mathematical representation of Step 5 and calculates the remaining portion of the national payment rate, the amount not
The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs.
We are providing examples below of the calculation of both the full and reduced national unadjusted payment rates that will apply to certain outpatient items and services performed by hospitals that meet and that fail to meet the Hospital OQR Program requirements, using the steps outlined above. For purposes of this example, we used a provider that is located in Brooklyn, New York that is assigned to CBSA 35614. This provider bills one service that is assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). The CY 2019 full national unadjusted payment rate for APC 5071 is approximately $579.34. The reduced national unadjusted payment rate for APC 5071 for a hospital that fails to meet the Hospital OQR Program requirements is approximately $567.75. This reduced rate is calculated by multiplying the reporting ratio of 0.980 by the full unadjusted payment rate for APC 5071.
The FY 2019 wage index for a provider located in CBSA 35614 in New York is 1.2853. The labor-related portion of the full national unadjusted payment is approximately $446.77 (.60 * $579.34 * 1.2853). The labor-related portion of the reduced national unadjusted payment is approximately $437.84 (.60 * 567.75 * 1.2853). The nonlabor-related portion of the full national unadjusted payment is approximately $231.74 (.40 * $579.34). The nonlabor-related portion of the reduced national unadjusted payment is approximately $227.10 (.40 * $567.75). The sum of the labor-related and nonlabor-related portions of the full national adjusted payment is approximately $678.51 ($446.77 + $231.74). The sum of the portions of the reduced national adjusted payment is approximately $664.94 ($437.84 + $227.10).
Section 1833(t)(3)(B) of the Act requires the Secretary to set rules for determining the unadjusted copayment amounts to be paid by beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of the Act specifies that the Secretary must reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed a specified percentage. As specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective copayment rate for a covered OPD service paid under the OPPS in CY 2006, and in calendar years thereafter, shall not exceed 40 percent of the APC payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted copayment amount cannot be less than 20 percent of the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure (including items such as drugs and biologicals) performed in a year to the amount of the inpatient hospital deductible for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure. Our discussion of the changes made by the Affordable Care Act with regard to copayments for preventive services furnished on and after January 1, 2011, may be found in section XII.B. of the CY 2011 OPPS/ASC final rule with comment period (75 FR 72013).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37083), for CY 2019, we proposed to determine copayment amounts for new and revised APCs using the same methodology that we implemented beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule with comment period (68 FR 63458).) In addition, we proposed to use the same standard rounding principles that we have historically used in instances where the application of our standard copayment methodology would result in a copayment amount that is less than 20 percent and cannot be rounded, under standard rounding principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in which we discuss our rationale for applying these rounding principles.) The proposed national unadjusted copayment amounts for services payable under the OPPS that would be effective January 1, 2019 were included in Addenda A and B to the proposed rule (which are available via the internet on the CMS website).
As discussed in section XIII.E. of the proposed rule and this final rule with comment period, for CY 2019, the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies will equal the product of the reporting ratio and the national unadjusted copayment, or the product of the reporting ratio and the minimum unadjusted copayment, respectively, for the service.
We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates due to updated cost report and claims data, and any changes to the OPPS cost modeling process. However, as described in the CY 2004 OPPS final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR 63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459), we adopted a new methodology to calculate unadjusted copayment amounts in situations including reorganizing APCs, and we finalized the following rules to determine copayment amounts in CY 2004 and subsequent years.
• When an APC group consists solely of HCPCS codes that were not paid under the OPPS the prior year because they were packaged or excluded or are new codes, the unadjusted copayment amount would be 20 percent of the APC payment rate.
• If a new APC that did not exist during the prior year is created and consists of HCPCS codes previously assigned to other APCs, the copayment amount is calculated as the product of the APC payment rate and the lowest
• If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is equal to or
• If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is
• If HCPCS codes are added to or deleted from an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in a decrease in the coinsurance percentage for the reconfigured APC, the copayment amount would not change (unless retaining the copayment amount would result in a coinsurance rate less than 20 percent).
• If HCPCS codes are added to an APC and, after recalibrating its relative payment weight, holding its unadjusted copayment amount constant results in an increase in the coinsurance percentage for the reconfigured APC, the copayment amount would be calculated as the product of the payment rate of the reconfigured APC and the lowest coinsurance percentage of the codes being added to the reconfigured APC.
We noted in the CY 2004 OPPS final rule with comment period that we would seek to lower the copayment percentage for a service in an APC from the prior year if the copayment percentage was greater than 20 percent. We noted that this principle was consistent with section 1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the national unadjusted coinsurance rate so that beneficiary liability will eventually equal 20 percent of the OPPS payment rate for all OPPS services to which a copayment applies, and with section 1833(t)(3)(B) of the Act, which achieves a 20-percent copayment percentage when fully phased in and gives the Secretary the authority to set rules for determining copayment amounts for new services. We further noted that the use of this methodology would, in general, reduce the beneficiary coinsurance rate and copayment amount for APCs for which the payment rate changes as the result of the reconfiguration of APCs and/or recalibration of relative payment weights (68 FR 63459).
Individuals interested in calculating the national copayment liability for a Medicare beneficiary for a given service provided by a hospital that met or failed to meet its Hospital OQR Program requirements should follow the formulas presented in the following steps.
The formula below is a mathematical representation of Step 1 and calculates the national copayment as a percentage of national payment for a given service.
The formula below is a mathematical representation of Step 3 and applies the beneficiary payment percentage to the adjusted payment rate for a service calculated under section II.H. of this final rule with comment period, with and without the rural adjustment, to calculate the adjusted beneficiary copayment for a given service.
The unadjusted copayments for services payable under the OPPS that will be effective January 1, 2019, are shown in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website). We note that the national unadjusted payment rates and copayment rates shown in Addenda A and B to this final rule with comment period reflect the CY 2019 OPD fee schedule increase factor discussed in section II.B. of this final rule with comment period.
In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure performed in a year to the amount of the inpatient hospital deductible for that year.
CPT and Level II HCPCS codes are used to report procedures, services, items, and supplies under the hospital OPPS. Specifically, CMS recognizes the following codes on OPPS claims:
• Category I CPT codes, which describe surgical procedures and medical services;
• Category III CPT codes, which describe new and emerging technologies, services, and procedures; and
• Level II HCPCS codes, which are used primarily to identify products, supplies, temporary procedures, and services not described by CPT codes.
CPT codes are established by the American Medical Association (AMA) and the Level II HCPCS codes are established by CMS. These codes are updated and changed throughout the year. CPT and HCPCS code changes that affect the OPPS are published both through the annual rulemaking cycle and through the OPPS quarterly update Change Requests (CRs). CMS releases new Level II HCPCS codes to the public
We note that, under the OPPS, the APC assignment determines the payment rate for an item, procedure, or service. Those items, procedures, or services not paid separately under the hospital OPPS are assigned to appropriate status indicators. Certain payment status indicators provide separate payment, while other payment status indicators do not. Section XI. of this final rule with comment period discusses the various status indicators used under the OPPS.
In Table 11 below, we summarize our current process for updating codes through our OPPS quarterly update CRs, seeking public comments, and finalizing the treatment of these new codes under the OPPS.
Through the April 2018 OPPS quarterly update CR (Transmittal 4005, Change Request 10515, dated March 20, 2018), we made effective nine new Level II HCPCS codes for separate payment under the OPPS. In the CY 2019 OPPS/ASC proposed rule (83 FR 37085), we solicited public comments on the proposed APC and status indicator assignments for these Level II HCPCS codes, which were listed in Table 8 of the proposed rule.
We received some public comments related to HCPCS code C9749 (Repair of nasal vestibular lateral wall stenosis with implant(s)), which we address in section III.D.16. of this final rule with comment period. With the exception of HCPCS code C9749, we did not receive any public comments on the proposed OPPS APC and status indicator assignments for the new Level II HCPCS codes implemented in April 2018. Therefore, we are finalizing the proposed APC and status indicator assignments for these codes, as indicated in Table 12 below. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2019. Their replacement codes are listed in Table 12. The final payment rates for these codes can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website). In addition, the status indicator meanings can be found in Addendum D1 to this final rule with comment period (which is available via the internet on the CMS website).
In addition, there were several new laboratory CPT Multianalyte Assays with Algorithmic Analyses (MAAA) codes (M-codes) and Proprietary Laboratory Analyses (PLA) codes (U-codes) that were effective April 1, 2018, but were too late to include in the April 2018 OPPS Update. Because these codes were released on the American Medical Association's (AMA) CPT website in February 2018, they were too late for us to include in the April 2018 OPPS Update CR and in the April 2018 Integrated Outpatient Code Editor (IOCE) and, consequently, were included in the July 2018 OPPS Update with an effective date of April 1, 2018. These CPT codes were listed in Table 9 of the CY 2019 OPPS/ASC proposed rule (83 FR 37086). In the proposed rule, we solicited public comments on the proposed APC and status indicator assignments for these CPT codes. The proposed payment rates for these codes, where applicable, were included in Addendum B to the proposed rule (which is available via the internet on the CMS website).
After consideration of the public comment we received, we are finalizing the proposed status indicator assignments for the new MAAA and PLA CPT codes effective April 1, 2018. The final status indicator assignments for the CPT codes are listed in Table 13 below. The status indicator meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2019) to this final rule with comment period (which is available via the internet on the CMS website).
Through the July 2018 OPPS quarterly update CR (Transmittal 4075, Change Request 1078, dated June 15, 2018), we made 4 new Category III CPT codes and 10 Level II HCPCS codes effective July 1, 2018 (14 codes total), and assigned them to appropriate interim OPPS status indicators and APCs. As listed in Table 10 of the CY 2019 OPPS/ASC proposed rule (83 FR 37086 through 37087), 13 of the 14 HCPCS codes are separately payable under the OPPS while 1 HCPCS code is not. Specifically, HCPCS code Q9994 is assigned to status indicator “E1” to indicate that the item is not payable by Medicare. In addition, we note that HCPCS code C9469 was deleted June 30, 2018, and replaced with HCPCS code Q9993 effective July 1, 2018. Because HCPCS code Q9993 describes the same drug as HCPCS code C9469, we proposed to continue the drug's pass-through payment status and to assign HCPCS code Q9993 to the same APC and status indicators as its predecessor HCPCS code C9469, as shown in Table 10 of the proposed rule.
In the CY 2019 OPPS/ASC proposed rule, we solicited public comments on the proposed APC and status indicator assignments for CY 2019 for the CPT and Level II HCPCS codes implemented on July 1, 2018, all of which were listed in Table 10 of the proposed rule. The proposed payment rates and status indicators for these codes, where applicable, were included in Addendum B to the proposed rule (which is available via the internet on the CMS website).
We did not receive any public comments on the proposed APC and status indicator assignments for the new Category III CPT codes and Level II HCPCS codes implemented in July 2018. Therefore, we are finalizing the proposed APC and status indicator assignments for these codes, as indicated in Table 14 below. We note that several of the HCPCS C and Q-codes have been replaced with HCPCS J-codes effective January 1, 2019. Their replacement codes are listed in Table 14 below. The final payment rates for these codes can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website). In addition, the status indicator meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2019) to this final rule with comment period (which is available via the internet on the CMS website).
In addition, there are several new PLA codes (U-codes) that were effective July 1, 2018, but were too late to include in the July 2018 OPPS Update. Consequently, the codes were included in the October 2018 OPPS Update with an effective date of July 1, 2018. The CPT codes were listed in Table 11 of the CY 2019 OPPS/ASC proposed rule along with the proposed APC and status indicator assignments for these CPT codes. In the CY 2019 OPPS/ASC proposed rule (83 FR 37087), we solicited public comments on the proposed APC and status indicator assignments for the CPT codes. The proposed payment rates for these codes, where applicable, were included in Addendum B to the proposed rule (which is available via the internet on the CMS website).
We did not receive any public comments on the proposed status indicator assignments for the PLA codes effective July 1, 2018. Therefore, we are finalizing the proposed status indicator assignments for these codes, as indicated in Table 15 below. We note that the status indicator meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2019) to this final rule with comment period (which is available via the internet on the CMS website).
As has been our practice in the past, we incorporate those new Level II HCPCS codes that are effective October 1 and January 1 in the final rule with comment period, thereby updating the OPPS for the following calendar year, as displayed in Table 11 of this final rule with comment period. These codes are released to the public through the October and January OPPS quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS codes). For CY 2019, these codes are flagged with comment indicator “NI” in Addendum B to this OPPS/ASC final rule with comment period to indicate that we are assigning them an interim payment status which is subject to public comment. Specifically, the interim status indicator and APC assignments for codes flagged with comment indicator “NI” are open to public comment in this final rule with comment period, and we will respond to these public comments in the OPPS/ASC final rule with comment period for the next year's OPPS/ASC update.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37088), we proposed to continue this process for CY 2019. Specifically, for CY 2019, we proposed to include in Addendum B to the CY 2019 OPPS/ASC final rule with comment period the following new HCPCS codes:
• New Level II HCPCS codes effective October 1, 2018, that would be incorporated in the October 2018 OPPS quarterly update CR; and
• New Level II HCPCS codes effective January 1, 2019, that would be incorporated in the January 2019 OPPS quarterly update CR.
As stated above, the October 1, 2018 and January 1, 2019 codes are flagged with comment indicator “NI” in Addendum B to this CY 2019 OPPS/ASC final rule with comment period to indicate that we have assigned these codes an interim OPPS payment status for CY 2019. We are inviting public comments on the interim status indicator and APC assignments for these codes, if applicable, that will be finalized in the CY 2020 OPPS/ASC final rule with comment period.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 through 66844), we finalized a revised process of assigning APC and status indicators for new and revised Category I and III CPT codes that would be effective January 1. Specifically, for the new/revised CPT codes that we receive in a timely manner from the AMA's CPT Editorial Panel, we finalized our proposal to include the codes that would be effective January 1 in the OPPS/ASC proposed rules, along with proposed APC and status indicator assignments for them, and to finalize the APC and status indicator assignments in the OPPS/ASC final rules beginning with the CY 2016 OPPS update. For those new/revised CPT codes that were received too late for inclusion in the OPPS/ASC proposed rule, we finalized our proposal to establish and use HCPCS G-codes that mirror the predecessor CPT codes and retain the current APC and status indicator assignments for a year until we can propose APC and status indicator assignments in the following year's rulemaking cycle. We note that even if we find that we need to create HCPCS G-codes in place of certain CPT codes for the PFS proposed rule, we do not anticipate that these HCPCS G-codes will always be necessary for OPPS purposes. We will make every effort to include proposed APC and status indicator assignments for all new and revised CPT codes that the AMA makes publicly available in time for us to include them in the annual proposed rule, and to avoid the resort to HCPCS G-codes and the resulting delay in utilization of the most current CPT codes. Also, we finalized our proposal to make interim APC and status indicator assignments for CPT codes that are not available in time for the proposed rule and that describe wholly new services (such as new technologies or new surgical procedures), solicit public comments, and finalize the specific APC and status indicator assignments for those codes in the following year's final rule.
For the CY 2019 OPPS update, we received the CY 2019 CPT codes from AMA in time for inclusion in the CY 2019 OPPS/ASC proposed rule. The new, revised, and deleted CY 2019 Category I and III CPT codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website). We noted in the proposed rule that the new and revised codes are assigned to new comment indicator “NP” to indicate that the code is new for the next calendar year or the code is an existing
Further, we reminded readers that the CPT code descriptors that appear in Addendum B are short descriptors and do not accurately describe the complete procedure, service, or item described by the CPT code. Therefore, we included the 5-digit placeholder codes and their long descriptors for the new and revised CY 2019 CPT codes in Addendum O to the proposed rule (which is available via the internet on the CMS website) so that the public could adequately comment on the proposed APCs and status indicator assignments. The 5-digit placeholder codes were included in Addendum O, specifically under the column labeled “CY 2019 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,” to the proposed rule. We noted that the final CPT code numbers will be included in this CY 2019 OPPS/ASC final rule with comment period. We also noted that not every code listed in Addendum O is subject to public comment. For the new and revised Category I and III CPT codes, we requested public comments on only those codes that are assigned to comment indicator “NP”.
In summary, in the CY 2019 OPPS/ASC proposed rule, we solicited public comments on the proposed CY 2019 status indicator and APC assignments for the new and revised Category I and III CPT codes that will be effective January 1, 2019. The CPT codes were listed in Addendum B to the proposed rule with short descriptors only. We listed them again in Addendum O to the proposed rule with long descriptors. We also proposed to finalize the status indicator and APC assignments for these codes (with their final CPT code numbers) in the CY 2019 OPPS/ASC final rule with comment period. The proposed status indicator and APC assignments for these codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website).
Commenters addressed several of the new CPT codes that were assigned to comment indicator “NP” in Addendum B to the CY 2019 OPPS/ASC proposed rule. We have responded to those public comments in sections II.A.2.b. (Comprehensive APCs), III.D. (OPPS APC-Specific Policies), IV.B. (Device-Intensive Procedures) and XII. (Updates to the ASC Payment System) of this CY 2019 OPPS/ASC final rule with comment period.
The final status indicators, APC assignments, and payment rates for the new CPT codes that are effective January 1, 2019 can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website). In addition, the status indicator meanings can be found in Addendum D1 (OPPS Payment Status Indicators for CY 2019) to this final rule with comment period (which is available via the internet on the CMS website).
Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered hospital outpatient department services. Section 1833(t)(2)(B) of the Act provides that the Secretary may establish groups of covered OPD services within this classification system, so that services classified within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we developed a grouping classification system, referred to as Ambulatory Payment Classifications (APCs), as set forth in regulations at 42 CFR 419.31. We use Level I and Level II HCPCS codes to identify and group the services within each APC. The APCs are organized such that each group is homogeneous both clinically and in terms of resource use. Using this classification system, we have established distinct groups of similar services. We also have developed separate APC groups for certain medical devices, drugs, biologicals, therapeutic radiopharmaceuticals, and brachytherapy devices that are not packaged into the payment for the procedure.
We have packaged into the payment for each procedure or service within an APC group the costs associated with those items and services that are typically ancillary and supportive to a primary diagnostic or therapeutic modality and, in those cases, are an integral part of the primary service they support. Therefore, we do not make separate payment for these packaged items or services. In general, packaged items and services include, but are not limited to, the items and services listed in regulations at 42 CFR 419.2(b). A further discussion of packaged services is included in section II.A.3. of this final rule with comment period.
Under the OPPS, we generally pay for covered hospital outpatient services on a rate-per-service basis, where the service may be reported with one or more HCPCS codes. Payment varies according to the APC group to which the independent service or combination of services is assigned. In the CY 2019 OPPS/ASC proposed rule (83 FR 37089), for CY 2019, we proposed that each APC relative payment weight represents the hospital cost of the services included in that APC, relative to the hospital cost of the services included in APC 5012 (Clinic Visits and Related Services). The APC relative payment weights are scaled to APC 5012 because it is the hospital clinic visit APC and clinic visits are among the most frequently furnished services in the hospital outpatient setting.
Section 1833(t)(9)(A) of the Act requires the Secretary to review, not less often than annually, and revise the APC groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. Section 1833(t)(9)(A) of the Act also requires the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the APC groups and the relative payment weights. We note that the HOP Panel recommendations for specific services for the CY 2019 OPPS update are discussed in the relevant specific sections throughout this CY 2019 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest cost for an item or service in the group is more than 2 times greater than the lowest cost for an item or service within the same group (referred to as the “2 times rule”). The statute authorizes the Secretary to make exceptions to the 2 times rule in unusual cases, such as low-volume items and services (but the Secretary may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act). In determining the APCs with a 2 times rule violation, we consider only those HCPCS codes that are significant based on the number of claims. We note that, for purposes of identifying significant procedure codes for examination under
For the CY 2019 OPPS update, in the CY 2019 OPPS/ASC proposed rule, we identified the APCs with violations of the 2 times rule. Therefore, we proposed changes to the procedure codes assigned to these APCs in Addendum B to the proposed rule. We noted that Addendum B does not appear in the printed version of the
Taking into account the APC changes that we proposed to make for CY 2019 in the CY 2019 OPPS/ASC proposed rule, we reviewed all of the APCs to determine which APCs would not meet the requirements of the 2 times rule. We used the following criteria to evaluate whether to propose exceptions to the 2 times rule for affected APCs:
• Resource homogeneity;
• Clinical homogeneity;
• Hospital outpatient setting utilization;
• Frequency of service (volume); and
• Opportunity for upcoding and code fragments.
Based on the CY 2017 claims data available for the CY 2019 proposed rule, we found 16 APCs with violations of the 2 times rule. We applied the criteria as described above to identify the APCs for which we proposed to make exceptions under the 2 times rule for CY 2019, and found that all of the 16 APCs we identified met the criteria for an exception to the 2 times rule based on the CY 2017 claims data available for the proposed rule. We did not include in that determination those APCs where a 2 times rule violation was not a relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS codes assigned to it that have a similar geometric mean costs and do not create a 2 time rule violation. Therefore, we only identified those APCs, including those with criteria-based costs, such as device-dependent CPT/HCPCS codes, with violations of the 2 times rule.
We note that, for cases in which a recommendation by the HOP Panel appears to result in or allow a violation of the 2 times rule, we may accept the HOP Panel's recommendation because those recommendations are based on explicit consideration (that is, a review of the latest OPPS claims data and group discussion of the issue) of resource use, clinical homogeneity, site of service, and the quality of the claims data used to determine the APC payment rates.
Table 12 of the proposed rule listed the 16 APCs that we proposed to make an exception for under the 2 times rule for CY 2019 based on the criteria cited above and claims data submitted between January 1, 2017, and December 31, 2017, and processed on or before December 31, 2017. In the proposed rule, we stated that, for the final rule with comment period, we intend to use claims data for dates of service between January 1, 2017, and December 31, 2017, that were processed on or before June 30, 2018, and updated CCRs, if available.
Based on the updated final rule CY 2017 claims data used for this CY 2019 final rule with comment period, we were able to remedy 1 APC violation out of the 16 APCs that appeared in Table 12 of the CY 2019 OPPS/ASC proposed rule. Specifically, APC 5735 (Level 5 Minor Procedures) no longer met the criteria for exception to the 2 times rule in this final rule with comment period. In addition, based on our analysis of the final rule claims data, we found a total of 17 APCs with violations of the 2 times rule. Of these 17 total APCs, 15 were identified in the proposed rule and 2 are newly identified APCs. Specifically, we found the following 15 APCs that were identified for the proposed rule that continued to have violations of the 2 times rule for this final rule with comment period:
• APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage);
• APC 5113 (Level 3 Musculoskeletal Procedures);
• APC 5521 (Level 1 Imaging without Contrast);
• APC 5522 (Level 2 Imaging without Contrast);
•APC 5523 (Level 3 Imaging without Contrast);
• APC 5571 (Level 1 Imaging with Contrast);
• APC 5612 (Level 2 Therapeutic Radiation Treatment Preparation);
• APC 5691 (Level 1 Drug Administration);
• APC 5692 (Level 2 Drug Administration);
• APC 5721 (Level 1 Diagnostic Tests and Related Services);
• APC 5724 (Level 4 Diagnostic Tests and Related Services);
• APC 5731 (Level 1 Minor Procedures);
• APC 5732 (Level 2 Minor Procedures);
• APC 5822 (Level 2 Health and Behavior Services); and
• APC 5823 (Level 3 Health and Behavior Services).
In addition, we found that the following two additional APCs violated the 2 times rule using the final rule with comment period claims data:
• APC 5193 (Level 3 Endovascular Procedures); and
• APC 5524 (Level 4 Imaging without Contrast).
After considering the public comments we received on proposed APC assignments and our analysis of the CY 2017 costs from hospital claims and cost report data available for this CY 2019 final rule with comment period, we are finalizing our proposals, with some modifications. Specifically, we are
Table 16 below lists the 17 APCs that we are excepting from the 2 times rule for CY 2019 based on the criteria described earlier and a review of updated claims data for dates of service between January 1, 2017 and December 31, 2017, that were processed on or before June 30, 2018, and updated CCRs, if available. We note that, for cases in which a recommendation by the HOP Panel appears to result in or allow a violation of the 2 times rule, we generally accept the HOP Panel's recommendation because those recommendations are based on explicit consideration of resource use, clinical homogeneity, site of service, and the quality of the claims data used to determine the APC payment rates. The geometric mean costs for hospital outpatient services for these and all other APCs that were used in the development of this final rule with comment period can be found on the CMS website at:
In the November 30, 2001 final rule (66 FR 59903), we finalized changes to the time period in which a service can be eligible for payment under a New Technology APC. Beginning in CY 2002, we retain services within New Technology APC groups until we gather sufficient claims data to enable us to assign the service to an appropriate clinical APC. This policy allows us to move a service from a New Technology APC in less than 2 years if sufficient data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient data upon which to base a decision for reassignment have not been collected.
In the CY 2004 OPPS final rule with comment period (68 FR 63416), we restructured the New Technology APCs to make the cost intervals more consistent across payment levels and refined the cost bands for these APCs to retain two parallel sets of New Technology APCs, one set with a status indicator of “S” (Significant Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC payment) and the other set with a status indicator of “T” (Significant Procedure, Multiple Reduction Applies. Paid under OPPS; separate APC payment). These current New Technology APC configurations allow us to price new technology services more appropriately and consistently.
For CY 2018, there were 52 New Technology APC levels, ranging from the lowest cost band assigned to APC 1491 (New Technology—Level 1A ($0-$10)) through the highest cost band assigned to APC 1908 (New Technology—Level 52 ($145,001-$160,000)). We note that the cost bands for the New Technology APCs, specifically, APCs 1491 through 1599 and 1901 through 1908, vary with increments ranging from $10 to $14,999. These cost bands identify the APCs to which new technology procedures and services with estimated service costs that fall within those cost bands are assigned under the OPPS. Payment for each APC is made at the mid-point of the APC's assigned cost band. For example, payment for New Technology APC 1507 (New Technology—Level 7 ($501-$600)) is made at $550.50.
Under the OPPS, one of our goals is to make payments that are appropriate for the services that are necessary for the treatment of Medicare beneficiaries. The OPPS, like other Medicare payment systems, is budget neutral and increases are limited to the annual hospital inpatient market basket increase. We
For many emerging technologies, there is a transitional period during which utilization may be low, often because providers are first learning about the techniques and their clinical utility. Quite often, parties request that Medicare make higher payment amounts under the New Technology APCs for new procedures in that transitional phase. These requests, and their accompanying estimates for expected total patient utilization, often reflect very low rates of patient use of expensive equipment, resulting in high per use costs for which requesters believe Medicare should make full payment. Medicare does not, and we believe should not, assume responsibility for more than its share of the costs of procedures based on projected utilization for Medicare beneficiaries and does not set its payment rates based on initial projections of low utilization for services that require expensive capital equipment. For the OPPS, we rely on hospitals to make informed business decisions regarding the acquisition of high-cost capital equipment, taking into consideration their knowledge about their entire patient base (Medicare beneficiaries included) and an understanding of Medicare's and other payers' payment policies. (We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68314) for further discussion regarding this payment policy.)
We note that, in a budget neutral system, payments may not fully cover hospitals' costs in a particular circumstance, including those for the purchase and maintenance of capital equipment. We rely on hospitals to make their decisions regarding the acquisition of high-cost equipment with the understanding that the Medicare program must be careful to establish its initial payment rates, including those made through New Technology APCs, for new services that lack hospital claims data based on realistic utilization projections for all such services delivered in cost-efficient hospital outpatient settings. As the OPPS acquires claims data regarding hospital costs associated with new procedures, we regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures as they transition into mainstream medical practice (77 FR 68314). For CY 2019, we included the proposed payment rates for New Technology APCs 1491 to 1599 and 1901 through 1908 in Addendum A to the CY 2019 OPPS/ASC proposed rule (which is available via the internet on the CMS website). The final payment rates for these New Technology APCs are included in Addendum A to the CY 2019 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website).
Procedures that are assigned to New Technology APCs are typically new procedures that do not have sufficient claims history to establish an accurate payment for the procedures. One of the objectives of establishing New Technology APCs is to generate sufficient claims data for a new procedure so that it can be assigned to an appropriate clinical APC. Some procedures that are assigned to New Technology APCs have very low annual volume, which we consider to be fewer than 100 claims. We consider procedures with fewer than 100 claims annually as low-volume procedures because there is a higher probability that the payment data for a procedure may not have a normal statistical distribution, which could affect the quality of our standard cost methodology that is used to assign services to an APC. In addition, services with fewer than 100 claims per year are not generally considered to be a significant contributor to the APC ratesetting calculations and, therefore, are not included in the assessment of the 2 times rule. For these low-volume procedures, we are concerned that the methodology we use to estimate the cost of a procedure under the OPPS by calculating the geometric mean for all separately paid claims for a HCPCS procedure code from the most recent available year of claims data may not generate an accurate estimate of the actual cost of the procedure.
In accordance with section 1833(t)(2)(B) of the Act, services classified within each APC must be comparable clinically and with respect to the use of resources. As described earlier, assigning a procedure to a new technology APC allows us to gather claims data to price the procedure and assign it to the APC with services that use similar resources and are clinically comparable. However, where utilization of services assigned to a New Technology APC is low, it can lead to wide variation in payment rates from year to year, resulting in even lower utilization and potential barriers to access to new technologies, which ultimately limits our ability to assign the service to the appropriate clinical APC. To mitigate these issues, we believe that it is appropriate to utilize our equitable adjustment authority at section 1833(t)(2)(E) of the Act to adjust how we determine the costs for low-volume services assigned to New Technology APCs. We have utilized our equitable adjustment authority at section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to estimate an appropriate payment amount for low-volume new technology procedures in the past (82 FR 59281). Although we have used this adjustment authority on a case-by-case basis in the past, we believe that it is appropriate to adopt an adjustment for low-volume services assigned to New Technology APCs in order mitigate the wide payment fluctuations that can occur for new technology services with fewer than 100 claims and to provide more predictable payment for these services.
For purposes of this adjustment, we believe that it is appropriate to use up to 4 years of claims data in calculating the applicable payment rate for the prospective year, rather than using solely the most recent available year of claims data, when a service assigned to a New Technology APC has a low annual volume of claims, which, for purposes of this adjustment, we define as fewer than 100 claims annually. We consider procedures with fewer than 100 claims annually as low-volume procedures because there is a higher probability that the payment data for a procedure may not have a normal statistical distribution, which could affect the quality of our standard cost methodology that is used to assign services to an APC. For these low-volume procedures, we are concerned that the methodology we use to estimate the cost of a procedure under the OPPS by calculating the geometric mean for all separately paid claims for a HCPCS procedure code from the most recent available year of claims data may not generate an accurate estimate of the actual cost of the procedure. Using multiple years of claims data will potentially allow for more than 100 claims to be used to set the payment rate, which would, in turn, create a more statistically reliable payment rate.
In addition, to better approximate the cost of a low-volume service within a New Technology APC, we believe that using the median or arithmetic mean rather than the geometric mean (which
Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37091 through 37092), for CY 2019, we proposed to establish a different payment methodology for services assigned to New Technology APCs with fewer than 100 claims using our equitable adjustment authority under section 1833(t)(2)(E) of the Act. Under this proposal, we proposed to use up to 4 years of claims data to establish a payment rate for each applicable service both for purposes of assigning a service to a New Technology APC and for assigning a service to a regular APC at the conclusion of payment for the service through a New Technology APC. The goal of such a policy is to promote transparency and stability in the payment rates for these low-volume new technology procedures and to mitigate wide variation from year to year for such services. We also proposed to use the geometric mean, the median, or the arithmetic mean to calculate the cost of furnishing the applicable service, present the result of each statistical methodology in our annual rulemaking, and solicit public comment on which methodology should be used to establish the payment rate. We stated that the geometric mean may not be representative of the actual cost of a service when fewer than 100 claims are present because the payment amounts for the claims may not be distributed normally. We stated that, under this proposal, we would have the option to use the median payment amount or the arithmetic mean to assign a more representative payment for the service. Once we identify the payment rate for a service, we would assign the service to the New Technology APC with the cost band that includes its payment rate.
After consideration of the public comments we received, we are finalizing our proposed policy to establish payment rates for low-volume procedures with fewer than 100 claims per year that are assigned to New Technology APCs, without modification. We may use up to 4 years of claims data to establish a payment rate for each applicable service both for purposes of assigning a service to a New Technology APC and for assigning a service to a regular APC at the conclusion of payment for the service through a New Technology APC. We will use the geometric mean, the median, or the arithmetic mean to calculate the cost of furnishing the applicable service, present the result of each statistical methodology in our annual rulemaking, and solicit public comment on which methodology should be used to establish the payment rate. Once we identify the payment rate for a service, we would assign the service to the New Technology APC with the cost band that includes its payment rate.
As we explained in the CY 2002 OPPS final rule with comment period (66 FR 59902), we generally retain a procedure in the New Technology APC to which it is initially assigned until we have obtained sufficient claims data to justify reassignment of the procedure to a clinically appropriate APC.
In addition, in cases where we find that our initial New Technology APC assignment was based on inaccurate or inadequate information (although it was the best information available at the time), where we obtain new information that was not available at the time of our initial New Technology APC assignment, or where the New Technology APCs are restructured, we may, based on more recent resource utilization information (including claims data) or the availability of refined New Technology APC cost bands, reassign the procedure or service to a
Consistent with our current policy, for CY 2019, in the CY 2019 OPPS/ASC proposed rule (83 FR 37092), we proposed to retain services within New Technology APC groups until we obtain sufficient claims data to justify reassignment of the service to a clinically appropriate APC. The flexibility associated with this policy allows us to reassign a service from a New Technology APC in less than 2 years if sufficient claims data are available. It also allows us to retain a service in a New Technology APC for more than 2 years if sufficient claims data upon which to base a decision for reassignment have not been obtained (66 FR 59902).
Currently, there are four CPT/HCPCS codes that describe magnetic resonance image-guided, high-intensity focused ultrasound (MRgFUS) procedures, three of which we proposed to continue to assign to standard APCs, and one that we proposed to reassign to a different New Technology APC for CY 2019. These codes include CPT codes 0071T, 0072T, and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T describe procedures for the treatment of uterine fibroids, CPT code 0398T describes procedures for the treatment of essential tremor, and HCPCS code C9734 describes procedures for pain palliation for metastatic bone cancer.
As shown in Table 13 of the CY 2019 OPPS/ASC proposed rule, and as listed in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to continue to assign the procedures described by CPT codes 0071T and 0072T to APC 5414 (Level 4 Gynecologic Procedures), with a proposed payment rate of approximately $2,410 for CY 2019. We also proposed to continue to assign the APC to status indicator “J1” (Hospital Part B services paid through a comprehensive APC) to indicate that payment for all covered Part B services reported on the claim are packaged with the payment for the primary “J1” service for the claim, except for services assigned to OPPS status indicator “F”, “G”, “H”, “L”, and “U”; ambulance services; diagnostic and screening mammography; all preventive services; and certain Part B inpatient services. In addition, we proposed to continue to assign the services described by HCPCS code C9734 (Focused ultrasound ablation/therapeutic intervention, other than uterine leiomyomata, with magnetic resonance (mr) guidance) to APC 5115 (Level 5 Musculoskeletal Procedures), with a proposed payment rate of approximately $10,936 for CY 2019. We also proposed to continue to assign HCPCS code C9734 to status indicator “J1”.
For procedures described by CPT code 0398T, we have only identified one paid claim for a procedure in CY 2016 and two paid claims in CY 2017, for a total of three paid claims. We note that the procedures described by CPT code 0398T were first assigned to a New Technology APC in CY 2016. Accordingly, there are only 2 years of claims data available for the OPPS ratesetting purposes. The payment amounts for the claims varied widely, with a cost of $29,254 for the sole CY 2016 claim and a geometric mean cost of $4,647 for the two CY 2017 claims. In the proposed rule, we expressed concerned that the reported geometric mean cost for CY 2017, which we would normally use to determine the proposed payment rate for the procedures described by CPT code 0398T, was significantly lower than the reported cost of the claim received in CY 2016, as well as the payment rate for the procedures for CY 2017 ($9,750.50) and for CY 2018 ($17,500.50). In accordance with section 1833(t)(2)(B) of the Act, we must establish that services classified within each APC are comparable clinically and with respect to the use of resources.
Therefore, as mentioned in section III.C.2. of the proposed rule, we proposed to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to establish a payment rate that is more likely to be representative of the cost of the procedures described by CPT code 0398T, despite the low geometric mean costs for procedures described by CPT code 0398T available in the claims data used for the proposed rule. We stated that we continue to believe that this situation for the procedures described by CPT code 0398T is unique, given the very limited number of claims for the procedures and the high variability for the cost of the claims which makes it challenging to determine a reliable payment rate for the procedures.
Our analysis found that the arithmetic mean of the three claims is $12,849.11, the geometric mean of the three claims is $8,579.91 (compared to $4,646.56 for CY 2017), and the median of the claims is $4,676.77. Consistent with what we stated in section III.C.2. of the proposed rule, we presented the result of each statistical methodology in this preamble, and we sought public comments on which method should be used to establish payment for the procedures described by CPT code 0398T. We believe that the arithmetic mean is the most appropriate representative cost of the procedures described by CPT code 0398T, which gives consideration to the payment rates established for the procedures in CY 2017 and CY 2018, without any trimming. The arithmetic mean also gives consideration to the full range in cost for the three paid claims, which represent 2 years of claims data for the procedures. We proposed to estimate the proposed payment rate for the procedures described by CPT code 0398T by calculating the arithmetic mean of the three paid claims for the procedures in CY 2016 and CY 2017, and assigning the procedures described by CPT code 0398T to the New Technology APC that includes the estimated cost. Accordingly, we proposed to reassign the procedures described by CPT code 0398T from APC 1576 (New Technology—Level 39 ($15,001-$20,000)) to APC 1575 (New Technology—Level 38 ($10,001-$15,000)), with a proposed payment rate of $12,500.50 for CY 2019. We refer readers to Addendum B to the proposed rule for the proposed payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
We have concerns about using the claims data available for this final rule with comment period to set the payment rate for CPT code 0398T for CY 2019. The payment rate for CPT code 0398T for CY 2018 was $17,500.50, and in the CY 2019 proposed rule (83 FR 37093), we proposed a payment rate of $12,500.50. However for this final rule with comment period, the highest payment rate using the most recent available claims data and the newly adopted smoothing methodology for low-volume New Technology APCs is $6,750.50, which is the mid-point of New Technology APC 1531. New Technology APC 1531 is the cost band for the arithmetic mean cost of CPT code 0398T. A payment rate of $6,750.50 would be the result of a $10,750 reduction in the payment rate in a period of just 1 year, or a payment rate reduction of over 60 percent. In addition, this payment reduction would be based on a total of 14 claims that have been billed for CPT code 0398T since we first received claims for this procedure in CY 2016. We believe that it is important to mitigate significant payment differences, especially payment differences that result in shifts of over $10,000 in a single year, while also basing payment rates on available costs information and claims data. We are concerned that these large changes in payment could potentially create an access to care issue for services described by CPT code 0398T; especially, when the procedure is starting to receive local coverage determinations from MACs allowing more Medicare beneficiaries to use the procedure. While the proposed payment rate of $12,500.50 is also a decrease from the current payment rate, we believe that it would be appropriate to finalize the proposed rate to mitigate a much sharper decline in payment from one year to the next.
In accordance with section 1833(t)(2)(B) of the Act, we must establish that services classified within each APC are comparable clinically and with respect to the use of resources. Accordingly, we are using our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to maintain the proposed rate for this procedure, despite the lower geometric mean, arithmetic mean, and median costs calculated from the claims data used for this final rule with comment period. As stated earlier, we believe that this situation is unique, given the large reduction in payment this would represent for CPT code 0398T and the very limited number of claims reported for the procedure. Therefore, for CY 2019, we are reassigning CPT code 0398T from APC 1576 to APC 1575 (New Technology—Level 38 ($10,001-$15,000)). This APC assignment will establish a payment rate for CPT code 0398T of $12,500.50, which was the proposed payment rate for the procedure in the CY 2019 OPPS/ASC proposed rule. As we do each year, we acquire claims data regarding hospital costs associated with new procedures. We regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures like CPT code 0398T as they transition into mainstream medical practice (77 FR 68314).
In summary, after consideration of the public comments we received, we are finalizing our proposal for the APC assignment of CPT code 0398T. Specifically, we are reassigning this code to New Technology APC 1575 (New Technology—Level 38 ($10,001-$15,000)), with a payment rate of $12,500.50, for CY 2019 through use of our equitable adjustment authority. In addition, we are finalizing our proposal, without modification, to assign HCPCS code C9734 to APC 5114. We also are finalizing our proposal to continue to assign CPT codes 0071T and 0072T to APC 5414, without modification. Table 17 below lists the final CY 2018 status indicator and APC assignments for MRgFUS procedures. We refer readers to Addendum B of this final rule with comment period for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
CPT code 0100T (Placement of a subconjunctival retinal prosthesis receiver and pulse generator, and implantation of intra-ocular retinal electrode array, with vitrectomy) describes the implantation of a retinal prosthesis, specifically, a procedure involving the use of the Argus® II Retinal Prosthesis System. This first retinal prosthesis was approved by the Food and Drug Administration (FDA) in 2013 for adult patients diagnosed with severe to profound retinitis pigmentosa. Pass-through payment status was granted for the Argus® II device under HCPCS code C1841 (Retinal prosthesis, includes all internal and external components) beginning October 1, 2013, and this status expired on December 31, 2015. We note that after pass-through payment status expires for a medical device, the payment for the device is packaged into the payment for the associated surgical procedure. Consequently, for CY 2016, the device described by HCPCS code C1841 was assigned to OPPS status indicator “N” to indicate that payment for the device is packaged and included in the payment rate for the surgical procedure described by CPT code 0100T. For CY 2016, the procedure described by CPT code 0100T was assigned to New Technology APC 1599, with a payment rate of $95,000, which was the highest paying New Technology APC for that year. This payment includes both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841). However, stakeholders (including the device manufacturer and hospitals) believed that the CY 2016 payment rate for the procedure involving the Argus® II System was insufficient to cover the hospital cost of performing the procedure, which includes the cost of the retinal prosthesis at the retail price of approximately $145,000.
For CY 2017, analysis of the CY 2015 OPPS claims data used for the CY 2017 final rule with comment period showed 9 single claims (out of 13 total claims) for the procedure described by CPT code 0100T, with a geometric mean cost of approximately $142,003 based on claims submitted between January 1, 2015, through December 31, 2015, and processed through June 30, 2016. Based on the CY 2015 OPPS claims data available for the final rule with comment period and our understanding of the Argus® II procedure, we reassigned the procedure described by CPT code 0100T from New Technology APC 1599 to New Technology APC 1906, with a final payment rate of $150,000.50 for CY 2017. We noted that this payment rate included the cost of both the surgical procedure (CPT code 0100T) and the retinal prosthesis device (HCPCS code C1841).
For CY 2018, the reported cost of the Argus® II procedure based on CY 2016 hospital outpatient claims data used for the CY 2018 OPPS/ASC final rule with comment period was approximately $94,455, which was more than $55,000 less than the payment rate for the procedure in CY 2017. We noted that the costs of the Argus® II procedure are extraordinarily high compared to many other procedures paid under the OPPS. In addition, the number of claims submitted has been very low and has not exceeded 10 claims within a single year. We believed that it is important to mitigate significant payment differences, especially shifts of several tens of thousands of dollars, while also basing payment rates on available cost information and claims data. In CY 2016, the payment rate for the Argus® II procedure was $95,000.50. The payment rate increased to $150,000.50 in CY 2017. For CY 2018, if we had established the payment rate based on updated final rule claims data, the payment rate would have decreased to $95,000.50 for CY 2018, a decrease of $55,000 relative to CY 2017. We were concerned that these large changes in payment could potentially create an access to care issue for the Argus® II procedure, and we wanted to establish a payment rate to mitigate the potential sharp decline in payment from CY 2017 to CY 2018.
In accordance with section 1833(t)(2)(B) of the Act, we must establish that services classified within each APC are comparable clinically and with respect to the use of resources. Therefore, we used our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to maintain the payment rate for this procedure, despite the lower geometric mean costs available in the claims data used for the final rule with comment period. For CY 2018, we reassigned the Argus® II procedure to APC 1904 (New Technology—Level 50 ($115,001-$130,000)), which established a payment rate for the Argus® II procedure of $122,500.50, which was the arithmetic mean of the payment rates for the procedure for CY 2016 and CY 2017.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37093 through 37094), for CY 2019, the reported cost of the Argus® II procedure based on CY 2017 hospital outpatient claims data used for the CY 2019 OPPS/ASC proposed rule was approximately $152,021, which was $29,520 more than the payment rate for the procedure for CY 2018. In the proposed rule, we continued to note that the costs of the Argus® II procedure are extraordinarily high compared to many other procedures paid under the OPPS. In
In accordance with section 1833(t)(2)(B) of the Act, we must establish that services classified within each APC are comparable clinically and with respect to the use of resources. Therefore, as discussed in section III.C.2. of the proposed rule, we proposed to use our equitable adjustment authority under section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments, to establish a payment rate that is more representative of the likely cost of the service. We stated that we believe the likely cost of the Argus® II procedure is lower than the geometric mean cost calculated from the CY 2017 claims data used for the proposed rule and closer to the CY 2018 payment rate.
We analyzed claims data for the Argus® II procedure using the last 3 years of available data from CY 2015 through CY 2017. These data included claims from the last year (CY 2015) that the Argus® II received transitional device pass-through payments and the first 2 years since device pass-through payment status for the Argus® II expired. We found the geometric mean for the procedure to be $129,891 (compared to $152,021 in CY 2017 alone), the arithmetic mean to be $134,619, and the median to be $133,679. As indicated in our proposal in section III.C.2. of the proposed rule (83 FR 37091 through 37092), we presented the result of each statistical methodology in the preamble of the proposed rule, and requested public comment on which methodology should be used to establish a payment rate. We proposed to use the arithmetic mean, which generates the highest payment rate of the three statistical methodologies, to estimate the cost of the Argus® II procedure as a means to balance the fluctuations in the costs of the procedure that have occurred from CY 2015 through CY 2017, while acknowledging the higher payment rates for the procedure in CY 2015 and CY 2017. Therefore, for CY 2019, we proposed to reassign the Argus® II procedure from APC 1904 (New Technology—Level 50 ($115,001-$130,000)) to APC 1906 (New Technology—Level 51 ($130,001-$145,000)), which resulted in a proposed payment rate for the Argus® II procedure of $137,500.50.
As we do each year, we acquired claims data regarding hospital costs associated with new procedures. We regularly examine the claims data and any available new information regarding the clinical aspects of new procedures to confirm that our OPPS payments remain appropriate for procedures like the Argus® II procedure as they transition into mainstream medical practice (77 FR 68314). We noted that the proposed payment rate included both the surgical procedure (CPT code 0100T) and the use of the Argus® II device (HCPCS code C1841).
After reviewing the comments we received and updating our data analysis, we are reassigning the Argus® II procedure (CPT code 0100T) to APC 1908 (New Technology—Level 52 ($145,001-$160,000)) with a payment rate of $152,500.50 for CY 2019.
We discussed in the CY 2019 OPPS/ASC proposed rule that the most recent claims data available have shown another payment issue with regard to the Argus® II procedure. We have found that payment for the Argus® II procedure is sometimes bundled into the payment for another procedure. We identified two possible instances in the CY 2017 claims data in which this may have occurred. The bundling of payment for the Argus® II procedure occurs when the procedure is reported with other eye procedures assigned to a comprehensive APC (C-APC). A C-APC bundles payment for all services related to the primary service into one payment rate. We stated in the proposed rule that we were concerned that when payment for new technology services is bundled into the payment for comprehensive procedures, there is not complete claims information to estimate accurately the cost of these services to allow their assignment to clinical APCs. Therefore, we proposed to exclude payment for all procedures assigned to New Technology APCs from being bundled into the payment for procedures assigned to a C-APC. This action would allow for separate payment for the Argus® II procedure even when it is performed with another comprehensive service, which would provide more cost information regarding the procedure. This proposal was also discussed in section II.A.2.c. of the proposed rule.
After consideration of the public comments we received, we are finalizing our proposal to exclude payment for all procedures assigned to New Technology APCs from being bundled into the payment for procedures assigned to a C-APC for CY 2019.
CMS has established HCPCS code C9751 (Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s) by microwave energy, including fluoroscopic guidance, when performed, with computed tomography acquisition(s) and 3-D rendering, computer-assisted, image-guided navigation, and endobronchial ultrasound (EBUS) guided transtracheal and/or transbronchial sampling (
For the CY 2019 OPPS update, the CPT Editorial Panel established new CPT code 53854 to describe the Rezum Therapy procedure, which is also known as steam therapy or water vapor therapy, for the treatment of benign prostatic hyperplasia. Prior to January 1, 2019, the Rezum Therapy procedure was described by HCPCS code C9748, which was assigned to APC 5373 (Level 3 Urology and Related Services) when the code was established effective January 1, 2018. HCPCS code C9748 will be deleted on December 31, 2018 because it will be replaced with new CPT code 53854, effective January 1, 2019. We note that Table 19 below lists the long descriptors for both HCPCS code C9748 and CPT code 53854.
As displayed in Table 19 below, and in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to delete HCPCS code C9748 and assign the code to status indicator “D” to indicate that the code would be deleted for the January 2019 OPPS update. We also proposed to assign the new replacement code, CPT code 53854, to APC 5373, with a proposed payment rate of approximately $1,731. We note that the predecessor HCPCS code for CPT code 53854 (HCPCS code C9748) was also assigned to APC 5373. In addition, we note that CPT code 53854 was listed as code 538X3 (the 5-digit CMS placeholder code) in Addendum B, with the short descriptor, and in Addendum O, with the long descriptor, to the CY 2019 OPPS/ASC proposed rule. We also assigned CPT code 53854 to comment indicator “NP” in Addendum B to indicate that the code is new for CY 2019 with a proposed APC assignment.
• Transurethral microwave therapy (TUMT) procedure, which is described by CPT code 53850, and which we proposed to continue to assign to APC 5374 (Level 4 Urology and Related Services), with a proposed payment rate of approximately $2,756;
• Transurethral needle ablation procedure (TUNA), which is described by CPT 53852, and which we proposed to continue to assign to APC 5375 (Level 5 Urology and Related Services) with a proposed payment rate of approximately $3,776.
We note that Table 19 lists the long descriptors for the Rezum Therapy, TUMT, and TUNA procedures.
One commenter disagreed with the proposed assignment for the Rezum Therapy procedure described by CPT code 53854 to APC 5373, and indicated that APC 5373 does not contain other procedures that are similar clinically or in resource costs. The commenter stated that the Rezum Therapy procedure is comparable to the TUMT procedure, which is proposed to be assigned to APC 5374, and the TUNA procedure, which is proposed to be assigned to APC 5375. Therefore, the commenter requested that CPT code 53854, which describes the Rezum Therapy procedure, be assigned to APC 5375 instead of APC 5373. In addition, the commenter requested that the TUMT procedure described by CPT code 53850 be reassigned from APC 5374 to APC 5375. The commenter further stated that all three benign prostatic hyperplasia treatment procedures are comparable and suggested that they be assigned to APC 5375 based on clinical homogeneity and resource costs. Another commenter also believed that the Rezum Therapy procedure described by CPT code 53854 should be assigned to APC 5375.
Our analysis shows that the geometric mean cost for CPT code 53850 (the TUMT procedure) is approximately
Further, because of the public comments received on the Rezum Therapy procedure, we conducted a preliminary claims review for HCPCS code C9748, and found that, based on 73 claims that were processed on or before July 27, 2018, the geometric mean cost for the procedure is approximately $1,711, which is significantly lower than the geometric mean cost for either CPT code 53850 (TUMT procedure) at approximately $3,272 or CPT code 53852 (TUNA procedure) at approximately $2,989.
In addition, a presenter at the August 20, 2018 HOP Panel meeting requested that the HOP Panel recommend that CMS reassign placeholder CPT code 538X3 (CPT code 53854) to APC 5374 or 5375 based on clinical similarity to the procedures described by CPT codes 53850 and 53852. Based on the information presented at the meeting, the HOP Panel made no recommendation to revise the APC assignment for the Rezum Therapy procedure. However, based on the public comments received for the reassignment for all three benign prostatic hyperplasia treatment procedures, we reviewed the procedures assigned to the family of Urology APCs for this final rule with comment period and made some modifications to more appropriately reflect the resource costs and clinical characteristics of the services within each APC grouping. Specifically, we revised the APC assignment of the procedures assigned to the family of Urology APCs to more appropriately reflect a prospective payment system that is based on payment groupings and not code-specific payment rates, while maintaining clinical and resource homogeneity. Based on our review and modification, we revised the APC assignment for CPT code 53852 (the TUNA procedure) from APC 5375 (Level 5 Urology and Related Services) to APC 5374 (Level 4 Urology and Related Services) based on its clinical and resource homogeneity to the other procedures in the APC 5374. Specifically, our claims data show that the geometric mean cost for CPT code 53852 is approximately $2,989, which is comparable to the geometric mean cost of approximately $2,952 for APC 5374, rather than the geometric mean cost of approximately $4,055 for APC 5375. We believe that this modification to the proposed assignment of CPT code 53852 to APC 5374 is appropriate.
In addition, based on our latest claims data used for the final rule with comment period, we believe that CPT codes 53850 (the TUMT procedure) and 53852 (the TUNA procedure) are appropriately assigned to APC 5374. We also believe that, based on our assessment of the Rezum Therapy procedure and its cost, as reported in the CMS New Technology application, and based on our preliminary claims review for HCPCS code C9748 (which is the predecessor code for CPT code 53854), the Rezum Therapy procedure continues to be appropriately assigned to APC 5373 based on its clinical and resource homogeneity to the other procedures in the APC.
After consideration of the public comments we received, and based on the information presented above, as well as our evaluation of the latest claims data for the TUMT, TUNA, and Rezum Therapy procedures, we are finalizing the proposed APC assignment for the procedures described by CPT code 53850 and CPT code 53854, and revising the APC assignment for the procedure described by CPT code 53852 to APC 5374 (instead of APC 5375). The final APC and status indicator assignments are listed in Table 19 below. We refer readers to Addendum B to this final rule with comment period for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
For CY 2019, we proposed to continue to assign the procedure described by CPT code 0408T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; pulse generator with transvenous electrodes) to APC 5231 (Level 1 ICD and Similar Procedures) with a proposed payment rate of approximately $22,242.
• Cardiac contractility modulation (CCM): CPT code 0408T (which we proposed in APC 5231 (Level 1 ICD and Similar Procedures));
• Implantable cardioverter-defibrillator (ICD): CPT code 33249 (which we proposed in APC 5232 (Level 2 ICD and Similar Procedures)); and
• Cardiac Resynchronization Therapy Defibrillator (CRT-D): CPT codes 33249 (which we proposed to assign to APC 5232 (Level 2 ICD and Similar Procedures) and 33225 (which we proposed to package payment because this is an add-on code), or CPT code 33270 (which we proposed to assign to APC 5232 (Level 2 ICD and Similar Procedures)).
Based on the latest hospital outpatient claims data used for this final rule with comment period, our analysis does not support the assignment of the procedures describing the insertion of the complete CCM systems (described by CPT code 0408T) to APC 5232. We examined the latest hospital outpatient claims data for CPT code 0408T for dates of service between January 1, 2017, and December 31, 2017, that were processed on or before June 30, 2018. Our analysis of the claims data show a geometric mean cost of approximately $15,131 for CPT code 0408T, based on 2 single claims (out of 2 total claims). We do not believe that it is appropriate
We also analyzed the latest hospital outpatient claims data for the procedure for the insertion of the complete systems for ICD and CRT-D. The insertion of a complete ICD system is described by CPT code 33249, and our analysis reveals that the geometric mean cost of approximately $33,384 for CPT code 33249 based on 29,451 single claims (out of 29,867 total claims) is significantly higher than that of CPT code 0408T whose geometric mean cost is approximately $15,131. The insertion of a complete CRT-D system is described by either CPT code 33249 or 33270. Similar to the procedure described by CPT code 33249, our findings reveal that the geometric mean cost for the procedure described by CPT code 33270 is approximately $35,361 based on 1,011 single claims (out of 1,023 total claims), which is significantly greater than that of CPT code 0408T. Based on our claims data, we do not believe that we should reassign the procedure described by CPT code 0408T (the insertion of the complete CCM systems) to APC 5232, which is the APC assignment for the insertion of the complete ICD and CRT-D systems. We believe that the geometric mean cost of approximately $15,131 for CPT code 0408T is comparable to the geometric mean cost of about $22,187 for APC 5231. We also believe that the geometric mean cost of approximately $33,384 for CPT code 33249, and the geometric mean cost of approximately $35,361 for CPT code 33270 are comparable to the geometric mean cost of approximately $30,921 for APC 5232.
Therefore, after consideration of the public comment we received, we are finalizing our proposal, without modification, to assign CPT code 0408T to APC 5231, and to continue to assign CPT code 33249 and 33270 to APC 5232 for CY 2019. The final CY 2019 payment rate for the code can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
As we do every year, we will reevaluate the APC assignment for CPT codes 0408T, 33249, and 33270 for the next rulemaking cycle. We remind hospitals that we review, on an annual basis, the APC assignments for all items and services paid under the OPPS.
In Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign eight new CY 2019 cardiac resynchronization therapy CPT codes to various APCs, which are listed in Table 20 below. The codes were listed as 06X5T, 06X6T, 06X7T, 06X8T, 06X9T, 07X2T, 06X0T, and 07X0T (the 5-digit CMS placeholder codes) in Addendum B with short descriptors and in Addendum O with long descriptors to the CY 2019 OPPS/ASC proposed rule. We also assigned these codes to comment indicator “NP” in Addendum B to the proposed rule to indicate that the codes are new for CY 2019 with proposed APC assignments and that public comments would be accepted on their proposed APC assignments. We note that these codes will be effective January 1, 2019.
• CPT code 0515T (Insertion of wireless cardiac stimulator for left ventricular pacing, including device interrogation and programming, and imaging supervision and interpretation
• CPT code 0516T (Insertion of wireless cardiac stimulator for left ventricular pacing, including device interrogation and programming, and imaging supervision and interpretation when performed; electrode only)—from the proposed assignment to APC 5221 (Level 1 Pacemaker and Similar Procedures) to APC 5194 (Level 4 Endovascular Procedures);
• CPT code 0517T (Insertion of wireless cardiac stimulator for left ventricular pacing, including device interrogation and programming, and imaging supervision and interpretation when performed; pulse generator component(s) only (battery and/or transmitter))—from the proposed assignment to APC 5221 to APC 5222 (Level 2 Pacemaker and Similar Procedures);
• CPT code 0520T (Removal and replacement of wireless cardiac stimulator for left ventricular pacing; pulse generator component(s) (battery and/or transmitter) including placement of a new electrode)—from the proposed assignment to APC 5221 to APC 5231; and
• CPT code 0521T (Interrogation device evaluation (in person) with analysis, review and report, includes connection, recording, and disconnection per patient encounter, wireless cardiac stimulator for left ventricular pacing)—from the proposed assignment to APC 5731 (Level 1 Minor Procedures) to APC 5741 (Level 1 Electronic Analysis of Devices)
First, the commenter stated that CPT codes 0515T and 0520T describe the implantation or removal/replacement of the complete system and, consequently, these procedures should be assigned to APC 5231. Second, the commenter stated that the resources associated with the procedure described by CPT 0516T are similar to those procedures described by CPT code 33274 (Transcatheter insertion or replacement of permanent leadless pacemaker, right ventricular, including imaging guidance (
In summary, after consideration of the public comment we received, we are finalizing our proposal to assign the procedures described by CPT codes 0518T, 0519T, 0521T, and 0522T to the final APCs listed in Table 21 below. We are modifying our proposed APC assignment of the procedures described by CPT codes 0515T, 0516T, 0517T, and 0520T, and these modifications are reflected in the final APCs listed in Table 21 below. The final CY 2019 payment rate for CPT codes 0515T through 0521T can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
Chimeric Antigen Receptor (CAR) T-cell therapy is a cell-based gene therapy in which T-cells are collected and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient's cancerous cells. The CAR T-cells are then administered to the patient to attack certain cancerous cells and the individual is observed for potential serious side effects that would require medical intervention.
Two CAR T-cell therapies received FDA approval in 2017. KYMRIAH® (manufactured by Novartis Pharmaceuticals Corporation) was approved 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. In May 2018, KYMRIAH® received FDA approval for a second indication, treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (DLBCL), high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma. YESCARTA® (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.
As indicated in the CY 2019 OPPS/ASC proposed rule (83 FR 37114), the HCPCS code to describe the use of KYMRIAH® (HCPCS code Q2040) has been active since January 1, 2018 for OPPS, and the HCPCS code to describe the use of YESCARTA® (HCPCS code Q2041) has been active since April, 1, 2018 for OPPS. The HCPCS coding for the currently approved CAR T-cell therapies include leukapheresis and dose preparation procedures because these services are included in the manufacturing of these biologicals. Both of these CAR T-cell therapies were approved for transitional pass-through payment status, effective April 1, 2018. The HCPCS codes that describe the use of these CAR T-cell therapies were assigned status indicator “G” in Addenda A and B to the CY 2019 OPPS/ASC proposed rule.
As discussed in section V.A.4. (Drugs, Biologicals, and Radiopharmaceuticals with New or Continuing Pass-Through Payment Status in CY 2019) of this final rule with comment period, we are finalizing our proposal to continue pass-through payment status for HCPCS code Q2040 (which is being deleted and replaced with HCPCS code Q2042, effective January 1, 2019) and HCPCS code Q2041 for CY 2019. In section V.A.4. of this final rule with comment period, we also are finalizing our proposal to determine the pass-through payment rate following the standard ASP methodology, updating pass-through payment rates on a quarterly basis if applicable information indicates that adjustments to the payment rates are necessary.
The AMA created four Category III CPT codes that are related to CAR T-cell therapy, effective January 1, 2019. As listed in Addendum B of the CY 2019 OPPS/ASC proposed rule, we proposed to assign procedures described by these CPT codes, 0537T, 0538T, 0539T, and 0540T, to status indicator “B” (Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x)) to indicate that the services are not paid under the OPPS. We note that, these codes were listed as placeholder CPT codes 05X1T, 05X2T, 05X3T, and 05X4T in both Addendum B and O to the CY 2019
At the summer 2018 meeting of the HOP Panel, the HOP Panel recommended that CMS reassign the status indicator for procedures described by these specific CPT codes from “B” to “S”. The Panel further recommended that CMS assign the procedures described by CPT code 0537T and CPT code 0540T to APC 5242 (Level 2 Blood Product Exchange and Related Services), and the procedures described by CPT code 0538T and CPT code 0539T to APC 5241 (Level 1 Blood Product Exchange and Related Services).
A few commenters believed that there are possible similarities between the CAR T-cell procedure CPT code 0540T and chemotherapy codes, in general. However, other commenters asserted that CAR T-cell services were distinct from the services associated with chemotherapy and stem cell transplant codes, but noted that the codes suggested were the best available approximations for payment at present and could provide useful benchmarks of resource utilization. Some commenters also supported the creation of a new Autologous HCT C-APC to adequately compensate providers for providing CAR T-cell related services. Some commenters requested that the existing Q-codes for CAR T-cell therapies be revised to reference only the CAR T-cell products, and that leukapheresis and other services related to the preparation, collection and treatment be separately coded and paid.
A few commenters referenced the National Coverage Decision (NCD) for apheresis (effective 1992), which provides coverage only under limited conditions for therapeutic apheresis, and asked CMS to clarify whether it applies to harvesting blood-derived T-lymphocytes for development of genetically modified autologous CAR T-cells. Some commenters referenced the ongoing National Coverage Analysis (NCA) for CAR T-cells, and asked CMS to provide guidance in the interim on how to bill for CAR T-cells and its therapies' administration.
The commenters also suggested additional modifications to HCPCS codes Q2040 and Q2041, such as adopting HCPCS J-codes instead of HCPCS Q-codes. Some commenters requested guidance on how to bill for specific services, incomplete services, or partial services related to CAR T-cell therapy, including but not limited to, billing for pre-infusion steps, billing for services provided a number of days before the infusion, billing if the CAR T-cell product is not infused, and billing if services are provided at different facilities, such as both inpatient and outpatient facilities.
Finally, another commenter supported the proposal not to pay separately for procedures described by CPT codes 0537T, 0538T and 0539T because the commenters maintained that payment for these CPT codes and the performance of the services describe various steps of the manufacturing process and, therefore, are appropriately included and conveyed in the descriptors of and the existence of Q-codes for CAR T-cell therapies. The commenter supported the appropriateness of including these steps in the payment for the drug as a means to ensure the manufacturer can preserve the integrity of the process and to maximize the quality of therapy. Finally, one commenter believed that separate payments for leukapheresis would increase beneficiary cost-sharing.
With respect to NCD 110.14 for apheresis (Therapeutic Pheresis) (
In regard to comments concerning CPT code 0540T, we were persuaded by commenters that the administration of CAR T-cell services would be more specifically described by CPT code 0540T. Because CPT code 0540T is a new code for CY 2019, we do not have any claims data on which to base our proposed payment rate. In the absence of claims data, we reviewed the clinical characteristics of the procedures to determine whether they are similar to existing procedures. After reviewing information from public commenters and input from our medical advisors, we believe that new CPT code 0540T is clinically similar to the services assigned to APC 5694 (Level IV Drug Administration), with a proposed payment rate of approximately $291, such as the procedure described by CPT code 96413 (Chemotherapy administration, intravenous infusion technique; up to 1 hour, single or initial substance/drug). We acknowledge commenters' supporting data and indications that CAR T-cell service is complex, distinct from chemotherapy, and has the potential for highly adverse reactions. However, we note that CPT's prefatory language for the “Chemotherapy and Other Highly Complex Drug or Highly Complex Biologic Agent Administration” section in which the procedure described by CPT code 96413, and some other services assigned to APC 5694 are listed, describes these procedures as administration of highly complex drugs or biologic agents with greater incidence of severe adverse patient reaction. We also note that the unique toxicities associated with CAR T-cell therapies tend not to occur at time of infusion, and services to monitor or treat adverse reactions on a subsequent day would not be included in the procedure described by CPT code 0540T. Therefore, we are accepting the HOP Panel's recommendation and the commenters' request to reassign the status indicator assignment of the procedure described by CPT code 0540T from “B” to “S.” However, we are not accepting the HOP Panel's recommendation and the commenters' request to assign the procedure described by CPT code 0540T to APC 5242 (Level 2 Blood Product Exchange and Related Services), but instead are assigning the procedure described by CPT code 0540T to APC 5694 (Level IV Drug Administration) for CY 2019. We remind hospitals that every year, we review the APC assignments for all services and items paid under the OPPS, and we will reevaluate the APC assignment for the procedures described by CPT code 0540T once sufficient claims data for this code become available.
In summary, after consideration of the public comments we received, we are adopting as final, without modification, the proposal to assign status indicator “B” to CPT codes 0537T, 0538T, and 0539T for CY 2019. We are revising our proposal and finalizing the policy to assign status indicator “S” to CPT code 0540T and to assign CPT code 0540T to APC 5694 for CY 2019. Additionally, for CY 2019, we are assigning status indicator “D” to CPT code Q2040, status indicator “G” to HCPCS code Q2041, and status indicator “G” to HCPCS code Q2042, as summarized in Table 22 below. We refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. In addition, we refer readers to Addendum D1 to this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2019.
For CY 2019, we proposed to continue to assign CPT code 0356T (Insertion of drug-eluting implant (including punctal dilation and implant removal when performed) into lacrimal canaliculus, each) to APC 5733 (Level 3 Minor Procedures) with a proposed payment rate of approximately $57. We also proposed to continue to assign the CPT code to status indicator “Q1” to indicate one of the following with regards to payment:
• Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”; or
• Composite APC payment if billed with specific combinations of services based on OPPS composite-specific payment criteria. Payment is packaged into a single payment for specific combinations of services; or
• In other circumstances, payment is made through a separate APC payment.
After consideration of the public comments we received, we are finalizing our proposal, without
At the annual meeting for the HOP Panel held on August 21, 2017, the HOP Panel recommended that, for CY 2018, CMS examine the number of APCs for endovascular procedures. The HOP Panel also recommended that the appropriate Panel subcommittee review the APCs for endovascular procedures to determine whether more granularity (that is, more APCs) is warranted.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59293 through 59294), we stated that we believed that the current C-APC levels for the Endovascular Procedures C-APC family provide an appropriate distinction between the resource costs at each level and clinical homogeneity. We also stated that we would continue to review the C-APC structure for endovascular procedures to determine if any additional granularity is necessary for this C-APC family.
Using the most recent data available for the CY 2019 OPPS/ASC proposed rule, we analyzed the four existing levels of the Endovascular Procedures C-APCs. We did not observe any violations of the 2 times rule within the current Endovascular Procedures C-APC structure. Some stakeholders have suggested that for certain procedures, such as angioplasty procedures involving the use of a drug-coated balloon in addition to a nondrug-coated balloon, resource costs are significantly higher than the geometric mean cost (and associated C-APC payment) for all of the angioplasty procedures combined. We stated in the proposed rule that we recognize that the costs of a given procedure, involving additional devices, will be higher than the costs of the procedure when it does not involve such additional devices. However, the OPPS is a prospective payment system based on a system of averages in which the costs of some cases within an APC will be more costly than the APC payment rate, while the costs of other cases will be less costly. While we believe that there is sufficient granularity within the existing Endovascular Procedures C-APC structure and at least one stakeholder agrees, we stated that we have also received input from other stakeholders who have suggested alternative structures for this C-APC family that include a five-level structure and a six-level structure. An illustration of these proposed C-APC structure levels was displayed in Table 15 and Table 16, respectively, of the proposed rule. Because interested stakeholders have suggested a variety of options for the endovascular procedures C-APC structure, including keeping the existing C-APC structure, in the CY 2019 OPPS/ASC proposed rule, we proposed to maintain the existing four-level structure for this C-APC family listed in Table 14 of the proposed rule. However, we invited public comments on our proposal, as well as the stakeholder-requested five-level and six-level structures displayed in the Tables 15 and 16 of the proposed rule. We noted that the approximate geometric mean costs associated with the suggested five-level and six-level C-APC structures shown in Tables 15 and 16 of the proposed rule were only estimates and, if either of the suggested structure levels were adopted, they would be subject to change, depending on the final rule with comment period data and the particular services that are assigned to each C-APC.
Other commenters also agreed with CMS' assessment that the four-level APC structure and the assignment of the procedures to these APCs does not result in any 2 times rule violations, and believed that the current granularity within the existing Endovascular Procedures C-APCs' structure sufficiently represents resource cost and clinical homogeneity.
Some of these commenters believed that the current structure of the Endovascular Procedures APCs is insufficiently granular, and noted that the current APC structure has significant differentials in payments of over $5,000 between the current procedures assigned to Level 2 (APC 5192) and between the procedures assigned to Level 3 and Level 4 (APC 5194). These commenters further contended that the large numbers of procedures assigned to each level of APC, coupled with the high total volume of procedures assigned to each level within each APC, prevent technology costs from being adequately and accurately reflected in the OPPS payment rates. As a result, these commenters requested that CMS create a six-level structure Endovascular Procedure APC reflecting the following cost bands:
Some of these commenters also specifically suggested that the procedures described by CPT code 37224 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal angioplasty) and HCPCS code C2623 (Catheter, transluminal angioplasty, drug-coated, non-laser); and CPT code 37726 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed) and HCPCS code C1874 (Stent, coated/covered, with delivery system) be assigned to the newly leveled structure within APC 5193 and APC 5195, respectively, in order to take into consideration the performance of and utilization of procedures involving drug-coated balloons and drug eluting stents that are required for these procedures.
Several of these same commenters requested that CMS create new HCPCS code modifiers to take into account the performance of the procedures described by CPT code 37724 when reported in combination with HCPCS code C2623, and CPT code 37226 when reported in combination with HCPCS code C1874. The commenters provided that CMS could model the costs for these cases using CY 2017 and CY 2018 claims data when these codes are reported in combination with one another. The commenters further believed that the creation of new HCPCS code modifiers are necessary in order to differentiate drug-coated device procedures from non-drug-coated device procedures, and will provide the granularity in HCPCS and APC coding that will allow CMS to collect data for the CPT/HCPCS codes to appropriately calculate payment rates within the APCs. Another commenter further stated that these procedures should be assigned to the newly created APC 5193 and APC 5195, respectively.
Using the most recent data available for this final rule with comment period, we analyzed the various alternative suggestions for the recommended HCPCS code placements, including maintaining the CY 2018 APC groupings, creating a six-level APC, and reconfiguring significant HCPCS code placements within the current structure. We note that, when we modeled the creation of a six-level structure APC and modeled a reconfiguration of significant HCPCS code placements, we noticed significant downward payment fluctuations for several services, some as high as a $2,500 decrease relative to the payment rate in CY 2018. Furthermore, based on these findings, we are still not convinced that we should pay for a complexity adjustment for the procedure described by CPT code 37224 when reported in combination with HCPCS code C2623 or for the procedure described by CPT code 37226 when reported in combination with HCPCS code C1874. As noted above and as provided in the proposed rule, the OPPS is a prospective payment system based on a system of averages in which the costs of some cases within an APC will be more costly than the APC payment rate, while the costs of other cases will be less costly and in these particular procedures we believe that if a complexity adjustment would be applied it would adversely affect the APC payment (83 FR 37095). Additionally, at this time, we do not support the creation of any new HCPCS codes for inclusion in the Endovascular Procedures APCs. Specifically, we do not believe that we have the needed evidence and data to support combining payment for either the procedure described by CPT code 37724 when reported in combination with HCPCS code C2623 or the procedure described by CPT code 37226 when reported in combination with HCPCS code C1874 because we believe that payment for these services are currently adequate.
However, we do share similar concerns with the commenters regarding the significant differential payments between the procedures assigned within the current four-level structure of the Endovascular Procedures APCs and intend to revisit this particular issue in future rulemaking. Therefore, after consideration of the public comments and suggestions we received, we are maintaining the CY 2018 APC structure of four levels for the Endovascular Procedures APCs. We understand the importance of payment stability for providers and believe that continuation of the four levels within the Endovascular Procedures APCs will minimize fluctuation in payment rates from CY 2018 to CY 2019. As displayed in the “Two Times Listing” file to this final rule with comment period, which is available via the internet on the CMS website, the APC geometric mean costs for APCs 5521 through 5524 are consistent with the CY 2018 APC geometric mean costs for the same APCs, indicating the relative weights that are used to calculate payment are stable.
We will continue to review this APC structure to determine if additional granularity is necessary for this C-APC family, including if additional HCPCS codes should be created in future rulemaking. We refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reported under the OPPS. Additionally, we refer readers to Addendum A to this final rule with comment period for the complete list of APCs and their payment rates under the OPPS. Both Addendum A and Addendum B are available via the internet on the CMS website.
As displayed in Table 25 below and in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign CPT codes 10009 and 10011 to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage), with a proposed payment rate of approximately $582. The codes were listed as 10X16 and 10X18 (the 5-digit CMS placeholder codes), respectively, in Addendum B with the short descriptors and in Addendum O with the long descriptors to the CY 2019 OPPS/ASC proposed rule. We also assigned these codes to comment indicator “NP” in Addendum B to indicate that the codes are new for CY 2019, with proposed APC assignments, and that public comments would be accepted on their proposed APC assignments. We note that these codes will be effective January 1, 2019.
After consideration of the public comment received, we are finalizing our proposal, without modification, to assign the procedures described by CPT codes 10009 and 10011 to APC 5071 for CY 2019. The final APC and status indicator assignments are listed in Table 25 below. We refer readers to Addendum B of this final rule with comment period for the final payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
As displayed in Table 26 below and in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign the procedures described by CPT codes 88364 through 88377 to status indicator “N” to indicate a packaged payment status, or status indicators “Q1” and “Q2” to indicate a conditionally packaged payment status, with APC assignments to either APC 5672 (Level 2 Pathology), with a proposed payment rate of approximately $145, or APC 5673 (Level 3 Pathology), with a proposed payment rate of approximately $273.
• Molecular pathology tests, because these relatively new tests may have a different pattern of clinical use than more conventional laboratory tests, which may make them generally less tied to a primary service in the hospital outpatient setting than the more common and routine laboratory tests that are packaged (80 FR 70348 through 70350);
• ADLTs, as designated under the CLFS, that meet the criteria of section 1834A(d)(5)(A) of the Act (81 FR 79593 through 79594), and
• Preventive laboratory tests that are listed in Section 1.2, Chapter 18 of the Medicare Claims Processing Manual (Pub. 100-04) (80 FR 70349).
We note that laboratory tests also are paid separately when they are the only services provided to a beneficiary on a claim (81 FR 79593). When payment for laboratory tests is not packaged under the OPPS, and the tests are listed on the CLFS, the payment is made at the CLFS payment rates, outside the OPPS, under Medicare Part B.
With regard to the services described by CPT codes 88364, 88369, and 88373, we proposed to continue to assign these add-on services to status indicator “N” because, under the OPPS, payment for services described by add-on codes are packaged in accordance with the regulations at § 419.2(b)(18).
In addition, with regard to the services described by CPT codes 88365, 88366, 88374, and 88377, we proposed to continue to assign these codes to status indicator “Q1” to indicate that these services are separately payable when not billed on the same claim as a HCPCS code assigned status indicator “S”, “T”, or “V”. Further, with regard to the services described by CPT codes 88367 and 88368, we proposed to continue to assign these codes to status indicator “Q2” to indicate that payment for these services will be packaged in the APC payment if billed on the same date of service as a HCPCS code assigned to status indicator “T”, but in all other circumstances, separate APC payment for the services would be made. Based on the nature of these services, we believe the payment for the services described by CPT codes 88365, 88366, 88367, 88368, 88374, and 88377 should continue to be conditionally packaged under the OPPS because these laboratory tests may be performed with other procedures on the same day.
In summary, because the services described by CPT codes 88364, 88365, 88366, 88367, 88368, 88369, 88373, 88374, and 88377 are not molecular pathology laboratory tests, ADLTs, or preventive laboratory tests as stated in the above response, we believe that we should continue to package the payment for these services under the OPPS. Therefore, after consideration of the public comment received, we are finalizing our proposal, without modification, to assign the services described by CPT codes 88364, 88365, 88366, 88367, 88368, 88369, 88373, 88374, and 88377 to the final APCs and status indicator assignments listed in Table 26 below. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website. In addition, we refer readers to Addendum D1 of this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2019.
For CY 2019, we proposed to continue to assign the procedures described by CPT code 19340 (Immediate insertion of breast prosthesis following mastopexy, mastectomy or in reconstruction) to C-APC 5092 (Level 2 Breast/Lymphatic Surgery and Related Procedures), with a proposed payment rate of approximately $4,960.
After consideration of the public comments we received and based on our analysis of the latest hospital outpatient claims data for the procedures described by CPT codes 19340, 19325, and 19342, we are finalizing our proposal, without modification, to continue to assign CPT code 19340 to C-APC 5092. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
In Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign eight new intracardiac ischemia monitoring CPT codes to various APCs, which are listed in Table 27 below. The codes were listed as 00X0T through 00X7T (the 5-digit CMS placeholder codes) in Addendum B with short descriptors and in Addendum O with long descriptors to the CY 2019 OPPS/ASC proposed rule. We also assigned these codes to comment indicator “NP” in Addendum B to the proposed rule to indicate that the codes are new for CY 2019, with proposed APC assignments, and that public comments would be accepted on their proposed APC assignments. We note these codes will be effective January 1, 2019. Although the codes are new for CY 2019, the services associated with intracardiac ischemia monitoring were previously described by CPT codes 0302T through 0307T, which were deleted on December 31, 2017.
In addition, we reviewed our claims data for the predecessor CPT code 0302T that were submitted during CY 2012 through CY 2017. We note that predecessor CPT code 0302T became effective July 1, 2012 and was deleted on December 31, 2017. Our analysis of the claims data for CPT code 0302T revealed no single claim submitted for CY 2017, CY 2016, CY 2014, CY 2013, or CY 2012. We did find one claim that was submitted during CY 2015 with a geometric mean cost of approximately $4,619. However, based on cost information submitted to CMS in the New Technology APC application, we believe that APC 5223, whose geometric mean cost is approximately $9,964, is the appropriate APC assignment for the procedure described by CPT code 0525T. We believe that the procedure described by CPT code 0525T shares similar resource and clinical homogeneity to the other procedures currently assigned to APC 5223. Consequently, we did not assign the code to a New Technology APC because the services assigned to APC 5223 are clinically similar to the service described by CPT code 0525T. Therefore, we believe that APC 5223 is the more appropriate APC assignment for the procedure described by CPT code 0525T.
• CPT code 0462T (Programming device evaluation (in person) with iterative adjustment of the implantable mechano-electrical skin interface and/or external driver to test the function of the device and select optimal permanent programmed values with analysis, including review and report, implantable aortic counterpulsation ventricular assist system, per day);
• CPT code 0463T (Interrogation device evaluation (in person) with analysis, review and report, includes connection, recording and disconnection per patient encounter, implantable aortic counterpulsation ventricular assist system, per day); and
• CPT code 0472T (Device evaluation, interrogation, and initial programming of intraocular retinal electrode array (
In summary, after consideration of the public comment we received, we are finalizing our proposal, without modification, to assign the services described by CPT codes 0525T through 0532T to the final APCs listed in Table 28 below. We note that HCPCS code C9750 will be deleted December 31, 2018, because it will be replaced with CPT code 0525T, effective January 1, 2019. The final CY 2019 payment rate for CPT codes 0525T through 0532T can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
As noted in Table 29 below, for CY 2019, we proposed to continue to assign the procedure described by CPT code 0472T to APC 5743 (Level 3 Electronic Analysis of Devices), with a proposed payment rate of approximately $280. We also proposed to continue to assign the procedure described by CPT code 0473T to APC 5742 (Level 2 Electronic Analysis of Devices), with a proposed payment rate of approximately $115.
Therefore, after consideration of the public comment received, we are finalizing our proposal, without modification, to continue to assign the procedures described by CPT codes 0472T and 0473T to APCs 5743 and APC 5742, respectively, for CY 2019. The final APC and status indicator assignments are listed in Table 29 below. The final payment rates for these codes, where applicable, can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
In Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign the procedure described by CPT code 50436 (Dilation of existing tract, percutaneous, for an endourologic procedure including imaging guidance (
After consideration of the public comment we received, we are finalizing our proposal to assign the procedure described by CPT code 50436 to C-APC 5373. We refer readers to Addendum B of this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
In prior years, the procedure described by CPT code 0308T (Insertion of ocular telescope prosthesis including removal of crystalline lens or intraocular lens prosthesis) has been assigned to the APC 5495 (Level 5
In reviewing the claims data available for the proposed rule for CY 2019 OPPS ratesetting, we found that there were only two claims containing procedures described by CPT code 0308T, with a geometric mean of $5,438.99 and a median of $8,237.56. Based on those two claims, APC 5495 would have had a proposed geometric mean of $5,438.99 and a proposed median of $8,237.56. However, based on its estimated costs in the most recently available claims data, we stated in the proposed rule that we believe that the procedure described by CPT code 0308T is more appropriately placed in the APC 5493, which has a geometric mean cost of $9,821.47, which is more comparable to that of the procedure described by CPT code 0308T. Therefore, for CY 2019, we proposed to reassign the procedure described by CPT code 0308T from APC 5495 to APC 5493 (Level 3 Intraocular Procedures) and to delete APC 5495. We stated that we would continue to monitor the volume of claims reporting a procedure described by CPT code 0308T available to us for future ratesetting.
While we appreciate the stakeholder's comments regarding changes in estimated costs based on the claims data available for ratesetting, we have concerns with establishing a New Technology APC methodology for a clinical APC especially in the absence of a New Technology application, which is used to evaluate new technology APC requests. We also note that the procedure described by CPT code 0308T has historically been assigned to a clinical APC beginning with the CY 2013 OPPS.
Recognizing the estimated cost based on the final rule claims data and the commenter's concerns, we believe that the procedure described by CPT code 0308T is appropriate for assignment to clinical APC 5494 (Level 4 Intraocular Procedures). CPT code 0308T has device-intensive status based on its device offset percentage and the fact that the APC to which the procedure is assigned has fewer than 100 total claims. Therefore, the low-volume device intensive policy of using the median cost for OPPS ratesetting would apply.
After consideration of the public comment we received, we are modifying our proposal to assign the procedure described by CPT code 0308T to APC 5493 and instead are assigning the procedure described by CPT code 0308T to APC 5494 (Level 4 Intraocular Procedures) for CY 2019.
As displayed in Table 30 below and in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign the services described by CPT codes 0541T and 0542T to status indicator “E1” to indicate that these codes are not payable by Medicare when submitted on outpatient claims (any outpatient bill type) because the services associated with these codes are either not covered by any Medicare outpatient benefit category, statutorily excluded by Medicare, or not reasonable and necessary. The codes were listed as 0X01T and 0X02T (the 5-digit CMS placeholder codes), respectively, in Addendum B, with the short descriptors, and in Addendum O, with the long descriptors, to the CY 2019 OPPS/ASC proposed rule. We also assigned these codes to comment indicator “NP” in Addendum B to indicate that the codes are new for CY 2019 and that public comments would be accepted on their proposed status indicator assignments. We note that these codes will be effective January 1, 2019.
Because the technology has been approved by the FDA, the commenter requested that CMS assign the procedures described by both CPT codes to APC 5593 (Level 3 Nuclear Medicine) or APC 5724 (Level 4 Diagnostic Tests and Related Services). Although the commenter requested an assignment to either APC 5593 or 5724, the commenter also noted that the services described by CPT codes 0541T and 0542T are clinically comparable to the services that are assigned to the following three APCs:
• APC 5593 (Level 3 Nuclear Medicine), with a proposed payment rate of approximately $1,228, which includes—
○ CPT code 78451 (Myocardial perfusion imaging); and
○ CPT code 78452 (Myocardial perfusion imaging)
• APC 5594 (Level 4 Nuclear Medicine), with a proposed payment rate of approximately $1,386, which includes—
○ CPT code 78491 (Positron Emission Tomography (PET) myocardial functional imaging); and
○ CPT code 78492 (Positron Emission Tomography (PET) myocardial functional imaging)
• APC 5724 (Level 4 Diagnostic Tests and Related Services), with a proposed payment rate of approximately $918, which includes—
○ CPT code 95965 (Magnetoencephalography (MEG)); and
○ CPT code 95966 (Magnetoencephalography (MEG))
In addition to the requested APC assignment, the commenter requested that CMS assign the codes status indicator “S” (Procedure or Service, Not Discounted When Multiple. Paid under OPPS; separate APC payment), instead of status indicator “E1”, similar to the status indicator assignment for the comparable codes in APCs 5593, 5594, and 5724.
Therefore, after consideration of the public comment received, we are finalizing our proposal, without modification, for the assignment of status indicator “E1” to the procedures described by CPT codes 0541T and 0542T. The final status indicator assignment for both codes is listed in Table 30 below. We refer readers to Addendum D1 of this final rule with comment period for the complete list of the OPPS payment status indicators and their definitions for CY 2019. Addendum D1 is available via the internet on the CMS website.
Prior to the CY 2016 OPPS, payment for musculoskeletal procedures was primarily divided according to anatomy and the type of musculoskeletal procedure. As part of the CY 2016 reorganization to better structure the OPPS payments towards prospective payment packages, we consolidated those individual APCs so that they became a general Musculoskeletal Procedures APC series (80 FR 70397 through 70398).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59300), we continued to apply a six-level structure for the Musculoskeletal APCs because doing so provided an appropriate distinction for resource costs at each level and to provide clinical homogeneity. However, we also indicated that we would continue to review the structure of these APCs to determine whether additional granularity would be necessary.
While we did not propose any changes to the 2019 OPPS structure of the Musculoskeletal Procedures APC series in the CY 2019 OPPS/ASC proposed rule, we stated that we recognize that commenters have previously expressed concerns regarding the granularity of the current APC levels and requested establishment of additional APC levels. Therefore, we solicited public comments on the creation of a new APC level between the current Level 5 and Level 6 within the Musculoskeletal Procedures APC series.
With regards to the placement of the total knee arthroplasty procedure in APC 5115 (Level 5 Musculoskeletal Procedures), we continue to believe that C-APC 5115 is an appropriate APC assignment for the procedures described by CPT code 27447, which has an estimated geometric mean cost of $9,997.45. Further, we note that the 50th percentile IPPS payment for total knee arthroplasty procedures without major complications or comorbidities (MS-DRG 470) is approximately $11,550 for FY 2019. We note that the final CY 2019 payment for New Technology APC 1575 is $12,500.50. As previously stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 58394 through 59385), we would expect that beneficiaries selected for outpatient total knee arthroplasty procedures would generally be expected to be less complex than those treated as hospital inpatients. Therefore, we do not believe that it would be appropriate for the OPPS payment rate to exceed the IPPS payment rate for total knee arthroplasty procedures without major complications/comorbidities because IPPS cases would generally be expected to be more complicated and complex than those performed in the hospital outpatient setting.
We note that we rely on hospitals to bill all HCPCS codes accurately in accordance with their code descriptors and CPT and CMS instructions, as applicable, and to report charges on claims and charges and costs on their Medicare hospital cost reports appropriately (77 FR 68324). As we do every year, we will review and evaluate the APC groupings based on the latest available data in the next rulemaking cycle.
After consideration of the public comments we received, we are finalizing the six level Musculoskeletal Procedures APC structure. We also are finalizing the proposed assignments of the procedures described by CPT codes 27279 (Arthrodesis sacroiliac joint) to APC 5116, the procedures described by CPT codes 28740 (Fusion of foot bones) and 28297 (Correction hallux valgus) to APC 5114, and the procedures described by CPT code 27447 (Total knee arthroplasty) to APC 5115.
For CY 2019, we proposed to continue to assign the procedures described by HCPCS code C9749 (Repair of nasal vestibular lateral wall stenosis with implant(s)) to APC 5164 (Level 4 ENT Procedures) with a proposed payment rate of approximately $2,241. We note that HCPCS code C9749 describes the Latera absorbable implant procedure for nasal airway obstruction.
Therefore, after consideration of the public comment we received, we are finalizing our proposal, without modification, to assign the procedure described by HCPCS code C9749 from APC 5164 to APC 5165. The final payment rate for HCPCS code C9749 can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
For CY 2019, we proposed to continue the existing two-level structure of the Nerve Procedures APCs (APC 5431 through 5432), as displayed in Table 32 below and in Addendum A to the CY 2019 OPPS/ASC proposed rule (which is available via the internet on the CMS website).
The commenter further believed that CMS should create a new HCPCS code modifier in order to track, research, and identify the use of non-opioid pain management alternatives that are resulting in positive beneficiary health care impacts and outcomes, which are reducing opioid use and combatting the opioid crisis. Additionally, the commenter included a list of applicable continuous nerve block procedure codes (shown in the table below) to which the commenter suggested that a HCPCS modifier could be appended to indicate that the procedure would receive separate payment.
The commenter also recommended that CMS develop two new HCPCSG-codes to describe the performance of radiofrequency nerve ablation procedures. The commenter suggested that one of the G-codes could be created to describe procedures involving the genicular nerve, and the other G-code could be created to describe procedures
With regard to the request to establish new HCPCS G-codes, although new CPT codes are in development for release for the CY 2020 update, we note that it does not appear that a request for new temporary Category III codes was made for CY 2019. Nonetheless, we intend to take the commenter's request for new HCPCS G-codes under advisement.
Therefore, after consideration of the public comment received, we are finalizing our CY 2019 Nerve Procedures APCs two-level structure, as proposed. We refer readers to Addendum A to this final rule with comment period for the complete list of APCs and their payment rates. In addition, we refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reported under the OPPS. Both Addendum A and Addendum B are available via the internet on the CMS website.
Section 1833(t)(2)(G) of the Act requires the Secretary to create additional groups of covered OPD services that classify separately those procedures that utilize contrast agents from those procedures that do not utilize contrast agents. In CY 2016, as a part of our comprehensive review of the structure of the APCs and procedure code assignments, we restructured the APCs that contain imaging services (80 FR 70392). The purpose of this restructuring was to more appropriately reflect the resource costs and clinical characteristics of the services classified within the Imaging APCs. The restructuring of the Imaging APCs resulted in broader groupings that removed the excessive granularity of grouping imaging services according to organ or physiologic system, which did not necessarily reflect either significant differences in resources or how these services are delivered in the hospital outpatient setting. In CY 2017, in response to public comments on the CY 2017 OPPS/ASC proposed rule, we further consolidated the Imaging APCs from 17 APCs in CY 2016 to 7 APCs in CY 2017 (81 FR 79633). These included four Imaging without Contrast APCs and three Imaging with Contrast APCs.
For CY 2018, we proposed to establish a new Level 5 Imaging without Contrast APC to more appropriately group certain imaging services with higher resource costs and stated that our latest claims data supported splitting the CY 2017 Level 4 Imaging without Contrast APC into two APCs such that the Level 4 Imaging without Contrast APC would include high frequency, low-cost services and the proposed Level 5 Imaging without Contrast APC would include low frequency, high-cost services. Therefore, for CY 2018, we proposed to add a fifth level within the Imaging without Contrast APCs (82 FR 33608). However, based on public comments, we did not finalize this proposal. In general, commenters disagreed with CMS' proposal to add a fifth level within the Imaging without Contrast APC series because they believed that the addition of a fifth level would reduce payment for several imaging services, including vascular ultrasound procedures (82 FR 59309 through 59311). Commenters also noted that the lower payment rates under the OPPS would also apply under the PFS.
For the CY 2019 OPPS/ASC proposed rule (83 FR 37096 through 37097), we reviewed the services assigned to the seven imaging APCs listed in Table 17 of the proposed rule. Specifically, we evaluated the resource costs and clinical coherence of the procedures associated with the four levels of Imaging without Contrast APCs and the three levels of Imaging with Contrast APCs, as well as identified for correction any 2 times rule violations, to the extent feasible. Based on the geometric mean cost for each APC, which was listed in Table 17 of the proposed rule, for CY 2019, we proposed to maintain the seven Imaging APCs, which consist of four levels of Imaging without Contrast APCs and three levels of Imaging with Contrast APCs, and to make minor reassignments to the HCPCS codes within this series to resolve or mitigate any violations of the 2 times rule, or both.
We invited public comments on our proposal. Moreover, we specifically expressed an interest in receiving public comments and recommendations on the proposed HCPCS code reassignments associated with each of the seven Imaging APCs. We referred readers to Addendum B to the proposed rule (which is available via the internet on the CMS website) for the proposed list of specific codes that would be reassigned to each Imaging APC.
Furthermore, the highest significant cost for a procedure within APC 5524 is for the procedure described by HCPCS 93312 (Echocardiography, transesophageal, real-time with image documentation (2d) (with or without m-mode recording); including probe placement, image acquisition, interpretation and report), which has a geometric mean cost of $854.45. This proposed reassignment would have a greater impact on the 2 times violation by being over the violation limit by approximately $138, compared to the assignment of the CPT code to APC 5523, which also has a 2 times violation, but to a lesser extent (that is, approximately $31). Therefore, based on this information, we are finalizing the proposed structure of APC 5523, with assignment of the CPT codes as proposed in the CY 2019 OPPS/ASC proposed rule. We will continue to monitor clinical homogeneity and resource costs within these APCs to identify any payment changes that may be warranted in future rulemaking.
Additionally, we refer readers to the Medicare CY 2019 OPPS Final Rule Claims Accounting narrative for additional details regarding the calculation of the geometric mean costs.
After consideration of the public comments we received, we are finalizing our proposal to maintain the existing levels of the Imaging APCs, which consist of four levels of Imaging without Contrast APCs and three levels of Imaging with Contrast APCs. Table 33 below compares the CY 2018 and CY 2019 geometric mean costs for the imaging APCs. We refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reported under the OPPS. In addition, we refer readers to Addendum D1 to this final rule with comment period for the status indicator meanings for all codes reported under the OPPS. Both Addendum B and Addendum D1 are available via the internet on the CMS website.
As listed in Addendum B of the CY 2019 OPPS/ASC proposed rule, we proposed to continue to assign the procedure described by HCPCS code C9733 to APC 5523 (Level 3 Imaging without Contrast) with a proposed payment rate of approximately $232. We also proposed to maintain the status indicator assignment of “Q2” (T-packaged) to indicate that payment for the service is conditionally packaged when performed in conjunction with other procedures on the same day but paid separately when performed as a stand-alone service.
In addition, with regard to the comment that hospitals underreport the procedure described by HCPCS code C9733, based on our analysis of the CY 2019 hospital outpatient claims data used for this final rule with comment period, we are unable to determine whether hospitals are underreporting the procedure. It is generally not our policy to judge the accuracy of hospital coding and charging for purposes of ratesetting. We rely on hospitals to accurately report the use of HCPCS codes in accordance with their code descriptors and CPT and CMS instructions, and to report services on
After consideration of the public comment received, we are finalizing our proposal with modification. Specifically, we are reassigning the procedure described by HCPCS code C9733 to APC 5572 instead of APC 5523, based on its clinical and resource homogeneity to the other procedures assigned to APC 5572. We refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
As displayed in Table 34 below and in Addendum B to the CY 2019 OPPS/ASC proposed rule, we proposed to assign the procedure described by CPT code 99453 to APC 5012 (Clinic Visits and Related Services) with a proposed payment rate of approximately $116. We also proposed to assign the procedure described by CPT code 99454 to APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed payment rate of approximately $37. The long descriptors for CPT codes 99453 and 99454 can be found in Table 34 below. The codes were listed as 990X0 and 990X1 (the 5-digit CMS placeholder codes), respectively, in Addendum B, with short descriptors, and in Addendum O, with long descriptors, to the CY 2019 OPPS/ASC proposed rule. We also assigned these codes to comment indicator “NP” in Addendum B to the proposed rule to indicate that the codes are new for CY 2019 with proposed APC assignments, and that public comments would be accepted on their proposed APC assignments. We note that these codes will be effective January 1, 2019.
Therefore, after consideration of the public comment received, we are finalizing our proposal without modification for the procedures described by CPT codes 99453 and 99454. The final APC and status indicator assignments are listed in Table 34 below. The final payment rates for these codes, where applicable, can be found in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
As displayed in Table 35 below and in Addendum B of the CY 2019 OPPS/ASC proposed rule, we proposed to continue to assign CPT codes 36465 and 36466 to APC 5054 (Level 4 Skin Procedures), with a proposed payment rate of approximately $1,565.
• CPT code 36473 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical; first vein treated);
• CPT code 36475 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, radiofrequency; first vein treated); and
• CPT code 36478 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, laser; first vein treated).
Therefore, after consideration of the public comment received, we are finalizing our proposal without modification for assignment of the procedures described by CPT codes 36465 and 36466 to APC 5054. The final APC and status indicator assignments are listed in Table 35 below. As we do every year, we review the APC assignments for all services and items paid under the OPPS. We will reassess the APC assignment for the procedures described by CPT codes 36465 and 36466 for the CY 2020 rulemaking. We refer readers to Addendum B to this final rule with comment period for the payment rates for all codes reportable under the OPPS. Addendum B is available via the internet on the CMS website.
Under section 1833(t)(6)(B)(iii) of the Act, the period for which a device category eligible for transitional pass-through payments under the OPPS can be in effect is at least 2 years but not more than 3 years. Prior to CY 2017, our regulation at 42 CFR 419.66(g) provided that this pass-through payment eligibility period began on the date CMS established a particular transitional pass-through category of devices, and we based the pass-through status expiration date for a device category on the date on which pass-through payment was effective for the category. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79654), in accordance with section 1833(t)(6)(B)(iii)(II) of the Act, we amended § 419.66(g) to provide that the pass-through eligibility period for a device category begins on the first date on which pass-through payment is made under the OPPS for any medical device described by such category.
In addition, prior to CY 2017, our policy was to propose and finalize the dates for expiration of pass-through status for device categories as part of the OPPS annual update. This means that device pass-through status would expire at the end of a calendar year when at least 2 years of pass-through payments have been made, regardless of the quarter in which the device was approved. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79655), we changed our policy to allow for quarterly expiration of pass-through payment status for devices, beginning with pass-through devices approved in CY 2017 and subsequent calendar years, to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through payment devices. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79648 through 79661) for a full discussion of the changes to the device pass-through payment policy. We also have an established policy to package the costs of the devices that are no longer eligible for pass-through payments into the costs of the procedures with which the devices are reported in the claims data used to set the payment rates (67 FR 66763).
As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires that, under the OPPS, a category of devices be eligible for transitional pass-through payments for at least 2 years, but not more than 3 years. There currently are no device categories eligible for pass-through payment.
Section 1833(t)(6) of the Act provides for pass-through payments for devices, and section 1833(t)(6)(B) of the Act requires CMS to use categories in determining the eligibility of devices for pass-through payments. As part of implementing the statute through regulations, we have continued to believe that it is important for hospitals to receive pass-through payments for devices that offer substantial clinical improvement in the treatment of Medicare beneficiaries to facilitate access by beneficiaries to the advantages of the new technology. Conversely, we have noted that the need for additional payments for devices that offer little or no clinical improvement over previously existing devices is less apparent. In such cases, these devices can still be used by hospitals, and hospitals will be paid for them through appropriate APC payment. Moreover, a goal is to target pass-through payments for those devices where cost considerations might be most likely to interfere with patient access (66 FR 55852; 67 FR 66782; and 70 FR 68629).
As specified in regulations at 42 CFR 419.66(b)(1) through (3), to be eligible for transitional pass-through payment under the OPPS, a device must meet the following criteria: (1) If required by FDA, the device must have received FDA approval or clearance (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA), or meet another appropriate FDA exemption; and the pass-through payment application must be submitted within 3 years from the date of the initial FDA approval or clearance, if required, unless there is a documented, verifiable delay in U.S. market availability after FDA approval or clearance is granted, in which case CMS will consider the pass-through payment application if it is submitted within 3 years from the date of market availability; (2) the device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part, as required by section 1862(a)(1)(A) of the Act; and (3) the device is an integral part of the service furnished, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted (either permanently or temporarily), or applied in or on a wound or other skin lesion. In addition, according to § 419.66(b)(4), a device is not eligible to be considered for device pass-through payment if it is any of the following: (1) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciation assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker).
Separately, we use the following criteria, as set forth under § 419.66(c), to determine whether a new category of pass-through payment devices should be established. The device to be included in the new category must—
• Not be appropriately described by an existing category or by any category previously in effect established for transitional pass-through payments, and was not being paid for as an outpatient service as of December 31, 1996;
• Have an average cost that is not “insignificant” relative to the payment amount for the procedure or service with which the device is associated as determined under § 419.66(d) by demonstrating: (1) The estimated average reasonable costs of devices in the category exceeds 25 percent of the applicable APC payment amount for the service related to the category of devices; (2) the estimated average reasonable cost of the devices in the category exceeds the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent; and (3) the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device exceeds 10 percent of the APC payment amount for the related service (with the exception of brachytherapy and temperature-monitored cryoblation, which are exempt from the cost requirements as specified at § 419.66(c)(3) and (e)); and
• Demonstrate a substantial clinical improvement, that is, substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or
Beginning in CY 2016, we changed our device pass-through evaluation and determination process. Device pass-through applications are still submitted to CMS through the quarterly subregulatory process, but the applications will be subject to notice-and-comment rulemaking in the next applicable OPPS annual rulemaking cycle. Under this process, all applications that are preliminarily approved upon quarterly review will automatically be included in the next applicable OPPS annual rulemaking cycle, while submitters of applications that are not approved upon quarterly review will have the option of being included in the next applicable OPPS annual rulemaking cycle or withdrawing their application from consideration. Under this notice-and-comment process, applicants may submit new evidence, such as clinical trial results published in a peer-reviewed journal or other materials for consideration during the public comment process for the proposed rule. This process allows those applications that we are able to determine meet all the criteria for device pass-through payment under the quarterly review process to receive timely pass-through payment status, while still allowing for a transparent, public review process for all applications (80 FR 70417 through 70418).
More details on the requirements for device pass-through payment applications are included on the CMS website in the application form itself at:
We received seven applications by the March 1, 2018 quarterly deadline, which was the last quarterly deadline for applications to be received in time to be included in the CY 2019 OPPS/ASC proposed rule. We received four of the applications in the second quarter of 2017, one of the applications in the third quarter of 2017, and two of the applications in the first quarter of 2018. None of the seven applications were approved for device pass-through payment during the quarterly review process.
Applications received for the later deadlines for the remaining 2018 quarters (June 1, September 1, and December 1), if any, will be presented in the CY 2020 OPPS/ASC proposed rule. We note that the quarterly application process and requirements have not changed in light of the addition of rulemaking review. Detailed instructions on submission of a quarterly device pass-through payment application are included on the CMS website at:
PROCEPT BioRobotics Corporation submitted an application for a new device category for transitional pass-through payment status for the AquaBeam System. The AquaBeam System is intended for the resection and removal of prostate tissue in males suffering from lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH). The applicant stated that this is a very common condition typically occurring in elderly men. The clinical symptoms of this condition can include diminished urinary stream and partial urethral obstruction.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the AquaBeam System is integral to the service provided, is used for one patient only, comes in contact with human skin, and is surgically implanted or inserted (either permanently or temporarily). The applicant also claimed the AquaBeam System meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or items for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service. However, in the CY 2000 interim final rule with comment period (65 FR 67804 through 67805), we explained how we interpreted § 419.43(e)(4)(iv). We stated that we consider a device to be surgically implanted or inserted if it is surgically inserted or implanted via a natural or surgically created orifice, or inserted or implanted via a surgically created incision. We also stated that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We consider items used to create incisions, such as scalpels, electrocautery units, biopsy apparatuses, or other commonly used operating room instruments, to be supplies or capital equipment, not eligible for transitional pass-through payments. We stated that we believe the function of these items is different and distinct from that of devices that are used for surgical implantation or insertion. Finally, we stated that, generally, we would expect that surgical implantation or insertion of a device occurs after the surgeon uses certain primary tools, supplies, or instruments to create the surgical path or site for implanting the device. In the CY 2006 final rule with comment period (70 FR 68629 and 68630), we adopted as final our interpretation that surgical insertion or implantation criteria include devices that are surgically inserted or implanted via a natural or surgically created orifice, as well as those devices that are inserted or implanted via a surgically created incision. We reiterated that we maintain all of the other criteria in § 419.66 of the regulations, namely, that we do not consider an item used to cut or otherwise create a surgical opening to be a device that is surgically implanted or inserted. We invited public comments on whether the AquaBeam System meets the eligibility criteria at § 419.66(b).
After consideration of the public comments we received, we are not approving device pass-through payment status for the AquaBeam System for CY 2019.
BioMonde US, LLC resubmitted an application for a new device pass-through category for the BioBag® (larval debridement therapy in a contained dressing), hereinafter referred to as the BioBag®. The application submitted contained similar information to the previous application received in March 2016 that was evaluated in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79650). The only new information provided by the applicant were additional studies completed since the original application addressing the substantial clinical improvement criterion.
According to the applicant, the BioBag® is a biosurgical wound treatment (“maggot therapy”) consisting of disinfected, living larvae (Lucilia sericata) in a polyester net bag; the larvae remove dead tissue from wounds. The BioBag® is indicated for debridement of nonhealing necrotic skin and soft tissue wounds, including pressure ulcers, venous stasis ulcers, neuropathic foot ulcers, and nonhealing traumatic or postsurgical wounds. Debridement, which is the action of removing devitalized tissue and bacteria from a wound, is required to treat or prevent infection and to allow the wound to progress through the healing process. This system contains disinfected, living larvae that remove the dead tissue from wounds and leave healthy tissue undisturbed. The larvae are provided in a sterile polyester net bag, available in different sizes. The only other similar product is free-range (that is, uncontained) larvae. Free-range larvae are not widely used in the United States because application is time consuming, there is a fear of larvae escaping from the wound, and there are concerns about proper and safe handling of the larvae. The total number of treatment cycles depends on the characteristics of the wound, the response of the wound, and the aim of the therapy. Most ulcers are completely debrided within 1 to 6 treatment cycles.
With respect to the newness criterion at § 419.66(b)(1), the applicant received FDA clearance for the BioBag® through the premarket notification section 510(k) process on August 28, 2013, and the first U.S. sale of the BioBag® occurred in April 2015. The June 1, 2017 application is more than 3 years after FDA clearance but less than 3 years after its first U.S. sale. We invited public comments on whether the BioBag® meets the newness criterion.
With respect to the eligibility criterion at § 419.66(b)(3), the applicant claimed that the BioBag® is an integral part of the wound debridement, is used for one patient only, comes in contact with human skin, and is applied in or on a wound. In addition, the applicant stated that the BioBag® meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, or item for which depreciation and financing expenses are recovered. We also had determined in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79650) that the BioBag® is not a material or supply furnished incident to a service. We invited public comments on whether the BioBag® meets the eligibility criterion.
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. With respect to the existence of a previous pass-through device category that describes the BioBag®, the applicant suggested a category descriptor of “Contained medicinal larvae for the debridement of necrotic non-healing skin and soft tissue wounds.” We have not identified an existing pass-through payment category that describes the BioBag®.
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. With respect to the substantial clinical improvement criterion, the applicant provided substantial evidence that larval therapy may improve outcomes compared to other methods of wound debridement. However, given the existence of the Medical Maggots®, another form of larval therapy that has been on the market since 2004, the relevant comparison is between the BioBag® and the Medical Maggots®. There are many reasons to suspect that the BioBag® could improve outcomes and be preferable to the Medical Maggots®. In essence, with the latter, the maggots are directly placed on the wound, which may result in escape, leading to infection control issues as well as dosing variability. In addition, there are the issues with patient comfort. With the Biobag®, the maggots are in a sealed container so escape is not an issue. The applicant cited a study showing large decreases in maggot escape with the BioBag® as opposed to the Medical Maggots®. However, the applicant did
Several other commenters discussed the benefits of the BioBag®, and a few commenters discussed the benefits of larval debridement of wounds more generally. The commenters cited benefits that included that the BioBag® debrides only dead tissue, that BioBag® makes it easier to apply and remove maggots from wounds, and that BioBag® is a lower-cost and less-invasive treatment than surgical debridement. The commenters did not provide any support of these benefits by medical studies.
For example, the study of debridement through containment,
After consideration of the public comments we received, we have determined that the BioBag® does not meet the significant clinical improvement criterion.
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of a device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. With respect to the cost criterion, the applicant stated that the BioBag® would be reported with CPT code 97602 (Removal of devitalized tissue from wound(s), non-selective debridement, without anesthesia (
Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated reasonable cost of $435 for the BioBag® exceeds the applicable APC amount for the service related to the category of devices of $153.12 by 284.09 percent ($435/$153.12 × 100 = 284.09 percent). Thus, we determined that the BioBag® appears to meet the first cost significance test.
The second cost significance test, at § 419.66(d)(2), provides that the estimated average reasonable cost of devices in the category must exceed the cost of the device-related portion of the APC payment amount by at least 25 percent, which means the device cost needs to be at least 125 percent of the device offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $435 for the BioBag® exceeds the proposed device-related portion of the APC amount for the related service of $0.02 by 2,175,000 percent ($435/$0.02 × 100 = 2,175,000 percent). Thus, we determined that the BioBag® appears to meet the second cost significance test.
Section 419.66(d)(3), the third cost significance test, requires that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount determined to be associated with the device exceeds 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $435 for the BioBag® and the portion of the proposed APC payment for the device of $0.02 exceeds 10 percent at 284.08 percent (($435−$0.02)/$153.12 × 100 = 284.08 percent). Thus, we determined that the BioBag® appears to meet the third cost significance test and satisfies the cost significance criterion. We invited public comments on whether the BioBag® meets the device pass-through payment criteria discussed in this section, including all three cost criteria.
We did not receive any public comments on the cost criteria for the BioBag®. Therefore, we have determined that the BioBag® does meet all three cost criteria.
After consideration of the public comments we received and our review of the criteria necessary to receive device pass-through payment, we are not approving the application for the BioBag® to receive device pass-through payment status in CY 2019 because the BioBag® does not meet the substantial clinical improvement criterion.
Next Science
The manufacturer stated in its application for transitional pass-through payment status that BlastX
Based on the evidence provided in the manufacturer's application, BlastX
Therefore, with respect to the eligibility criterion at § 419.66(b)(3), in the proposed rule, we determined that BlastX
We did not receive any public comments regarding the eligibility of BlastX
MiMedx® submitted an application for a new OPPS device category for transitional pass-through payment status for EpiCord®, a skin substitute product. According to the applicant, EpiCord® is a minimally manipulated, dehydrated, devitalized cellular umbilical cord allograft for homologous use that provides a protective environment for the healing process. According to the applicant, EpiCord® is comprised of the protective elements of the umbilical cord with a thin amnion layer and a thicker Wharton's Jelly mucopolysaccharides component. The Wharton's Jelly contains collagen, hyaluronic acid, and chondroitin sulfate, which are the components principally responsible for its mechanical properties.
The applicant stated that EpiCord® is packaged as an individual unit in two sizes, 2 cm x 3 cm and 3 cm x 5 cm. The applicant asserted that EpiCord® is clinically superior to other skin substitutes because it is much thicker than dehydrated amnion/chorion allografts, which allows for application over exposed bone, tendon, nerves, muscle, joint capsule and hardware. According to the applicant, due to its unique thicker, stiffer structure, clinicians are able to apply or suture EpiCord® for deep, tunneling wounds where other products cannot fill the entire wound bed or dead spaces.
With respect to the newness criterion at § 419.66(b)(1), EpiCord® was added to the MiMedx® registration for human cells, tissues, and cellular and tissue-based products (HCT/Ps) on December 31, 2015. In adding EpiCord, MiMedx® asserted that EpiCord® conformed to the requirements for HCT/Ps regulated solely under section 361 of the Public Health Service Act and the regulations at 21 CFR part 1271. For these products, FDA requires that the manufacturer register and list its HCT/Ps with the FDA's Center for Biologics Evaluation and Research (CBER) within 5 days after beginning operations and update its registration annually, and MiMedx® provided documentation verifying that EpiCord® had been registered. However, no documentation regarding an FDA determination that EpiCord® is appropriate for regulation solely under section 361 of the Public Health Service Act had been submitted. According to the applicant, December 31, 2015 was the first date of sale within the United States for EpiCord®. Therefore, it appears that market availability of EpiCord® is within 3 years of this application.
We note that a product that is regulated solely under section 361 of the Public Health Service Act and the regulations in 21 CFR part 1271, as asserted by the manufacturer of Epicord®, is not regulated as a device under the Federal Food, Drug, and Cosmetic Act. The regulations at 21 CFR 1271.20 state that “If you are an establishment that manufactures an HCT/P that does not meet the criteria set out in § 1271.10(a) [for regulation solely under section 361 of the Public Health Service Act and the regulations in part 1271], and you do not qualify for any of the exceptions in § 1271.15, yourHCT/P will be regulated as a drug, device, and/or biological product. . . .” The Federal Food, Drug, and Cosmetic Act requires that manufacturers of devices that are not exempt obtain marketing approval or clearance for their products from FDA before they may offer them for sale in the United States. We did not receive documentation from the applicant that EpiCord® is regulated as a device by FDA in accordance with Medicare regulations at 42 CFR 419.66(b)(1). We invited public comments on whether EpiCord® meets the newness criterion.
After consideration of the public comments we received, we have determined that EpiCord® meets the newness criterion.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, EpiCord® is a skin substitute product that is integral to the service provided, is used for one patient only, comes in contact with human tissue, and is surgically inserted into the patient. The applicant also claimed EpiCord® meets the device eligibility requirements of § 419.66(b)(4) because EpiCord® is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material. We invited public comments on whether EpiCord® meets these eligibility criteria.
We did not receive any public comments regarding whether EpiCord® meets the eligibility criterion. Based on the information we have received, we have determined that EpiCord® meets the eligibility criterion.
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We have not identified an existing pass-through category that describes EpiCord®. There are no present or previously established device categories for pass-through status that describe minimally manipulated, lyophilized, nonviable cellular umbilical membrane allografts regulated solely under section 361 of the Public Health Service Act and the regulations at 21 CFR part 1271. MiMedx® suggested a new device category descriptor of “Dehydrated Human Umbilical Cord Allografts” for EpiCord®.
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. With regard to the substantial clinical improvement criterion, the applicant asserted that EpiCord® reduces the mortality rate with use of the device; reduces the rate of device-related complications; decreases the rate of subsequent diagnostic or therapeutic interventions; decreases the number of future hospitalizations or physician visits; provides more rapid beneficial resolution of the disease process treated because of the use of the device; decreases pain, bleeding, or other quantifiable symptom; and reduces recovery time.
To determine if the product meets the substantial improvement criterion, we compared EpiCord® to other skin substitute products. Compared to NEOX CORD 1K Wound Allograft, EpiCord® has half the levels of Vascular Endothelial Growth Factor (VEGF) and insulin-like growth factor binding protein-4 (IGFBP-4) and lower levels of Glial Cell Line Derived Neurotrophic Factor (GDNF) and Epidermal Growth Factor (EGF). Despite EpiCord® having higher levels of other growth factors, the cumulative effect of these differences has not been sufficiently demonstrated in the application. Moreover, most professional opinions do not compare EpiCord® to specific alternative skin substitutes; the few that do are, for the most part, of limited specificity (in terms of foci of superiority to other skin substitutes). Studies demonstrated 41 percent higher relative rates (4.1 percent higher absolute rates) of severe complications for EpiCord® compared to standard of care. Additionally, the control group was moist dressings and offloading (instead of another umbilical or biologic product). Furthermore, 38 percent of EpiCord® patients in the study were smokers versus 58 percent of
Based on the evidence submitted with the application, we had insufficient evidence that EpiCord® provides a substantial clinical improvement over other treatments for wound care. We invited public comments on whether EpiCord® meets the substantial clinical improvement criterion.
The manufacturer responded to a statement in the proposed rule that noted 41 percent higher relative rates of severe complications for EpiCord® compared to the standard of care, and concerns the control group in the studies were moist dressings and offloading instead of a biologic product. The manufacturer indicated that the studies include adverse events from all causes and a new study in progress will show no adverse events directly related to EpiCord® or alginate dressings. The manufacturer also stated that many wound experts do not attempt to compare new products to each other because of the high variability of the composition of products, how they are applied, and the dynamics of how different products work.
The manufacturer replied to a statement in the CY 2019 OPPS/ASC proposed rule questioning the substantial higher amount of smokers in the control group for the primary study compared to the group of EpiCord® patients. The manufacturer noted that the concern is that smoking impairs wound healing, and the presence of a higher number of smokers in the control group casts doubt on the conclusion that the difference in outcomes between the control group and the EpiCord® group was because of the use of EpiCord®. The manufacturer performed statistical analyses and the manufacturer reported that it found the effect of the higher proportion of smokers in the control group was not statistically significant.
Finally, the manufacturer asserted that EpiCord® meets the substantial clinical improvement criterion as a result of the published multi-center randomized controlled study showing an 81-percent healing rate within 12 weeks, which increases to a 96-percent healing rate when adequate debridement is performed.
After consideration of the public comments we received, we have determined that EpiCord® does not meet the substantial clinical improvement criterion.
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. EpiCord® would be reported with CPT code 15271 or 15275. CPT code 15271 describes the application of skin substitute graft to trunk, arms, legs, total wound surface area up to 100 sq cm; first 25 sq cm or less wound surface area. CPT code 15275 describes the application of skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area up to 100 sq cm; first 25 sq cm or less wound surface area. Both codes are assigned to APC 5054 (Level 4 Skin Procedures). CPT codes 15271 through 15278 are assigned to either APC 5054 (Level 4 Skin Procedures), with a payment rate of $1,427.77 and a device offset of $4.70, or APC 5055 (Level 5 Skin Procedures), with a payment rate of $2,504.69 and a device offset of $35.01. The price of EpiCord® is $1,595 for the 2 cm x 3 cm and $3,695 for the 3 cm x 5 cm product size.
To meet the cost criterion for device pass-through payment, a device must pass all three tests of the cost criterion for at least one APC. Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated average reasonable cost of $3,695 for the 3 cm x 5 cm product exceeds the applicable APC amount for the service related to the category of devices of $1,427.77 by 258.80 percent ($3,695/$1427.77 × 100 percent = 258.80 percent). Therefore, it appears that EpiCord® meets the first cost significance test.
The second cost significance test, at § 419.66(d)(2), provides that the estimated average reasonable cost of the
Section 419.66(d)(3), the third cost significance test, requires that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $3,695 for the 3 cm x 5 cm product and the portion of the APC payment amount for the device of $4.70 exceeds 10 percent at 258.47 percent (($3,695−$4.70)/$1,427.77) × 100 percent = 258.47 percent). Therefore, it appears that EpiCord® meets the third cost significance test. Based on the costs submitted by the applicant and the calculations noted earlier, it appears that EpiCord® meets the cost criterion at § 419.66(c)(3) for new device categories. We invited public comments on whether EpiCord® meets the cost criterion for device pass-through payment.
We did not receive any public comments regarding the cost criteria for EpiCord®. Based on the information that we received, we have determined that EpiCord® meets the cost criteria.
After consideration of the public comments and additional information we have received, we are not approving EpiCord® for transition pass-through payment status in CY 2019 because the product does not meet the substantial clinical improvement criterion.
Respicardia, Inc. submitted an application for a new device category for transitional pass-through payment status for the remedē® System Transvenous Neurostimulator. According to the applicant, the remedē® System is an implantable phrenic nerve stimulator indicated for the treatment of moderate to severe central sleep apnea (CSA) in adult patients. The applicant stated that the remedē® System is the first and only implantable neurostimulator to use transvenous sensing and stimulation technology. The applicant also stated that the remedē® System consists of an implantable pulse generator, a transvenous lead to stimulate the phrenic nerve and a transvenous sensing lead to sense respiration via transthoracic impedance. Lastly, the applicant stated that the device stimulates a nerve located in the chest (phrenic nerve) that is responsible for sending signals to the diaphragm to stimulate breathing to restore normal sleep and respiration in patients with moderate to severe central sleep apnea (CSA).
With respect to the newness criterion at § 419.66(b)(1), the applicant received a Category B Investigational Device Exemption (IDE) from FDA on April 18, 2013. Subsequently, the applicant received approval of its premarket approval (PMA) application from FDA on October 6, 2017. The application for a new device category for transitional pass-through payment status for the remedē® System was received on May 31, 2017, which is within 3 years of the date of the initial FDA approval or clearance. We invited public comments on whether the remedē® System meets the newness criterion.
After consideration of the public comments we received, we believe that the remedē® System meets the newness criterion.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the remedē® System is integral to the service provided, is used for one patient only, comes in contact with human skin, and is applied in or on a wound or other skin lesion. The applicant also claimed the remedē® System meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We have not identified an existing pass-through payment category that describes the remedē® System. The applicant proposed a category descriptor for the remedē® System of “generator, neurostimulator (implantable), non-rechargeable, with transvenous sensing and stimulation.” We invited public comments on this issue.
After consideration of the public comments we received, we believe that the remedē® System meets the eligibility criterion.
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. With respect to this criterion, the applicant submitted several journal articles that discussed the health effects of central sleep apnea (CSA) which include fatigue, decreased mental acuity, myocardial ischemia, and dysrhythmias. The applicant stated that patients with CSA may suffer from poor clinical outcomes, including myocardial infarction and congestive heart failure.
The applicant claims that the remedē® System has been found to significantly improve apnea-hypopnea index (AHI), which is an index used to indicate the severity of sleep apnea. AHI is represented by the number of apnea and hypopnea events per hour of sleep and was used as the primary effectiveness endpoint in the remedē® System pivotal trial. The applicant noted that the remedē® System was shown to improve AHI in small, self-controlled studies as well as in larger trials.
The applicant reported that in the pivotal study, a large, multicenter, randomized controlled trial of CSA patients, intention-to-treat analysis found that 51 percent (35/68) of CSA patients using the remedē® System had greater than 50 percent reduction of apnea-hypopnea index (AHI) from baseline at 6 months compared to 11 percent (8/73) of the control group (p<0.0001). Per-protocol analysis found that 60 percent (35/58) of remedē® System patients had a greater than 50
According to the applicant, an exploratory post-hoc analysis of patients with CSA and congestive heart failure (CHF) in the Pivotal trial found that, at 6 months, the remedē® System group had a greater percentage of patients with >=50 percent reduction in AHI compared to control group (63 percent versus 4 percent, p< 0.001).
The applicant noted that patient symptoms and quality of life were improved with the remedē® System therapy. The mean Epworth Sleepiness Scale (ESS) score significantly decreased in remedē® System patients, indicating less daytime sleepiness.
Adverse events associated with remedē® System insertion and therapy included lead dislodgement/dislocation, hematoma, migraine, atypical chest pain, pocket perforation, pocket infection, extra-respiratory stimulation, concomitant device interaction, and elevated transaminases.
One concern regarding the remedē® System is the potential for complications in patients with coexisting cardiac devices, such as pacemakers or ICDs, given that the remedē® System device requires lead placement and generation of electric impulses. Another concern with the evidence of substantial clinical improvement is that there is limited long-term data on patients with remedē® System implants. The pivotal trial included only 6 months of follow-up. Also, while the applicant reported a reduction in AHI in the treatment group, the applicant did not establish that that level of change was biologically meaningful in the population(s) being studied. The applicant did not conduct a power analysis to determine the necessary size of the study population and the necessary duration of the study to detect both early and late events.
In addition, patients in the pivotal study were not characterized by the use of cardiac devices. Cardiac resynchronization therapy (CRT), in particular, is known to improve chronic sleep apnea in addition to its primary effects on heart failure, and central apnea is a marker of the severity of the congestive heart failure. The applicant did not conduct subset analyses to assess the impact of cardiac resynchronization therapy.
Lastly, while evaluation of AHI and quality of life metrics show improvement with the remedē® System, the translation of those effects to mortality benefit is yet to be determined. Further studies of the remedē® System are likely needed to determine long-term effects of the device, and as well as its efficacy compared to existing treatments of CPAP or medications.
Based on the evidence submitted with the application, we had insufficient evidence that the remedē® System provides a substantial clinical improvement over other similar products and invited public comments on whether the remedē® System meets the substantial clinical improvement criterion.
In response to CMS' question regarding why an untreated control group was used in the pivotal trial, as opposed to a direct comparison with CPAP or other treatments, the manufacturer presented several reasons, such as considerable controversy about CPAP in CSA patients with heart failure due to CPAP patients with an ejection fraction less than 40 percent having higher mortality, and a dearth of prospective, randomized clinical data on the safety and efficacy of using CPAP, ASV, or medications to treat patients with non-heart failure CSA.
Regarding CMS' question of why no power analysis was performed to determine the necessary size of the study population and the necessary duration of the study to detect both early and late events, the manufacturer noted that it worked directly with clinical experts and consulted with the FDA in designing the clinical trial, which the manufacturer maintains was effective and well-rounded. The manufacturer noted that the rationale was that the remedē® System would be evaluated on a continuum of efficacy versus safety, but noted that had they determined to power the study for a primary safety endpoint based on the threshold of other implantable cardiac devices, the pivotal trial would have been adequately powered based on the study design (132 patients needed versus 151 enrolled).
In response to CMS' question regarding potential complications in patients with coexisting cardiac devices, the manufacturer noted that it was understood that many CSA patients would likely have other cardiac devices already implanted and that this led to the design of both implant and testing procedures that accommodated concomitant devices. The manufacturer noted that the remedē® System is typically placed on the right side of the chest to leave room for patients to have a cardiac device, which are typically placed on the left side, and that, in the pivotal trial, implantation of the remedē® System in patients with a concomitant device did not demonstrate any increased risk. Further, the manufacturer noted that key metrics of implant duration, use of contrast dye, and fluoroscopy time were similar between patients with and without a
Regarding CMS' question about whether the impact of cardiac resynchronization therapy (CRT) drove improvement for heart failure patient with a concomitant CRT device, the manufacturer noted limited literature available on this topic, but stated that the literature that does exist suggests that CRT may improve the apnea hypopnea index in some patients, which may be due to an improvement in ejection fraction. However, the manufacturer noted that all CRT patients in the remedē® System pivotal trial had their CRT devices for a minimum of nine months and that despite having CRT for a significant duration, still had severe CSA at baseline. Accordingly, the manufacturer believed that it is unlikely that significant CSA improvements were based on CRT rather than the remedē® System. The manufacturer noted that statistically significant subgroup analysis on CRT was difficult, but believed that the CRT subgroup did not lead to the overall results on the primary endpoint because the CRT subgroup “underperformed” relative to the non-CRT subgroup.
Finally, with respect to CMS' question regarding whether the clinical results and patient response were durable and sustainable over time, the manufacturer asserted that it continues to collect effectiveness data beyond the 6-month endpoints of the pivotal IDE trial and that 12-month follow-up results on the pivotal IDE trial were recently published, demonstrating a trend towards increasing benefit for the treatment group at 12 months. Specifically, the commenter stated that, at 12 months, 91 percent of patients saw a reduction of AHI and with 67 percent achieving a 50 percent or greater reduction in AHI (compared to 60 percent at 6 months).
Several commenters, individual physicians who have treated CSA patients with the remedē® System, stated that, for these patients, traditional types of positive pressure ventilation did not work and the remedē® System is the only treatment available.
Commenters have adequately addressed the clinical concerns that we outlined in the proposed rule with additional evidence, longer follow-up from the pivotal IDE trial, the interplay of the remedē® System and a concomitant cardiac device, and information about power calculations and other data summarized above. Further, we believe that the remedē® System offers a treatment option for a patient population unresponsive to, or ineligible for, treatment involving currently available options. That is, those patients who have been diagnosed with moderate to severe CSA have no other available treatment options than the remedē® System. Accordingly, we have determined that the remedē® System has demonstrated substantial clinical improvement relative to existing treatment options for patients diagnosed with moderate to severe CSA.
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the remedē® System would be reported with CPT code 0424T. CPT code 0424T is assigned to APC 5464 (Level 4 Neurostimulator and Related Procedures). To meet the cost criterion for device pass-through payment, a device must pass all three tests of the cost criterion for at least one APC. For our calculations, we used APC 5464, which had a CY 2017 payment rate of $27,047.11 at the time the application was received. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). CPT code 0424T had a device offset amount of $11,089 at the time the application was received. According to the applicant, the cost of the remedē® System was $34,500.
Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated average reasonable cost of $34,500 for the remedē® System exceeds 127 percent of the applicable APC payment amount for the service related to the category of devices of $27,047.11 ($34,500/$27,047.11 × 100 = 127.5 percent). Therefore, we believe the remedē® System meets the first cost significance test.
The second cost significance test, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $34,500 for the remedē® System exceeds the cost of the device-related portion of the proposed APC payment amount for the related service of $11,089 by 311 percent ($34,500−$11,089) × 100 = 311 percent). Therefore, we believe that the remedē® System meets the second cost significance test.
The third cost significance test, at § 419.66(d)(3), requires that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $34,500 for the remedē® System and the portion of the proposed APC payment amount for the device of $11,089 exceeds the APC payment amount for the related service of $27,047.11 by 87 percent (($34,500/11,089)/$27,047.11 × 100 = 86.6 percent). Therefore, we believe that the remedē® System meets the third cost significance test.
We invited public comments on whether the remedē® System meets the device pass-through payment criteria discussed in this section, including the cost criteria for device pass-through payment.
After consideration of the public comments we received, we are approving the remedē® System for device pass-through payment status for CY 2019.
Acera Surgical, Inc. submitted an application for a new device category for transitional pass-through payment status for Restrata® Wound Matrix. Restrata® Wound Matrix is a sterile, single-use product intended for use in local management of wounds. According to the applicant, Restrata® Wound Matrix is a soft, white, conformable, nonfriable, absorbable matrix that works as a wound care management product by acting as a protective covering for wound defects, providing a moist environment for the body's natural healing process to occur. Restrata® Wound Matrix is made from synthetic biocompatible materials and was designed with a nanoscale nonwoven fibrous structure with high porosity, similar to native extracellular matrix. Restrata® Wound Matrix allows for cellular infiltration, new tissue formation, neovascularization, and wound healing before completely degrading via hydrolysis. The product permits the ingress of cells and soft tissue formation in the defect space/wound bed. Restrata® Wound Matrix can be used to manage wounds, including: Partial and full-thickness wounds, pressure sores/ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (for example, donor site/grafts, post-laser surgery, post-Mohs surgery, podiatric wounds, wound dehiscence), trauma wounds (for example, abrasions, lacerations, partial thickness burns, skin tears), and draining wounds.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, Restrata® Wound Matrix is a product that is integral to the service provided, is used for one patient only, comes in contact with human skin, and is surgically inserted into the patient. The description of Restrata® Wound Matrix shows the product meets the device eligibility requirements of § 419.66(b)(4) because Restrata® Wound Matrix is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material. We invited public comment on whether Restrata® Wound Matrix meets the eligibility criteria.
We did not receive any public comments on whether Restrata® Wound Matrix meets the eligibility criteria. However, after the CY 2019 OPPS/ASC proposed rule was released, CMS determined that Restrata® Wound Matrix is an alginate dressing described with the HCPCS code series A6196 through A6198 (Alginate or other fiber gelling dressing, wound cover, sterile). Alginate dressings are not skin substitute products and are considered to be a supply. According to the eligibility criterion, a supply or material is not eligible to receive device pass-through payment. Based on this determination, we were required to reassess our initial view on whether or not Restrata® Wound Matrix meets the eligibility criterion for device pass-through payment status.
After consideration of all of the information we have received, we have determined that Restrata® Wound Matrix is an alginate dressing and is a supply, and the product does not meet the eligibility criterion for device pass-through payment status. Because we have determined that Restrata® Wound Matrix does not meet the basic eligibility criterion for transitional pass-through payment status, we have not evaluated this product to determine whether it meets the other criteria required for transitional pass-through payment for devices; that is, the newness criterion, the substantial clinical improvement criterion, and the cost criterion.
After consideration of the public comments we received, we are not approving device pass-through payment status for Restrata® Wound Matrix for CY 2019.
Augmenix, Inc. submitted an application for a new device category for transitional pass-through payment status for the SpaceOAR® System. According to the applicant, the SpaceOAR® System is a polyethylene glycol hydrogel spacer that temporarily positions the anterior rectal wall away from the prostate to reduce the radiation delivered to the anterior rectum during prostate cancer radiotherapy treatment. The applicant stated that the SpaceOAR® System reduces some of the side effects associated with radiotherapy, which are collectively known as “rectal toxicity” (diarrhea, rectal bleeding, painful defecation, and erectile dysfunction, among other conditions). The applicant stated that the SpaceOAR® is implanted several weeks before radiotherapy; the hydrogel maintains space between the prostate and rectum for the entire course of radiotherapy and is completely absorbed by the patient's body within 6 months.
With respect to the newness criterion at § 419.66(b)(1), FDA granted a De Novo request classifying the SpaceOAR® System as a class II device under section 513(f)(2) of the Federal Food, Drug, and Cosmetic Act on April 1, 2015. We received the application for a new device category for transitional pass-through payment status for the SpaceOAR® System on June 1, 2017, which is within 3 years of the date of the initial FDA approval or clearance. We invited public comments on whether the SpaceOAR® System meets the newness criterion.
After consideration of the public comments we received, we believe that the SpaceOAR® System meets the newness criterion for device pass-through payment status.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the SpaceOAR® System is integral to the service provided, is used for one patient only, comes in contact with human skin, and is applied in or on a wound or other skin lesion. The applicant also claimed the SpaceOAR® System meets the device eligibility requirements of § 419.66(b)(4) because it is not an instrument, apparatus, implement, or item for which depreciation and financing expenses are recovered, and it is not a supply or material furnished incident to a service.
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. We have not identified an existing pass-through payment category that describes the SpaceOAR® System. The applicant suggested a category descriptor for the SpaceOAR® System of “Absorbable perirectal spacer”. We invited public comments on this issue.
After consideration of the public comments we received, we believe that there is no existing pass-through payment category that appropriately describes the SpaceOAR® System and that the SpaceOAR® System meets the eligibility criterion.
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment. With respect to this criterion, the applicant submitted studies which discussed the techniques for using hydrogel spacers to limit radiation exposure to the rectum in prostate radiotherapy. In support of its assertion that SpaceOAR is a substantial clinical improvement, the applicant submitted several studies that examined the effect that the SpaceOAR® System had on outcomes such as rectal dose, radiation toxicity, and quality of life declines after image guided intensity modulated radiation therapy for prostate cancer. Articles by Mariados et al.
The results of this study
The applicant also included a secondary analysis of the phase III trial data which showed that participants who received lower radiation doses to the penile bulb, associated with the SpaceOAR® System injection, reported similar erectile function compared with the control group based on patient-reported sexual quality of life.
Based on the evidence submitted with the application, we have insufficient evidence that the SpaceOAR® System provides a substantial clinical improvement over other similar products. We invited public comments on whether the SpaceOAR® System meets the substantial clinical improvement criterion.
The manufacturer disagreed with a statement in the proposed rule where CMS indicated that the SpaceOAR® System patients “reported similar erectile function compared with the control group based on patient-reported sexual quality of life.” The commenter noted that the patient reported quality of life analysis of baseline potent men at three years found that men treated with the SpaceOAR® System had improved scores on “erections sufficient for intercourse” as well as better scores on seven of the 13 items regarding sexual function.
In response to the statement in the proposed rule that the submitted studies included only low to moderate risk prostate cancer in the study population and failed to use a clinical outcome as a primary endpoint, the manufacturer noted that the phase III trial design specifically selected a low and
In response to the statement in the proposed rule that it was unclear that the SpaceOAR® System was superior to existing alternative spacers used for prostate radiotherapy, the manufacturer noted that the SpaceOAR® System is the only prostate-rectum spacer authorized for marketing by the FDA for use in prostate radiotherapy. The manufacturer indicated that the closest comparable product is the endorectal balloon, and that a study comparing the rectal-spacing capabilities of these two products during prostate cancer stereotactic body radiation therapy found significantly less rectal radiation dose in the patients who received the SpaceOAR System®.
Several commenters, representing various oncological and urologic specialty societies, believed that the SpaceOAR® System meets the substantial clinical improvement criterion. These commenters noted that there were no other alternative biodegradable biomaterials with FDA marketing authorization currently utilized for spacing in the context of prostate radiotherapy and that this device provided physicians with an option to help ensure patients are provided with the best clinical outcomes with the fewest adverse effects.
In response to our concern that the control arm of the study had very low rates of rectal toxicity (the manufacturers quoted rates of late rectal toxicity of between 14 and 25 percent for studies without the use of the SpaceOAR® System), the commenter responded that the low rates of rectal toxicity in the control arm of the study were due to (1) the radiation plans in both the treatment group and the control group were evaluated and approved by an independent core laboratory for compliance with protocol guidelines, which led to low toxicity in the control group relative to standard practice, and (2) all study dose plans used CT and MRI image fusion to improve plan accuracy, while typical plans only use CT imaging. The commenter further noted that, despite low rates of rectal toxicity in the control arm of the phase III trial, patients in the SpaceOAR® System group still had statistically significant reductions in rectal toxicity and improvements in quality of life in comparison to the control group. We are still concerned that the low rates of rectal toxicity demonstrated in the control group may not support claims of substantial clinical improvement of the SpaceOAR® System. For example, the rates of late grade one or higher rectal toxicity in the control population in the clinical trials submitted by the applicant were 7 percent
As discussed further below, we continue to have concerns regarding the applicant's claims that the statistically significant reduction in late rectal toxicity as well as the improvements in QOL scores lend to substantial clinical improvement, despite the relatively low rates of rectal toxicity in the control group. We note that the data showing reduction in rectal toxicity and improvements in quality are from studies that were not designed with primary clinical outcomes to show superiority, but rather were designed primarily to evaluate the threshold of radiation exposure to the rectum and adverse events related to the procedure. Consequently, the studied clinical outcomes have many differences that did not meet statistical significance or were not sustained over time.
In the pivotal trial,
Even at 3 years after the procedure, the control arm had very low rates of rectal toxicity. The 3-year incidence of grade ≥1 rectal toxicity was 9.2 percent (approximately 4 patients) in the control group versus 2.0 percent (approximately 2 patients) in the SpaceOAR® System group. The cumulative rate of grade ≥2 rectal bowel toxicity was 6 percent at 3 years in the control arm, with no cases of grade ≥2 rectal toxicity in the SpaceOAR® System group.
With regard to corresponding improvements in quality of life, the pivotal trial,
The commenter claimed that when followed up at 3 years, patients in the phase III trial receiving the SpaceOAR® System prior to their prostate cancer radiotherapy demonstrated significant rectal (bowel), urinary, and sexual benefit. However, we found the data to be inconsistent and unreliable to support this claim. Specifically, in the study including 3 years of follow-up data,
In this study, the proportion of patients with measurable changes in bowel quality of life meeting the minimally important difference (MID) threshold (5 points) or twice that threshold (10 points) was evaluated. According to the authors, these thresholds give an idea of when patient-reported symptoms are likely to be clinically meaningful to prostate cancer patients, with a 10-point decline indicating a more serious clinical effect. From 6 months through 3 years, more men in the control group had a MID in bowel quality of life meeting the threshold of 5 points, but no difference was found for a 10-point decline. At 3 years, the SpaceOAR® System group patients were less likely than the control group patients to have a detectable decline in bowel quality of life for both MID thresholds (5-point: 41 percent (control) versus 14 percent (the SpaceOAR® System; 10-point: 21 percent (control) versus 5 percent (the SpaceOAR® System).
The researchers in this study also assessed the percent of patients with moderate or big problems in quality of life. The researchers found that, at 3 years, only one item showed a statistically significant difference between the treatment groups (moderate to big bother for urinary frequency: The control group of 18 percent versus the SpaceOAR® System group of 5 percent; P <.05). At 3 years after treatment, 2.2 percent of the men in the SpaceOAR® System group evaluated their overall bowel function as a big or moderate bother. This compares to 4.4 percent in the control group, which was not a statistically significant difference. None of the components of rectal bother were statistically significantly better in the men who received the SpaceOAR® System. In contrast, regarding the question of bowel pain, none of the control group patients reported a moderate or big bother after 3 years, while 1.1 percent of the SpaceOAR® System group patients reported that
The manufacturer stated that CMS incorrectly stated in the proposed rule that the SpaceOAR® System patients reported similar erectile function compared with the control group based on patient-reported sexual quality of life. The manufacturer is correct; in a study by Hamstra et al.,
We appreciate the comments received from the urological and the oncological community as well members of the public in support of this technology. The SpaceOAR® System device effectively displaces the anterior wall reducing the dose of radiation the rectum receives during radiation treatment for prostate cancer. However, after consideration of the public comments and the application materials we received, at this time we do not believe that the SpaceOAR® System meets the substantial clinical improvement criterion to receive device pass-through payment. The submitted studies were not designed to show primary clinical outcomes, and consequently the data on toxicity and quality of life improvement are inconsistent and fail to show enduring improvements. It is difficult to attribute the reductions in late rectal toxicity solely to the device, given improvements in radiation therapy and planning as well as the large number of nonresponders at 3 years postradiation and the 3-year follow-up data were being taken from volunteer centers that decided to continue in the study. We note that many favorable clinical outcomes were not statistically significant but trended in favor of the SpaceOAR® System group. We agree with many authors that seem to suggest that the greatest utility of the SpaceOAR® System will be its use in populations at greatest risk for radiation toxicity such as hypofractionated treatment or other dose intensifications.
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that the SpaceOAR® System would be reported with CPT code 0438T (which was deleted and replaced with CPT code 55874, effective January 1, 2018). CPT code 0438T was assigned to APC 5374 (Level 4 Urology and Related Services). To meet the cost criterion for device pass-through payment, a device must pass all three tests of the cost criterion for at least one APC. For our calculations, we used APC 5374, which had a CY 2017 payment rate of $2,542.56 at the time the application was received. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). CPT code 0438T had a device offset amount of $587.07 at the time the application was received. According to the applicant, the cost of the SpaceOAR® System was $2,850.
Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated average reasonable cost of $2,850 for the SpaceOAR® System exceeds 112 percent of the applicable APC payment amount for the service related to the category of devices of $2,542.56 ($2850/$2,542.56 × 100 = 112 percent). Therefore, we believe the SpaceOAR® system meets the first cost significance test.
The second cost significance test, at § 419.66(d)(2), provides that the estimated average reasonable cost of the devices in the category must exceed the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent, which means that the device cost needs to be at least 125 percent of the offset amount (the device-related portion of the APC found on the offset list). The estimated average reasonable cost of $2,850 for the SpaceOAR® System exceeds the cost of the device-related portion of the APC payment amount for the related service of $587.07 by 485 percent ($2,850/$587.07) × 100 = 485 percent). Therefore, we believe that the SpaceOAR® System meets the second cost significance test.
The third cost significance test, at § 419.66(d)(3), requires that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $2,850 for the SpaceOAR® System and the portion of the APC payment amount for the device of $587.07 exceeds the APC payment amount for the related service of $2,542.56 by 89 percent (($2,850−$587.07)/$2,542.56 × 100 = 89 percent). Therefore, we believe that the SpaceOAR® System meets the third cost significance test.
We invited public comments on whether the SpaceOAR® System meets the device pass-through payment
After consideration of the public comments we received, we believe that SpaceOAR® System meets the cost criterion for device pass-through payment status.
After consideration of the public comments we received, we believe that SpaceOAR® System does not qualify for device pass-through payment status because it does not meet the substantial clinical improvement criterion, although it may have clinical benefit for certain patients. As such, we are not approving the application for device pass-through payment status for the SpaceOAR® System for CY 2019.
Under the OPPS, prior to CY 2017, device-intensive status for procedures was determined at the APC level for APCs with a device offset percentage greater than 40 percent (79 FR 66795). Beginning in CY 2017, CMS began determining device-intensive status at the HCPCS code level. In assigning device-intensive status to an APC prior to CY 2017, the device costs of all the procedures within the APC were calculated and the geometric mean device offset of all of the procedures had to exceed 40 percent. Almost all of the procedures assigned to device-intensive APCs utilized devices, and the device costs for the associated HCPCS codes exceeded the 40-percent threshold. The no cost/full credit and partial credit device policy (79 FR 66872 through 66873) applies to device-intensive APCs and is discussed in detail in section IV.B.4. of this final rule with comment period. A related device policy was the requirement that certain procedures assigned to device-intensive APCs require the reporting of a device code on the claim (80 FR 70422). For further background information on the device-intensive APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through 70426).
As stated earlier, prior to CY 2017, the device-intensive methodology assigned device-intensive status to all procedures requiring the implantation of a device that were assigned to an APC with a device offset greater than 40 percent and, beginning in CY 2015, that met the three criteria listed below. Historically, the device-intensive designation was at the APC level and applied to the applicable procedures within that APC. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we changed our methodology to assign device-intensive status at the individual HCPCS code level rather than at the APC level. Under this policy, a procedure could be assigned device-intensive status regardless of its APC assignment, and device-intensive APCs were no longer applied under the OPPS or the ASC payment system.
We believe that a HCPCS code-level device offset is, in most cases, a better representation of a procedure's device cost than an APC-wide average device offset based on the average device offset of all of the procedures assigned to an APC. Unlike a device offset calculated at the APC level, which is a weighted average offset for all devices used in all of the procedures assigned to an APC, a HCPCS code-level device offset is calculated using only claims for a single HCPCS code. We believe that this methodological change results in a more accurate representation of the cost attributable to implantation of a high-cost device, which ensures consistent device-intensive designation of procedures with a significant device cost. Further, we believe a HCPCS code-level device offset removes inappropriate device-intensive status for procedures without a significant device cost that are granted such status because of APC assignment.
Under our existing policy, procedures that meet the criteria listed below in section IV.B.1.b. of this final rule with comment period are identified as device-intensive procedures and are subject to all the policies applicable to procedures assigned device-intensive status under our established methodology, including our policies on device edits and no cost/full credit and partial credit devices discussed in sections IV.B.3. and IV.B.4. of this final rule with comment period, respectively.
We clarified our established policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 52474), where we explained that device-intensive procedures require the implantation of a device and additionally are subject to the following criteria:
• All procedures must involve implantable devices that would be reported if device insertion procedures were performed;
• The required devices must be surgically inserted or implanted devices that remain in the patient's body after the conclusion of the procedure (at least temporarily); and
• The device offset amount must be significant, which is defined as exceeding 40 percent of the procedure's mean cost.
We changed our policy to apply these three criteria to determine whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66926), where we stated that we would apply the no cost/full credit and partial credit device policy—which includes the three criteria listed above—to all device-intensive procedures beginning in CY 2015. We reiterated this position in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), where we explained that we were finalizing our proposal to continue using the three criteria established in the CY 2007 OPPS/ASC final rule with comment period for determining the APCs to which the CY 2016 device intensive policy will apply. Under the policies we adopted in CYs 2015, 2016, and 2017, all procedures that require the implantation of a device and meet the above criteria are assigned device-intensive status, regardless of their APC placement.
As part of CMS' effort to better capture costs for procedures with significant device costs, in the CY 2019 OPPS/ASC proposed rule (83 FR 37108), for CY 2019, we proposed to modify our criteria for device-intensive procedures. We have heard from stakeholders that the current criteria exclude some procedures that stakeholders believe should qualify as device-intensive procedures. Specifically, we were persuaded by stakeholder arguments that procedures requiring expensive surgically inserted or implanted devices that are not capital equipment should qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure. We agreed that a broader definition of device-intensive procedures was warranted, and proposed two modifications to the criteria for CY 2019. First, we proposed to allow procedures that involve surgically inserted or implanted, single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless
• All procedures must involve implantable devices assigned a CPT or HCPCS code;
• The required devices (including single-use devices) must be surgically inserted or implanted; and
• The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost.
In addition, to further align the device-intensive policy with the criteria used for device pass-through payment status, we proposed to specify, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that:
• Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE), and has been classified as a Category B device by the FDA in accordance with 42 CFR 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review;
• Is an integral part of the service furnished;
• Is used for one patient only;
• Comes in contact with human tissue;
• Is surgically implanted or inserted (either permanently or temporarily); and
• Is not any of the following:
(a) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub.15-1); or
(b) A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker).
As part of this proposal, we solicited public comment on these proposed revised criteria, including whether there are any devices that are not capital equipment that commenters believe should be deemed part of device-intensive procedures that would not meet the proposed definition of single-use devices. In addition, we solicited public comments on the full list of proposed CY 2019 OPPS device-intensive procedures provided in Addendum P to the proposed rule, which is available at:
In addition, for new HCPCS codes describing procedures requiring the implantation of medical devices that do not yet have associated claims data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658), we finalized a policy for CY 2017 to apply device-intensive status with a default device offset set at 41 percent for new HCPCS codes describing procedures requiring the implantation or insertion of a medical device that do not yet have associated claims data until claims data are available to establish the HCPCS code-level device offset for the procedures. This default device offset amount of 41 percent is not calculated from claims data; instead, it is applied as a default until claims data are available upon which to calculate an actual device offset for the new code. The purpose of applying the 41-percent default device offset to new codes that describe procedures that implant or insert medical devices is to ensure ASC access for new procedures until claims data become available.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37108 through 37109), in accordance with our proposal stated above to lower the
In addition, in the proposed rule, we clarified that since the adoption of our policy in effect as of CY 2018, the associated claims data used for purposes of determining whether or not to apply the default device offset are the associated claims data for either the new HCPCS code or any predecessor code, as described by CPT coding guidance, for the new HCPCS code. Additionally, for CY 2019 and subsequent years, in limited instances where a new HCPCS code does not have a predecessor code as defined by CPT, but describes a procedure that was previously described by an existing code, we proposed to use clinical discretion to identify HCPCS codes that are clinically related or similar to the new HCPCS code but are not officially recognized as a predecessor code by CPT, and to use the claims data of the clinically related or similar code(s) for purposes of determining whether or not to apply the default device offset to the new HCPCS code. Clinically related and similar procedures for purposes of this policy are procedures that have little or no clinical differences and use the same devices as the new HCPCS code. In addition, clinically related and similar codes for purposes of this policy are codes that either currently or previously describe the procedure described by the new HCPCS code. Under this proposal, claims data from clinically related and similar codes would be included as associated claims data for a new code, and where an existing HCPCS code is found to be clinically related or similar to a new HCPCS code, we proposed to apply the device offset percentage derived from the existing clinically related or similar HCPCS code's claims data to the new HCPCS code for determining the device offset percentage. We stated in the proposed rule that we believe that claims data for HCPCS codes describing procedures that have very minor differences from the procedures described by new HCPCS codes would provide an accurate depiction of the cost relationship between the procedure and the device(s) that are used, and would be appropriate to use to set a new code's device offset percentage, in the same way that predecessor codes are used. For instance, for CY 2019, we proposed to use the claims data from existing CPT code 36568 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump; younger than 5 years of age), for which the description as of January 1, 2019 is changing to “(Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, without imaging guidance; younger than 5 years of age)”, to determine the appropriate device offset percentage for new CPT code 36X72 (Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion; younger than 5 years of age). We believe that although CPT code 36568 is not identified as a predecessor code by CPT, the procedure described by new CPT code 36X72 was previously described by CPT code 36568 and, therefore, CPT code 36X72 is clinically related and similar to CPT code 36568, and the device offset percentage for CPT code 36568 can be accurately applied to both codes. If a new HCPCS code has multiple predecessor codes, the claims data for the predecessor code that has the highest individual HCPCS-level device offset percentage would be used to determine whether the new HCPCS code qualifies for device-intensive status. Similarly, in the event that a new HCPCS code does not have a predecessor code but has multiple clinically related or similar codes, the claims data for the clinically related or similar code that has the highest individual HCPCS level device offset percentage would be used to determine whether the new HCPCS code qualifies for device-intensive status.
In the CY 2019 OPPS/ASC proposed rule, we indicated that additional information for our consideration of an offset percentage higher than the proposed default of 31 percent for new HCPCS codes describing procedures requiring the implantation (or, in some cases, the insertion) of a medical device that do not yet have associated claims data, such as pricing data or invoices from a device manufacturer, should be directed to the Division of Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850, or electronically at
The full listing of proposed CY 2019 OPPS device-intensive procedures was included in Addendum P to the proposed rule (which is available via the internet on the CMS website).
• Confirm that the ASC device-intensive status as assigned by CMS is based on the offset calculated according to the ASC ratesetting methodology;
• Disclose what offset data (meaning the calculation methodology used) appear in the second spreadsheet of Addendum P titled “2019 NPRM HCPCS Offsets”;
• Display the device offsets in Addendum P, in future rulemaking, based on the ASC methodology and not the OPPS methodology if the offset data displayed in the second spreadsheet of Addendum P is based on the OPPS methodology and device intensive status is based on the ASC methodology; and
• Modify the second worksheet of Addendum P titled “2019 NPRM HCPCS Offsets” to only include the codes for procedures that employ implantable and insertable devices and exclude all of the codes that do not employ implantable or insertable devices.
In response to the commenter's questions and suggestions relating to Addendum P, we note that the device offset percentages reflected in both worksheets of Addendum P are based upon the OPPS methodology (including the C-APC methodology). We believe this is appropriate as Addendum P is created to display the device offsets, device offset percentages, and device-intensive codes under the OPPS. Specific to the commenter's suggestion that we modify the second worksheet of Addendum P titled “2019 NPRM HCPCS Offsets” to only include the codes for procedures that employ implantable and insertable devices and exclude all of the codes that do not employ implantable or insertable devices, we note that the second worksheet of Addendum P is intended to display the device offsets and device offset percentages for all codes for which we have such data under the OPPS. In addition, the list of services that qualify as device-intensive under the ASC payment system and the services' device offset percentages for the ASC payment system are included on the CMS website at
• CPT code 28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint arthrodesis, any method);
• CPT code 28730 (Arthrodesis, midtarsal or tarsometatarsal, multiple or transverse);
• CPT code 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint);
• CPT code 36903 (Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report; with transcatheter placement of intravascular stent(s), peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis segment);
• CPT code 36904 (Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s)); and
• CPT code 36906 (Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s); with transcatheter placement of intravascular stent(s), peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis circuit).
Other commenters requested that CMS assign device-intensive status to:
• HCPCS code C9747 (Ablation of prostate, transrectal, high intensity focused ultrasound (hifu), including imaging guidance);
• CPT code 43210 (Esophagogastroduodenoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performed);
• CPT code 0275T (Percutaneous laminotomy/laminectomy (interlaminar approach) for decompression of neural elements, (with or without ligamentous resection, discectomy, facetectomy and/or foraminotomy), any method, under indirect image guidance (
• CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed);
• CPT code 0409T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; pulse generator only);
• CPT code 0410T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; atrial electrode only);
• CPT code 0411T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; ventricular electrode only); and
• CPT code 0414T (Removal and replacement of permanent cardiac contractility modulation system pulse generator only).
After consideration of the public comments we received, we are finalizing our proposals to allow procedures that involve surgically inserted or implanted, single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless of whether the device remains in the patient's body after the conclusion of the procedure and to modify our criteria to lower the device offset percentage threshold from 40 percent to 30 percent. The full listing of the final CY 2019 device-intensive procedures is included in Addendum P to this final rule with comment period (which is available via the internet on the CMS website).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66795), we finalized a policy and implemented claims processing edits that require any of the device codes used in the previous device-to-procedure edits to be present on the claim whenever a procedure code assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC final rule with comment period (the CY 2015 device-dependent APCs) is reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70422), we modified our previously existing policy and applied the device coding requirements exclusively to procedures that require the implantation of a device that are assigned to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with comment period, we also finalized our policy that the claims processing edits are such that any device code, when reported on a claim with a procedure assigned to a device-intensive APC (listed in Table 42 of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658 through 79659), we changed our policy for CY 2017 and subsequent years to apply the CY 2016 device coding requirements to the newly defined device-intensive procedures. For CY 2017 and subsequent years, we also specified that any device code, when reported on a claim with a device-intensive procedure, will satisfy the edit. In addition, we created HCPCS code C1889 to recognize devices furnished during a device-intensive procedure that are not described by a specific Level II HCPCS Category C-code. Reporting HCPCS code C1889 with a device-intensive procedure will satisfy the edit requiring a device code to be reported on a claim with a device-intensive procedure.
We did not propose any changes to this policy for CY 2019.
To ensure equitable OPPS payment when a hospital receives a device without cost or with full credit, in CY 2007, we implemented a policy to reduce the payment for specified device-dependent APCs by the estimated portion of the APC payment attributable to device costs (that is, the device offset) when the hospital receives a specified device at no cost or with full credit (71 FR 68071 through 68077). Hospitals were instructed to report no cost/full credit device cases on the claim using the “FB” modifier on the line with the procedure code in which the no cost/full credit device is used. In cases in which the device is furnished without cost or with full credit, hospitals were instructed to report a token device charge of less than $1.01. In cases in which the device being inserted is an upgrade (either of the same type of device or to a different type of device) with a full credit for the device being replaced, hospitals were instructed to report as the device charge the difference between the hospital's usual charge for the device being implanted and the hospital's usual charge for the device for which it received full credit. In CY 2008, we expanded this payment adjustment policy to include cases in which hospitals receive partial credit of 50 percent or more of the cost of a specified device. Hospitals were instructed to append the “FC” modifier to the procedure code that reports the service provided to furnish the device when they receive a partial credit of 50 percent or more of the cost of the new device. We refer readers to the CY 2008 OPPS/ASC final rule with comment period for more background information on the “FB” and “FC” modifiers payment adjustment policies (72 FR 66743 through 66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75007), beginning in CY 2014, we modified our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit. For CY 2013 and prior years, our policy had been to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnishes a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital receives partial credit in the amount of 50 percent or more of the cost for the specified device. For CY 2014, we reduced OPPS payment, for the applicable APCs, by the full or partial credit a hospital receives for a replaced device. Specifically, under this modified policy, hospitals are required to report on the claim the amount of the credit in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Medical Device) when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device. For CY 2014, we also limited the OPPS payment deduction for the applicable APCs to the total amount of the device offset when the “FD” value code appears on a claim. For CY 2015, we continued our policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit and to use the three criteria established in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68072 through 68077) for determining the APCs to which our CY 2015 policy will apply (79 FR 66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), we finalized our policy to no longer specify a list of devices to which the OPPS payment adjustment for no cost/full credit and partial credit devices would
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 through 79660), for CY 2017 and subsequent years, we finalized our policy to reduce OPPS payment for device-intensive procedures, by the full or partial credit a provider receives for a replaced device, when a hospital furnishes a specified device without cost or with a full or partial credit. Under our current policy, hospitals continue to be required to report on the claim the amount of the credit in the amount portion for value code “FD” when the hospital receives a credit for a replaced device that is 50 percent or greater than the cost of the device.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37110), for CY 2019 and subsequent years, we proposed to apply our no cost/full credit and partial credit device policies to all procedures that qualify as device-intensive under our proposed modified criteria discussed in section IV.B.2. of the proposed rule and this final rule with comment period.
We did not receive any public comments on this proposal. Therefore, we are finalizing our proposal to apply our no cost/full credit and partial credit device policies to all procedures that qualify as device-intensive under our finalized modified criteria discussed in section IV.B.2. of this final rule with comment period, for CY 2019 and subsequent years.
In CY 2016, we used our equitable adjustment authority under section 1833(t)(2)(E) of the Act and used the median cost (instead of the geometric mean cost per our standard methodology) to calculate the payment rate for the implantable miniature telescope procedure described by CPT code 0308T (Insertion of ocular telescope prosthesis including removal of crystalline lens or intraocular lens prosthesis), which is the only code assigned to APC 5494 (Level 4 Intraocular Procedures) (80 FR 70388). We note that, as stated in the CY 2017 OPPS/ASC proposed rule (81 FR 45656), we proposed to reassign the procedure described by CPT code 0308T to APC 5495 (Level 5 Intraocular Procedures) for CY 2017, but it would be the only procedure code assigned to APC 5495. The payment rates for a procedure described by CPT code 0308T (including the predecessor HCPCS code C9732) were $15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The procedure described by CPT code 0308T is a high-cost device-intensive surgical procedure that has a very low volume of claims (in part because most of the procedures described by CPT code 0308T are performed in ASCs), and we believe that the median cost is a more appropriate measure of the central tendency for purposes of calculating the cost and the payment rate for this procedure because the median cost is impacted to a lesser degree than the geometric mean cost by more extreme observations. We stated that, in future rulemaking, we would consider proposing a general policy for the payment rate calculation for very low-volume device-intensive APCs (80 FR 70389).
For CY 2017, we proposed and finalized a payment policy for low-volume device-intensive procedures that is similar to the policy applied to the procedure described by CPT code 0308T in CY 2016. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through 79661), we established our current policy that the payment rate for any device-intensive procedure that is assigned to a clinical APC with fewer than 100 total claims for all procedures in the APC be calculated using the median cost instead of the geometric mean cost, for the reasons described above for the policy applied to the procedure described by CPT code 0308T in CY 2016. The CY 2018 final rule geometric mean cost for the procedure described by CPT code 0308T (based on 19 claims containing the device HCPCS C-code, in accordance with the device-intensive edit policy) was approximately $21,302, and the median cost was approximately $19,521. The final CY 2018 payment rate (calculated using the median cost) was approximately $17,560.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37111), for CY 2019, we proposed to continue with our current policy of establishing the payment rate for any device-intensive procedure that is assigned to a clinical APC with fewer than 100 total claims for all procedures in the APC based on calculations using the median cost instead of the geometric mean cost. We stated in the proposed rule that, due to the proposed change in APC assignment for CPT code 0308T to APC 5493 (Level 3 Intraocular Procedures) from APC 5495 (Level 5 Intraocular Procedures), our payment policy for low-volume device-intensive procedures would not apply to CPT code 0308T for CY 2019 because there are now more than 100 total claims for the APC to which CPT code 0308T would be assigned. For more information on the proposed and final APC assignment change for CPT code 0308T, we refer readers to section III.D.13. of this final rule with comment period.
Based on the CY 2017 claims data available for ratesetting, in the CY 2019 OPPS/ASC proposed rule, we proposed to assign CPT code 0308T to APC 5493, noting that we would continue to monitor the data. In the CY 2019 OPPS final rule claims data, we found that the estimated cost of the single claim with CPT code 0308T as the primary service is $12,939.75. To recognize the estimated cost based on the final rule claims data, we have assigned CPT code 0308T to APC 5494 (Level 4 Intraocular Procedures) for CY 2019 instead of APC 5493. Due to the assignment of CPT code 0308T to APC 5494 for CY 2019, our payment policy for low-volume device-intensive procedures will apply to CPT code 0308T for CY 2019 because there are less than 100 total claims for the APC to which CPT code 0308T is assigned. For more information on the proposed and final APC assignment change for CPT code 0308T, including a summary of public comments and our responses, we refer readers to section III.D.13. of this final rule with comment period.
Section 1833(t)(6) of the Act provides for temporary additional payments or “transitional pass-through payments” for certain drugs and biologicals. Throughout this final rule with comment period, the term “biological” is used because this is the term that appears in section 1861(t) of the Act. A “biological” as used in this final rule with comment period includes (but is not necessarily limited to) a “biological product” or a “biologic” as defined in the Public Health Service Act. As enacted by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), this pass-through payment provision requires the Secretary to make additional payments to hospitals for: Current orphan drugs, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act; current drugs
Transitional pass-through payments also are provided for certain “new” drugs and biologicals that were not being paid for as an HOPD service as of December 31, 1996 and whose cost is “not insignificant” in relation to the OPPS payments for the procedures or services associated with the new drug or biological. For pass-through payment purposes, radiopharmaceuticals are included as “drugs.” As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the product as a hospital outpatient service under Medicare Part B. CY 2019 pass-through drugs and biologicals and their designated APCs are assigned status indicator “G” in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through payment amount, in the case of a drug or biological, is the amount by which the amount determined under section 1842(o) of the Act for the drug or biological exceeds the portion of the otherwise applicable Medicare OPD fee schedule that the Secretary determines is associated with the drug or biological. The methodology for determining the pass-through payment amount is set forth in regulations at 42 CFR 419.64. These regulations specify that the pass-through payment equals the amount determined under section 1842(o) of the Act minus the portion of the APC payment that CMS determines is associated with the drug or biological.
Section 1847A of the Act establishes the average sales price (ASP) methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the wholesale acquisition cost (WAC), and the average wholesale price (AWP). In this final rule with comment period, the term “ASP methodology” and “ASP-based” are inclusive of all data sources and methodologies described therein. Additional information on the ASP methodology can be found on the CMS website at:
The pass-through application and review process for drugs and biologicals is described on the CMS website at:
As required by statute, transitional pass-through payments for a drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a period of at least 2 years, but not more than 3 years, after the payment was first made for the product as a hospital outpatient service under Medicare Part B. Our current policy is to accept pass-through applications on a quarterly basis and to begin pass-through payments for newly approved pass-through drugs and biologicals on a quarterly basis through the next available OPPS quarterly update after the approval of a product's pass-through status. However, prior to CY 2017, we expired pass-through status for drugs and biologicals on an annual basis through notice-and-comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79662), we finalized a policy change, beginning with pass-through drugs and biologicals newly approved in CY 2017 and subsequent calendar years, to allow for a quarterly expiration of pass-through payment status for drugs, biologicals, and radiopharmaceuticals to afford a pass-through payment period that is as close to a full 3 years as possible for all pass-through drugs, biologicals, and radiopharmaceuticals.
This change eliminated the variability of the pass-through payment eligibility period, which previously varied based on when a particular application was initially received. We adopted this change for pass-through approvals beginning on or after CY 2017, to allow, on a prospective basis, for the maximum pass-through payment period for each pass-through drug without exceeding the statutory limit of 3 years.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37112), we proposed that the pass-through payment status of 23 drugs and biologicals would expire on December 31, 2018, as listed in Table 19 of the proposed rule (83 FR 37112). All of these drugs and biologicals will have received OPPS pass-through payment for at least 2 years and no more than 3 years by December 31, 2018. These drugs and biologicals were approved for pass-through payment status on or before January 1, 2017. In accordance with the policy finalized in CY 2017 and described earlier, pass-through payment status for drugs and biologicals newly approved in CY 2017 and subsequent years will expire on a quarterly basis, with a pass-through payment period as close to 3 years as possible. With the exception of those groups of drugs and biologicals that are always packaged when they do not have pass-through payment status (specifically, anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including diagnostic radiopharmaceuticals, contrast agents, and stress agents); and drugs and biologicals that function as supplies when used in a surgical procedure), our standard methodology for providing payment for drugs and biologicals with expiring pass-through payment status in an upcoming calendar year is to determine the product's estimated per day cost and compare it with the OPPS drug packaging threshold for that calendar year (which is $125 for CY 2019), as discussed further in section V.B.2. of this final rule with comment period. In the CY 2019 OPPS/ASC proposed rule (83 FR 37112), we proposed that if the estimated per day cost for the drug or biological is less than or equal to the applicable OPPS drug packaging threshold, we would package payment for the drug or biological into the payment for the associated procedure in the upcoming calendar year. If the estimated per day cost of the drug or biological is greater than the OPPS drug packaging threshold, we proposed to provide separate payment at the applicable relative ASP-based payment amount (which was proposed at ASP+6 percent for CY 2019, and is finalized at ASP+6 percent for CY 2019, as discussed further in section V.B.3. of this final rule with comment period).
After consideration of the public comments we received, we are finalizing our proposal, without modification, to expire the pass-through payment status of the 23 drugs and biologicals listed in Table 37 below on December 31, 2018.
The final packaged or separately payable status of each of these drugs or biologicals is listed in Addendum B to this final rule with comment period (which is available via the internet on the CMS website).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37112), we proposed to continue pass-through payment status in CY 2019 for 45 drugs and biologicals. These drugs and biologicals, which were approved for pass-through payment status between January 1, 2017, and July 1, 2018, were listed in Table 20 of the proposed rule (83 FR 37113 through 37114). The APCs and HCPCS codes for these drugs and biologicals approved for pass-through
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the pass-through payment amount) as the difference between the amount authorized under section 1842(o) of the Act and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is associated with the drug or biological. For CY 2019, we proposed to continue to pay for pass-through drugs and biologicals at ASP+6 percent, equivalent to the payment rate these drugs and biologicals would receive in the physician's office setting in CY 2019. We proposed that a $0 pass-through payment amount would be paid for pass-through drugs and biologicals under the CY 2019 OPPS because the difference between the amount authorized under section 1842(o) of the Act, which was proposed at ASP+6 percent, and the portion of the otherwise applicable OPD fee schedule that the Secretary determines is appropriate, which was proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following: Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including contrast agents, diagnostic radiopharmaceuticals, and stress agents); and drugs and biologicals that function as supplies when used in a surgical procedure), we proposed that their pass-through payment amount would be equal to ASP+6 percent for CY 2019 minus a payment offset for any predecessor drug products contributing to the pass-through payment as described in section V.A.6. of the proposed rule. We made this proposal because, if not for the pass-through payment status of these policy-packaged products, payment for these products would be packaged into the associated procedure.
We proposed to continue to update pass-through payment rates on a quarterly basis on the CMS website during CY 2019 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through payment drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635).
For CY 2019, consistent with our CY 2018 policy for diagnostic and therapeutic radiopharmaceuticals, we proposed to provide payment for both diagnostic and therapeutic radiopharmaceuticals that are granted pass-through payment status based on the ASP methodology. As stated earlier, for purposes of pass-through payment, we consider radiopharmaceuticals to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic radiopharmaceutical receives pass-through payment status during CY 2019, we proposed to follow the standard ASP methodology to determine the pass-through payment rate that drugs receive under section 1842(o) of the Act, which was proposed at ASP+6 percent. If ASP data are not available for a radiopharmaceutical, we proposed to provide pass-through payment at WAC+3 percent (consistent with our proposed policy in section V.B.2.b. of the proposed rule), the equivalent payment provided to pass-through payment drugs and biologicals without ASP information. Additional detail and comments on the WAC+3 percent payment policy can be found in section V.B.2.b. of this final rule. If WAC information also is not available, we proposed to provide payment for the pass-through radiopharmaceutical at 95 percent of its most recent AWP.
We did not receive any public comments regarding our proposals. Therefore, we are implementing these proposals for CY 2019 without modification. We note that public comments pertaining to our proposal to pay WAC+3 percent for drugs and biologicals without ASP information as well as public comments on section 1301 pass-through payment status extensions are addressed elsewhere in this final rule with comment period.
The drugs and biologicals that continue to have pass-through payment status for CY 2019 or have been granted pass-through payment status as of January 2019 are shown in Table 38 below.
As mentioned earlier, section 1301(a)(1) of the Consolidated Appropriations Act of 2018 (Pub. L. 115-141) amended section 1833(t)(6) of the Act and added a new section 1833(t)(6)(G), which provides that for drugs or biologicals whose period of pass-through payment status ended on December 31, 2017 and for which payment was packaged into a covered hospital outpatient service furnished beginning January 1, 2018, such pass-through payment status shall be extended for a 2-year period beginning on October 1, 2018 through September 30, 2020. There are four products whose period of drug and biological pass-through payment status ended on December 31, 2017. These products were listed in Table 21 of the CY 2019 OPPS/ASC proposed rule (83 FR 37115). For CY 2019, we proposed to continue pass-through payment status for the drugs and biologicals listed in Table 21 of the proposed rule (we note that these drugs and biologicals were also listed in Table 20 of the proposed rule). The APCs and HCPCS codes for these drugs and biologicals approved for pass-through payment status were assigned status indicator “G” in Addenda A and B to the proposed rule (which are available via the internet on the CMS website).
In addition, new section 1833(t)(6)(H) of the Act specifies that the payment amount for such drug or biological under this subsection that is furnished during the period beginning on October 1, 2018, and ending on March 31, 2019, shall be the greater of: (i) The payment amount that would otherwise apply under section 1833(t)(6)(D)(i) of the Act for such drug or biological during such period; or (ii) the payment amount that applied under section 1833(t)(6)(D)(i) of the Act for such drug or biological on December 31, 2017. We stated in the proposed rule that we intended to address pass-through payment for these drugs and biologicals for the last quarter of CY 2018 through program instruction. The program instruction covering pass-through payment for these drugs and biologicals for the last quarter of CY 2018 is Transmittal 4123 titled “October 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS)”, and can be found on the CMS website at:
We proposed to continue to update pass-through payment rates for these four drugs and biologicals on a quarterly basis on the CMS website during CY 2019 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through drugs or biologicals are necessary. For a full description of this policy, we refer readers to the CY 2006 OPPS/ASC final rule with comment period (70 FR 68632 through 68635).
The four drugs and biologicals that we proposed would have pass-through payment status for CY 2019 under section 1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the Consolidated Appropriations Act of 2018, were shown in Table 21 of the CY 2019 OPPS/ASC proposed rule (83 FR 37115). Included as one of the four drugs and biologicals with pass-through payment status for CY 2019 is HCPCS code Q4172 (Puraply, and Puraply AM per square centimeter). PuraPly is a skin substitute product that was approved for pass-through payment status on January 1, 2015 through the drug and biological pass-through payment process. Beginning on April 1, 2015, skin substitute products are evaluated for pass-through payment status through the device pass-through payment process. However, we stated in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66887) that skin substitutes that are approved for pass-through payment status as biologicals effective on or before January 1, 2015 would continue to be paid as pass-through biologicals for the duration of their pass-through payment period. Because PuraPly was approved for pass-through payment status through the drug and biological pass-through payment pathway, we proposed to consider PuraPly to be a drug or biological as described by section 1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the Consolidated Appropriations Act of 2018, and to be eligible for extended pass-through payment under our proposal for CY 2019.
We also recognize that the commenters raised important concerns about the impact that extending pass-through payment status for PuraPly and PuraPly AM could have on the payment of wound care services using graft skin substitute products. However, we nonetheless believe that section 1833(t)(6)(G) of the Act requires us to extend the pass-through payment period for PuraPly and PuraPly AM.
Several members of Congress supported extending pass-through payment status for PuraPly and PuraPly
After consideration of the public comments we received, we are finalizing our proposals, with modification, to accommodate a coding change related to the PuraPly products. Specifically, after the proposed rule was published, we became aware that HCPCS code Q4172 (Puraply, and Puraply AM per square centimeter) will be deleted effective January 1, 2019, and will be replaced by three new HCPCS codes: Q4195 (Puraply, per square centimeter); Q4196 (Puraply am, per square centimeter); and Q4197 (Puraply xt, per square centimeter), effective January 1, 2019. Two of these products, PuraPly (HCPCS code Q4195) and PuraPly AM (HCPCS code Q4196), were products that received original pass-through payment status on January 1, 2015, and will continue to receive pass-through payment status in CY 2019 when our finalized policies are implemented.
For January 1, 2019 through March 31, 2019, we are finalizing our proposal that pass-through payment for the covered drugs and biologicals will be the greater of: (1) ASP+6 percent based on current ASP data; or (2) the payment rate for the drug or biological on December 31, 2017. We also are finalizing our proposal that the pass-through payment amount for these drugs and biologicals will be the amount that applies under section 1833(t)(6)(D)(i) of the Act for the period of April 1, 2019 through December 31, 2019.
We are finalizing our proposal to continue to update pass-through payment rates for these covered drugs and biologicals on a quarterly basis on the CMS website during CY 2019 if later quarter ASP submissions (or more recent WAC or AWP information, as applicable) indicate that adjustments to the payment rates for these pass-through drugs or biologicals are necessary. We refer readers to Table 39 below for the drugs and biologicals covered by the requirements of this section.
Under the regulations at 42 CFR 419.2(b), nonpass-through drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure are packaged in the OPPS. This category includes diagnostic radiopharmaceuticals, contrast agents, stress agents, and other diagnostic drugs. Also under 42 CFR 419.2(b), nonpass-through drugs and biologicals that function as supplies in a surgical procedure are packaged in the OPPS. This category includes skin substitutes and other surgical-supply drugs and biologicals. As described earlier, section 1833(t)(6)(D)(i) of the Act specifies that the transitional pass-through payment amount for pass-through drugs and biologicals is the difference between the amount paid under section 1842(o) of the Act and the otherwise applicable OPD fee schedule amount. Because a payment offset is necessary in order to provide an appropriate transitional pass-through payment, we deduct from the pass-through payment for policy-packaged drugs, biologicals, and radiopharmaceuticals an amount reflecting the portion of the APC payment associated with predecessor products in order to ensure no duplicate payment is made. This amount reflecting the portion of the APC payment associated with predecessor products is called the payment offset.
The payment offset policy applies to all policy packaged drugs, biologicals, and radiopharmaceuticals. For a full
We did not receive any comments on this proposal. Therefore, we are finalizing this proposal without modification.
In the CY 2019 OPPS/ASC proposed rule, we proposed to continue to post annually on the CMS website at:
In accordance with section 1833(t)(16)(B) of the Act, the threshold for establishing separate APCs for payment of drugs and biologicals was set to $50 per administration during CYs 2005 and 2006. In CY 2007, we used the four quarter moving average Producer Price Index (PPI) levels for Pharmaceutical Preparations (Prescription) to trend the $50 threshold forward from the third quarter of CY 2005 (when the Pub. L. 108-173 mandated threshold became effective) to the third quarter of CY 2007. We then rounded the resulting dollar amount to the nearest $5 increment in order to determine the CY 2007 threshold amount of $55. Using the same methodology as that used in CY 2007 (which is discussed in more detail in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68085 through 68086)), we set the packaging threshold for establishing separate APCs for drugs and biologicals at $120 for CY 2018 (82 FR 59343).
Following the CY 2007 methodology, for this CY 2019 OPPS/ASC final rule with comment period, we used the most recently available four quarter moving average PPI levels to trend the $50 threshold forward from the third quarter of CY 2005 to the third quarter of CY 2019 and rounded the resulting dollar amount ($127.01) to the nearest $5 increment, which yielded a figure of $125. In performing this calculation, we used the most recent forecast of the quarterly index levels for the PPI for Pharmaceuticals for Human Use (Prescription) (Bureau of Labor Statistics series code WPUSI07003) from CMS' Office of the Actuary. For this CY 2019 OPPS/ASC final rule with comment period, based on these calculations using the CY 2007 OPPS methodology,
In the CY 2019 OPPS/ASC proposed rule (83 FR 37116), to determine the proposed CY 2019 packaging status for all nonpass-through drugs and biologicals that are not policy packaged, we calculated, on a HCPCS code-specific basis, the per day cost of all drugs, biologicals, and therapeutic radiopharmaceuticals (collectively called “threshold-packaged” drugs) that had a HCPCS code in CY 2017 and were paid (via packaged or separate payment) under the OPPS. We used data from CY 2017 claims processed before January 1, 2018 for this calculation. However, we did not perform this calculation for those drugs and biologicals with multiple HCPCS codes that include different dosages, as described in section V.B.1.d. of the proposed rule, or for the following policy-packaged items that we proposed to continue to package in CY 2019: Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure.
In order to calculate the per day costs for drugs, biologicals, and therapeutic radiopharmaceuticals to determine their proposed packaging status in CY 2019, we used the methodology that was described in detail in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and finalized in the CY 2006 OPPS final rule with comment period (70 FR 68636 through 68638). For each drug and biological HCPCS code, we used an estimated payment rate of ASP+6 percent (which is the payment rate we proposed for separately payable drugs and biologicals for CY 2019, as discussed in more detail in section V.B.2.b. of the proposed rule) to calculate the CY 2019 proposed rule per day costs. We used the manufacturer-submitted ASP data from the fourth quarter of CY 2017 (data that were used for payment purposes in the physician's office setting, effective April 1, 2018) to determine the proposed rule per day cost.
As is our standard methodology, for CY 2019, we proposed to use payment rates based on the ASP data from the first quarter of CY 2018 for budget neutrality estimates, packaging determinations, impact analyses, and completion of Addenda A and B to the proposed rule (which are available via the internet on the CMS website) because these were the most recent data available for use at the time of development of the proposed rule. These data also were the basis for drug payments in the physician's office setting, effective April 1, 2018. For items that did not have an ASP-based payment rate, such as some therapeutic radiopharmaceuticals, we used their mean unit cost derived from the CY 2017 hospital claims data to determine their per day cost.
We proposed to package items with a per day cost less than or equal to $125, and identify items with a per day cost greater than $125 as separately payable unless they are policy-packaged. Consistent with our past practice, we cross-walked historical OPPS claims data from the CY 2017 HCPCS codes that were reported to the CY 2018 HCPCS codes that we displayed in Addendum B to the proposed rule (which is available via the internet on the CMS website) for proposed payment in CY 2019.
After consideration of the public comments we received, and consistent with our methodology for establishing the packaging threshold using the most recent PPI forecast data, we are adopting a CY 2019 packaging threshold of $125.
Our policy during previous cycles of the OPPS has been to use updated ASP and claims data to make final determinations of the packaging status of HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals for the OPPS/ASC final rule with comment period. We note that it is also our policy to make an annual packaging determination for a HCPCS code only when we develop the OPPS/ASC final rule with comment period for the update year. Only HCPCS codes that are identified as separately payable in the final rule with comment period are subject to quarterly updates. For our calculation of per day costs of HCPCS codes for drugs and biologicals in this CY 2019 OPPS/ASC final rule with comment period, we used ASP data from the third quarter of CY 2018, which is the basis for calculating payment rates for drugs and biologicals in the physician's office setting using the ASP methodology, effective July 1, 2018, along with updated hospital claims data from CY 2017. We note that we also used these data for budget neutrality estimates and impact analyses for this CY 2019 OPPS/ASC final rule with comment period.
Payment rates for HCPCS codes for separately payable drugs and biologicals included in Addenda A and B for this final rule with comment period are based on ASP data from the third quarter of CY 2018. These data are the basis for calculating payment rates for drugs and biologicals in the physician's office setting using the ASP methodology, effective October 1, 2018. These payment rates will then be updated in the January 2019 OPPS update, based on the most recent ASP data to be used for physician's office and OPPS payment as of January 1, 2019. For items that do not currently have an ASP-based payment rate, we proposed to recalculate their mean unit cost from all of the CY 2017 claims data and updated cost report information available for this CY 2019 final rule with comment period to determine their final per day cost.
Consequently, as stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37117), the packaging status of some HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals in the proposed rule may be different from the same drug HCPCS code's packaging status determined based on the data used for this final rule with comment period. Under such circumstances, in the CY 2019 OPPS/ASC proposed rule (83 FR 37117), we proposed to continue to follow the established policies
• HCPCS codes for drugs and biologicals that were paid separately in CY 2018 and that were proposed for separate payment in CY 2019, and that then have per day costs equal to or less than the CY 2019 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for this CY 2019 final rule, would continue to receive separate payment in CY 2019.
• HCPCS codes for drugs and biologicals that were packaged in CY 2018 and that were proposed for separate payment in CY 2019, and that then have per day costs equal to or less than the CY 2019 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for this CY 2019 final rule, would remain packaged in CY 2019.
• HCPCS codes for drugs and biologicals for which we proposed packaged payment in CY 2019 but that then have per-day costs greater than the CY 2019 final rule drug packaging threshold, based on the updated ASPs and hospital claims data used for this CY 2019 final rule, would receive separate payment in CY 2019.
We did not receive any public comments on our proposal to recalculate the mean unit cost for items that do not currently have an ASP-based payment rate from all of the CY 2017 claims data and updated cost report information available for this CY 2019 final rule with comment period to determine their final per day cost. We also did not receive any public comments on our proposal to continue to follow the established policies, initially adopted for the CY 2005 OPPS (69 FR 65780), when the packaging status of some HCPCS codes for drugs, biologicals, and therapeutic radiopharmaceuticals in the proposed rule may be different from the same drug HCPCS code's packaging status determined based on the data used for the final rule with comment period. Therefore, for CY 2019, we are finalizing these two proposals without modification.
As mentioned earlier in this section, in the OPPS, we package several categories of drugs, biologicals, and radiopharmaceuticals, regardless of the cost of the products. Because the products are packaged according to the policies in 42 CFR 419.2(b), we refer to these packaged drugs, biologicals, and radiopharmaceuticals as “policy-packaged” drugs, biologicals, and radiopharmaceuticals. These policies are either longstanding or based on longstanding principles and inherent to the OPPS and are as follows:
• Anesthesia, certain drugs, biologicals, and other pharmaceuticals; medical and surgical supplies and equipment; surgical dressings; and devices used for external reduction of fractures and dislocations (§ 419.2(b)(4));
• Intraoperative items and services (§ 419.2(b)(14));
• Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure (including, but not limited to, diagnostic radiopharmaceuticals, contrast agents, and pharmacologic stress agents) (§ 419.2(b)(15)); and
• Drugs and biologicals that function as supplies when used in a surgical procedure (including, but not limited to, skin substitutes and similar products that aid wound healing and implantable biologicals) (§ 419.2(b)(16)).
The policy at § 419.2(b)(16) is broader than that at § 419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with comment period: “We consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy” (79 FR 66875). The category described by § 419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, contrast agents, stress agents, and some other products. The category described by § 419.2(b)(16) includes skin substitutes and some other products. We believe it is important to reiterate that cost consideration is not a factor when determining whether an item is a surgical supply (79 FR 66875).
We did not make any proposals to revise our policy-packaged drug policy. We solicited public comment on the general OPPS packaging policies as discussed in section II.3.a. of this final rule with comment period.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74938), we unconditionally packaged skin substitute products into their associated surgical procedures as part of a broader policy to package all drugs and biologicals that function as supplies when used in a surgical procedure. As part of the policy to finalize the packaging of skin substitutes, we also finalized a methodology that divides the skin substitutes into a high cost group and a low cost group, in order to ensure adequate resource homogeneity among APC assignments for the skin substitute application procedures (78 FR 74933).
Skin substitutes assigned to the high cost group are described by HCPCS codes 15271 through 15278. Skin substitutes assigned to the low cost group are described by HCPCS codes C5271 through C5278. Geometric mean costs for the various procedures are calculated using only claims for the skin substitutes that are assigned to each group. Specifically, claims billed with HCPCS code 15271, 15273, 15275, or 15277 are used to calculate the geometric mean costs for procedures assigned to the high cost group, and claims billed with HCPCS code C5271, C5273, C5275, or C5277 are used to calculate the geometric mean costs for procedures assigned to the low cost group (78 FR 74935).
Each of the HCPCS codes described above are assigned to one of the following three skin procedure APCs according to the geometric mean cost for the code: APC 5053 (Level 3 Skin Procedures) (HCPCS codes C5271, C5275, and C5277); APC 5054 (Level 4 Skin Procedures) (HCPCS codes C5273, 15271, 15275, and 15277); or APC 5055 (Level 5 Skin Procedures) (HCPCS code 15273). In CY 2018, the payment rate for APC 5053 (Level 3 Skin Procedures) was $488.20, the payment rate for APC 5054 (Level 4 Skin Procedures) was $1,568.43, and the payment rate for APC 5055 (Level 5 Skin Procedures) was $2,710.48. This information also is available in Addenda A and B of the CY 2018 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website).
We have continued the high cost/low cost categories policy since CY 2014, and in the CY 2019 OPPS/ASC proposed rule (83 FR 37117), we proposed to continue it for CY 2019. Under this current policy, skin substitutes in the high cost category are reported with the skin substitute application CPT codes, and skin substitutes in the low cost category are reported with the analogous skin substitute HCPCS C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for assigning skin substitutes to either the high cost group or the low cost group, we refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 74932 through 74935) and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66882 through 66885).
For a discussion of the high cost/low cost methodology that was adopted in CY 2016 and has been in effect since then, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434 through 70435). For CY 2019, as with our policy since CY 2016, we proposed to continue to determine the high cost/low cost status for each skin substitute product based on either a product's geometric mean unit cost (MUC) exceeding the geometric MUC threshold or the product's per day cost (PDC) (the total units of a skin substitute multiplied by the mean unit cost and divided by the total number of days) exceeding the PDC threshold. For CY 2019, as for CY 2018, we proposed to assign each skin substitute that exceeds either the MUC threshold or the PDC threshold to the high cost group. In addition, as described in more detail later in this section, for CY 2019, as for CY 2018, we proposed to assign any skin substitute with a MUC or a PDC that does not exceed either the MUC threshold or the PDC threshold to the low cost group. For CY 2019, we proposed that any skin substitute product that was assigned to the high cost group in CY 2018 would be assigned to the high cost group for CY 2019, regardless of whether it exceeds or falls below the CY 2019 MUC or PDC threshold.
For this CY 2019 OPPS/ASC final rule with comment period, consistent with the methodology as established in the CY 2014 through CY 2017 final rules with comment period, we analyzed updated CY 2017 claims data to calculate the MUC threshold (a weighted average of all skin substitutes' MUCs) and the PDC threshold (a weighted average of all skin substitutes' PDCs). The final CY 2019 MUC threshold is $49 per cm
For CY 2019, we proposed to continue to assign skin substitutes with pass-through payment status to the high cost category. We proposed to assign skin substitutes with pricing information but without claims data to calculate a geometric MUC or PDC to either the high cost or low cost category based on the product's ASP+6 percent payment rate as compared to the MUC threshold. If ASP is not available, we proposed to use WAC+3 percent to assign a product to either the high cost or low cost category. Finally, if neither ASP nor WAC is available, we stated in the proposed rule that we would use 95 percent of AWP to assign a skin substitute to either the high cost or low cost category. We proposed to use WAC+3 percent instead of WAC+6 percent to conform to our proposed policy described in section V.B.2.b. of the proposed rule to establish a payment rate of WAC+3 percent for separately payable drugs and biologicals that do not have ASP data available. We also
Some skin substitute manufacturers have raised concerns about significant fluctuation in both the MUC threshold and the PDC threshold from year to year. The fluctuation in the thresholds may result in the reassignment of several skin substitutes from the high cost group to the low cost group which, under current payment rates, can be a difference of approximately $1,000 in the payment amount for the same procedure. In addition, these stakeholders were concerned that the inclusion of cost data from skin substitutes with pass-through payment status in the MUC and PDC calculations would artificially inflate the thresholds. Skin substitute stakeholders requested that CMS consider alternatives to the current methodology used to calculate the MUC and PDC thresholds and also requested that CMS consider whether it might be appropriate to establish a new cost group in between the low cost group and the high cost group to allow for assignment of moderately priced skin substitutes to a newly created middle group.
We share the goal of promoting payment stability for skin substitute products and their related procedures as price stability allows hospitals using such products to more easily anticipate future payments associated with these products. We have attempted to limit year-to-year shifts for skin substitute products between the high cost and low cost groups through multiple initiatives implemented since CY 2014, including: Establishing separate skin substitute application procedure codes for low-cost skin substitutes (78 FR 74935); using a skin substitute's MUC calculated from outpatient hospital claims data instead of an average of ASP+6 percent as the primary methodology to assign products to the high cost or low cost group (79 FR 66883); and establishing the PDC threshold as an alternate methodology to assign a skin substitute to the high cost group (80 FR 70434 through 70435).
To allow additional time to evaluate concerns and suggestions from stakeholders about the volatility of the MUC and PDC thresholds, in the CY 2018 OPPS/ASC proposed rule (82 FR 33627), for CY 2018, we proposed that a skin substitute that was assigned to the high cost group for CY 2017 would be assigned to the high cost group for CY 2018, even if it does not exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347). We stated in the CY 2018 OPPS/ASC proposed rule that the goal of our proposal to retain the same skin substitute cost group assignments in CY 2018 as in CY 2017 was to maintain similar levels of payment for skin substitute products for CY 2018 while we study our skin substitute payment methodology to determine whether refinement to the existing policies is consistent with our policy goal of providing payment stability for skin substitutes.
We stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347) that we would continue to study issues related to the payment of skin substitutes and take these comments into consideration for future rulemaking. We received many responses to our requests for comments in the CY 2018 OPPS/ASC proposed rule about possible refinements to the existing payment methodology for skin substitutes that would be consistent with our policy goal of providing payment stability for these products. In addition, several stakeholders have made us aware of additional concerns and recommendations since the release of the CY 2018 OPPS/ASC final rule with comment period. As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37118 through 37119), we have identified four potential methodologies that have been raised to us that we encouraged the public to review and provide comments on. We stated in the proposed rule that we are especially interested in any specific feedback on policy concerns with any of the options presented as they relate to skin substitutes with differing per day or per episode costs and sizes and other factors that may differ among the dozens of skin substitutes currently on the market. We also specified in the proposed rule that we are interested in any new ideas that are not represented below along with an analysis of how different skin substitute products would fare under such ideas. We stated that we intend to explore the full array of public comments on these ideas for the CY 2020 rulemaking, and we indicated that we will consider the feedback received in response to our requests for comments in the CY 2019 proposed rule in developing proposals for CY 2020.
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To allow stakeholders time to analyze and comment on the potential ideas raised above, in the CY 2019 OPPS/ASC proposed rule (83 FR 37119), for CY 2019, we proposed to continue our policy established in CY 2018 to assign skin substitutes to the low cost or high cost group. However, for CY 2020, we stated in the proposed rule that we may revise our policy to reflect one of the potential new methodologies discussed above or a new methodology included in public comments in response to the CY 2019 proposed rule. Specifically, for CY 2019, we proposed to assign a skin substitute with a MUC or a PDC that does not exceed either the MUC threshold or the PDC threshold to the low cost group, unless the product was assigned to the high cost group in CY 2018, in which case we would assign the product to the high cost group for CY 2019, regardless of whether it exceeds the CY 2019 MUC or PDC threshold. We also proposed to assign to the high cost group any skin substitute product that exceeds the CY 2019 MUC or PDC thresholds and assign to the low cost group any skin substitute product that does not exceed the CY 2019 MUC or PDC thresholds and were not assigned to the high cost group in CY 2018. We proposed to continue to use payment methodologies including ASP+6 percent and 95 percent of AWP for skin substitute products that have pricing information but do not have claims data to determine if their costs exceed the CY 2019 MUC. In addition, we proposed to use WAC+3 percent instead of WAC+6 percent for skin substitute products that do not have ASP pricing information or have claims data to determine if those products' costs exceed the CY 2019 MUC. We also proposed to retain our established policy to assign new skin substitute products with pricing information to the low cost group.
Table 23 in the CY 2019 OPPS/ASC proposed rule (83 FR 37119 through 37120) displayed the proposed CY 2019 high cost or low cost category assignment for each skin substitute product.
After consideration of the public comments we received, we are finalizing our proposal to assign a skin substitute with a MUC or a PDC that does not exceed either the MUC threshold or the PDC threshold to the low cost group, unless the product was assigned to the high cost group in CY 2018, in which case we would assign the product to the high cost group for CY 2019, regardless of whether it exceeds the CY 2019 MUC or PDC threshold. We also are finalizing our proposal to assign to the high cost group any skin substitute product that exceeds the CY 2019 MUC or PDC thresholds and assign to the low cost group any skin substitute product that does not exceed the CY 2019 MUC or PDC thresholds and was not assigned to the high cost group in CY 2018. We are finalizing our proposal to continue to use payment methodologies including ASP+6 percent and 95 percent of AWP for skin substitute products that have pricing information but do not have claims data to determine if their costs exceed the CY 2019 MUC. In addition, we are finalizing our proposal to use WAC+3 percent instead of WAC+6
Table 41 below displays the final CY 2019 cost category assignment for each skin substitute product.
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490 through 60491), we finalized a policy to make a single packaging determination for a drug, rather than an individual HCPCS code, when a drug has multiple HCPCS codes describing different dosages because we believed that adopting the standard HCPCS code-specific packaging determinations for these codes could lead to inappropriate payment incentives for hospitals to report certain HCPCS codes instead of others. We continue to believe that making packaging determinations on a drug-specific basis eliminates payment incentives for hospitals to report certain HCPCS codes for drugs and allows hospitals flexibility in choosing to report all HCPCS codes for different dosages of the same drug or only the lowest dosage HCPCS code. Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37121), we proposed to continue our policy to make packaging determinations on a drug-specific basis, rather than a HCPCS code-specific basis, for those HCPCS codes that describe the same drug or biological but different dosages in CY 2019.
For CY 2019, in order to propose a packaging determination that is consistent across all HCPCS codes that describe different dosages of the same drug or biological, we aggregated both our CY 2017 claims data and our pricing information at ASP+6 percent across all of the HCPCS codes that describe each distinct drug or biological in order to determine the mean units per day of the drug or biological in terms of the HCPCS code with the lowest dosage descriptor. The following drugs did not have pricing information available for the ASP methodology for the CY 2019 OPPS/ASC proposed rule, and as is our current policy for determining the packaging status of other drugs, we used the mean unit cost available from the CY 2017 claims data to make the proposed packaging determinations for these drugs: HCPCS code J1840 (Injection, kanamycin sulfate, up to 500 mg); HCPCS code J1850 (Injection, kanamycin sulfate, up to 75 mg); HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative free, per 1,000 usp units); HCPCS code J7100 (Infusion, dextran 40, 500 ml); and HCPCS code J7110 (Infusion, dextran 75, 500 ml).
For all other drugs and biologicals that have HCPCS codes describing different doses, we then multiplied the proposed weighted average ASP+6 percent per unit payment amount across all dosage levels of a specific drug or biological by the estimated units per day for all HCPCS codes that describe each drug or biological from our claims data to determine the estimated per day cost of each drug or biological at less than or equal to the proposed CY 2019 drug packaging threshold of $125 (so that all HCPCS codes for the same drug or biological would be packaged) or greater than the proposed CY 2019 drug packaging threshold of $125 (so that all HCPCS codes for the same drug or biological would be separately payable). The proposed packaging status of each drug and biological HCPCS code to which this methodology would apply in CY 2019 was displayed in Table 24 of the CY 2019 OPPS/ASC proposed rule (83 FR 37121).
We did not receive any public comments on this proposal. Therefore, for CY 2019, we are finalizing our CY 2019 proposal, without modification, to continue our policy to make packaging determinations on a drug-specific basis, rather than a HCPCS code-specific basis, for those HCPCS codes that describe the same drug or biological but different dosages. Table 42 below displays the final packaging status of each drug and biological HCPCS code to which the finalized methodology applies for CY 2019.
Section 1833(t)(14) of the Act defines certain separately payable radiopharmaceuticals, drugs, and biologicals and mandates specific payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a “specified covered outpatient drug” (known as a SCOD) is defined as a covered outpatient drug, as defined in section 1927(k)(2) of the Act, for which a separate APC has been established and that either is a radiopharmaceutical agent or is a drug or biological for which payment was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and biologicals are designated as exceptions and are not included in the definition of SCODs. These exceptions are—
• A drug or biological for which payment is first made on or after January 1, 2003, under the transitional pass-through payment provision in section 1833(t)(6) of the Act.
• A drug or biological for which a temporary HCPCS code has not been assigned.
• During CYs 2004 and 2005, an orphan drug (as designated by the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for SCODs in CY 2006 and subsequent years be equal to the average acquisition cost for the drug for that year as determined by the Secretary, subject to any adjustment for overhead costs and taking into account the hospital acquisition cost survey data collected by the Government Accountability Office (GAO) in CYs 2004 and 2005, and later periodic surveys conducted by the Secretary as set forth in the statute. If hospital acquisition cost data are not available, the law requires that payment be equal to payment rates established under the methodology described in section 1842(o), section 1847A, or section 1847B of the Act, as calculated and adjusted by the Secretary as necessary for purposes of paragraph (14). We refer to this alternative methodology as the “statutory default.” Most physician Part B drugs are paid at ASP+6 percent in accordance with section 1842(o) and section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in OPPS payment rates for SCODs to take into account overhead and related expenses, such as pharmacy services and handling costs. Section 1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead and related expenses and to make recommendations to the Secretary regarding whether, and if so how, a payment adjustment should be made to compensate hospitals for overhead and related expenses. Section 1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the weights for ambulatory procedure classifications for SCODs to take into account the findings of the MedPAC study.
It has been our policy since CY 2006 to apply the same treatment to all separately payable drugs and biologicals, which include SCODs, and drugs and biologicals that are not SCODs. Therefore, we apply the payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs, as required by statute, but we also apply it to separately payable drugs and biologicals that are not SCODs, which is a policy determination rather than a statutory requirement. In the CY 2019 OPPS/ASC proposed rule (83 FR 37122), we proposed to apply section 1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and biologicals, including SCODs. Although we do not distinguish SCODs in this discussion, we note that we are required to apply section 1833(t)(14)(A)(iii)(II) of the Act to SCODs, but we also are applying this provision to other separately payable drugs and biologicals, consistent with our history of using the same payment methodology for all separately payable drugs and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY 2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68386 through 68389), we first adopted the statutory default policy to pay for separately payable drugs and biologicals at ASP+6 percent based on section 1833(t)(14)(A)(iii)(II) of the Act. We continued this policy of paying for separately payable drugs and biologicals at the statutory default for CYs 2014 through 2018.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37122), for CY 2019, we proposed to continue our payment policy that has been in effect since CY 2013 to pay for separately payable drugs and biologicals at ASP+6 percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We proposed to continue to pay for separately payable nonpass-through drugs acquired with a 340B discount at a rate of ASP minus 22.5 percent. We refer readers to section V.A.7. of the proposed rule and this final rule with comment period for more information about how the payment rate for drugs acquired with a 340B discount was established.
In the case of a drug or biological during an initial sales period in which data on the prices for sales for the drug or biological are not sufficiently available from the manufacturer, section 1847A(c)(4) of the Act permits the Secretary to make payments that are based on WAC. Under section 1833(t)(14)(A)(iii)(II), the amount of payment for a separately payable drug equals the average price for the drug for the year established under, among other authorities, section 1847A of the Act. As explained in greater detail in the CY 2019 PFS proposed rule, under section 1847A(c)(4), although payments may be based on WAC, unlike section 1847A(b) of the Act (which specifies that certain payments must be made with a 6 percent add-on), section 1847A(c)(4) of the Act does not require that a particular
In the CY 2019 OPPS/ASC proposed rule (83 FR 37123), we proposed that payments for separately payable drugs and biologicals are included in the budget neutrality adjustments, under the requirements in section 1833(t)(9)(B) of the Act. We also proposed that the budget neutral weight scalar not be applied in determining payments for these separately paid drugs and biologicals.
We note that separately payable drug and biological payment rates listed in Addenda A and B to this final rule with comment period (available via the internet on the CMS website), which illustrate the final CY 2019 payment of ASP+6 percent for separately payable nonpass-through drugs and biologicals and ASP+6 percent for pass-through drugs and biologicals, reflect either ASP information that is the basis for calculating payment rates for drugs and biologicals in the physician's office setting effective October 1, 2018, or WAC, AWP, or mean unit cost from CY 2017 claims data and updated cost report information available for this final rule with comment period. In general, these published payment rates are not the same as the actual January 2019 payment rates. This is because payment rates for drugs and biologicals with ASP information for January 2019 will be determined through the standard quarterly process where ASP data submitted by manufacturers for the third quarter of CY 2018 (July 1, 2018 through September 30, 2018) will be used to set the payment rates that are released for the quarter beginning in January 2019 near the end of December 2018. In addition, payment rates for drugs and biologicals in Addenda A and B to this final rule with comment period for which there was no ASP information available for October 2018 are based on mean unit cost in the available CY 2017 claims data. If ASP information becomes available for payment for the quarter beginning in January 2019, we will price payment for these drugs and biologicals based on their newly available ASP information. Finally, there may be drugs and biologicals that have ASP information available for this final rule with comment period (reflecting October 2018 ASP data) that do not have ASP information available for the quarter beginning in January 2019. As stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), these drugs and biologicals will then be paid based on mean unit cost data derived from CY 2017 hospital claims. Therefore, the payment rates listed in Addenda A and B to this final rule with comment period are not for January 2019 payment purposes and are only illustrative of the CY 2019 OPPS payment methodology using the most recently available information at the time of issuance of this final rule with comment period.
After consideration of the public comments we received, we are finalizing our proposal, without modification, to utilize a 3 percent add-on instead of a 6 percent add-on for drugs that are paid based on WAC under section 1847A(c)(4) of the Act pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of the Act.
For CY 2016 and CY 2017, we finalized a policy to pay for biosimilar biological products based on the payment allowance of the product as determined under section 1847A of the Act and to subject nonpass-through biosimilar biological products to our annual threshold-packaged policy (for CY 2016, 80 FR 70445 through 70446; and for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed rule (82 FR 33630), for CY 2018, we proposed to continue this same payment policy for biosimilar biological products.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59351), we noted that, with respect to comments we received regarding OPPS payment for biosimilar biological products, in the CY 2018 PFS final rule, CMS finalized a policy to implement separate HCPCS codes for biosimilar biological products. Therefore, consistent with our established OPPS drug, biological, and radiopharmaceutical payment policy, HCPCS coding for biosimilar biological products will be based on policy established under the CY 2018 PFS final rule.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59351), after consideration of the public comments we received, we finalized our proposed payment policy for biosimilar biological products, with the following technical correction: All biosimilar biological products will be eligible for pass-through payment and not just the first biosimilar biological product for a reference product. In the CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed to continue the policy in place from CY 2018 to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product.
In addition, in CY 2018, we adopted a policy that biosimilars without pass-through payment status that were acquired under the 340B Program would be paid the ASP of the biosimilar minus 22.5 percent of the reference product (82 FR 59367). We adopted this policy in the CY 2018 OPPS/ASC final rule with comment period because we believe that biosimilars without pass-through payment status acquired under the 340B Program should be treated in the same manner as other drugs and biologicals acquired through the 340B Program. As noted earlier, biosimilars with pass-through payment status are paid their own ASP+6 percent of the reference product's ASP. Separately payable biosimilars that do not have pass-through payment status and are not acquired under the 340B Program are also paid their own ASP+6 percent of the reference product's ASP.
As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), several stakeholders raised concerns to us that the current payment policy for biosimilars acquired under the 340B Program could unfairly lower the OPPS payment for biosimilars not on pass-through payment status because the payment reduction would be based on the reference product's ASP, which would generally be expected to be priced higher than the biosimilar, thus resulting in a more significant reduction in payment than if the 22.5 percent was calculated based on the biosimilar's ASP. We agreed with stakeholders that the current payment policy could unfairly lower the price of biosimilars without pass-through payment status that are acquired under the 340B Program. In addition, we believed that these changes would better reflect the resources and production costs that biosimilar manufacturers incur. We also believed this approach is more consistent with the payment methodology for 340B-acquired drugs and biologicals, for which the 22.5 percent reduction is calculated based on the drug or biological's ASP, rather than the ASP of another product. In addition, we believed that paying for biosimilars acquired under the 340B Program at ASP minus 22.5 percent of the biosimilar's ASP, rather than 22.5 percent of the reference product's ASP, will more closely approximate hospitals' acquisition costs for these products.
Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed changes to our Medicare Part B drug payment methodology for biosimilars acquired
After consideration of the public comments we received, we are finalizing our proposed payment policy for biosimilar products, without modification, to continue the policy in place from CY 2018 to make all biosimilar biological products eligible for pass-through payment and not just the first biosimilar biological product for a reference product. We also are finalizing our proposal to pay nonpass-through biosimilars acquired under the 340B Program at the biosimilar's ASP minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5 percent of the reference product's ASP, in accordance with section 1833(t)(14)(A)(iii)(II) of the Act.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed to continue the payment policy for therapeutic radiopharmaceuticals that began in CY 2010. We pay for separately payable therapeutic radiopharmaceuticals under the ASP methodology adopted for separately payable drugs and biologicals. If ASP information is unavailable for a therapeutic radiopharmaceutical, we base therapeutic radiopharmaceutical payment on mean unit cost data derived from hospital claims. We believe that the rationale outlined in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 through 60525) for applying the principles of separately payable drug pricing to therapeutic radiopharmaceuticals continues to be appropriate for nonpass-through, separately payable therapeutic radiopharmaceuticals in CY 2019. Therefore, we proposed for CY 2019 to pay all nonpass-through, separately payable therapeutic radiopharmaceuticals at ASP+6 percent, based on the statutory default described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full discussion of ASP-based payment for therapeutic radiopharmaceuticals, we refer readers to the CY 2010 OPPS/ASC final rule with comment period (74 FR 60520 through 60521). We also proposed to rely on CY 2017 mean unit cost data derived from hospital claims data for payment rates for therapeutic radiopharmaceuticals for which ASP data are unavailable and to update the payment rates for separately payable therapeutic radiopharmaceuticals according to our usual process for updating the payment rates for separately payable drugs and biologicals on a quarterly basis if updated ASP information is unavailable. For a complete history of the OPPS payment policy for therapeutic radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule with comment period (69 FR 65811), the CY 2006 OPPS final rule with comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524). The proposed CY 2019 payment rates for nonpass-through, separately payable therapeutic radiopharmaceuticals were included in Addenda A and B to the proposed rule (which are available via the internet on the CMS website).
After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue to pay all nonpass-through, separately payable therapeutic radiopharmaceuticals at ASP+6 percent. We also are finalizing our proposal to continue to rely on CY 2017 mean unit cost data derived from hospital claims data for payment rates for therapeutic radiopharmaceuticals for which ASP data are unavailable. The CY 2019 final payment rates for nonpass-through separately payable therapeutic radiopharmaceuticals are included in Addenda A and B to this final rule with comment period (which are available via the internet on the CMS website).
Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Some of the Technetium-99 (Tc-99m), the radioisotope used in the majority of such diagnostic imaging services, is produced in legacy reactors outside of the United States using highly enriched uranium (HEU).
The United States would like to eliminate domestic reliance on these reactors, and is promoting the conversion of all medical radioisotope production to non-HEU sources. Alternative methods for producing Tc-99m without HEU are technologically and economically viable, and conversion to such production has begun. We expect that this change in the supply source for the radioisotope used for modern medical imaging will introduce new costs into the payment system that are not accounted for in the historical claims data.
Therefore, beginning in CY 2013, we finalized a policy to provide an additional payment of $10 for the marginal cost for radioisotopes produced by non-HEU sources (77 FR 68323). Under this policy, hospitals report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium source, full cost recovery add-on per study dose) once per dose along with any diagnostic scan or scans furnished using Tc-99m as long as the Tc-99m doses used can be certified by the hospital to be at least 95 percent derived from non-HEU sources (77 FR 68321).
We stated in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68321) that our expectation is that this additional payment will be needed for the duration of the industry's conversion to alternative methods to producing Tc-99m without HEU. We also stated that we would reassess, and propose if necessary, on an annual basis whether such an adjustment continued to be necessary and whether any changes to the adjustment were warranted (77 FR 68316). A 2016 report from the National Academies of Sciences, Engineering, and Medicine anticipates the conversion of Tc-99m production from non-HEU sources will not be complete until the end of 2019.
We appreciate the feedback from stakeholders. However, as stated in the CY 2019 OPPS/ASC proposed rule, we continue to believe that the current adjustment is sufficient for the reasons we have outlined in this and prior rulemakings. The information from stakeholders and the National Academies of Sciences, Engineering, and Medicine indicates that the conversion of the production of Tc-99m from non-HEU sources may take more than 1 year after CY 2018. Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37124), for CY 2019 and subsequent years, we proposed to continue to provide an additional $10 payment for radioisotopes produced by non-HEU sources. We noted in the proposed rule our intention to reassess this payment policy once conversion to non-HEU sources is closer to completion or has been completed.
One commenter requested that CMS provide an explanation for not applying an annual inflation update to the $10 payment for radioisotopes produced by non-HEU sources, provide details on plans to offset nuclear medicine procedures by the amount of cost paid through the non-HEU policy, and make available to the public data regarding the claims submitted to date under this policy. The commenter also stated that CMS should assess whether the beneficiary copayment policy is adversely impacting patient access.
With respect to the comment that we should assess whether the beneficiary copayment amount is adversely affecting patient access, we will consider the commenter's concern. However, we note that increasing the add-on payment from the current level as the commenter suggested would necessarily increase the beneficiary copayment liability. Finally, the offset for nuclear medicine procedures does not include the cost of the non-HEU add-on payment.
After consideration of the public comments we received, we are finalizing our proposal, without modification, to continue the policy of providing an additional $10 payment for radioisotopes produced by non-HEU sources for CY 2019 and subsequent years. We will reassess this payment policy once conversion to non-HEU sources is closer to completion or has been completed.
For CY 2018, we provided payment for blood clotting factors under the same methodology as other nonpass-through separately payable drugs and biologicals under the OPPS and continued paying an updated furnishing fee (82 FR 59353). That is, for CY 2018, we provided payment for blood clotting factors under the OPPS at ASP+6 percent, plus an additional payment for the furnishing fee. We note that when blood clotting factors are provided in physicians' offices under Medicare Part B and in other Medicare settings, a furnishing fee is also applied to the payment. The CY 2018 updated furnishing fee was $0.215 per unit.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37124), for CY 2019, we proposed to pay for blood clotting factors at ASP+6 percent, consistent with our proposed payment policy for other nonpass-through, separately payable drugs and biologicals, and to continue our policy for payment of the furnishing fee using an updated amount. Our policy to pay for a furnishing fee for blood clotting factors under the OPPS is consistent with the methodology applied in the physician's office and in the inpatient hospital setting. These methodologies were first articulated in the CY 2006 OPPS final rule with comment period (70 FR 68661) and later discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66765). The proposed furnishing fee update was based on the percentage increase in the Consumer Price Index (CPI) for medical care for the 12-month period ending with June of the previous year. Because the Bureau of Labor Statistics releases the applicable CPI data after the PFS and OPPS/ASC proposed rules are published, we were not able to include the actual updated furnishing fee in the proposed rules. Therefore, in accordance with our policy, as finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66765), we proposed to announce the actual figure for the percent change in the applicable CPI and the updated furnishing fee calculated based on that figure through applicable program instructions and posting on the CMS website at:
After consideration of the public comments we received, we are finalizing our proposal, without modification, to provide payment for blood clotting factors under the same methodology as other separately payable drugs and biologicals under the OPPS and to continue payment of an updated furnishing fee. We will announce the actual figure of the percent change in the applicable CPI and the updated furnishing fee calculation based on that figure through the applicable program instructions and posting on the CMS website.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37125), for CY 2019, we proposed to continue to use the same payment policy as in CY 2018 for nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data, which describes how we determine the payment rate for drugs, biologicals, or radiopharmaceuticals without an ASP. For a detailed discussion of the payment policy and methodology, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442 through 70443). The proposed CY 2019 payment status of each of the nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data was listed in Addendum B to the proposed rule, which is available via the internet on the CMS website.
We did not receive any comments on our proposal. Therefore, we are finalizing our CY 2019 proposal without modification, including our proposal to assign drug or biological products status indicator “K” and pay for them separately for the remainder of CY 2019 if pricing information becomes available. The CY 2019 payment status of each of the nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS hospital claims data is listed in Addendum B to this final rule with comment period, which is available via the internet on the CMS website.
In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724), we proposed changes to the Medicare Part B drug payment methodology for 340B hospitals. We proposed these changes to better, and more accurately, reflect the resources and acquisition costs that these hospitals incur. We believed that such changes would allow Medicare beneficiaries (and the Medicare program) to pay a more appropriate amount when hospitals participating in the 340B Program furnish drugs to Medicare beneficiaries that are purchased under the 340B Program. Subsequently, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59369 through 59370), we finalized our proposal and adjusted the payment rate for separately payable drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B Program from average sales price (ASP)+6 percent to ASP minus 22.5 percent. Our goal is to make Medicare payment for separately payable drugs more aligned with the resources expended by hospitals to acquire such drugs, while recognizing the intent of the 340B Program to allow covered entities, including eligible hospitals, to stretch scarce resources in ways that enable hospitals to continue providing access to care for Medicare beneficiaries and other patients. Critical access hospitals are not included in this 340B policy change because they are paid under section 1834(g) of the Act. We also excepted rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals from the 340B payment adjustment in CY 2018. In addition, as stated in the CY 2018 OPPS/ASC final rule with comment period, this policy change does not apply to drugs on pass-through payment status, which are required to be paid based on the ASP methodology, or
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37125), another topic that has been brought to our attention since we finalized the payment adjustment for 340B-acquired drugs in the CY 2018 OPPS/ASC final rule with comment period is whether drugs that do not have ASP pricing but instead receive WAC or AWP pricing are subject to the 340B payment adjustment. We did not receive public comments on this topic in response to the CY 2018 OPPS/ASC proposed rule. However, we have since heard from stakeholders that there has been some confusion about this issue. We clarified in the CY 2019 proposed rule that the 340B payment adjustment applies to drugs that are priced using either WAC or AWP, and it has been our policy to subject 340B-acquired drugs that use these pricing methodologies to the 340B payment adjustment since the policy was first adopted. The 340B payment adjustment for WAC-priced drugs is WAC minus 22.5 percent and AWP-priced drugs have a payment rate of 69.46 percent of AWP when the 340B payment adjustment is applied. The 69.46 percent of AWP is calculated by first reducing the original 95 percent of AWP price by 6 percent to generate a value that is similar to ASP or WAC with no percentage markup. Then we apply the 22.5 percent reduction to ASP/WAC-similar AWP value to obtain the 69.46 percent of AWP, which is similar to either ASP minus 22.5 percent or WAC minus 22.5 percent. The number of separately payable drugs receiving WAC or AWP pricing that are affected by the 340B payment adjustment is small—consisting of less than 10 percent of all separately payable Medicare Part B drugs in April 2018.
Furthermore, data limitations previously inhibited our ability to identify which drugs were acquired under the 340B Program in the Medicare OPPS claims data. This lack of information within the claims data has limited researchers' and our ability to precisely analyze differences in acquisition cost of 340B and non-340B acquired drugs with Medicare claims data. Accordingly, in the CY 2018 OPPS/ASC proposed rule (82 FR 33633), we stated our intent to establish a modifier, to be effective January 1, 2018, for hospitals to report with separately payable drugs that were not acquired under the 340B Program. Because a significant portion of hospitals paid under the OPPS participate in the 340B Program, we stated our belief that it is appropriate to presume that a separately payable drug reported on an OPPS claim was purchased under the 340B Program, unless the hospital identifies that the drug was not purchased under the 340B Program. We stated in the CY 2018 proposed rule that we intended to provide further details about this modifier in the CY 2018 OPPS/ASC final rule with comment period and/or through subregulatory guidance, including guidance related to billing for dually eligible beneficiaries (that is, beneficiaries covered under Medicare and Medicaid) for whom covered entities do not receive a discount under the 340B Program. As discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59369 through 59370), to effectuate the payment adjustment for 340B-acquired drugs, CMS implemented modifier “JG”, effective January 1, 2018. Hospitals paid under the OPPS, other than a type of hospital excluded from the OPPS (such as critical access hospitals or those hospitals paid under the Maryland waiver), or excepted from the 340B drug payment policy for CY 2018, are required to report modifier “JG” on the same claim line as the drug HCPCS code to identify a 340B-acquired drug. For CY 2018, rural sole community hospitals, children's hospitals and PPS-exempt cancer hospitals are excepted from the 340B payment adjustment. These hospitals are required to report informational modifier “TB” for 340B-acquired drugs, and continue to be paid ASP+6 percent.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 59370) for a full discussion and rationale for the CY 2018 policies and use of modifier “JG”.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37125), for CY 2019, we proposed to continue the 340B Program policies that were implemented in CY 2018 with the exception of the way we calculate payment for 340B-acquired biosimilars (that is, we proposed to pay for nonpass-through 340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's ASP, rather than of the reference product's ASP). More information on our revised policy for the payment of biosimilars acquired through the 340B Program is available in section V.B.2.c. of this final rule. We proposed, in accordance with section 1833(t)(14)(A)(iii)(II) of the Act, to pay for separately payable Medicare Part B drugs (assigned status indicator “K”), other than vaccines and drugs on pass-through payment status, that meet the definition of “covered outpatient drug” as defined in section 1927(k) of the Act, that are acquired through the 340B Program at ASP minus 22.5 percent when billed by a hospital paid under the OPPS that is not excepted from the payment adjustment. Medicare Part B drugs or biologicals excluded from the 340B payment adjustment include vaccines (assigned status indicator “L” or “M”) and drugs with OPPS transitional pass-through payment status (assigned status indicator “G”). As discussed in section V.B.2.c. of the proposed rule, we proposed to pay nonpass-through biosimilars acquired under the 340B Program at the biosimilar's ASP minus 22.5 percent of the biosimilar's ASP. We also proposed that Medicare would continue to pay for drugs or biologicals that were not purchased with a 340B discount at ASP+6 percent.
As stated earlier, to effectuate the payment adjustment for 340B-acquired drugs, CMS implemented modifier “JG”, effective January 1, 2018. For CY 2019, we proposed that hospitals paid under the OPPS, other than a type of hospital excluded from the OPPS, or excepted from the 340B drug payment policy for CY 2018, continue to be required to report modifier “JG” on the same claim line as the drug HCPCS code to identify a 340B-acquired drug. We also proposed for CY 2019 that rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals continue to be excepted from the 340B payment adjustment. We proposed that these hospitals be required to report informational modifier “TB” for 340B-acquired drugs, and continue to be paid ASP+6 percent.
Another commenter, MedPAC, also supported the proposal. MedPAC believed a lower payment rate allows beneficiaries to share in the savings from the 340B Program, better targets resources to hospitals providing the most uncompensated care, and still allows 340B hospitals to make a profit off the drugs obtained through the program. MedPAC preferred that the payment rate be ASP+6 percent minus a 10 percent discount with the savings assigned to a Medicare-funded uncompensated care pool, but noted that this policy requires Congressional action.
Regarding the concerns of the commenters that drugs and biologicals and services where drugs and biologicals are packaged into the cost of the service would cost more at hospitals that do not participate in the 340B Program as compared to hospitals participating in the 340B Program, any differential in these costs is a feature of the 340B Program rather than Medicare payment policy. In fact, one of the objectives of our payment policy for drugs and biologicals acquired through the 340B Program is to lower costs for Medicare beneficiaries, and we believe it is appropriate that hospitals participating in the 340B Program pass the cost savings they receive to their beneficiaries.
Finally, regarding the commenters' assertion that CMS lacks the legal authority to continue requiring payment reductions for drugs and biologicals obtained through the 340B Program, we refer these commenters to our detailed response regarding our statutory authority to require payment reductions for drugs and biologicals obtained through the 340B Program in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59359 through 59364).
After consideration of the public comments we received, we are finalizing our proposals without modification. For CY 2019, we are continuing the 340B Program policies that were implemented in CY 2018 with the exception of the way we are calculating payment for 340B-acquired biosimilars, which is discussed in section V.B.2.c. of this final rule with comment period. We refer readers to the CY 2018 final rule with comment period (82 FR 59369 through 59370) for more detail on the policies implemented in CY 2018 for drugs acquired through the 340B Program.
Section 1833(t)(6)(E) of the Act limits the total projected amount of transitional pass-through payments for drugs, biologicals, radiopharmaceuticals, and categories of devices for a given year to an “applicable percentage,” currently not to exceed 2.0 percent of total program payments estimated to be made for all covered services under the OPPS furnished for that year. If we estimate before the beginning of the calendar year that the total amount of pass-through payments in that year would exceed the applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction in the amount of each of the transitional pass-through payments made in that year to ensure that the limit is not exceeded. We estimate the pass-through spending to determine whether payments exceed the applicable percentage and the appropriate pro-rata reduction to the conversion factor for the projected level of pass-through spending in the following year to ensure that total estimated pass-through spending for the prospective payment year is budget neutral, as required by section 1833(t)(6)(E) of the Act.
For devices, developing an estimate of pass-through spending in CY 2019 entails estimating spending for two groups of items. The first group of items consists of device categories that are currently eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2019. The CY 2008 OPPS/ASC final rule with comment period (72 FR 66778) describes the methodology we have used in previous years to develop the pass-through spending estimate for known device categories continuing into the applicable update year. The second group of items consists of items that we know are newly eligible, or project may be newly eligible, for device pass-through payment in the remaining quarters of CY 2018 or beginning in CY 2019. The sum of the CY 2019 pass-through spending estimates for these two groups of device categories equals the total CY 2019 pass-through spending estimate for device categories with pass-through payment status. We base the device pass-through estimated payments for each device category on the amount of payment as established in section 1833(t)(6)(D)(ii) of the Act, and as outlined in previous rules, including the CY 2014 OPPS/ASC final rule with comment period (78 FR 75034 through 75036). We note that, beginning in CY 2010, the pass-through evaluation process and pass-through payment for implantable biologicals newly approved for pass-through payment beginning on or after January 1, 2010, that are surgically inserted or implanted (through a surgical incision or a natural orifice) use the device pass-through process and payment methodology (74 FR 60476). As has been our past practice (76 FR 74335), in the CY 2019 OPPS/ASC proposed rule (83 FR 37126), we proposed to include an estimate of any implantable biologicals eligible for pass-through payment in our estimate of pass-through spending for devices. Similarly, we finalized a policy in CY 2015 that applications for pass-through payment for skin substitutes and similar products be evaluated using the medical device pass-through process and payment methodology (76 FR 66885 through 66888). Therefore, as we did beginning in CY 2015, for CY 2019, we
For drugs and biologicals eligible for pass-through payment, section 1833(t)(6)(D)(i) of the Act establishes the pass-through payment amount as the amount by which the amount authorized under section 1842(o) of the Act (or, if the drug or biological is covered under a competitive acquisition contract under section 1847B of the Act, an amount determined by the Secretary equal to the average price for the drug or biological for all competitive acquisition areas and year established under such section as calculated and adjusted by the Secretary) exceeds the portion of the otherwise applicable fee schedule amount that the Secretary determines is associated with the drug or biological. Our estimate of drug and biological pass-through payment for CY 2019 for this group of items is $0, as discussed below, because we proposed to pay for most nonpass-through separately payable drugs and biologicals under the CY 2019 OPPS at ASP+6 percent (with the exception of 340B-acquired separately payable drugs, for which we do not yet have sufficient data to estimate a share of total drug payments), and because we proposed to pay for CY 2019 pass-through payment drugs and biologicals at ASP+6 percent, as we discuss in section V.A. of the proposed rule and this final rule with comment period.
Furthermore, payment for certain drugs, specifically diagnostic radiopharmaceuticals and contrast agents without pass-through payment status is packaged into payment for the associated procedures, and these products will not be separately paid. In addition, we policy-package all nonpass-through drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure and drugs and biologicals that function as supplies when used in a surgical procedure, as discussed in section II.A.3. of the proposed rule and this final rule with comment period. In the CY 2019 OPPS/ASC proposed rule (83 FR 37126), we proposed that all of these policy-packaged drugs and biologicals with pass-through payment status would be paid at ASP+6 percent, like other pass-through drugs and biologicals, for CY 2019. Therefore, our estimate of pass-through payment for policy-packaged drugs and biologicals with pass-through payment status approved prior to CY 2019 was not $0, as discussed below. In section V.A.5. of the proposed rule, we discussed our policy to determine if the costs of certain policy-packaged drugs or biologicals are already packaged into the existing APC structure. If we determine that a policy-packaged drug or biological approved for pass-through payment resembles predecessor drugs or biologicals already included in the costs of the APCs that are associated with the drug receiving pass-through payment, we proposed to offset the amount of pass-through payment for the policy-packaged drug or biological. For these drugs or biologicals, the APC offset amount is the portion of the APC payment for the specific procedure performed with the pass-through drug or biological, which we refer to as the policy-packaged drug APC offset amount. If we determine that an offset is appropriate for a specific policy-packaged drug or biological receiving pass-through payment, we proposed to reduce our estimate of pass-through payments for these drugs or biologicals by this amount.
Similar to pass-through spending estimates for devices, the first group of drugs and biologicals requiring a pass-through payment estimate consists of those products that were recently made eligible for pass-through payment and that will continue to be eligible for pass-through payment in CY 2019. The second group contains drugs and biologicals that we know are newly eligible, or project will be newly eligible in the remaining quarters of CY 2018 or beginning in CY 2019. The sum of the CY 2019 pass-through spending estimates for these two groups of drugs and biologicals equals the total CY 2019 pass-through spending estimate for drugs and biologicals with pass-through payment status.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37127), we proposed to set the applicable pass-through payment percentage limit at 2.0 percent of the total projected OPPS payments for CY 2019, consistent with section 1833(t)(6)(E)(ii)(II) of the Act and our OPPS policy from CY 2004 through CY 2018 (82 FR 59371 through 59373).
For the first group, consisting of device categories that are currently eligible for pass-through payment and will continue to be eligible for pass-through payment in CY 2019, there are no active categories for CY 2019. Because there are no active device categories for CY 2019, we proposed an estimate for the first group of devices of $0. We did not receive any public comments on the proposal. Therefore, we are finalizing the proposed estimate for the first group of devices of $0 for CY 2019.
In estimating our proposed CY 2019 pass-through spending for device categories in the second group, we included: Device categories that we knew at the time of the development of the proposed rule will be newly eligible for pass-through payment in CY 2019; additional device categories that we estimated could be approved for pass-through status subsequent to the development of the proposed rule and before January 1, 2019; and contingent projections for new device categories established in the second through fourth quarters of CY 2019. In the CY 2019 OPPS/ASC proposed rule (83 FR 37127), we proposed to use the general methodology described in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66778), while also taking into account recent OPPS experience in approving new pass-through device categories. For the proposed rule, the estimate of CY 2019 pass-through spending for this second group of device categories was $10 million.
We did not receive any public comments on this proposal. As stated earlier in this final rule with comment period, we have decided to approve one device to receive pass-through status, the remedē® System Transvenous Neurostimulator. The manufacturer of the remedē® System provided utilization data that indicate the spending for the device would be approximately $2.5 million. However, it is possible that additional new devices may receive pass-through payment status during CY 2019, which would lead to the higher pass-through spending for new devices closer to our proposed estimate of $10 million. Therefore, we are finalizing the proposed estimate for this second group of devices of $10 million for CY 2019.
To estimate proposed CY 2019 pass-through spending for drugs and biologicals in the first group, specifically those drugs and biologicals recently made eligible for pass-through payment and continuing on pass-through payment status for CY 2019, we proposed to use the most recent Medicare hospital outpatient claims data regarding their utilization, information provided in the respective pass-through applications, historical hospital claims data, pharmaceutical industry information, and clinical information regarding those drugs or biologicals to project the CY 2019 OPPS utilization of the products.
For the known drugs and biologicals (excluding policy-packaged diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test
We did not receive any public comments on our proposal. Using our methodology for this final rule with comment period, we calculated a CY 2019 spending estimate for this first group of drugs and biologicals of approximately $50.9 million.
To estimate proposed CY 2019 pass-through spending for drugs and biologicals in the second group (that is, drugs and biologicals that we knew at the time of development of the proposed rule were newly eligible for pass-through payment in CY 2019, additional drugs and biologicals that we estimated could be approved for pass-through status subsequent to the development of the proposed rule and before January 1, 2018, and projections for new drugs and biologicals that could be initially eligible for pass-through payment in the second through fourth quarters of CY 2019), we proposed to use utilization estimates from pass-through applicants, pharmaceutical industry data, clinical information, recent trends in the per unit ASPs of hospital outpatient drugs, and projected annual changes in service volume and intensity as our basis for making the CY 2019 pass-through payment estimate. We also proposed to consider the most recent OPPS experience in approving new pass-through drugs and biologicals. Using our proposed methodology for estimating CY 2019 pass-through payments for this second group of drugs, we calculated a proposed spending estimate for this second group of drugs and biologicals of approximately $55.2 million.
We did not receive any public comments on our proposal. Therefore, for CY 2019, we are continuing to use the general methodology described above. For this final rule with comment period, we calculated a CY 2019 spending estimate for this second group of drugs and biologicals of approximately $39.9 million.
In summary, in accordance with the methodology described earlier in this section, for this final rule with comment period, we estimate that total pass-through spending for the device categories and the drugs and biologicals that are continuing to receive pass-through payment in CY 2019 and those device categories, drugs, and biologicals that first become eligible for pass-through payment during CY 2019 is approximately $100.8 million (approximately $10 million for device categories and approximately $90.8 million for drugs and biologicals) which represents 0.14 percent of total projected OPPS payments for CY 2019 (approximately $74 billion). Therefore, we estimate that pass-through spending in CY 2019 will not amount to 2.0 percent of total projected OPPS CY 2019 program spending.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37128), for CY 2019, we proposed to continue with our current clinic and emergency department (ED) hospital outpatient visits payment policies. For a description of the current clinic and ED hospital outpatient visits policies, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70448). We also proposed to continue and did not propose any change to our payment policy for critical care services for CY 2019. For a description of the current payment policy for critical care services, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70449), and for the history of the payment policy for critical care services, we refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75043). In the CY 2019 OPPS/ASC proposed rule, we sought public comments on any changes to these codes that we should consider for future rulemaking cycles. We continue to encourage commenters to provide the data and analysis necessary to justify any suggested changes.
We did not receive any public comments on our proposals to continue our current clinic and ED hospital outpatient visits payment policies and our current critical care services payment policies. Therefore, we are adopting these proposals as final without modification.
In section X.V. of the CY 2019 OPPS/ASC proposed rule (83 FR 37138 through 37143), for 2019, we proposed a method to control unnecessary increases in the volume of covered outpatient department services under section 1833(t)(2)(F) of the Act by utilizing a Medicare Physician Fee Schedule (PFS)-equivalent payment rate for the hospital outpatient clinic visit (HCPCS code G0463) when it is furnished by excepted off-campus provider-based departments (PBDs). For a full discussion of the proposal as well as the comment solicitation on potential methods to control for unnecessary increases in the volume of covered outpatient department services, we refer readers to section X.B. of this final rule with comment period.
A partial hospitalization program (PHP) is an intensive outpatient program of psychiatric services provided as an alternative to inpatient psychiatric care for individuals who have an acute mental illness, which includes, but is not limited to, conditions such as depression, schizophrenia, and substance use disorders. Section 1861(ff)(1) of the Act defines partial hospitalization services as the items and services described in paragraph (2) prescribed by a physician and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. Section 1861(ff)(2) of the Act describes the items and services included in partial hospitalization services. Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program furnished by a hospital to its outpatients or by a community mental health center (CMHC), as a distinct and organized
Section 1833(t)(1)(B)(i) of the Act provides the Secretary with the authority to designate the outpatient department (OPD) services to be covered under the OPPS. The Medicare regulations that implement this provision specify, at 42 CFR 419.21, that payments under the OPPS will be made for partial hospitalization services furnished by CMHCs as well as Medicare Part B services furnished to hospital outpatients designated by the Secretary, which include partial hospitalization services (65 FR 18444 through 18445).
Section 1833(t)(2)(C) of the Act requires the Secretary, in part, to establish relative payment weights for covered OPD services (and any groups of such services described in section 1833(t)(2)(B) of the Act) based on median (or, at the election of the Secretary, mean) hospital costs using data on claims from 1996 and data from the most recent available cost reports. In pertinent part, section 1833(t)(2)(B) of the Act provides that the Secretary may establish groups of covered OPD services, within a classification system developed by the Secretary for covered OPD services, so that services classified within each group are comparable clinically and with respect to the use of resources. In accordance with these provisions, we have developed the PHP APCs. Because a day of care is the unit that defines the structure and scheduling of partial hospitalization services, we established a per diem payment methodology for the PHP APCs, effective for services furnished on or after July 1, 2000 (65 FR 18452 through 18455). Under this methodology, the median per diem costs were used to calculate the relative payment weights for the PHP APCs. Section 1833(t)(9)(A) of the Act requires the Secretary to review, not less often than annually, and revise the groups, the relative payment weights, and the wage and other adjustments described in section 1833(t)(2) of the Act to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors.
We began efforts to strengthen the PHP benefit through extensive data analysis, along with policy and payment changes finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670 through 66676). In that final rule with comment period, we made two refinements to the methodology for computing the PHP median: The first remapped 10 revenue codes that are common among hospital-based PHP claims to the most appropriate cost centers; and the second refined our methodology for computing the PHP median per diem cost by computing a separate per diem cost for each day rather than for each bill.
In CY 2009, we implemented several regulatory, policy, and payment changes, including a two-tier payment approach for partial hospitalization services under which we paid one amount for days with 3 services under PHP APC 0172 (Level 1 Partial Hospitalization) and a higher amount for days with 4 or more services under PHP APC 0173 (Level 2 Partial Hospitalization) (73 FR 68688 through 68693). We also finalized our policy to deny payment for any PHP claims submitted for days when fewer than 3 units of therapeutic services are provided (73 FR 68694). Furthermore, for CY 2009, we revised the regulations at 42 CFR 410.43 to codify existing basic PHP patient eligibility criteria and to add a reference to current physician certification requirements under 42 CFR 424.24 to conform our regulations to our longstanding policy (73 FR 68694 through 68695). We also revised the partial hospitalization benefit to include several coding updates (73 FR 68695 through 68697).
For CY 2010, we retained the two-tier payment approach for partial hospitalization services and used only hospital-based PHP data in computing the PHP APC per diem costs, upon which PHP APC per diem payment rates are based. We used only hospital-based PHP data because we were concerned about further reducing both PHP APC per diem payment rates without knowing the impact of the policy and payment changes we made in CY 2009. Because of the 2-year lag between data collection and rulemaking, the changes we made in CY 2009 were reflected for the first time in the claims data that we used to determine payment rates for the CY 2011 rulemaking (74 FR 60556 through 60559).
In the CY 2011 OPPS/ASC final rule with comment period (75 FR 71994), we established four separate PHP APC per diem payment rates: Two for CMHCs (APC 0172 (for Level 1 services) and APC 0173 (for Level 2 services)) and two for hospital-based PHPs (APC 0175 (for Level 1 services) and 0176 (for Level 2 services)), based on each provider type's own unique data. For CY 2011, we also instituted a 2-year transition period for CMHCs to the CMHC APC per diem payment rates based solely on CMHC data. Under the transition methodology, CMHC APCs Level 1 and Level 2 per diem costs were calculated by taking 50 percent of the difference between the CY 2010 final hospital-based PHP median costs and the CY 2011 final CMHC median costs and then adding that number to the CY 2011 final CMHC median costs. A 2-year transition under this methodology moved us in the direction of our goal, which is to pay appropriately for partial hospitalization services based on each provider type's data, while at the same time allowing providers time to adjust their business operations and protect access to care for Medicare beneficiaries. We also stated that we would review and analyze the data during the CY 2012 rulemaking cycle and, based on these analyses, we might further refine the payment mechanism. We refer readers to section X.B. of the CY 2011 OPPS/ASC final rule with comment period (75 FR 71991 through 71994) for a full discussion.
In addition, in accordance with section 1301(b) of the Health Care and Education Reconciliation Act of 2010 (HCERA 2010), we amended the description of a PHP in our regulations to specify that a PHP must be a distinct and organized intensive ambulatory treatment program offering less than 24-hour daily care other than in an individual's home or in an inpatient or residential setting. In accordance with section 1301(a) of HCERA 2010, we revised the definition of a CMHC in the regulations to conform to the revised definition now set forth under section 1861(ff)(3)(B) of the Act (75 FR 71990).
For CY 2012, as discussed in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74348 through 74352), we determined the relative payment weights for partial hospitalization services provided by CMHCs based on data derived solely from CMHCs and the relative payment weights for partial hospitalization services provided by hospital-based PHPs based exclusively on hospital data.
In the CY 2013 OPPS/ASC final rule with comment period, we finalized our proposal to base the relative payment weights that underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173, 0175, and 0176), on geometric mean costs rather than on the median costs. We established these four PHP APC per diem payment rates based on geometric mean cost levels calculated using the most recent claims and cost data for each provider type. For a detailed discussion on this policy, we refer readers to the CY 2013 OPPS/ASC
In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622), we solicited comments on possible future initiatives that may help to ensure the long-term stability of PHPs and further improve the accuracy of payment for PHP services, but proposed no changes. In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75050 through 75053), we summarized the comments received on those possible future initiatives. We also continued to apply our established policies to calculate the four PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims data for each provider type. For a detailed discussion on this policy, we refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through 75050).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66902 through 66908), we continued to apply our established policies to calculate the four PHP APC per diem payment rates based on PHP APC geometric mean per diem costs, using the most recent claims and cost data for each provider type.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70455 through 70465), we described our extensive analysis of the claims and cost data and ratesetting methodology. We found aberrant data from some hospital-based PHP providers that were not captured using the existing OPPS ±3 standard deviation trims for extreme cost-to-charge ratios (CCRs) and excessive CMHC charges resulting in CMHC geometric mean costs per day that were approximately the same as or more than the daily payment for inpatient psychiatric facility services. Consequently, we implemented a trim to remove hospital-based PHP service days that use a CCR that was greater than 5 to calculate costs for at least one of their component services, and a trim on CMHCs with a geometric mean cost per day that is above or below 2 (±2) standard deviations from the mean. We stated in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70456) that, without using a trimming process, the data from these providers would inappropriately skew the geometric mean per diem cost for Level 2 CMHC services.
In addition, in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70459 through 70460), we corrected a cost inversion that occurred in the final rule data with respect to hospital-based PHP providers. We corrected the cost inversion with an equitable adjustment to the actual geometric mean per diem costs by increasing the Level 2 hospital-based PHP APC geometric mean per diem costs and decreasing the Level 1 hospital-based PHP APC geometric mean per diem costs by the same factor, to result in a percentage difference equal to the average percent difference between the hospital-based Level 1 PHP APC and the Level 2 PHP APC for partial hospitalization services from CY 2013 through CY 2015.
Finally, we renumbered the PHP APCs, which were previously 0172, 0173, 0175, and 0176, to 5851, 5852, 5861, and 5862, respectively. For a detailed discussion of the PHP ratesetting process, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70462 through 70467).
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims and cost data for each provider type. However, we finalized a policy to combine the Level 1 and Level 2 PHP APCs for CMHCs and to combine the Level 1 and Level 2 APCs for hospital-based PHPs because we believed this would best reflect actual geometric mean per diem costs going forward, provide more predictable per diem costs, particularly given the small number of CMHCs, and generate more appropriate payments for these services, for example by avoiding the cost inversions for hospital-based PHPs addressed in the CY 2016 and CY 2017 OPPS/ASC final rules with comment period (80 FR 70459 and 81 FR 79682). We implemented an 8-percent outlier cap for CMHCs to mitigate potential outlier billing vulnerabilities by limiting the impact of inflated CMHC charges on outlier payments. We will continue to monitor the trends in outlier payments and consider policy adjustments as necessary.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59373 through 59381), we continued to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims and cost data for each provider type. We continued to designate a portion of the estimated 1.0 percent hospital outpatient outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS, excluding outlier payments.
For a comprehensive description of PHP payment policy, including a detailed methodology for determining PHP per diem amounts, we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with comment period (80 FR 70453 through 70455 and 81 FR 79678 through 79680).
For CY 2019, in the CY 2019 OPPS/ASC proposed rule (83 FR 37130), we proposed to continue to apply our established policies to calculate the PHP APC per diem payment rates based on geometric mean per diem costs using the most recent claims and cost data for each provider type. Specifically, we proposed to continue to use CMHC APC 5853 (Partial Hospitalization (3 or More Services Per Day)) and hospital-based PHP APC 5863 (Partial Hospitalization (3 or More Services Per Day)). We proposed to continue to calculate the geometric mean per diem costs for CY 2019 for APC 5853 for CMHCs using only CY 2017 CMHC claims data and the most recent CMHC cost data, and the CY 2019 geometric mean per diem costs for APC 5863 for hospital-based PHPs using only CY 2017 hospital-based PHP claims data and the most recent hospital cost data.
We summarize the public comments we received related to these PHP proposals and methodology and include our responses in the sections below focused on CMHC ratesetting and on hospital-based PHP ratesetting in this CY 2019 OPPS/ASC final rule with comment period.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37130), for CY 2019 and subsequent years, we proposed to follow the PHP ratesetting methodology described in section VIII.B.2. of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70462 through 70466) to determine the PHP APCs' geometric mean per diem costs and to calculate the payment rates for APCs 5853 and 5863, incorporating the modifications made in the CY 2017 OPPS/ASC final rule with comment period. As discussed in section VIII.B.1. of the CY 2017 OPPS/ASC final rule with comment period (81 FR 79680 through 79687), the geometric mean per diem cost for hospital-based PHP APC 5863 is based upon actual hospital-based PHP claims and costs for PHP service days providing 3 or more services. Similarly, the geometric mean per diem cost for CMHC APC 5853 is based upon actual CMHC claims and costs for CMHC service days providing 3 or more services.
The CMHC or hospital-based PHP APC per diem costs are the provider-type specific costs derived from the most recent claims and cost data. The CMHC or hospital-based PHP APC per diem payment rates are the national unadjusted payment rates calculated from the CMHC or hospital-based PHP APC per diem costs, after applying the OPPS budget neutrality adjustments described in section II.A.4. of this final rule with comment period.
As previously stated, in the CY 2019 OPPS/ASC proposed rule, we proposed to apply our established methodologies in developing the CY 2019 geometric mean per diem costs and payment rates, including the application of a ±2 standard deviation trim on costs per day for CMHCs and a CCR greater than 5 hospital service day trim for hospital-based PHP providers. These two trims were finalized in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70455 through 70462) for CY 2016 and subsequent years.
For this CY 2019 final rule with comment period, prior to calculating the final geometric mean per diem cost for CMHC APC 5853, we prepared the data by first applying trims and data exclusions, and assessing CCRs as described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70463 through 70465), so that ratesetting is not skewed by providers with extreme data. For this CY 2019 OPPS/ASC final rule with comment period, we used the same data preparation steps. Before any trims or exclusions were applied, there were 45 CMHCs in the final PHP claims data file (compared to 44 in the CY 2019 OPPS/ASC proposed rule). Under the ±2 standard deviation trim policy, we excluded any data from a CMHC for ratesetting purposes when the CMHC's geometric mean cost per day was more than ±2 standard deviations from the geometric mean cost per day for all CMHCs. By applying this trim for CY 2019 ratesetting, in this final rule with comment period, we excluded 4 CMHCs with geometric mean costs per day below the trim's lower limit of $49.86 and 2 CMHCs with geometric mean costs per day above the trim's upper limit of $293.60. This standard deviation trim removed 6 providers from the ratesetting whose overall effect on the data would have skewed downward the calculation of the final geometric mean per diem costs for CMHCs.
In accordance with our PHP ratesetting methodology, as stated in the proposed rule, we also remove service days with no wage index values, because we use the wage index data to remove the effects of geographic variation in costs prior to APC geometric mean per diem cost calculation (80 FR 70465). For this CY 2019 final rule with comment period ratesetting, 1 CMHC was missing wage index data for all of its service days and was excluded.
In addition to our trims and data exclusions, before determining the PHP APC geometric mean per diem costs, we also assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting methodology defaults any CMHC CCR greater than 1 to the statewide hospital CCR (80 FR 70457). For this CY 2019 final rule with comment period ratesetting, we identified 3 CMHCs that had CCRs greater than 1. These CMHCs' CCRs were 1.053, 1.009, and 1.025, and each was defaulted to its appropriate statewide hospital CCR for CY 2019 ratesetting purposes.
In summary, these data preparation steps adjusted the CCR for 3 CMHCs by defaulting to the appropriate statewide hospital CCR and excluded 7 CMHCs, resulting in the inclusion of a total of 38 CMHCs (45 total—7 excluded) in our CY 2019 final rule with comment period ratesetting modeling (compared to a total of 36 CMHCs in our modeling in the CY 2019 OPPS/ASC proposed rule). The ±2 standard deviation trim and the exclusion for missing wage index data removed 425 CMHC claims out of a total of 14,431 CMHC claims, resulting in 14,006 CMHC claims used for ratesetting purposes. We believe that excluding providers with extremely low or high geometric mean costs per day or extremely low or high CCRs protects CMHCs from having that data inappropriately skew the calculation of the CMHC APC geometric mean per diem cost.
After applying all of the above trims, exclusions, and adjustments, we followed the methodology described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70464 through 70465) and modified in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687 through 79688, and 79691) to calculate the final PHP APC geometric mean per diem cost.
Below we summarize the public comments we received on our proposals related to continuing to follow our existing CMHC ratesetting methodology and the calculation of the CMHC geometric mean per diem costs.
Because the cost of providing partial hospitalization services differs significantly by site of service, we established different PHP payment rates for hospital-based PHPs and CMHCs in the CY 2011 OPPS/ASC final rule with comment period (75 FR 71991 through 71994). With respect to the continued use of PHP APC geometric mean per diem costs for determining payment rates by provider, we refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68406 through
We do not believe that the single-tier payment system will lead to a reduction in the number of PHPs because total payments to an individual CMHC using the single-tier payment system are approximately equal to total payments to that same CMHC if the previous 2-tiered payment system were used instead. The calculated rates for APCs 5853 and 5863 continue to be based upon the actual costs for CMHCs and hospital-based PHPs, respectively. Therefore, the payment rates for the single-tier PHP APCs are an appropriate approximation of provider costs, and should not result in reduced access. As we noted in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79685), the single-tier PHP APCs are calculated by following the existing methodology for ratesetting, except that the geometric mean per diem costs for each provider type were calculated for days providing 3 or more partial hospitalization services, as opposed to being calculated separately for days with exactly 3 services and for days with 4 or more services, as was previously done. The combined PHP APCs' geometric mean costs are similar to a weighted average of actual provider costs. As such, combining the PHP APCs geometric mean per diem costs does not reduce total costs or total payments by provider type. We refer readers to the CY 2017 OPPS/ASC final rule with comment period for a detailed review of the methodology used in determining per diem costs using the single-tier PHP APCs (81 FR 79686 through 79688).
The 2017 claims data used for this CY 2019 ratesetting are the first year of data using the single-tier payment system. We will monitor the data for any unintended consequences on the number of operational PHPs associated with using the single-tier payment system. We note that the number of PHP providers is generally affected by multiple factors, such as business and market conditions, competition, estimated profit margins, private insurance coverage changes, Federal and State fraud and abuse efforts, and community support for mental health treatment.
As part of the effort to increase the accuracy of the PHP per diem costs, for the CY 2016 ratesetting, we completed an extensive analysis of the claims and cost data. That analysis identified aberrant data from several providers that impacted the calculation of the proposed PHP geometric mean per diem costs. For example, we found claims with excessive CMHC charges resulting in CMHC geometric mean costs per day that were approximately the same as or more than the daily payment for inpatient psychiatric facility services. For an outpatient program like PHP, because it does not incur room and board costs such as an inpatient stay would, these costs per day were excessive. In addition, we found some CMHCs had very low costs per day (less than $25 per day) (80 FR 70456). The ±2 standard deviation trim on CMHC costs per day excludes providers with extremely low or extremely high costs per day, and protects CMHCs from having those extreme costs inappropriately skew the CMHC PHP APC geometric mean per diem costs.
In addition, in that CY 2016 OPPS final rule with comment, we noted that the ±2 standard deviation trim aligned the geometric mean and median per diem costs for the CMHC Level 2 PHP APC payment tier, which indicated that the trim removed the skewing in the data caused by the inclusion of aberrant data (80 FR 70456). We continue to believe that the ±2 standard deviation trim excludes CMHCs with aberrant data from the ratesetting process while allowing for the use of as much data as possible. In addition, we stated that implementing a ±2 standard deviation trim on CMHCs would target these aberrancies without limiting overall per diem cost increases. For normally distributed data, ±2 standard deviations from the mean capture approximately 95 percent of the data. Our analyses for the CY 2016 ratesetting also showed that a higher trim level, such as a ±2.5 standard deviation trim or the ±3 standard deviation trim used by the rest of OPPS, did not remove the CMHCs with aberrant data from the ratesetting process (80 FR 70456 and 70457).
In this CY 2019 OPPS/ASC final rule, the ±2 standard deviation trim on CMHC costs/day removed 6 CMHCs from ratesetting, which affected the final
With regard to the questions about why the same trims are not used for both CMHCs and hospital-based PHPs, we refer readers to the discussion in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70458). As we noted in that CY 2016 OPPS/ASC final rule with comment period, there are differences in the ratesetting process between hospital-based PHPs and CMHCs, which are largely due to differences between the hospital cost reports and the CMHC cost reports, and we believe that having different trims more appropriately targets aberrant data for each provider type. As noted previously, the OPPS ±3 standard deviation trim on per diem costs did not remove the aberrant CMHC data. We considered applying the ±2 standard deviation trim on per diem costs to hospital-based PHP providers, but an alternative trim on hospital-based CCRs greater than 5 allowed for use of more data from hospital-based providers and still removed aberrant data. We continue to believe this trim based on hospital-based PHP CCRs is more effective in removing aberrant hospital-based PHP data and allows for the use and retention of more data than a ±2 standard deviation trim on hospital-based PHP costs per day.
In response to commenters concerned that CMHCs cannot provide all of the services offered on a daily basis at the proposed payment rate, we remind commenters that we calculate the PHP APC geometric mean per diem costs based on the data provided for each type of provider to determine payment for these services. The final PHP APC geometric mean per diem costs for CY 2019 reflect actual provider costs of covered services. We believe that this system provides appropriate payment for covered partial hospitalization services based on actual provider costs. We further note that section 1861(ff)(2)(I) of the Act explicitly prohibits Medicare from paying for the costs of meals or transportation, which some CMHCs incur. Therefore, these costs, although incurred by CMHCs, are not covered under the OPPS.
In response to the commenters who stated that CMHCs incur extra costs to meet the CMHC CoPs, most (if not all) of the costs associated with adhering to CoPs should be captured in the cost report data used in ratesetting and, therefore, are accounted for when computing the geometric mean per diem costs. Similar to the requirement for CMHCs to comply with CMHC CoPs, hospital-based PHPs must also comply with hospital CoPs. All Medicare-participating facilities have CoPs or other requirements that must be met, and CMHCs are not specifically being singled out for compliance, nor are there “extra” costs associated with the CMHC CoPs.
Allowable labor costs for providing direct patient care would also be captured in the cost report data used for ratesetting. We refer the commenters to the instructions for the CMHC cost reports for more information on capturing the costs associated with meeting CoPs and with labor costs for direct patient care, which are available online in links to Chapters 18 and 45 found at:
The reduction to bad debt reimbursement was a result of provisions of section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112-96). The reduction to bad debt reimbursement impacted all providers eligible to receive bad debt reimbursement, as discussed in the CY 2013 End-Stage Renal Disease final rule (77 FR 67518). Medicare currently reimburses bad debt for eligible providers at 65 percent. Therefore, CMHCs are not specifically being singled out for a payment reduction as a result of bad debt expenses. Because this percentage was enacted by Congress, CMS does not have the authority to change the percentage.
We appreciate the commenter's input regarding the effect any reduction in PHP payment rates would have on access to care, but we disagree with the commenter's assertion that CMS considers CMHCs to be a “fraud benefit” or that CMS has any motivation (veiled or otherwise) to eliminate CMHCs. Both are simply not true; we appreciate the work CMHCs do to care for a particularly vulnerable population with serious mental illnesses. We are very concerned about the decline in the number of CMHCs, but, as noted in a previous comment response in this section, we believe that a number of factors affect PHP provider closures. We will continue working to strengthen
We want to ensure that CMHCs remain a viable option as providers of mental health care in the beneficiary's own community. We agree that beneficiaries receiving care at a CMHC instead of a hospital-based PHP would have a lower out-of-pocket cost, which increases the attractiveness of CMHCs to those needing their services. We will continue to explore policy options for strengthening the PHP benefit and increasing access to the valuable services provided by CMHCs as well as by hospital-based PHPs.
For the CY 2019 proposed rule and for this CY 2019 final rule with comment period, we followed a data preparation process for hospital-based PHP providers that is similar to that used for CMHCs by applying trims and data exclusions as described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70463 through 70465) so that our ratesetting is not skewed by providers with extreme data. Before any trimming or exclusions were applied, there were 426 hospital-based PHP providers in the final CY 2017 PHP claims data used in this CY 2019 OPPS/ASC final rule with comment period (compared to 394 hospital-based PHPs in the CY 2019 OPPS/ASC proposed rule).
For hospital-based PHP providers, we applied a trim on hospital service days when the CCR was greater than 5 at the cost center level. This trim removed hospital-based PHP service days that use a CCR greater than 5 to calculate costs for at least one of their component services. Unlike the ±2 standard deviation trim, which excluded CMHC providers that failed the trim, the CCR greater than 5 trim excluded any hospital-based PHP service day where any of the services provided on that day were associated with a CCR greater than 5 (in other words, the CCR greater than 5 trim is a (service) day-level trim in contrast to the CMHC ±2 standard deviation trim, which is a provider-level trim). Applying this CCR greater than 5 trim removed from our final rule ratesetting affected service days from 3 hospital-based PHP providers with CCRs greater than 5. However, 100 percent of the service days for 1 of these affected hospital-based PHP providers had at least 1 service associated with a CCR of 9.5744, so the trim removed that 1 provider entirely from our final rule ratesetting. The two other providers remained in the ratesetting data, but with affected service days trimmed out. In addition, 48 hospital-based PHPs were removed for having no PHP costs and, therefore, no days with PHP payment. No hospital-based PHPs were removed for missing wage index data or by the OPPS ±3 standard deviation trim on costs per day.
Therefore, we trimmed out 49 hospital-based PHP providers [(1 with all service days having a CCR greater than 5) + (48 with zero daily costs and no PHP payment)], resulting in 377 (426 total−49 excluded) hospital-based PHP providers in the data used for final rule with comment period ratesetting (compared to 374 hospital-based PHPs in the CY 2019 OPPS/ASC proposed rule). No hospital-based PHP providers were defaulted to using their overall hospital ancillary CCRs due to outlier cost center CCR values. After completing these data preparation steps, we calculated the final CY 2019 geometric mean per diem cost for hospital-based PHP APC 5863 for hospital-based PHP services by following the methodology described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70464 through 70465) and modified in the CY 2017
For the second 2-percent reduction that the commenter referenced, which the commenter noted occurs at actual claim payout, we believe that the commenter is referencing the required sequestration 2-percent reduction to the Medicare portion of claim payments. That reduction is a Congressionally-mandated decrease, established by the Budget Control Act of 2011 (Pub. L. 112-25) and amended by the American Taxpayer Relief Act of 2012 (Pub. L. 112-240). Sequestration is discussed in a Medicare Fee-for-Service Provider eNews article available at:
Regarding the usage of the geometric mean per diem cost for determining payment rates, as we noted in a previous comment response in this section, we refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68406 through 68412) for a discussion of the implementation of this policy. We believe that this system provides appropriate payment for partial hospitalization services based on actual provider costs. The final PHP APC geometric mean per diem costs for CY 2019 reflect these actual provider costs, using our existing methodology.
After consideration of the public comments we received, we are finalizing our proposals, without modification, to continue to follow our existing ratesetting methodologies for both CMHCs and for hospital-based PHPs in determining geometric mean per diem costs. Specifically, we are applying our established methodologies in developing the CY 2019 geometric mean per diem costs and payment rates, including the application of a ±2 standard deviation trim on costs per day for CMHCs and a CCR greater than 5 hospital service day trim for hospital-based PHP providers. We also are finalizing our proposals, without modification, to continue to use CMHC APC 5853 (Partial Hospitalization (3 or More Services Per Day)) and hospital-based PHP APC 5863 (Partial Hospitalization (3 or More Services Per Day)) and base the CMHC geometric mean per diem costs on the most recent available CMHC claims and CMHC cost data, and the hospital-based PHP geometric mean per diem costs on the most recent available hospital claims and cost data.
The final CY 2019 PHP APC geometric mean per diem costs for CMHC PHP APC 5853 are $121.62 and for hospital-based PHP APC 5863 are $222.76, as stated above and shown in Table 43. The final PHP APCs payment rates, which are derived from these PHP APCs geometric mean per diem costs, are included in Addendum A to this final rule with comment period (which is available on the CMS website at:
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79691), we received public comments identifying an issue that may have contributed to a decreased PHP median cost for hospital-based PHPs. The commenters stated that the lack of a required standardized PHP cost center on the Medicare cost report may be creating some cost-finding nuances in the cost report itself—for example, inaccurate step-down of overhead cost allocations to the PHP program, diluted CCRs by the comingling of PHP and “Intensive Outpatient Program (IOP)” on the cost report, among others. We agreed with the commenters that, if PHP costs are combined with other less intensive outpatient mental health treatment costs in the same cost center, the CCR values could be diluted, leading to lower geometric mean per diem costs being calculated. We stated in response that we would consider adding a cost center to the hospital cost report for PHP costs only.
On November 17, 2017, in Transmittal No. 12, we added a new cost center, “Partial Hospitalization Program,” on Line 93.99 of Worksheet A (Line 93.99 is also displayed on Worksheets B, Parts I and II, B-1; and C, Parts I and II) for hospital-based PHPs, for cost reporting periods ending on or after August 31, 2017 (
During current hospital-based PHP ratesetting, costs are estimated by multiplying revenue code charges on the claim by the appropriate cost center-level CCR from the hospital cost report (80 FR 70465). Each PHP revenue code is associated with particular cost centers on the cost report (80 FR 70464). The appropriate cost center-level CCR is identified by using the OPPS Revenue-Code-to-Cost-Center crosswalk; the current crosswalk is discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59228) and is available on the CMS website at:
With the new PHP cost center, the crosswalk must be updated for hospital-based PHP cost estimation to correctly match hospital-based PHP revenue code charges with the PHP cost center CCR for future ratesetting. However, because the PHP-allowable revenue codes are also used for reporting non-PHP mental health services, we could not designate the PHP cost center as the primary cost center in the existing OPPS Revenue-Code-to-Cost-Center crosswalk. Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37132 through 37133), we proposed to create a separate PHP-only Revenue-Code-to-Cost-Center crosswalk for use in CY 2019 and subsequent years, which would provide a more accurate and operationally simpler method of matching hospital-based PHP charges to the correct hospital-based PHP cost center CCR without affecting non-PHP ratesetting. We note that, because CMHCs have their own cost reports, we use each CMHC's overall CCR in estimating costs for PHP ratesetting (80 FR 70463 through 70464). As such, CMHCs do not have a crosswalk and, therefore, the proposal to create a PHP-only crosswalk does not apply to CMHCs.
Therefore, we proposed that, for CY 2019 and subsequent years, hospital-
In addition, we proposed one exception to this policy for the mapping for revenue code 0904, which is the only PHP-allowable revenue code in the existing crosswalk with a tertiary cost center source for the CCR. We proposed that for revenue code 0904, the secondary cost center for CY 2019 and subsequent years would be the existing secondary cost center 3550 (“Psychiatric/Psychological Services”). Similarly, we proposed that for revenue code 0904, the tertiary cost center for CY 2019 and subsequent years would be existing tertiary cost center 9000 (“Clinic”). We considered expanding the Revenue-Code-to-Cost-Center crosswalk hierarchy to add a 4th or quaternary level to the hierarchy, before the system would default to the overall hospital ancillary CCR. However, we evaluated the usage of the current hierarchy for revenue code 0904 for the CY 2017, CY 2018, and CY 2019 PHP ratesetting modelling, and found that expanding the hierarchy would not be necessary. Our analysis showed that the existing primary cost center 3580 (“Recreational Therapy”) for revenue code 0904 had not been used during any of the past 3 years.
We did not receive any public comments on our proposals related to the PHP-only Revenue-Code-to-Cost-Center crosswalk and, therefore, are finalizing our proposals, as proposed, for CY 2019 and subsequent years.
Our previous and newly finalized PHP-only Revenue-Code-to-Cost-Center Crosswalks are shown in Table 44 below.
We stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37133 through 37134) that, while we were not proposing any changes to the policy on PHP service utilization, we would continue to monitor the provision of days with only 3 services. In the CY 2016 OPPS/ASC final rule with comment period (81 FR 79684 through 79685), we expressed concern over the low frequency of individual therapy provided to beneficiaries. The CY 2017 claims data used for this CY 2019 final rule with comment period revealed some changes in the provision of individual therapy compared to CY 2016 and CY 2015 claims data as shown in the Table 45 below.
As shown in Table 45, both CMHCs and hospital-based PHPs have decreased the provision of individual therapy, based on the CY 2017 claims used for this final rule with comment period.
In the CY 2018 OPPS/ASC proposed rule and final rule with comment period (82 FR 33640 and 82 FR 59378), we stated that we are aware that our single-tier payment policy may influence a change in service provision because providers are able to obtain payment that is heavily weighted to the cost of providing 4 or more services when they provide only 3 services. We indicated that we are interested in ensuring that providers furnish an appropriate number of services to beneficiaries enrolled in PHPs. Therefore, with the CY 2017 implementation of APC 5853 and APC 5863 for providing 3 or more PHP services per day, we are continuing to monitor utilization of days with only 3 PHP services.
For this CY 2019 OPPS/ASC final rule with comment period, we used the final update of the CY 2017 claims data. Table 46 below shows the utilization findings based on the most recent claims data.
As shown in Table 46, the CY 2017 claims data used for this final rule with comment period showed that PHPs maintained an appropriately low utilization of 3 service days compared to CY 2016 and CY 2015. Compared to CY 2016, hospital-based PHPs have provided fewer days with 3 services only, fewer days with 4 services only, and more days with 5 or more services. Compared to CY 2016, CMHCs have slightly increased their provision of 3 service days, increased their provision of days with 4 services, but have decreased their provision of days with 5 or more services.
As we noted in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79685), we will continue to monitor the provision of days with only 3 services, particularly now that the single-tier PHP APCs 5853 and 5863 are in place for providing 3 or more services per day to CMHCs and hospital-based PHPs, respectively. The CY 2017 data are the first year of claims data to reflect the change to the single-tier PHP APCs, and the declining level of utilization of days with 3 services only by hospital-based PHPs indicates that these providers did not reduce care for this patient population. It is too early to determine if the increase in days providing 3 services only by CMHCs is a trend. We will continue to monitor the data for both hospital-based PHPs and CMHCs.
It is important to reiterate our expectation that days with only 3 services are meant to be an exception and not the typical PHP day. In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68694), we clearly stated that we consider the acceptable
We made no proposals in this section of the CY 2019 OPPS/ASC proposed rule, but received several public comments related to utilization.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37134 through 37136), for CY 2019, we proposed to continue to calculate the CMHC outlier percentage, cutoff point and percentage payment amount, outlier reconciliation, outlier payment cap, and fixed-dollar threshold according to previously established policies. These topics are discussed in more detail below. We refer readers to section II.G. of this final rule with comment period for our general policies for hospital outpatient outlier payments.
As discussed in the CY 2004 OPPS final rule with comment period (68 FR 63469 through 63470), we noted a significant difference in the amount of outlier payments made to hospitals and CMHCs for PHP services. Given the difference in PHP charges between hospitals and CMHCs, we did not believe it was appropriate to make outlier payments to CMHCs using the outlier percentage target amount and threshold established for hospitals. Therefore, beginning in CY 2004, we created a separate outlier policy specific to the estimated costs and OPPS payments provided to CMHCs. We designated a portion of the estimated OPPS outlier threshold specifically for CMHCs, consistent with the percentage of projected payments to CMHCs under the OPPS each year, excluding outlier payments, and established a separate outlier threshold for CMHCs. This separate outlier threshold for CMHCs resulted in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5 million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In contrast, in CY 2003, more than $30 million was paid to CMHCs in outlier payments (82 FR 59381).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 through 59268), we described the current outlier policy for hospital outpatient payments and CMHCs. We note that we also discussed our outlier policy for CMHCs in more detail in section VIII. C. of that same final rule (82 FR 59381). We set our projected target for all OPPS aggregate outlier payments at 1.0 percent of the estimated aggregate total payments under the OPPS (82 FR 59267). We estimate CMHC per diem payments and outlier payments by using the most recent available utilization and charges from CMHC claims, updated CCRs, and the updated payment rate for APC 5853. For increased transparency, we are providing a more detailed explanation of the existing calculation process for determining the CMHC outlier percentages below. As previously stated, we proposed to continue to calculate the CMHC outlier percentage according to previously established policies, and we did not propose any changes to our current methodology for calculating the CMHC outlier percentage for CY 2019. To calculate the CMHC outlier percentage, we followed three steps:
• Step 1: We multiplied the OPPS outlier threshold, which is 1.0 percent, by the total estimated OPPS Medicare payments (before outliers) for the prospective year to calculate the estimated total OPPS outlier payments:
(0.01 × Estimated Total OPPS Payments) = Estimated Total OPPS Outlier Payments.
• Step 2: We estimated CMHC outlier payments by taking each provider's estimated costs (based on their allowable charges multiplied by the provider's CCR) minus each provider's estimated CMHC outlier multiplier threshold (we refer readers to section VIII.C.3. of this final rule with comment period). That threshold was determined by multiplying the provider's estimated paid days by 3.4 times the CMHC PHP APC payment rate. If the provider's costs exceeded the threshold, we multiplied that excess by 50 percent, as described in section VIII.C.3. of this final rule with comment period, to determine the estimated outlier payments for that provider. CMHC outlier payments are capped at 8 percent of the provider's estimated total per diem payments (including the beneficiary's copayment), as described in section VIII.C.5. of this final rule with comment period, so any provider's costs that exceed the CMHC outlier cap will have its payments adjusted downward. After accounting for the CMHC outlier cap, we summed all of the estimated outlier payments to determine the estimated total CMHC outlier payments.
(Each Provider's Estimated Costs—Each Provider's Estimated Multiplier Threshold) = A. If A is greater than 0, then (A × 0.50) = Estimated CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 × Provider's Total Estimated Per Diem Payments), then cap-adjusted B = (0.08 × Provider's Total Estimated Per Diem Payments); otherwise, B = B. Sum (B or cap-adjusted B) for Each Provider = Total CMHC Outlier Payments.
• Step 3: We determined the percentage of all OPPS outlier payments that CMHCs represent by dividing the estimated CMHC outlier payments from Step 2 by the total OPPS outlier payments from Step 1:
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
In CY 2018, we designated approximately 0.03 percent of that estimated 1.0 percent hospital outpatient outlier threshold for CMHCs (82 FR 59381), based on this methodology. In the proposed rule, we proposed to continue to use the same methodology for CY 2019. Therefore, based on our CY 2019 payment estimates, CMHCs are projected to receive 0.02 percent of total hospital outpatient payments in CY 2019, excluding outlier payments. We proposed to designate approximately less than 0.01 percent of the estimated 1.0 percent hospital outpatient outlier threshold for CMHCs. This percentage is based upon the formula given in Step 3 above.
We did not receive any public comments on our proposal and, therefore, are finalizing our proposal, without modification, to continue with this existing policy on outliers, and are implementing this policy as proposed for CY 2019.
As described in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59381), our policy has been to pay CMHCs for outliers if the estimated cost of the day exceeds a cutoff point. In CY 2006, we set the cutoff point for outlier payments at 3.4 times the highest CMHC PHP APC payment rate implemented for that calendar year (70 FR 68551). This cutoff point is sometimes called a multiplier threshold (70 FR 68550). For CY 2018, the highest CMHC PHP APC payment rate is the payment rate for CMHC PHP APC 5853. In addition, in 2002, the final OPPS outlier payment percentage for costs above the multiplier threshold was set at 50 percent (66 FR
In the CY 2019 OPPS/ASC proposed rule (83 FR 37135), for CY 2019, in accordance with our existing policy, we proposed to continue to pay for partial hospitalization services that exceed 3.4 times the proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC geometric mean per diem costs over the cutoff point. That is, for CY 2019, if a CMHC's cost for partial hospitalization services paid under CMHC PHP APC 5853 exceeds 3.4 times the payment rate for CMHC APC 5853, the outlier payment will be calculated as [0.50 × (CMHC Cost−(3.4 × APC 5853 rate))].
We did not receive any public comments on our proposals. We are finalizing our proposals, without modification, to continue to calculate the CMHC outlier percentage according to previously established policies, and are implementing this policy as proposed for CY 2019.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 through 68599), we established an outlier reconciliation policy to address charging aberrations related to OPPS outlier payments. We addressed vulnerabilities in the OPPS outlier payment system that lead to differences between billed charges and charges included in the overall CCR, which are used to estimate cost and would apply to all hospitals and CMHCs paid under the OPPS. The main vulnerability in the OPPS outlier payment system is the time lag between the update of the CCRs that are based on the latest settled cost report and the current charges that creates the potential for hospitals and CMHCs to set their own charges to exploit the delay in calculating new CCRs. CMS initiated steps to ensure that outlier payments appropriately account for the financial risk when providing an extraordinarily costly and complex service, but are only being made for services that legitimately qualify for the additional payment.
The current outlier reconciliation policy requires that providers whose outlier payments meet a specified threshold (currently $500,000 for hospitals and any outlier payments for CMHCs) and whose overall ancillary CCRs change by plus or minus 10 percentage points or more, are subject to outlier reconciliation, pending approval of the CMS Central Office and Regional Office (73 FR 68596 through 68599). The policy also includes provisions related to CCRs and to calculating the time value of money for reconciled outlier payments due to or due from Medicare, as detailed in the CY 2009 OPPS/ASC final rule with comment period and in the Medicare Claims Processing Manual (73 FR 68595 through 68599 and Medicare Claims Processing internet Only Manual, Chapter 4, Section 10.7.2 and its subsections, available online at:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37135), we proposed to continue these policies for CY 2019.
We did not receive any public comments on our proposals and, therefore, are finalizing our proposals, without modification, to continue our existing policy for CY 2019.
In the CY 2017 OPPS/ASC final rule with comment period, we implemented a CMHC outlier payment cap to be applied at the provider level, such that in any given year, an individual CMHC will receive no more than a set percentage of its CMHC total per diem payments in outlier payments (81 FR 79692 through 79695). We finalized the CMHC outlier payment cap to be set at 8 percent of the CMHC's total per diem payments (81 FR 79694 through 79695). This outlier payment cap only affects CMHCs, does not affect other provider types (that is, hospital-based PHPs), and is in addition to and separate from the current outlier policy and reconciliation policy in effect. For CY 2018, we continued this policy in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59381).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37135 through 37136), we proposed to continue this policy for CY 2019, such that the CMHC outlier payment cap would be 8 percent of the CMHC's total per diem payments.
We did not receive any public comments on our proposal and, therefore, are finalizing our proposal, without modification, to continue our existing policy for CY 2019, such that the CMHC outlier payment cap will be 8 percent of the CMHC's total per diem payments.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 through 59268), for the hospital outpatient outlier payment policy, we set a fixed-dollar threshold in addition to an APC multiplier threshold. Fixed-dollar thresholds are typically used to drive outlier payments for very costly items or services, such as cardiac pacemaker insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may receive payment under the OPPS, and is for providing a defined set of services that are relatively low cost when compared to other OPPS services. Because of the relatively low cost of CMHC services that are used to comprise the structure of CMHC PHP APC 5853, it is not necessary to also impose a fixed-dollar threshold on CMHCs. Therefore, in the CY 2018 OPPS/ASC final rule with comment period, we did not set a fixed-dollar threshold for CMHC outlier payments (82 FR 59381).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37134 through 37136), we proposed to continue this policy for CY 2019.
We did not receive any public comments on our proposal and, therefore, are finalizing our proposal, without modification, to continue with this existing policy, and are implementing this policy as proposed for CY 2019.
CMS received the CY 2019 CPT codes from the AMA in time for inclusion in the CY 2019 OPPS/ASC proposed rule (83 FR 37088). The new, revised, and deleted CY 2019 Category I and III CPT codes were included in Addendum B to the proposed rule (which is available via the internet on the CMS website). We are aware that the AMA will be deleting the following psychological and neuropsychological testing CPT codes, which affect PHPs, as of January 1, 2019:
• CPT code 96101 (Psychological testing by psychologist/physician);
• CPT code 96102 (Psychological testing by technician);
• CPT code 96103 (Psychological testing administered by computer);
• CPT code 96118 (Neuropsychological testing by psychologist/physician)
• CPT code 96119 (Neuropsychological testing by technician); and
• CPT code 96120 (Neuropsychological test administered w/computer).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37088), we proposed to delete these 6 CPT codes for the 2019 OPPS update under section III.A.4. (“Proposed Treatment of New and Revised CY 2019 Category I and III CPT Codes That Will Be Effective January 1, 2019 For Which We Are Soliciting Public Comments In This CY 2019 OPPS/ASC Proposed Rule”).
In addition, the AMA will be adding the following psychological and neuropsychological testing CPT codes to replace the deleted codes, as of January 1, 2019:
• CPT code 96130 (Psychological testing evaluation by physician/qualified health care professional; first hour);
• CPT code 93131 (Psychological testing evaluation by physician/qualified health care professional; each additional hour);
• CPT code 96132 (Neuropsychological testing evaluation by physician/qualified health care professional; first hour);
• CPT code 96133 (Neuropsychological testing evaluation by physician/qualified health care professional; each additional hour);
• CPT code 96136 (Psychological/neuropsychological testing by physician/qualified health care professional; first 30 minutes);
• CPT code 96137 (Psychological/neuropsychological testing by physician/qualified health care professional; each additional 30 minutes);
• CPT code 96138 (Psychological/neuropsychological testing by technician; first 30 minutes);
• CPT code 96139 (Psychological/neuropsychological testing by technician; each additional 30 minutes); and
• CPT code 96146 (Psychological/neuropsychological testing; automated result only).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37088), we also proposed to recognize and assign these 9 CPT codes under the CY 2019 OPPS in section III.A.4. (“Proposed Treatment of New and Revised CY 2019 Category I and III CPT Codes That Will Be Effective January 1, 2019 For Which We Are Soliciting Public Comments In This CY 2019 OPPS/ASC Proposed Rule”).
While these proposed changes to the above-referenced codes were included in the CY 2019 OPPS/ASC proposed rule (and are being finalized in section III.A.3. in this final rule with comment period for the CY 2019 OPPS), PHP is a part of the OPPS and PHP providers may not have been aware of those proposed changes because we did not also include the proposals in the PHP discussion presented in the proposed rule. To ensure that PHP providers are aware of the codes and have the opportunity to comment on the proposed changes, we are utilizing a practice similar to the one we use under the OPPS for new Level II HCPCS codes that become effective after the proposed rule is published. Therefore, in this final rule with comment period, we are proposing to delete the same 6 CPT codes listed above from the PHP-allowable code set for CMHC APC 5853 and hospital-based PHP APC 5863, and replace them with 9 new CPT codes as shown in Table 47 below, effective January 1, 2019. We are soliciting public comments on these proposals. We will consider the public comments we receive and seek to finalize our proposed actions in the CY 2020 OPPS/ASC final rule with comment period.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74352 through 74353) for a full historical discussion of our longstanding policies on how we identify procedures that are typically provided only in an inpatient setting (referred to as the inpatient only (IPO) list) and, therefore, will not be paid by Medicare under the OPPS, and on the criteria that we use to review the IPO list each year to determine whether or not any procedures should be removed from the list. The complete list of codes that describe procedures that will be paid by Medicare in CY 2019 as inpatient only procedures is included as Addendum E to this CY 2019 OPPS/ASC final rule with comment period, which is available via the internet on the CMS website.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37136 through 37143), for CY 2019, we proposed to use the same methodology (described in the November 15, 2004 final rule with comment period (69 FR 65834)) of reviewing the current list of procedures on the IPO list to identify any procedures that may be removed from the list. We have established five criteria that are part of this methodology. As noted in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74353), we utilize these criteria when reviewing procedures to determine whether or not they should be removed from the IPO list and assigned to an APC group for payment under the OPPS when provided in the hospital outpatient setting. We note that a procedure is not required to meet all of the established criteria to be removed from the IPO list. The criteria include the following:
1. Most outpatient departments are equipped to provide the services to the Medicare population.
2. The simplest procedure described by the code may be performed in most outpatient departments.
3. The procedure is related to codes that we have already removed from the IPO list.
4. A determination is made that the procedure is being performed in numerous hospitals on an outpatient basis.
5. A determination is made that the procedure can be appropriately and safely performed in an ASC and is on the list of approved ASC procedures or has been proposed by us for addition to the ASC list.
Using the above-listed criteria, for the CY 2019 OPPS, we identified two procedures described by the following codes that we proposed to remove from the IPO list for CY 2019: CPT code 31241 (Nasal/sinus endoscopy, surgical; with ligation of sphenopalatine artery) and CPT code 01402 (Anesthesia for open or surgical arthroscopic procedures on knee joint; total knee arthroplasty). We also proposed to add to the IPO list for CY 2019 the procedure described by HCPCS code C9606 (Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft, any combination of drug-eluting intracoronary stent, artherectomy and angioplasty, including aspiration thrombectomy when performed, single vessel). Table 29 of the proposed rule (83 FR 37137) displayed the proposed changes to the IPO list for CY 2019 and subsequent years, including the HCPCS codes, long descriptors, and the proposed CY 2019 payment indicators.
As noted earlier, we proposed to remove the procedure described by CPT code 31241 from the IPO list for CY 2019. Specifically, we stated that after reviewing the clinical characteristics of the procedure described by CPT code 31241 and consulting with stakeholders and our clinical advisors regarding this procedure, we believed that this procedure met criterion 3; that is, the procedure is related to codes that we have already removed from the IPO list. We proposed that the procedure described by CPT code 31241 be assigned to C-APC 5153 (Level 3 Airway Endoscopy) with a status indicator of “J1.” We sought public comments on whether the public believes that the procedure described by CPT code 31241 meets criterion 3 and whether the procedure meets any of the other five criteria for removal from the IPO list.
After consideration of the public comments we received, we are finalizing our proposal, without modification, to remove CPT code 31241 from the IPO list and to assign the procedure to C-APC 5153 (Level 3 Airway Endoscopy) with a status indicator of “J1”.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37136), we also proposed to remove the procedure described by CPT code 01402 from the IPO list. We reviewed the clinical characteristics of the procedure described by CPT code 01402, and proposed that this procedure be removed from the IPO list because it meets above-listed criteria 3 and 4. This procedure is typically billed with the procedure described by CPT code 27447 (Arthroplasty, knee, condyle and plateau; medial and lateral compartments with or without patella resurfacing (total knee arthroplasty)), which was removed from the IPO list for CY 2018 (82 FR 52526). This procedure is also often performed safely in the outpatient department setting. We sought public comments on whether the procedure described by CPT code 01402 meets criteria 3 and 4 and whether the procedure meets any of the other five criteria for removal from the IPO list.
While we continue to expect providers who perform an outpatient TKA procedure on Medicare beneficiaries to use comprehensive patient selection criteria to identify appropriate candidates for the procedure, we believe that the surgeons, clinical staff, and medical specialty societies representing physicians who perform outpatient TKA procedures and possess specialized clinical knowledge and experience are most suited to create such guidelines.
After consideration of the public comments we received, we are adopting, as final without modification, our proposal to remove the procedure described by CPT code 01402 from the IPO list. In accordance with the regulations at 42 CFR 419.2(b)(4), under the OPPS, this anesthesia service is packaged with the associated procedure and assigned status indicator “N” (Items and Services Packaged into APC Rates) for CY 2019.
In addition, in the CY 2019 OPPS/ASC proposed rule (83 FR 37136 through 37137), we proposed to add the procedure described by HCPCS code C9606 (Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft, any combination of drug-eluting intracoronary stent, atherectomy and angioplasty, including aspiration thrombectomy when performed, single vessel) to the IPO list for CY 2019. The IPO list specifies those procedures and services for which the hospital will be paid only when the procedures are provided in the inpatient setting because of the nature of the procedure, the underlying physical condition of the patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged (76 FR 74353). After evaluating the procedure described by HCPCS code C9606 using the criteria described above, we believe that the procedure should be added to the IPO list because this procedure is performed during acute myocardial infarction and it is similar to a procedure already on the IPO list (that is, the procedure described by CPT code 92941 (Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial
After consideration of the public comments we received, we are adopting as final without modification, our proposal to add the procedure described by HCPCS code C9606 (Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft, any combination of drug eluting intracoronary stent, atherectomy and angioplasty, including aspiration thrombectomy when performed, single vessel) to the IPO list for CY 2019.
CPT code 0266T describes the implantation or replacement of carotid sinus baroreflex activation device; total system (includes generator placement, unilateral or bilateral lead placement, intra-operative interrogation, programming, and repositioning, when performed). The procedure described by CPT code 0266T has been included on the IPO list since the procedure code became effective in CY 2011.
There are several codes that describe procedures that are similar to the procedure described by CPT code 0266T that are not on the IPO list, including: CPT code 0267T (Implantation or replacement of carotid sinus baroreflex activation device; lead only, unilateral (includes intra-operative interrogation, programming, and repositioning, when performed)) and CPT code 0268T (Implantation or replacement of carotid sinus baroreflex activation device; pulse generator only (includes intra-operative interrogation, programming, and repositioning, when performed)). The device that is billed with these two procedures has been granted a Category B Investigational Device Exemption (IDE) from FDA.
With respect to the commenters' recommendation that we remove CPT code 63265 (Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; cervical), CPT code 63266 (Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; thoracic), CPT code 63267 (Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; lumbar), and CPT code 63268 (Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; sacral) from the IPO list, we intend to continue to review these procedures and the appropriateness of the potential removal from the IPO list for subsequent rulemaking.
In regard to the commenters' recommendation to remove all orthropaedic, arthroplasty, and joint replacement procedures from the IPO list, we do not believe that we have sufficient data to support removal of all orthopaedic, arthroplasty, and joint replacement procedures from the IPO list. However, we encourage stakeholders to submit specific procedures, along with evidence, to support their requests for removal from the IPO list.
In conclusion, the complete list of procedure codes that are placed on the IPO list for CY 2019 is included as Addendum E to this CY 2019 OPPS/ASC final rule with comment period (which is available via the internet on the CMS website).
Table 49 below contains the final changes that we are making to the IPO list for CY 2019.
The June 2017 Report to Congress
MedPAC and other entities are concerned that these payment incentives may be a key factor contributing to the growth in the number of emergency departments located off-campus from a hospital. MedPAC recommended in its March 2017
In order to participate in Medicare as a hospital, the facility must meet the statutory definition of a hospital at section 1861(e) of the Act, which requires a facility to be primarily engaged in providing care and services to inpatients. In addition, 42 CFR 482.55 requires hospital emergency department services (to include off-campus provider-based emergency departments) to be fully integrated with departments and services of the hospital. The integration must be such that the hospital can immediately make available the full extent of its patient care resources to assess and furnish appropriate care for an emergency patient. Such services would include, but are not limited to, surgical services, laboratory services, and radiology services, among others. The emergency department must also be integrated with inpatient services, which means the hospital must have a sufficient number of inpatient beds and nursing units to support the volume of emergency department patients that could require inpatient services. The provision of services, equipment, personnel and resources of other hospital departments and services to emergency department patients must be within timeframes that protect the health and safety of patients and is within acceptable standards of practice.
We agree with MedPAC's recommendation and believe we need to develop data to assess the extent to which OPPS services are shifting to off-campus provider-based emergency departments. Therefore, we announced in the CY 2019 OPPS/ASC proposed rule (83 FR 37138) that we are implementing through the subregulatory HCPCS modifier process a new modifier for this purpose, effective beginning January 1, 2019.
We stated in the proposed rule that we will create a HCPCS modifier (“ER”—Items and services furnished by a provider-based off-campus emergency department) that is to be reported with every claim line for outpatient hospital services furnished in an off-campus provider-based emergency department. We specified in the proposed rule that the modifier would be reported on the UB-04 form (CMS Form 1450) for hospital outpatient services. We stated that critical access hospitals (CAHs) would not be required to report this modifier.
In response to our announcement of the creation of HCPCS modifier “ER” (Items and services furnished by a provider-based off-campus emergency department), we received the following feedback from commenters in response to the CY 2019 OPPS/ASC proposed rule: Some commenters, including MedPAC, supported the creation of HCPCS modifier “ER”, citing the opportunity to facilitate the collection of data on services furnished in off-campus emergency departments. Other commenters were opposed to the creation of the HCPCS modifier “ER” because they believed it would be an undue and unnecessary administrative burden on hospitals. Another commenter expressed a desire to have a better understanding of the reasoning for the creation of the modifier.
While we note that the creation of the HCPCS modifier “ER” was included in the CY 2019 OPPS/ASC proposed rule as an announcement, as opposed to a proposal, and therefore was not subject to public comment, we nonetheless appreciate the feedback provided by interested stakeholders, and will consider such feedback in potential future policy development.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37138 through 37143), when the Medicare program was first implemented, payment for hospital services (inpatient and outpatient) was based on hospital-specific reasonable costs attributable to furnishing services to Medicare beneficiaries. Although payment for most Medicare hospital inpatient services became subject to a prospective payment system (PPS) under section 1886(d) of the Act in 1983, Medicare hospital outpatient services continued to be paid based on hospital-specific costs. This methodology for payment provided little incentive for hospitals to furnish such outpatient services efficiently and in a cost effective manner. At the same time, advances in medical technology and changes in practice patterns were bringing about a shift in the site of medical care from the hospital inpatient setting to the hospital outpatient setting.
In the Omnibus Budget Reconciliation Act of 1986 (OBRA 1986) (Pub. L. 99-509), the Congress paved the way for development of a PPS for hospital outpatient services. Section 9343(g) of OBRA 1986 mandated that fiscal intermediaries require hospitals to report claims for services under the Healthcare Common Procedure Coding System (HCPCS). Section 9343(c) of OBRA 1986 extended the prohibition against unbundling of hospital services under section 1862(a)(14) of the Act to include outpatient services as well as inpatient services. The codes under the HCPCS enabled us to determine which specific procedures and services were billed, while the extension of the prohibition against unbundling ensured that all nonphysician services provided to hospital outpatients were reported on hospital bills and captured in the hospital outpatient data that were used to develop an outpatient PPS.
The brisk increase in hospital outpatient services further led to an interest in creating payment incentives to promote more efficient delivery of hospital outpatient services through a Medicare outpatient PPS. Section 9343(f) of OBRA 1986 and section 4151(b)(2) of the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990) (Pub. L. 101-508) required that we develop a proposal to replace the existing hospital outpatient payment system with a PPS and submit a report to the Congress on a new proposed system. The statutory framework for the Outpatient Prospective Payment System (OPPS) was established by section 4523 of the Balanced Budget Act (BBA) of 1997 (Pub. L. 105-33), which amended section 1833 of the Act by adding subsection (t), which establishes a PPS for hospital outpatient department services, and by section 201 of the Balanced Budget Reconciliation Act (BBRA) of 1999 (Pub. L. 106-113), which amended section 1833(t) of the Act to require outlier and transitional pass-through payments. At the outset of the OPPS, there was significant concern over observed increases in the volume of outpatient services and corresponding rapidly growing beneficiary coinsurance. Accordingly, most of the focus was on finding ways to address those issues.
When section 4523 of the BBA of 1997 established the OPPS, it included specific authority under section 1833(t)(2)(F) of the Act that requires the Secretary to develop a method for controlling unnecessary increases in the volume of covered outpatient department (OPD) services.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66611 through 66612), we noted that we had significant concerns about the growth in program expenditures for hospital outpatient services, and that while the OPPS was developed in order to address some of those concerns, its implementation had not generally slowed that growth in expenditures. To address some of those concerns, we established a set of packaging policies beginning in CY 2008 that would explicitly encourage efficiency in the provision of services in the hospital outpatient setting and potentially control future growth in the volume of OPPS services (72 FR 66612). Specifically, in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66580), we adopted a policy to package seven categories of items and services into the payment for the primary diagnostic or therapeutic modality to which we believe these items are typically ancillary or supportive.
Similarly, in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74925 through 74948), we expanded our packaging policies to include more categories of packaged items and services as part of a broader initiative to make the OPPS more like a prospective payment system and less like a per service fee schedule. Packaging can encourage hospitals to furnish services efficiently while also enabling hospitals to manage their resources with the maximum flexibility, thereby encouraging long-term cost containment, which is an essential component of a prospective payment system. While most of the packaging policies established in the CY 2014 OPPS focused on ancillary services that were part of a primary procedure, we also introduced the concept of comprehensive APCs (C-APCs) (78 FR 74861 through 74910), which were implemented beginning in the CY 2015 OPPS (79 FR 66798 through 66810). Comprehensive APCs package payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure under the OPPS at the claim level.
While we have developed many payment policies with these goals in mind, growth in program expenditures for hospital outpatient services paid under the OPPS continues. As illustrated in Table 30 in the CY 2019 OPPS/ASC proposed rule (83 FR 37139), total spending has been growing at a rate of roughly 8 percent per year under the OPPS, and total spending under the OPPS is projected to further increase by more than $5 billion from approximately $70 billion in CY 2018 through CY 2019 to nearly $75 billion. This is approximately twice the total estimated spending in CY 2008, a decade ago. We continue to be concerned with this rate of increase in program expenditures under the OPPS for several reasons. The OPPS was originally designed to manage Medicare spending growth. What was once a cost-based system was mandated by law to become a prospective payment system, which arguably should have slowed the increases in program spending. To the contrary, the OPPS has been the fastest growing sector of Medicare payments out of all payment systems under Medicare Parts A and B. Furthermore, we are concerned that the rate of growth suggests that payment incentives, rather than patient acuity or medical necessity, are affecting site-of-service decision-making. This site-of-service selection has an impact on not only the Medicare program, but also on Medicare beneficiary out-of-pocket spending. Therefore, to the extent that there are lower-cost sites-of-service available, we believe that beneficiaries and the physicians treating them should have that choice and not be encouraged to receive or provide care in higher paid settings solely for financial reasons. For example, to provide for easier comparisons between hospital outpatient departments and ASCs, as previously discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59389), we stated in the CY 2019 OPPS/ASC proposed rule that we also will make available a website that provides comparison information between the OPPS and ASC payment and copayment rates, as required under section 4011 of the 21st Century Cures Act (Pub. L. 114-255). Making this information available can help beneficiaries and their physicians determine the cost and appropriateness of receiving care at different sites-of-service. Although resources such as this website will help beneficiaries and physicians select a site-of-service, we do not believe this information alone is enough to control unnecessary volume increases. The growth in OPPS expenditures and the increase in the volume and intensity of hospital outpatient services were illustrated in Tables 30 and 31, respectively, of the CY 2019 OPPS/ASC proposed rule (83 FR 37139 through 37140). These tables, which include updated information, are presented below.
As noted in its March 2018 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) found that, from 2011 through 2016, combined program spending and beneficiary cost-sharing on services covered under the OPPS increased by 51 percent, from $39.8 billion to $60.0 billion, an average of 8.6 percent per year.
As noted in MedPAC's March 2017 Report to Congress, “from 2014 to 2015, the use of outpatient services increased by 2.2 percent per Medicare FFS beneficiary. Over the decade ending in 2015, volume per beneficiary grew by 47 percent. One-third of the growth in outpatient volume from 2014 to 2015 was due to an increase in the number of evaluation and management (E&M) visits billed as outpatient services. This growth in part reflects hospitals purchasing freestanding physician practices and converting the billing from the Physician Fee Schedule to higher paying hospital outpatient department (HOPD) visits. These conversions shift market share from freestanding physician offices to HOPDs. From 2012 to 2015, hospital-based E&M visits per beneficiary grew by 22 percent, compared with a1-percent decline in physician office-based visits.”
MedPAC has documented how the billing for these services has shifted from physician offices to higher-cost outpatient sites of care for several years. At the same time, MedPAC has repeated its recommendation that the difference in payment rates between hospital outpatient departments and physician offices should be reduced or eliminated. It specifically recommended in its 2012
As previously noted, in addition to the concern that the difference in payment is leading to unnecessary increases in the volume of covered outpatient department services, we also are concerned that this shift in care setting increases beneficiary cost-sharing liability because Medicare payment rates for the same or similar services are generally higher in hospital outpatient departments than in freestanding physician offices. For example, MedPAC estimates that “the Medicare program spent $1.0 billion more in 2009, $1.3 billion more in 2014, and $1.6 billion more in 2015 than it would have if payment rates for E&M office visits in HOPDs were the same as freestanding office rates. Relatedly, beneficiaries' cost-sharing was $260 million higher in 2009, $325 million higher in 2014, and $400 million higher in 2015 than it would have been because of the higher rates paid in HOPD settings.”
In the CY 2015 OPPS/ASC proposed rule (79 FR 41013), we stated that we continued to seek a better understanding of how the growing trend toward hospital acquisition of physicians' offices and subsequent treatment of those locations as off-campus provider-based departments (PBDs) of hospitals affects payments under the PFS and the OPPS, as well as beneficiary cost-sharing obligations. We noted that MedPAC continued to question the appropriateness of increased Medicare payment and beneficiary cost-sharing when physicians' offices become hospital outpatient departments and that MedPAC recommended that Medicare pay selected hospital outpatient services at PFS rates (MedPAC March 2012 and June 2013 Reports to Congress).
To understand how this trend was affecting Medicare, we explained that we needed information on the extent to which this shift was occurring. To that end, during the CY 2014 OPPS/ASC rulemaking cycle, we sought public comment regarding the best method for collecting information and data that would allow us to analyze the frequency, type, and payment for physicians' services and hospital outpatient services furnished in off-campus PBDs of hospitals (78 FR 75061 through 75062 and 78 FR 74427 through 74428). Based on our analysis of the public comments we received, we believed that the most efficient and equitable means of gathering this important information across two different payment systems would be to create a HCPCS modifier to be reported with every code for physicians' services and hospital outpatient services furnished in an off-campus PBD of a hospital on both the CMS-1500 claim form for physicians' services and the UB-04 form (CMS Form 1450 and OMB Control Number 0938-0997) for hospital outpatient services. We noted that a main provider may treat an off-campus facility as provider-based if certain requirements at 42 CFR 413.65 are satisfied, and we define a “campus” at 42 CFR 413.65(a)(2) to be the physical area immediately adjacent to the provider's main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of the provider's campus.
In 2015, the Congress took steps to address the higher Medicare payments for services furnished by certain off-campus PBDs that may be associated with hospital acquisition of physicians' offices through section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted on November 2, 2015. In the CY 2017 OPPS/ASC proposed rule, we discussed section 603 of the Bipartisan Budget Act of 2015, which amended section 1833(t) of the Act. For the full discussion of our initial implementation of this provision, we refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719) and the interim final rule with comment period (79720 through 79729).
Section 603 of the Bipartisan Budget Act of 2015 (Section 603) amended section 1833(t) of the Act by amending paragraph (1)(B) and adding a new paragraph (21). As a general matter, under sections 1833(t)(1)(B)(v) and (t)(21) of the Act, applicable items and services furnished by certain off-campus outpatient departments of a provider on or after January 1, 2017 are not considered covered OPD services as defined under section 1833(t)(1)(B) of the Act for purposes of payment under the OPPS and are instead paid “under the applicable payment system” under Medicare Part B if the requirements for such payment are otherwise met. We note that, in order to be considered part of a hospital, an off-campus department of a hospital must meet the provider-based criteria established under 42 CFR 413.65.
Section 603 amended section 1833(t)(1)(B) of the Act by adding a new clause (v), which excludes from the definition of “covered OPD services” applicable items and services (defined in paragraph (21)(A) of the section) that are furnished on or after January 1, 2017, by an off-campus PBD, as defined in paragraph (21)(B) of the section. Section 603 also added a new paragraph (21) to section 1833(t) of the Act, which defines the terms “applicable items and services” and “off-campus outpatient department of a provider,” requires the Secretary to make payments for such applicable items and services furnished by an off-campus PBD under an applicable payment system (other than the OPPS), provides that hospitals shall report on information as needed for implementation of the provision, and establishes a limitation on administrative and judicial review of the Secretary's determinations of applicable items and services, applicable payment system, whether a department meets the definition of an off-campus outpatient department of a provider, and information hospitals are required to report. In defining the term “off-campus outpatient department of a provider,” section 1833(t)(21)(B)(i) of the Act specifies that the term means a department of a provider (as defined at 42 CFR 413.65(a)(2) as that regulation was in effect on November 2, 2015, the date of enactment of Pub. L. 114-74) that is not located on the campus of such provider, or within the distance from a remote location of a hospital facility. Section 1833(t)(21)(B)(ii) of the Act excepts from the definition of “off-campus outpatient department of a provider,” for purposes of paragraphs (1)(B)(v) and (21)(B) of the section, an off-campus PBD that was billing under section 1833(t) of the Act with respect to covered OPD services furnished prior
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79720), we established a number of policies to implement section 603 of the Bipartisan Budget Act of 2015. Broadly, we: (1) Defined applicable items and services in accordance with section 1833(t)(21)(A) of the Act for purposes of determining whether such items and services are covered OPD services under section 1833(t)(1)(B)(v) of the Act or whether payment for such items and services will instead be made under the applicable payment system designated under section 1833(t)(21)(C) of the Act; (2) defined off-campus PBD for purposes of sections 1833(t)(1)(B)(v) and (t)(21) of the Act; and (3) established policies for payment for applicable items and services furnished by an off-campus PBD (nonexcepted items and services) under section 1833(t)(21)(C) of the Act. To do so, we finalized policies that define whether certain items and services furnished by a given off-campus PBD may be considered excepted and, thus, continue to be paid under the OPPS; established the requirements for the off-campus PBDs to maintain excepted status (both for the excepted off-campus PBDs and for the items and services furnished by such excepted off-campus PBDs); and described the applicable payment system for nonexcepted items and services (generally, the PFS).
As part of developing policies to implement the section 603 amendments to section 1833(t) of the Act, we solicited public comments on information collection requirements for implementing this provision in accordance with section 1833(t)(21)(D) of the Act (81 FR 45686; 81 FR 79709 through 79710). In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79719 and 79725), we created modifier “PN” to collect data for purposes of implementing section 603 but also to trigger payment under the newly adopted PFS rates for nonexcepted items and services.
While the changes required by the section 603 amendments to section 1833(t) of the Act address some of the concerns related to shifts in settings of care and overutilization in the hospital outpatient setting, the majority of hospital off-campus departments continue to receive full OPPS payment (including off-campus emergency departments and excepted off-campus departments of a hospital), which is often higher than the payment that would have been made if a similar service had been furnished in the physician office setting. Therefore, the current site-based payment creates an incentive for an unnecessary increase in the volume of this type of OPD service, which results in higher costs for the Medicare program, its beneficiaries, and taxpayers more generally. These differences in payment rates have unnecessarily shifted services away from the lower paying physician's office to the higher paying hospital outpatient department. We believe that the higher payment that is made under the OPPS, as compared to payment under the PFS, contributes to incentivizing providers to furnish care in the hospital outpatient setting rather than the physician office setting. In 2012, Medicare was paying approximately 80 percent more for a 15-minute office visit in a hospital outpatient department than in a freestanding physician office.
For example, under Medicare payment policy in effect for CY 2018, the Medicare program would pay more for a clinic visit (HCPCS code G0463) furnished under the OPPS than it would for the visit codes under the PFS. In the CY 2017 OPPS/ASC interim final rule, we noted that the most frequently billed service with the “PO” modifier was described by HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), which is paid under APC 5012 (Clinic Visits and Related Services); the total number of CY 2017 claim lines for this service was approximately 10.8 million lines with the “PO” modifier as of October 2018, out of a total 30.5 million
However, when services are furnished in the physician office setting, only one payment is made—typically, the “nonfacility” rate under the PFS. The CY 2017 PFS nonfacility payment rates for a Level 3 visit, a commonly billed service under the PFS, was $109.46 for a new patient and $73.93 for an established patient. Therefore, the total Medicare Part B payment rate (for the hospital and professional service) for a new patient when the service was furnished in the hospital outpatient setting was $184.44 ($106.56 + $77.88) compared to $109.46 in the physician office setting (approximately $75 or 68 percent more per visit), or for an established patient, $158.24 ($106.56 + $51.68) in the hospital outpatient setting compared to $73.93 in the physician office setting (approximately $84 or 114 percent more per visit). Under these examples, the payment rate was approximately $75 to $84 more for the same service when furnished in the hospital outpatient setting instead of the physician office setting, 20 percent of which was the responsibility of the beneficiary. Taking into account that this payment discrepancy occurs across tens of millions of claims each year, this is a significant source of unnecessary spending by Medicare beneficiaries directly (in the form of unnecessarily high copayments) and on behalf of Medicare beneficiaries (in the form of unnecessarily high Medicare payments for services that could be performed in a different setting).
We understand that many off-campus departments converted from physicians' offices to hospital outpatient departments without a change in either the physical location or a change in the acuity of the patients seen. To the extent that similar services can be safely provided in more than one setting, we do not believe it is prudent for the Medicare program to pay more for these services in one setting than another. We believe the difference in payment for these services is a significant factor in the shift in services from the physician's office to the hospital outpatient department, thus unnecessarily increasing hospital outpatient department volume and Medicare program and beneficiary expenditures.
We consider the shift of services from the physician office to the hospital outpatient department unnecessary if the beneficiary can safely receive the same services in a lower cost setting but is instead receiving services in the
Therefore, given the unnecessary increases in the volume of clinic visits in hospital outpatient departments, in the CY 2019 OPPS/ASC proposed rule (83 FR 37142), for the CY 2019 OPPS, we proposed to use our authority under section 1833(t)(2)(F) of the Act to apply an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate) for the clinic visit service, as described by HCPCS code G0463, when provided at an off-campus PBD excepted from section 1833(t)(21) of the Act (departments that bill the modifier “PO” on claim lines). Off-campus PBDs that are not excepted from section 603 (departments that bill the modifier “PN”) already receive a PFS-equivalent payment rate for the clinic visit.
In CY 2019, for an individual Medicare beneficiary, the standard unadjusted Medicare OPPS proposed payment for the clinic visit was approximately $116, with approximately $23 being the average copayment. The proposed PFS equivalent rate for Medicare payment for a clinic visit was approximately $46, and the copayment would be approximately $9. Under this proposal, an excepted off-campus PBD would continue to bill HCPCS code G0463 with the “PO” modifier in CY 2019, but the payment rate for services described by HCPCS code G0463 when billed with modifier “PO” would now be equivalent to the payment rate for services described by HCPCS code G0463 when billed with modifier “PN”. This would save beneficiaries an average of $14 per visit. For a discussion of the amount paid under the PFS for clinic visits furnished by nonexcepted off-campus PBDs, we referred readers to the CY 2018 PFS final rule (82 FR 53023 through 53024), as well as the CY 2019 PFS proposed rule and final rule.
In addition, in the CY 2019 OPPS/ASC proposed rule (83 FR 37142), we proposed to implement this proposed method in a nonbudget neutral manner. Specifically, while section 1833(t)(9)(B) of the Act requires that certain changes made under the OPPS be made in a budget neutral manner, we note that this section does not apply to the volume control method under section 1833(t)(2)(F) of the Act. In particular, section 1833(t)(9)(A) of the Act, titled “Periodic review,” provides, in part, that the Secretary must annually review and revise the groups, the relative payment weights, and
We stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37143) that we believe implementing a volume control method in a budget neutral manner would not appropriately reduce the overall unnecessary volume of covered OPD services, and instead would simply shift the movement of the volume within the OPPS system in the aggregate, a concern similar to the one we discussed in the CY 2008 OPPS final rule with comment period (72 FR 66613). This estimated payment impact was displayed in Column 5 of Table 42.— Estimated Impact of the Proposed Changes for the Hospital Outpatient Prospective Payment System in the CY 2019 OPPS/ASC proposed rule (83 FR 37228 through 37229). An estimate that includes the effects of estimated changes in enrollment, utilization, and case-mix based on the FY 2019 President's Budget approximates the estimated savings at $760 million, with $610 million of the savings accruing to Medicare, and $150 million saved by Medicare beneficiaries in the form of reduced copayments. In order to effectively establish a method for controlling the unnecessary growth in the volume of clinic visits furnished by excepted off-campus PBDs that does not simply reallocate expenditures that are unnecessary within the OPPS, we believe that this method must be adopted in a nonbudget neutral manner. The impact associated with this proposal is further described in section XXI. of the CY 2019 OPPS/ASC proposed rule.
• Patients receive more chemotherapy administration sessions, on average, when treated in the HOPD. Chemotherapy days per beneficiary were an estimated 9 to 12 percent higher in the hospital outpatient department than the physician office setting.
• Differences in utilization of chemotherapy drugs and services between hospital outpatient departments and physicians' offices resulted in an estimated increase in Medicare payments and Medicare beneficiary copayments of $167 million. Over 93 percent of the additional payments were related to chemotherapy and other chemotherapy-related drugs.
• Cardiac imaging procedures resulted in higher payments for a 3-day episode (217 percent) and 22-day episodes (80 percent) when performed in a HOPD compared to a physician's office.
• For certain cardiology, orthopedic, and gastroenterology services, employed physicians were seven times more likely to perform services in a HOPD setting than independent physicians, resulting in additional costs of $2.7 billion to Medicare and $411 million in patient copayments over a 3-year period.
One commenter believed that payment differentials between independent physician practices and hospital outpatient departments stem in part from inadequate Medicare physician payment rates and that any savings from site neutrality proposals derived from OPPS should be reinvested in increasing payment rates elsewhere in Part B, including payments to physicians. Some commenters urged HHS to work with Congress to expand site-neutral policies in the OPPS.
We appreciate the comments supporting the implementation of this policy in a nonbudget neutral manner. As we stated in the proposed rule (83 FR 37138 through 37143), we believe implementing a volume control method in a budget neutral manner would not appropriately reduce the overall unnecessary volume of covered OPD services, and instead would simply shift the volume of services within the OPPS system in the aggregate. As detailed later in this section, we are finalizing our proposal, with modifications, in response to public comments. We will continue to take information submitted by the commenters into consideration for future study.
With respect to the comment that it is inappropriate to establish a PFS-equivalent rate because PFS rates are inadequate and that any savings should be redistributed across Medicare Part B, we disagree that PFS rates as a whole are inadequate and note that the methodology to develop such rates was established by law and regulations and is updated each year through notice-and-comment rulemaking. We note that the overall amount of Medicare payments to physicians and other entities made under the PFS is determined by the PFS statute, and the rates for individual services are determined based on the resources involved in furnishing these services relative to other services paid under the PFS. To the extent the commenter believes that the PFS rate for a particular service is misvalued relative to other PFS services, we encourage the commenter to nominate the service for review as a potentially misvalued service under the PFS.
Many commenters challenged the statutory authority for various aspects of the proposal. These comments are summarized below.
• Have more severe chronic conditions;
• Have higher prior utilization of hospitals and EDs;
• Are more likely to live in low-income areas;
• Are 1.8 times more likely to be dually eligible for Medicare and Medicaid;
• Are 1.4 times more likely to be nonwhite;
• Are 1.6 times more likely to be under age 65 and disabled; and
• Are 1.1 times more likely to be over 85 years old.
The commenters also noted that Medicare beneficiaries with cancer seen in HOPDs relative to those beneficiaries seen in physician offices have more severe chronic conditions, higher prior utilization of services in hospitals and emergency departments, and higher likelihood of residing in low-income areas. In addition, the commenters noted that these cancer patients were more likely to be dually eligible for Medicare and Medicaid and be nonwhite, under age 65, and disabled.
In fact, the Government Accountability Office (GAO) found that “the percentage of E/M visits—as well as the number of E/M office visits per beneficiary—performed in HOPDs, rather than physician offices, was generally higher in counties with higher levels of vertical consolidation in 2007-2013.”
The GAO findings align with our assertions in the proposed rule (83 FR 37138 through 37143). Paying substantially more for the same service when performed in an HOPD rather than a physician office provides an incentive to shift services that were once performed in physician offices to HOPDs after consolidation has occurred. The GAO findings suggest that providers responded to this financial incentive: E/M office visits were more frequently performed in HOPDs in counties with higher levels of vertical consolidation. The GAO found this association in both of its analyses of E/M office visit utilization in counties with varying levels of vertical consolidation and in its regression analyses.
We heard from many commenters that the higher payment rate was justified by the fact that HOPDs were treating sicker patient populations. The GAO's study did not support this conclusion. It examined counties that experienced large growth in the billing of clinic visits in HOPDs and was able to determine that: “Beneficiaries from counties with higher levels of vertical consolidation were not sicker, on average, than beneficiaries from counties with lower levels of consolidation. Specifically, beneficiaries from counties with higher levels of vertical consolidation tended to have either similar or slightly lower median risk scores, death rates, rates of end-stage renal disease, and rates of disability compared to those from counties with lower levels of consolidation. Further, counties with higher levels of consolidation had a lower percentage of beneficiaries dually eligible for Medicaid, who tend to be sicker and have higher Medicare spending than Medicare beneficiaries who are not dually eligible for Medicaid.”
This suggests that areas with higher E/M office visit utilization in HOPDs are not composed of sicker-than-average beneficiaries. As we stated in the proposed rule (83 FR 37138 through 37143), paying more for the same service when performed in an HOPD rather than a physician's office provides an incentive to shift services that were once performed in physician offices to HOPDs. The GAO's findings suggest that providers responded to this financial incentive. As we noted in the proposed rule (83 FR 37138 through 37143), we have developed many payment policies, such as packaging policies and comprehensive APCs, to address the rapid growth of services in the OPPS. However, these policies have not been able to control for unnecessary increases in volume that are due to site-of-service payment differentials, which create an incentive to furnish a service in the OPD that could be furnished in a lower cost setting based solely on the higher payment amount available under the OPPS. Here, the clinic visit service furnished in excepted off-campus PBDs is the same as the clinic visit service furnished in nonexcepted off-campus PBDs. We believe that applying an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate) for the clinic visit service, as described by HCPCS code G0463, when provided at an off-campus PBD excepted from section 1833(t)(21) of the Act is an appropriate method to control the unnecessary increase in the volume of outpatient services.
When Congress passed the Bipartisan Budget Act of 2015, Medicare OPPS expenditures were $56 billion and growing at an annual rate of about 7.3 percent. In addition, the percentage increase in volume and intensity of outpatient services was increasing at 3.4 percent. For the upcoming 2019 calendar year, we estimate that, without this policy, OPPS expenditures would be $74.5 billion, growing at a rate of 9.1 percent, with the volume and intensity of outpatient services increasing at 5.4 percent, based on the Midsession Review for 2019. While it is clear that the action Congress took in 2015 to address certain off-campus PBDs helped stem the tide of these increases in the volume of OPD services, it is likewise clear that the more specific payment adjustment has not adequately addressed the overall increase in the volume of these types of OPD services because most off-campus PBDs continue to be paid the higher OPPS amount for these services. We would not be able to adequately address the unnecessary increases in the volume of clinic visits in HOPDs if we did not apply this policy to all off-campus HOPDs. We do not believe that the section 603 amendments to section 1833(t) of the Act, which exclude applicable items and services furnished by nonexcepted off-campus PBDs from payments under the OPPS, preclude us from exercising our authority in section 1833(t)(2)(F) of the Act to develop a method for controlling unnecessary increases in the volume of covered outpatient department services under the OPPS.
After consideration of the public comments we received, we are finalizing our proposal to use our authority under section 1833(t)(2)(F) of the Act to apply an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate) for the clinic visit service, as described by HCPCS code G0463, when provided at an off-campus PBD excepted from section 1833(t)(21) of the Act
In response to public comments we received, we will be phasing in the application of the reduction in payment for HCPCS code G0463 in this setting over 2 years. In CY 2019, the payment reduction will be transitioned by applying 50 percent of the total reduction in payment that would apply if these departments were paid the site-specific PFS rate for the clinic visit service. The final payment rates are available in Addendum B to this final rule with comment period (which is available via the internet on the CMS website). The PFS-equivalent amount paid to nonexcepted off-campus PBDs is 40 percent of OPPS payment (that is, 60 percent less than the OPPS rate) for CY 2019. Based on a 2-year phase-in of this policy, half of the total 60-percent payment reduction, a 30-percent reduction, will apply in CY 2019. In other words, these departments will be paid approximately 70 percent of the OPPS rate (100 percent of the OPPS rate minus the 30-percent payment reduction that applies in CY 2019) for the clinic visit service in CY 2019. In CY 2020, these departments will be paid the site-specific PFS rate for the clinic visit service. We note that by phasing in this policy over 2 years, the estimated savings associated with this policy will change. Considering the effects of estimated changes in enrollment, utilization, and case-mix, this policy results in an estimated CY 2019 savings of approximately $380 million, with approximately $300 million of the savings accruing to Medicare, and approximately $80 million saved by Medicare beneficiaries in the form of reduced copayments. We will continue to monitor the effect of this change in Medicare payment policy, including the volume of these types of OPD services.
While we are exploring developing a method to systematically control for unnecessary increases in the volume of other hospital outpatient department services that we may propose in future rulemaking, we continue to recognize the importance of not impeding development or beneficiary access to new innovations. In the CY 2019 OPPS/ASC proposed rule (83 FR 37143), we solicited public comments on how to maintain access to new innovations while controlling for unnecessary increases in the volume of covered hospital OPD services.
In addition, we solicited public comments on how to expand the application of the Secretary's statutory authority under section 1833(t)(2)(F) of the Act to additional items and services paid under the OPPS that may represent unnecessary increases in the utilization of OPD services. Therefore, we sought public comment on the following:
• How might Medicare define the terms “unnecessary” and “increase” for services (other than the clinic visit) that can be performed in multiple settings of care? Should the method to control for unnecessary increases in the volume of covered OPD services include consideration of factors such as enrollment, severity of illness, and patient demographics?
• While we proposed to pay the site-specific PFS payment rate for clinic visits beginning in CY 2019, we also were interested in other methods to control for unnecessary increases in the volume of outpatient services. Prior authorization is a requirement that a health care provider obtain approval from the insurer prior to providing a given service in order for the insurer to cover the service. Private health insurance plans often require prior authorization for certain services. Should prior authorization be considered as a method for controlling overutilization of services?
• For what reasons might it ever be appropriate to pay a higher OPPS rate for services that can be performed in lower cost settings?
• Several private health plans use utilization management as a cost-containment strategy. How might Medicare use the authority at section 1833(t)(2)(F) of the Act to implement an evidence-based, clinical support process to assist physicians in evaluating the use of medical services based on medical necessity, appropriateness, and efficiency? Could utilization management help reduce the overuse of inappropriate or unnecessary services?
• How should we account for providers that serve Medicare beneficiaries in provider shortage areas, which may include certain rural areas? With respect to rural providers, should there be exceptions from this policy, such as for providers who are at risk of hospital closure or that are sole community hospitals?
• What impact on beneficiaries and the health care market would such a method to control for unnecessary increases in the volume of covered OPD services have?
• What exceptions, if any, should be made if additional proposals to control for unnecessary increases in the volume of outpatient services are made?
We received feedback on a variety of issues in response to the comment solicitation on additional future considerations. These comments are summarized below.
In response to the solicitation on whether prior authorization should be considered as a method for controlling overutilization of services, most commenters believed that, while prior authorization may be a good method for controlling overutilization of services, it can also lead to increased administrative burden and inhibit patient access. One commenter suggested that CMS consider applying prior authorization for providers with service volumes that are statistical outliers or for those whose ordering rates are not in compliance with clinical guidelines.
In response to the comment solicitation on when it might be appropriate to pay a higher OPPS payment rate for a service that can be performed safely in a lower cost setting, several commenters believed that it would be appropriate to pay a higher OPPS rate for services that can be performed in a lower cost setting if providing this higher payment can improve patient experience, efficiency, and quality of care. Several commenters also mentioned that the comprehensive care management and coordination that accompanies receiving services at an off-campus PBD of a hospital might justify the higher OPPS payment rate. Commenters also asserted that the additional certifications required for services furnished in PBDs compared to services furnished in physician offices justify a higher payment rate.
In response to the comment solicitation on utilization management, several commenters were opposed to this concept and stated that utilization management would increase provider burden and delay patient access to care. One commenter supported the concept
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699), we discussed implementation of section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted on November 2, 2015, which amended section 1833(t) of the Act. Specifically, this provision amended section 1833(t) of the Act by amending paragraph (1)(B) and adding a new paragraph (21). As a general matter, under sections 1833(t)(1)(B)(v) and (t)(21) of the Act, applicable items and services furnished by certain off-campus outpatient departments of a provider on or after January 1, 2017 are not considered covered OPD services as defined under section 1833(t)(1)(B) of the Act for purposes of payment under the OPPS and are instead paid “under the applicable payment system” under Medicare Part B if the requirements for such payment are otherwise met. We indicated that, in order to be considered part of a hospital, an off-campus department of a hospital must meet the provider-based criteria established under 42 CFR 413.65. Accordingly, we refer to an “off-campus outpatient department of a provider,” which is the term used in section 603 of the Bipartisan Budget Act of 2015, as an “off-campus outpatient provider-based department” or an “off-campus PBD.” For a detailed discussion of the legislative history and statutory authority related to payments under section 603 of the Bipartisan Budget Act of 2015, we refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719) and interim final rule with comment period (81 FR 79720 through 79729).
As we stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37143 through 37144), to implement the amendments made by section 603 of Public Law 114-74, we issued an interim final rule with comment period (81 FR 79720) which accompanied the CY 2017 OPPS/ASC final rule with comment period to establish the Medicare PFS as the “applicable payment system” that applies in most cases, and we established payment rates under the PFS for those nonexcepted items and services furnished by nonexcepted off-campus PBDs. As we discussed in the CY 2017 OPPS/ASC interim final rule with comment period (81 FR 79718) and reiterated in the CY 2018 PFS final rule with comment period (82 FR 53028), payment for Medicare Part B drugs that would be separately payable under the OPPS (assigned a status indicator of “K”), but are not payable under the OPPS because they are furnished by nonexcepted off-campus PBDs, is made in accordance with section 1847A of the Act (generally, at a rate of ASP+6 percent), consistent with Part B drug payment policy for items or services furnished in the physician office (nonfacility) setting. We did not propose or make an adjustment to payment for 340B-acquired drugs in nonexcepted off-campus PBDs in CY 2018, but indicated we may consider doing so through future notice-and-comment rulemaking.
In the interim final rule with comment period that accompanied the CY 2017 OPPS/ASC final rule with comment period, we established payment policies under the Medicare PFS for nonexcepted items and services furnished by a nonexcepted off-campus PBD on or after January 1, 2017. In accordance with sections 1848(b) and (c) of the Act, Medicare PFS payment is based on the relative value of the resources involved in furnishing particular services (81 FR 79790). Resource-based relative values are established for each item and service (described by a HCPCS code(s)) based on the work (time and intensity), practice expense (such as clinical staff, supplies and equipment, office rent, and overhead), and malpractice expense required to furnish the typical case of the service. Because Medicare makes separate payment under institutional payment systems (such as the OPPS) for the facility costs associated with many of the same services that are valued under the PFS, we establish two different PFS payment rates for many of these services—one that applies when the service is furnished in a location where a facility bills and is paid for the service under a Medicare payment system other than the PFS (the facility rate), and another that applies when the billing practitioner or supplier furnishes and bills for the entire service (the nonfacility rate). Consistent with the long-established policy under the PFS to make payment to the billing practitioner at the facility rate when Medicare makes a corresponding payment to the facility (under the OPPS, for instance) for the same service, physicians and nonphysician practitioners furnishing services in nonexcepted PBDs continue to report their services on a professional claim form and are paid for their services at the PFS facility rate.
Similarly, there are many (mostly diagnostic) services paid under the PFS that have two distinct portions of the service: A technical component (TC) and a professional component (PC). These components can be furnished independently in time or by different suppliers, or they may be furnished and billed together as a “global” service (82 FR 52981). Payment for these services can also be made under a combination of payment systems; for example, under the PFS for the professional component and the OPPS for the facility portion. For instance, for a diagnostic CT scan, the technical component relates to the portion of the service during which the image is captured and might be furnished in an office or HOPD setting, and the professional component relates to the interpretation and report by a radiologist.
In the CY 2017 interim final rule with comment period, we stated that we continue to believe that it is operationally infeasible for nonexcepted off-campus PBDs to bill directly under the PFS for the subset of PFS services for which there is a separately valued technical component (81 FR 79721). In addition, we explained that we believe hospitals that furnish nonexcepted items and services are likely to furnish a broader range of services than other provider or supplier types for which there is a separately valued technical component under the PFS. We stated that we therefore believe it is necessary to establish a new set of payment rates under the PFS that reflect the relative resource costs of furnishing the technical component of a broad range of services to be paid under the PFS that is specific to one site of service (the off-campus PBD of a hospital) with the packaging (bundling) rules that are significantly different from current PFS rules (81 FR 79721).
In continuing to implement the requirements of sections 1833(t)(1)(B) and (t)(21) of the Act, we recognize that
Nonexcepted off-campus PBDs continue to bill for nonexcepted items and services on the institutional claim utilizing a new claim line (modifier “PN”) to indicate that an item or service is a nonexcepted item or service. For a detailed discussion of the current PFS relativity adjuster related to payments under section 603 of Public Law 114-74, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 52356 through 52637), the CY 2018 PFS final rule with comment period (82 FR 53019 through 53025), and the CY 2019 PFS proposed rule.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37144 through 37145), the 340B Program, which was established by section 340B of the Public Health Service Act by the Veterans Health Care Act of 1992, is administered by the Health Resources and Services Administration (HRSA) within HHS. The 340B Program allows participating hospitals and other health care providers to purchase certain “covered outpatient drugs” (as defined under section 1927(k) of the Act and interpreted by HRSA through various guidance documents) at discounted prices from drug manufacturers.
In the CY 2018 OPPS/ASC proposed rule (82 FR 33632 through 33635), we proposed changes to the payment methodology under the OPPS for separately payable drugs and biologicals acquired under the 340B Program. We stated that these changes would better, and more appropriately, reflect the resources and acquisition costs that these hospitals incur. Such changes would allow Medicare beneficiaries (and the Medicare program) to pay less when hospitals participating in the 340B Program furnish drugs that are purchased under the 340B Program to Medicare beneficiaries. Subsequently, in the CY 2018 OPPS/ASC final rule with comment period, we finalized our proposal that separately payable, covered outpatient drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B Program will be paid ASP minus 22.5 percent, rather than ASP+6 percent, when billed by a hospital paid under the OPPS that is not excepted from the payment adjustment. CAHs are not subject to this 340B policy change because they are paid under section 1834(g) of the Act. Rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals are excepted from the alternative payment methodology for 340B-acquired drugs and biologicals. In addition, as stated in the CY 2018 OPPS/ASC final rule with comment period, this policy change does not apply to drugs with pass-through payment status, which are required to be paid based on the ASP methodology, or to vaccines, which are excluded from the 340B Program.
As noted in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79716), prior to the implementation of the payment adjustment under the OPPS for drugs and biologicals acquired under the 340B program, separately payable drugs and biologicals were paid the same rate at both excepted and nonexcepted off-campus departments of a hospital. The policy we finalized in the CY 2018 OPPS/ASC final rule with comment period, in which we adjusted the payment rate for separately payable drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B Program from ASP+6 percent to ASP minus 22.5 percent, applies to separately payable drugs and biologicals paid under the OPPS (81 FR 59353 through 59369). Under sections 1833(t)(1)(B)(v) and (t)(21) of the Act, however, in accordance with our policy in effect as of CY 2018, nonexcepted items and services furnished by nonexcepted off-campus PBDs are no longer covered outpatient department services and, therefore, are not payable under the OPPS. This means that nonexcepted off-campus PBDs are not subject to the payment changes finalized in the CY 2018 OPPS/ASC final rule with comment period that apply to hospitals and PBDs paid under the OPPS. Because the separately payable drugs and biologicals acquired under the 340B Program and furnished in nonexcepted off-campus PBDs are no longer covered outpatient department services, as of CY 2018, these drugs and biologicals are currently paid in the same way Medicare Part B drugs are paid in the physician office and other nonhospital settings—typically at ASP+6 percent—regardless of whether they are acquired under the 340B Program.
The current PFS payment policies for nonexcepted items and services incorporate a significant number of payment policies and adjustments made under the OPPS (81 FR 79726; 82 FR 53024 through 53025). In establishing these policies in prior rulemaking, we pointed out that the adoption of these policies was necessary in order to maintain the integrity of the PFS relativity adjuster because it adjusts payment rates developed under the OPPS (81 FR 79726). For example, it is necessary to incorporate OPPS packaging rules into the site-specific PFS rate because the PFS relativity adjuster is applied to OPPS rates that were developed based on those packaging rules. In addition, many of the OPPS policies and adjustments are replicated under the nonexcepted off-campus PBD site-specific PFS rates because they are specifically applicable to hospitals as a setting of care. For example, we adopted the geographic adjustments used for hospitals instead of the adjustments developed for the
We note that, ordinarily, Medicare pays for drugs and biologicals furnished in the physician's office setting at ASP+6 percent. This is because section 1842(o)(1)(A) of the Act provides that if a physician's, supplier's, or any other person's bill or request for payment for services includes a charge for a drug or biological for which payment may be made under Medicare Part B and the drug or biological is not paid on a cost or prospective payment basis as otherwise provided in this part, the amount for the drug or biological is equal to the following: The amount provided under section 1847, section 1847A, section 1847B, or section 1881(b)(13) of the Act, as the case may be for the drug or biological.
Generally, in the hospital outpatient department setting, low-cost drugs and biologicals are packaged into the payment for other services billed under the OPPS. Separately payable drugs (1) have pass-through payment status, (2) have a per-day cost exceeding a threshold, or (3) are not policy-packaged or packaged in a C-APC. As described in section V.A.1. of the CY 2019 OPPS/ASC proposed rule, section 1847A of the Act establishes the ASP methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the WAC, and the AWP (82 FR 59337). As noted in section V.B.2.b. of the CY 2019 OPPS/ASC proposed rule, since CY 2013, our policy has been to pay for separately payable drugs and biologicals at ASP plus 6 percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default) (82 FR 59350). Consequently, in the case of services furnished in a hospital outpatient department, Medicare pays ASP+6 percent for separately payable Part B drugs and biologicals unless those drugs or biologicals are acquired under the 340B Program, in which case they are paid at ASP minus 22.5 percent. For a detailed discussion of our current OPPS drug payment policies, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59343 through 59371).
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37146), as a general matter, in the nonexcepted off-campus PBD setting, we pay hospitals under the PFS for all drugs and biologicals that are packaged under the OPPS based on a percentage of the OPPS payment rate, which is determined using the PFS relativity adjuster. Because OPPS packaging rules apply to the PFS payments to nonexcepted off-campus PBDs, the PFS payment for some nonexcepted items and services that are packaged includes payment for some drugs and biologicals that would be separately payable under the PFS if a similar service had been furnished in the office-based setting. As we noted in the CY 2017 final rule with comment period, in analyzing the term “applicable payment system,” we considered whether and how the requirements for payment could be met under alternative payment systems in order to pay for nonexcepted items and services, and considered several payment systems under which payment is made for similar items and services (81 FR 79712). Because the PFS relativity adjuster that is applied to calculate payment to hospitals for nonexcepted items and services furnished in nonexcepted off-campus PBDs is based on a percentage (40 percent) of the amount determined under the OPPS for a particular item or service, and the OPPS is a prospective payment system, we believe that items and services furnished by nonexcepted off-campus PBDs paid under the PFS are payable on a prospective payment basis. Therefore, we believe we have flexibility to pay for separately payable drugs and biologicals furnished in nonexcepted off-campus PBDs at an amount other than the amount dictated by sections 1842(o)(1)(C) and 1847A of the Act.
As we discussed in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59354), several recent studies and reports on Medicare Part B payments for 340B-acquired drugs highlight a difference in Medicare Part B drug spending between 340B hospitals and non-340B hospitals as well as varying differences in the amount by which the Part B payment exceeds the drug acquisition cost. When we initially developed the policy for nonexcepted off-campus PBDs, most separately payable drugs and biologicals were paid, both in the OPPS and in other Part B settings, such as physician offices, through similar methodologies under section 1847A/1842(o) of the Act. For drugs and biologicals that are packaged in the OPPS, we adopted similar packaging payment policies for purposes of making the site-specific payment under the PFS for nonexcepted off-campus PBDs. Because hospitals can, in some cases, acquire drugs and biologicals under the 340B Program for use in nonexcepted off-campus PBDs, we believe that not adjusting payment exclusively for these departments would present a significant incongruity between the payment amounts for these drugs depending upon where (for example, excepted PBD or nonexcepted PBD) they are furnished. This incongruity would distort the relative accuracy of the resource-based payment amounts under the site-specific PFS rates and could result in significant perverse incentives for hospitals to acquire drugs and biologicals under the 340B Program and avoid Medicare payment adjustments that account for the discount by providing these drugs to patients predominantly in nonexcepted off-campus PBDs. In light of the significant drug payment differences between excepted and nonexcepted off-campus PBDs, in combination with the potential eligibility for discounts, which result in reduced costs under the 340B Program for both kinds of departments, our current payment policy could undermine the validity of the use of the OPPS payment structure in nonexcepted off-campus PBDs. In order to avoid such perverse incentives and the potential resulting distortions in drug payment, in the CY 2019 OPPS/ASC proposed rule (83 FR 37146), we proposed, pursuant to our authority at section 1833(t)(21)(C) of the Act, to identify the PFS as the “applicable payment system” for 340B-acquired drugs and biologicals and, accordingly, to pay under the PFS instead of under section 1847A/1842(o) of the Act an amount equal to ASP minus 22.5 percent for drugs and biologicals acquired under the 340B Program that are furnished by nonexcepted off-campus PBDs. We stated in the proposed rule that we believe this proposed change in policy would eliminate the significant incongruity between the payment amounts for these drugs, depending upon whether they are furnished by excepted off-campus PBDs or nonexcepted off-campus PBDs, which we believe is an unnecessary difference in payment where the 340B Program does not differentiate between PBDs paid under the OPPS and PBDs paid under the PFS using the PFS relativity adjuster.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59367 through 59368), we discussed public comments that we received that noted that the alternative payment methodology for 340B-acquired drugs and biologicals did not apply to nonexcepted off-campus PBDs of a hospital and could result in behavioral
We agree with commenters that the difference in the payment amounts for 340B-acquired drugs furnished by hospital outpatient departments, excepted off-campus PBDs versus nonexcepted off-campus PBDs, creates an incentive for hospitals to move drug administration services for 340B-acquired drugs to nonexcepted off-campus PBDs to receive a higher payment amount for these drugs, thereby undermining our goals of reducing beneficiary cost-sharing for these drugs and biologicals and moving towards site neutrality through the section 603 amendments to section 1833(t) of the Act. Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37145), we proposed changes to the Medicare Part B drug payment methodology for drugs and biologicals furnished and billed by nonexcepted off-campus departments of a hospital that were acquired under the 340B Program. Specifically, for CY 2019 and subsequent years, we proposed to pay under the PFS the adjusted payment amount of ASP minus 22.5 percent for separately payable drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B Program when they are furnished by nonexcepted off-campus PBDs of a hospital. Furthermore, we proposed to except rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals from this payment adjustment (83 FR 37145). We stated that we believe that our proposed payment policy would better reflect the resources and acquisition costs that nonexcepted off-campus PBDs incur for these drugs and biologicals.
A few commenters, including organizations representing community oncology practices, stated that the opportunity for 340B-participating hospitals to get substantial revenue from cancer drugs has created financial incentives for hospitals to expand oncology services, notably through the acquisition of independent community oncology practices. Furthermore, one of these commenters asserted that, when these facilities purchased by 340B-participating entities become off-campus PBDs, they also become eligible for 340B Program discounts, thus “further fueling the program's staggering growth.” These commenters cited a report that states that, over the last decade, 658 community oncology practices have been acquired by hospitals, and 3 out of 4 of these acquisitions were by hospitals already eligible for the 340B Program. Accordingly, these commenters believe that the growth of Part B drug spending in recent years has been disproportionately driven by higher payments in the hospital outpatient setting. Another commenter asserted that the current situation creates two undesirable incentives. First, it creates an incentive for physicians to join a hospital to furnish the same types of services that could have been furnished in the physician office setting, thereby increasing costs to the Medicare program, Medicare beneficiaries, and taxpayers without any associated increase in access to care for Medicare beneficiaries, particularly low-income beneficiaries. Second, it encourages hospitals to move services off the hospital campus for financial incentives.
Some commenters urged CMS and HRSA to work with Congress to reform the 340B Program. One commenter recommended that CMS gather additional data to better understand 340B Program acquisition costs and the impact of payment reductions on 340B Program providers. In addition, a few commenters recommended that CMS revise the definition of “patient” to reflect the program's original intent.
As we previously stated, CMS does not administer the 340B Program. Accordingly, comments related to eligibility for the 340B Program as well as 340B Program policies are outside the scope of the proposed rule and are not addressed in this final rule with comment period.
In addition, it is unclear from the comment whether the referenced children's hospitals “within academic medical centers or health care systems” are enrolled in the Medicare program as children's hospitals or whether they are simply a department of an enrolled hospital provider. However, any separately enrolled children's hospital that is paid as such is exempt from the 340B-acquired drug payment reduction, while children's units that are not separately enrolled would not be exempt from the 340-acquired drug payment policy.
With respect to rural referral centers, in the CY 2018 OPPS/ASC final rule with comment period, we noted that there is no special payment designation for rural referral centers under the OPPS. By definition, rural referral centers must have at least 275 beds and therefore are larger relative to rural sole community hospitals. In addition, rural referral centers are not subject to a distance requirement from other hospitals. Accordingly, rural referral centers are neither as small (in terms of bed size) or as isolated (in terms of proximity to other hospitals) as rural SCHs, nor are they generally eligible for special payment status under the OPPS, and we do not believe that a payment exemption from this policy for these centers is warranted.
Furthermore, as stated earlier in this section, we believe that we should adopt an analogous payment policy across hospital settings, regardless of the status of each PBD. Because we did not exempt grandfathered off-campus PBDs with MDH classification from the 340B payment adjustment in CY 2018, we do not believe that nonexcepted off-campus PBDs with Medicare-dependent hospital status should be exempted at this time. Therefore, for CY 2019, Medicare-dependent hospitals will not be exempt from this payment policy.
For CY 2019, rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals will be excepted from the alternative payment methodology for 340B-acquired drugs and biologicals furnished in nonexcepted off-campus PBDs, and therefore will be required to bill under the PFS using the institutional claim form and report the informational modifier “TB” for 340B-acquired drugs and biologicals. These providers will continue to be paid ASP+6 percent for 340B-acquired drugs and biologicals under the PFS. In addition, as we stated in the CY 2018 OPPS/ASC final rule with comment period, this policy change does not apply to drugs with pass-through payment status, which are required to be paid based on the ASP methodology, or to vaccines, which are excluded from the 340B Program.
We note that this policy does not alter covered entities' access to the 340B Program. The expansion of the alternative 340B drug payment methodology solely changes Medicare payment for drugs furnished in nonexcepted off-campus PBDs of a hospital if such drugs were acquired under the 340B Program. We may revisit our policy regarding exceptions to the 340B drug payment reduction in the CY 2020 OPPS/ASC rulemaking.
We note that we responded to a similar public comment in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59364 through 59365) and refer readers to a summary of that comment and our response.
One commenter, an organization representing over 1,300 public and nonprofit providers enrolled in the 340B Program, argued that since the 340B payment policy took effect in January 2018, many hospitals have experienced financial and operational challenges, including staff reductions, fewer free or discounted drugs for patients, clinic and pharmacy closures, and reductions in services provided. The commenter opposed the 340B payment proposal for a number of reasons, primarily because the commenter believed that the current OPPS 340B payment rate harms hospitals' ability to treat low-income patients and the proposals to continue and expand the cuts would worsen the impact. Furthermore, the commenter argued that CMS' proposed payment reduction does not reduce patient costs or Medicare spending or address “skyrocketing drug prices”; CMS' payment reduction violates the 340B statute; CMS' payment reduction violates the Medicare statute; and CMS' payment reduction relies on a “faulty premise that fails to recognize that 340B hospitals serve patients with more expensive medical needs.” The commenter further asserted that Congress, as well as “one-hundred percent of hospitals,” have expressed concern about the payment reduction's impact on 340B providers' ability to serve their patients.
Many additional commenters, including some hospital associations, contended that CMS does not have the legal authority to apply the OPPS Medicare payment rate to nonexcepted off-campus PBDs in 340B-participating hospitals because section 1833(t)(21)(C) of the Act does not authorize CMS to pay at a rate that is less than the rate paid under the selected “applicable payment system.” Specifically, a few commenters asserted that payment for these drugs and biologicals is determined pursuant to the rules of section 1842(o)(1)(C) of the Act, which mandates that payment is to be made for these drugs and biologicals when furnished by nonexcepted off-campus PBDs pursuant to the rules of section 1847A of the Act.
We also disagree with commenters who believe that the OPPS payment rate for 340B-acquired drugs will “effectively eviscerate” the 340B Program as well as the implication that extending the same rate that applies to 340B-acquired drugs and biologicals furnished by hospital departments under the OPPS to nonexcepted off-campus PBDs will perpetuate that concern. The findings from several 340B studies conducted by the GAO, OIG, and MedPAC show a wide range of discounts that are afforded to 340B hospitals, with some reports finding discounts of up to 50 percent. Indeed, in some cases, beneficiary coinsurance alone exceeds the amount the hospital paid to acquire the drug under the 340B Program (OIG November 2015, Report OEI-12-14-00030, page 9). As stated in the CY 2018 final rule with comment period, we believe that ASP minus 22.5 percent is a conservative estimate of the discount for 340B-acquired drugs, and that even with the reduced payments, hospitals will continue to receive savings that can be directed at programs and services to carry out the intent of the 340B Program. We also have noted that 340B Program participation does not appear to be well aligned with the provision of uncompensated care, as some commenters suggested (82 FR 59359).
Payment under the “applicable payment system” pursuant to section 1833(t)(21)(C) of the Act is made under the PFS for most services, including for the many drugs that are packaged under the OPPS, using a PFS relativity adjuster that is applied to the OPPS payment rate. As such, the PFS payment for nonexcepted items and services in nonexcepted off-campus PBDs is made on a prospective payment basis, and we are therefore not required to make payment under section 1847A/1842(o) of the Act for those packaged drugs, many of which would be separately payable under the PFS. Further, as we stated in the CY 2019 OPPS/ASC proposed rule (83 FR 37145), the current PFS payment policies for nonexcepted items and services incorporate a significant number of payment policies and adjustments made under the OPPS (81 FR 79726; 82 FR 53024 through 53025). In establishing these policies in prior rulemaking, we pointed out that
Since we have adopted the payment adjustment under the OPPS for 340B-acquired separately payable drugs, we have become concerned that there would be a perverse incentive for hospitals to circumvent the OPPS payment adjustment by furnishing 340B-acquired drugs in nonexcepted off-campus PBDs where Medicare currently makes payment for those drugs at ASP+6 percent. To avoid this payment incongruity and perverse incentive, we proposed to designate the PFS as the “applicable payment system” for 340B-acquired separately payable drugs furnished in nonexcepted off-campus PBDs, and to make payment at the OPPS-comparable rate.
Many commenters opposed reducing payments to hospitals for 340B drugs in a nonbudget-neutral manner and instead suggested that such policy be implemented in a budget neutral manner as was implemented in the CY 2018 OPPS/ASC final rule with comment period. In addition, some commenters recommended that CMS annually calculate a budget neutral adjustment for the 340B policy, as the approach is consistent with other budget neutral policies included in the OPPS.
We thank the commenters for their feedback. After consideration of the public comments we received, we are finalizing our proposal, without modification, to make payment for separately payable 340B-acquired drugs furnished by nonexcepted off-campus departments of a hospital under the PFS, and to establish the payment rate for those drugs at ASP minus 22.5 percent. This policy is expected to lower the cost of drugs and biologicals for Medicare beneficiaries and ensure that they benefit from the discounts provided through the program, and to do so more equitably across HOPD settings.
In summary, for CY 2019, in accordance with section 1833(t)(21)(C) of the Act and our established 340B payment methodology as described in the CY 2018 OPPS/ASC final rule with comment period, separately payable Part B drugs and biologicals (assigned status indicator “K”), other than vaccines and drugs with pass-through payment status, that are acquired through the 340B Program or through the 340B PVP at or below the 340B ceiling price will be paid at a rate of ASP minus 22.5 percent when billed by a hospital that is not excepted from the payment adjustment. Part B drugs or biologicals excluded from the 340B payment adjustment include vaccines (assigned status indicator “L” or “M”) and drugs and biologicals with transitional pass-through payment status (assigned status indicator “G”).
To effectuate the payment adjustment for 340B-acquired drugs and biologicals, CMS implemented modifier “JG”, effective January 1, 2018. Hospitals paid under the OPPS (other than a type of hospital excluded from the OPPS or excepted from the 340B drug payment policy for CY 2019) and, beginning January 1, 2019, nonexcepted off-campus PBDs of a hospital paid under the PFS, are required to report modifier “JG” on the same claim line as the drug or biological HCPCS code to identify a 340B-acquired drug or biological. For CY 2019, rural sole community hospitals, children's hospitals, and PPS-exempt cancer hospitals are excepted from the 340B payment adjustment. These hospitals will be required to report informational modifier “TB” for 340B-acquired drugs and biologicals, and will continue to be paid ASP+6 percent.
We refer readers to section X.C.1.a. of the CY 2019 OPPS/ASC proposed rule (83 FR 37143) for a discussion of the provisions of section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74), as implemented in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719). As discussed in the CY 2017 OPPS/ASC final rule with comment period, we adopted the PFS as the applicable payment system for nonexcepted items and services furnished and billed by nonexcepted off-campus PBDs. In addition, we indicated that, in order to be considered part of a hospital, an off-campus department of a hospital must meet the provider-based criteria established under 42 CFR 413.65. For a detailed discussion of the history and statutory authority related to payments under section 603 of Public Law 114-74, we refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79719) and the interim final rule with comment period (81 FR 79720 through 79729).
In the CY 2017 OPPS/ASC proposed rule (81 FR 45685), we noted that we had received questions from some hospitals regarding whether an excepted off-campus PBD could expand the number or type of services the department furnishes and maintain excepted status for purposes of paragraphs (1)(B)(v) and (21) of section 1833(t) of the Act. We indicated that we were concerned that if excepted off-campus PBDs could expand the types of services provided at the excepted off-campus PBDs and also be paid OPPS rates for these new types of services, hospitals may be able to purchase additional physician practices and expand services furnished by existing excepted off-campus PBDs as a result (81 FR 45685). This could result in newly purchased physician practices furnishing services that are paid at OPPS rates, which we believed these amendments to section 1833(t) of the Act were intended to address (81 FR 45685). We believed section 1833(t)(21)(B)(ii) of the Act excepted off-campus PBDs and the items and services that are furnished by such excepted off-campus PBDs for purposes of paragraphs (1)(B)(v) and (21) of section 1833(t) of the Act as they were being furnished on the date of enactment of section 603 of the Bipartisan Budget Act of 2015, as guided by our regulatory definition at § 413.65(a)(2) of a department of a provider (81 FR 45685). Thus, in the CY 2017 OPPS/ASC proposed rule, we proposed that if an excepted off-campus PBD furnished items and services from a clinical family of services (clinical families of services were identified in Table 21 of the CY 2017 proposed rule (81 FR 45685 through 45686) that it did not furnish prior to November 2, 2015, and thus did not also bill for, services from these new expanded clinical families of services would not be covered OPD services, and instead would be subject to paragraphs (1)(B)(v) and (21) of section 1833(t) of the Act, as described in section X.A.1.c. of the CY 2017 proposed rule. In addition, in that rule, we proposed not to limit the volume of excepted items and services within a clinical family of services that an excepted off-campus PBD could furnish (81 FR 45685).
The majority of commenters, including several hospital associations, regional health systems, and medical equipment manufacturers opposed the proposal primarily because they believed: (1) CMS exceeded its statutory authority, as the statutory language included in section 603 does not address changes in service mix by excepted off-campus PBDs; (2) CMS' proposal did not account for evolving technologies and would hinder beneficiary access to those innovative technologies; (3) the term “clinical families of service” appeared to be a new term created by CMS for the purpose of implementing section 603 and it would be difficult for CMS and hospitals to manage changes in the composition of APCs and HCPCS code changes contained in those APCs; and (4) the proposal created significant operational challenges and administrative burden for both CMS and hospitals because commenters believed it was unnecessarily complex (81 FR 79706 through 79707).
In addition, MedPAC explained in its comment letter that the proposal was unnecessarily complex and instead suggested that CMS adopt a different approach by determining how much the Medicare program had paid an excepted off-campus PBD for services billed under the OPPS during a 12-month baseline period that preceded November 2, 2015 and to cap the OPPS payment made to the off-campus PBD at the amount paid during the baseline period.
In response to public comments, we did not finalize our proposal to limit the expansion of excepted services at excepted off-campus PBDs. However, we stated our intent to monitor this issue and expressed interest in additional feedback to help us consider whether excepted off-campus PBDs that expand the types of services offered after November 2, 2015 should be paid for furnishing those items and services under the applicable payment system (that is, the PFS) instead of the OPPS. Specifically, we requested comments on how either a limitation on volume or a limitation on lines of service would work in practice (81 FR 79707).
In addition, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79707), we sought public comments on how either a limitation on volume of services, or a limitation on lines of
We provided a summary of and responses to comments received in response to the CY 2017 OPPS/ASC final rule with comment period in the CY 2018 OPPS/ASC proposed rule. As stated in that rule, several of the public comments received in response to the comment solicitation included in the CY 2017 OPPS/ASC final rule with comment period were repeated from the same stakeholders in response to the CY 2017 OPPS/ASC proposed rule. These commenters again expressed concern regarding CMS' authority to address changes in service-mix; that a limitation on service expansion or volume would stifle innovative care delivery and use of new technologies; and that limiting service line expansion using clinical families of service was not workable. Because these commenters did not provide new information, we referred readers to the CY 2017 OPPS/ASC final rule with comment period for our responses to comments on statutory authority and concerns about hindering access to innovative technologies (81 FR 79707 and 82 FR 59388). A summary of and our responses to the other comments received in response to the comment solicitation included in the CY 2017 OPPS/ASC final rule with comment period were included in the CY 2018 OPPS/ASC proposed rule (82 FR 33645 through 33648).
In the CY 2018 OPPS/ASC proposed rule, we did not propose any policies related to clinical service line expansion or volume increases at excepted off-campus PBDs. However, we stated that we would continue to monitor claims data for changes in billing patterns and utilization, and we again invited public comments on the issue of service line expansion. In response to the CY 2018 comment solicitation, MedPAC largely reiterated the comments it submitted in response to the CY 2017 OPPS/ASC rulemaking and acknowledged the challenges of implementing its recommended approach as such approach would necessitate CMS requiring hospitals to report the amount of OPPS payments received by each excepted off-campus PBD during the baseline period (such as November 2014 through November 2015) because CMS was not collecting data on payments made to each individual PBD during that period. In its comments, MedPAC recommended that, to help ensure the accuracy of these data, CMS could selectively audit hospitals.
As we previously expressed in CYs 2017 and 2018 OPPS/ASC rulemaking, we continue to be concerned that if excepted off-campus PBDs may furnish new types of services that were not provided at the excepted off-campus PBDs prior to the date of enactment of the Bipartisan Budget Act of 2015 and can be paid OPPS rates for these new types of services, hospitals may be able to purchase additional physician practices and add those physicians to existing excepted off-campus PBDs. This could result in newly purchased physician practices furnishing services that are paid at OPPS rates, which we believe the section 603 amendments to section 1833(t) of the Act are intended to prevent. Of note, these statutory amendments “came after years of nonpartisan economists, health policy experts, and providers expressing concern over the Medicare program's [OPPS] paying more for the same services provided at HOPDs than in other settings—such as an ambulatory surgery center, physician office, or community outpatient facility.”
The Government Accountability Office (GAO) stated in its December 2015 Report to the Congress that “from 2007 through 2013, the number of vertically consolidated physicians nearly doubled, with faster growth in more recent years.” GAO concluded that, “regardless of what has driven hospitals and physicians to vertically consolidate, paying substantially more for the same service when performed in an HOPD rather than a physician office provides an incentive to shift services that were once performed in physician offices to HOPDs after consolidations have occurred.”
While there is no Congressional Record available for section 603 of the Bipartisan Budget Act of 2015, we do not believe that Congress intended to allow for new service lines to be paid OPPS rates because providing for such payment would allow for excepted off-campus PBDs to be paid higher rates for types of services they were not furnishing prior to the date of enactment of the Bipartisan Budget Act of 2015 and that would be paid at lower rates if performed in a nonexcepted off-campus PBD. Similarly, we are concerned that a potential shift of services from nonexcepted off-campus PBDs to excepted off-campus PBDs may be occurring, given the higher payment rate in this setting. We believe that the growth of service lines in currently excepted off-campus PBDs may be an unintended consequence of our current policy, which allows continued full OPPS payment for any services furnished by excepted off-campus PBDs, including services in new service lines.
In prior rulemaking, and as discussed in section X.A. of the CY 2019 OPPS/ASC proposed rule, we noted our concerns and discussed our efforts to begin collecting data and monitoring billing patterns for off-campus PBDs. Specifically, as described in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66910 through 66914), we created HCPCS modifier “PO” (Services, procedures, and/or surgeries furnished at off-campus provider-based outpatient departments) for hospital claims to be reported with every code for outpatient hospital items and services furnished in an off-campus PBD of a hospital. Reporting of this new modifier was voluntary for CY 2015, with reporting required beginning on January 1, 2016. In addition, we established modifier “PN” (Nonexcepted service provided at an off-campus, outpatient, provider-based department of a hospital) to identify and pay nonexcepted items and services billed on an institutional claim.
As discussed in the CY 2018 OPPS/ASC proposed rule (82 FR 33647), a few commenters supported CMS' intent to monitor service line expansion and changes in billing patterns by excepted off-campus PBDs. These commenters urged CMS to work to operationalize a method that would preclude an excepted off-campus PBD from increasing its payment advantage under the OPPS by expanding into wholly new clinical areas (82 FR 33647). Moreover, a few commenters urged CMS to pursue a limitation on service line expansion to ensure designation as an excepted off-campus PBD is not “abused” (82 FR 33647). One commenter suggested that CMS evaluate outpatient claims with the “PO” modifier to develop a list of “grandfathered” items and services for which the excepted off-campus PBD may continue to be paid under the OPPS (82 FR 33647). In response to these comments, we stated that we were concerned with the practicality of developing a list of excepted items and services for each excepted off-campus PBD, given the magnitude of such a list (82 FR 33647). We noted in the CY 2018 OPPS/ASC final rule with comment period, however, that we continued to monitor claims data for changes in billing patterns and utilization, and invited comments on this issue (82 FR 59388).
In light of our prior stated concerns about the expansion of services in excepted off-campus PBDs, in the CY 2019 OPPS/ASC proposed rule (83 FR 37148 through 37149), for CY 2019 and subsequent years, we proposed that if an excepted off-campus PBD furnishes services from any clinical family of services (as clinical families of services are defined in Table 32 of that proposed rule) from which it did not furnish an item or service during a baseline period from November 1, 2014 through November 1, 2015 (and subsequently bill under the OPPS for that item or service), items and services from these new clinical families of services would not be excepted items and services and, thus, would not be covered OPD services. Instead, they would be subject to paragraphs (1)(B)(v) and (21) of section 1833(t) of the Act and paid under the PFS. Furthermore, in the CY 2019 OPPS/ASC proposed rule, we proposed to revise 42 CFR 419.48 to limit the definition of “excepted items and services” in accordance with this proposal. Generally, excepted items and services are items or services that are furnished on or after January 1, 2017 by an excepted off-campus PBD (as defined in § 419.48) that has not impermissibly relocated or changed ownership. Under this proposal, beginning on January 1, 2019, excepted items and services would be items or services that are furnished and billed by an excepted off-campus PBD (defined in § 419.48) only from the clinical families of services (described later in this section) for which the excepted off-campus PBD furnished (and subsequently billed under the OPPS) for at least one item or service from November 1, 2014 through November 1, 2015. Further, for purposes of this section, “new clinical families of services” would be items or services: (1) That are furnished and billed by an excepted off-campus PBD; (2) that are otherwise paid under the OPPS through one of the APCs included in Table 32 of the CY 2019 OPPS/ASC proposed rule; and (3) that belong to a clinical family listed in Table 32 of the proposed rule from which the excepted off-campus PBD did not furnish an item or service during the baseline period from November 1, 2014 through November 1, 2015 (and subsequently bill for that service under the OPPS). In addition, for CY 2019, we proposed that if an excepted off-campus PBD furnishes a new item or service from a clinical family of services listed in Table 32 of the proposed rule from which the off-campus PBD furnished a service from November 1, 2014 through November 1, 2015, such service would continue to be paid under the OPPS because items and services from within a clinical family of services for which the excepted off-campus PBD furnished an item or service during the baseline period would not be considered a “service expansion.”
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37149), in order to determine the types of services provided at an excepted off-campus PBD, for purposes of OPPS payment eligibility, excepted off-campus PBDs would be required to ascertain the clinical families from which they furnished services from November 1, 2014 through November 1, 2015 (that were subsequently billed under the OPPS). In addition, items and services furnished by an excepted off-campus PBD that were not identified in Table 32 of the proposed rule would be reported with modifier “PN”. We selected the year prior to the date of enactment of the Bipartisan Budget Act of 2015 as the baseline period because it is the most recent year preceding the date of enactment of section 603 and we believed that a full year of claims data would adequately reflect the types of service lines furnished and billed by an excepted off-campus PBD. We considered expanding the baseline period to include a timeframe prior to November 2014, but did not propose this alternative due to the possibility that hospital claims data for an earlier time period might not be readily available and reviewing claims from a longer timeframe may impose undue burden. If an excepted off-campus PBD did not furnish services under the OPPS until after November 1, 2014, we proposed that the 1-year baseline period begins on the first date the off-campus PBD furnished covered OPD services prior to November 2, 2015. For providers that met the mid-build requirement (as defined at section 1833(t)(21)(B)(v) of the Act), we proposed to establish a 1-year baseline period that begins on the first date the off-campus PBDs furnished a service billed under the OPPS. We proposed changes to our regulation at 42 CFR 419.48 to include these alternative baseline periods. For guidance on the implementation of sections 16001 and 16002 of the 21st Century Cures Act, we refer readers to the CMS website at:
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37149), we were aware of past stakeholder concern regarding limiting service line expansion for excepted off-campus PBDs using the 19 clinical families identified in Table 32 of the proposed
In addition, we solicited public comments on alternate methodologies to limit the expansion of excepted services in excepted off-campus PBDs for CY 2019. Specifically, we invited public comments on the adoption and implementation of other methodologies, such as the approach recommended by MedPAC (discussed earlier in this section) in response to the CY 2017 and CY 2018 proposals whereby CMS would establish a baseline service volume for each applicable off-campus PBD, cap excepted services (regardless of clinical family) at that limit, and when the hospital reaches the annual cap for that location, additional services furnished by that off-campus PBD would no longer be considered covered OPD services and would instead be paid under the PFS (the annual cap could be updated based on the annual updates to the OPPS payment rates). Under such alternate approach, hospitals would need to report service volume for each off-campus PBD for the applicable period (such as November 1, 2014-November 1, 2015) and such applicable periods would be subject to audit.
One commenter, a pharmaceutical research and manufacturing organization, stated that this proposal “strikes a reasonable balance” in that the proposal would not limit PBDs to exactly the same services that they provided in the past, but would allow them to adjust their service-mix within relevant clinical families that reflect their specialties. The commenter contended that this provision would permit appropriate changes to the services excepted off-campus PBDs offer as clinical practices evolve. Additionally, the commenter stated that this policy proposal would prevent attempts to circumvent “the obvious intent of the law to reign in conversion of non-hospital entities into PBDs primarily in order to secure better payment, but without commensurate clinical benefit.”
A few commenters stated that most off-campus PBDs are able to take advantage of higher payment rates for a wide variety of services. Specifically, the commenters asserted that, given the significant payment disparities for certain services (for example, based on OPPS rates versus PFS rates—chemotherapy: $281 versus $136; cardiac imaging: $2,078 versus $655; and colonoscopy: $1,383 versus $625), hospital systems have been purchasing physician practices and, by integrating them with excepted off-campus PBDs, secured OPPS payment rates for these services.
Another commenter asserted that CMS is taking important steps to close loopholes that have enabled hospitals to continue driving volume of services through excepted off-campus PBDs. Moreover, the commenter noted that the current policy has caused “hundreds of hospitals that have already absorbed physician practices and converted them into PBDs . . . to enjoy an unfair reimbursement advantage” over other providers. The commenter further asserted that the proposal does not sufficiently limit the items and services for which an excepted off-campus PBD can seek payment under the OPPS, and that the proposal would still allow a PBD to expand its services “no matter how limited the PBD's range or volume of services were within that clinical family” during the baseline period. The commenter also expressed concern that CMS did not propose to limit the volume of excepted items and services within a clinical family of services that an excepted off-campus PBD can furnish, and indicated that, without such limitation, an excepted off-campus PBD has every incentive to grow the scope of its practice in order to maximize its ability to seek payment under the OPPS. Moreover, this commenter contended that CMS could require that “excepted” status be tied to those physicians and particular services that were in place at the off-campus PBD prior to November 2, 2015. In other words, an excepted off-campus PBD would not be able to seek payment under the OPPS with respect to: (1) Items or services furnished by a physician (as identified by National Provider Identifier) who did not furnish items or services at the off-campus PBD prior to November 2, 2015; or (2) any items or services that were not among the items or services for which the off-campus PBD billed Medicare at any point in the 12 months preceding November 2, 2015.
Accordingly, the commenter urged CMS to modify the portion of the proposed rule that would enable excepted PBDs to bill under the OPPS for any and all items and services within the clinical families through which the excepted PBDs had furnished care during the 12 months prior to November 2, 2015, and to adopt, instead, a policy that would limit excepted off-campus PBDs to billing under the OPPS for those items and services furnished in a hospital's outpatient department in the year prior to November 2, 2015, and within the specific, excepted PBD in 2016.
However, while we continue to believe that section 1833(t)(21)(B)(ii) of the Act excepted off-campus PBDs as they existed at the time that Pub. L. 114-74 was enacted, and provides the authority to define excepted off-campus PBDs, including those items and services furnished and billed by such a PBD that may be paid under the OPPS, we are concerned that the implementation of this payment policy may pose operational challenges and administrative burden for both CMS and hospitals. After consideration of the public comments we received, we are not finalizing this policy as detailed below.
Many commenters stated that the proposal is arbitrary and capricious, that CMS lacks statutory authority to pay new clinical families of service in excepted off-campus PBDs at the rate paid to nonexcepted PBDs, and that the proposal would pose operational challenges and create administrative burden on hospitals. In addition, some commenters asserted that the requirements for provider-based status are designed to “ensure integration with the main hospital” and, accordingly, these facilities should be able to “furnish health care services of the same type as the main provider.”
MedPAC expressed concern that CMS' proposed approach to address the issue of undesirable incentives for excepted PBDs was unnecessarily complex. MedPAC believed that a better approach would be for CMS to determine how much the Medicare program had paid an off-campus PBD for items and services billed under the OPPS during a 12-month baseline period, specifically, CY 2017. Then, beginning January 1, 2019, annual program spending for items and services billed by the PBD under the OPPS would be capped at the amount paid to the PBD during the baseline period. However, MedPAC acknowledged that, for hospitals that have more than one excepted off-campus PBD, CMS would have to determine which claims to attribute to each excepted off-campus PBD. MedPAC believed that this approach would be easier to administer and would curb the ability of hospitals to benefit financially from purchasing freestanding physician practices and converting them to off-campus PBDs.
Several commenters argued that off-campus PBDs must be able to expand the items and services that they offer in order to meet changes in clinical practice and the changing needs of their communities without losing their ability to be paid under the OPPS. Generally, these commenters asserted that finalizing this proposal would significantly discourage hospitals from offering new and enhanced outpatient services and, as a result, the payment policy would hinder beneficiary access to innovative technologies.
Many commenters asserted that it is unclear how CMS or hospitals will determine what service families were being provided during the baseline period, given the lack of department-specific data and that provider-based attestations are voluntary. In addition, these commenters contended that, even if CMS and the providers could identify the clinical families of services furnished during the baseline period, it would be exceedingly complicated and burdensome to providers and CMS to ensure services belonging to a new clinical family for the PBD are accurately reported.
We believe the statute gives us the authority to limit the volume of services furnished to the level that was furnished prior to the date of enactment; however, we did not propose to do so. As we mentioned in the proposed rule and reiterated earlier in this section, we are concerned that if excepted off-campus PBDs could expand the types of services provided at the excepted off-campus PBDs and also be paid OPPS rates for these new types of services, hospitals may be able to purchase additional physician practices and add those physicians to existing excepted off-campus PBDs.
Several commenters, including MedPAC, asserted that our proposed policy could be operationally complex and could create an administrative burden for hospitals, CMS, and CMS contractors to identify, track, and monitor billing for clinical services. We agree with these commenters regarding these concerns. Therefore, we are not finalizing our proposed policy.
After consideration of the public comments we received, we are not finalizing this proposal at this time. However, we intend to monitor expansion of services in off-campus PBDs and, if appropriate, may propose to adopt a limitation on the expansion of excepted services in future rulemaking. In that event, we will consider the concerns expressed by commenters on the proposed policy in development of any future rulemaking on service line expansion. Therefore, an excepted off-campus PBD will continue to receive payments under the OPPS in CY 2019 for all billed items and services that are paid under the OPPS, regardless of whether it furnished such items and services prior to the date of enactment of Public Law 114-74, as long as the excepted off-campus PBD remains excepted, including meeting the relocation and change of ownership requirements adopted in the CY 2017 OPPS/ASC final rule with comment period if applicable (81 FR 79705 through 79706 and 79708 through 79709). As mentioned earlier in this section, we intend to monitor this issue and continue to consider how potential policies could address this issue.
Payment status indicators (SIs) that we assign to HCPCS codes and APCs serve an important role in determining payment for services under the OPPS. They indicate whether a service represented by a HCPCS code is payable under the OPPS or another payment system, and also, whether particular OPPS policies apply to the code.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37150), for CY 2019, we did not propose to make any changes to the definitions of status indicators that were listed in Addendum D1 to the CY 2018 OPPS/ASC final rule with comment period available on the CMS website at:
The commenter also requested that CMS reiterate that the I/OCE logic regarding IPO procedures that are classified as a separate procedure (for example, status indicator of “C1”) is a line item rejection and does not cause the entire claim to be rejected.
There are currently 26 different status indicators in Addendum D1 that are used to indicate whether a service described by a HCPCS code is payable under the OPPS or another payment system and whether particular OPPS payment policies apply to the code. We believe that it is important to maintain only status indicators in the OPPS that convey the necessary payment-related information, and that additional indicators should only be created when necessary for payment policy purposes.
In regard to the comment related to the I/OCE, the latest October 2018 I/OCE CMS Specifications V19.3 document on the CMS website located at:
After considering the comments received, we continue to believe that the existing definitions of the OPPS status indicators will be appropriate for CY 2019. Therefore, we are finalizing our proposed policy without modifications.
The complete list of the payment status indicators and their definitions that will apply for CY 2019 is displayed in Addendum D1 to this final rule with comment period, which is available on the CMS website at:
The CY 2019 payment status indicator assignments for APCs and HCPCS codes are shown in Addendum A and Addendum B, respectively, to this final rule with comment period, which are available on the CMS website at:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37150), we proposed to use four comment indicators for the CY 2019 OPPS. These comment indicators, “CH”, “NC”, “NI”, and “NP”, are in effect for CY 2018 and we proposed to continue their use in CY 2019. The
• “CH”—Active HCPCS code in current and next calendar year, status indicator and/or APC assignment has changed; or active HCPCS code that will be discontinued at the end of the current calendar year.
• “NC”—New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year for which we requested comments in the proposed rule, final APC assignment; comments will
• “NI”—New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year, interim APC assignment; comments will be accepted on the interim APC assignment for the new code.
• “NP”—New code for the next calendar year or existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year, proposed APC assignment; comments will be accepted on the proposed APC assignment for the new code.
We did not receive any public comments regarding the proposed CY 2019 OPPS comment indicators. Therefore, we are adopting, as final, our proposal to continue to use for CY 2019 comment indicators “CH”, “NI”, “NP”, and “NP”. The definitions of the final OPPS comment indicators for CY 2019 are listed in Addendum D2 to this final rule with comment period, which is available on the CMS website at:
For a detailed discussion of the legislative history and statutory authority related to payments to ASCs under Medicare, we refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377 through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through 32292). For a discussion of prior rulemaking on the ASC payment system, we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, 2017 and 2018 OPPS/ASC final rules with comment period (76 FR 74378 through 74379; 77 FR 68434 through 68467; 78 FR 75064 through 75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 81 FR 79732 through 79753; and 82 FR 59401 through 59424, respectively).
Under 42 CFR 416.2 and 416.166 of the Medicare regulations, subject to certain exclusions, covered surgical procedures in an ASC are surgical procedures that are separately paid under the OPPS, that would not be expected to pose a significant risk to beneficiary safety when performed in an ASC, and for which standard medical practice dictates that the beneficiary would not typically be expected to require active medical monitoring and care at midnight following the procedure (“overnight stay”). We adopted this standard for defining which surgical procedures are covered under the ASC payment system as an indicator of the complexity of the procedure and its appropriateness for Medicare payment in ASCs. We use this standard only for purposes of evaluating procedures to determine whether or not they are appropriate to be furnished to Medicare beneficiaries in ASCs. We define surgical procedures as those described by Category I CPT codes in the surgical range from 10000 through 69999 as well as those Category III CPT codes and Level II HCPCS codes that directly crosswalk or are clinically similar to procedures in the CPT surgical range that we have determined do not pose a significant safety risk, that we would not expect to require an overnight stay when performed in ASCs, and that are separately paid under the OPPS (72 FR 42478).
In the August 2, 2007 final rule (72 FR 42495), we also established our policy to make separate ASC payments for the following ancillary items and services when they are provided integral to ASC covered surgical procedures: (1) Brachytherapy sources; (2) certain implantable items that have pass-through payment status under the OPPS; (3) certain items and services that we designate as contractor-priced, including, but not limited to, procurement of corneal tissue; (4) certain drugs and biologicals for which separate payment is allowed under the OPPS; and (5) certain radiology services for which separate payment is allowed under the OPPS. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66932 through 66934), we expanded the scope of ASC covered ancillary services to include certain diagnostic tests within the medicine range of CPT codes for which separate payment is allowed under the OPPS when they are provided integral to an ASC covered surgical procedure. Covered ancillary services are specified in § 416.164(b) and, as stated previously, are eligible for separate ASC payment. Payment for ancillary items and services that are not paid separately under the ASC payment system is packaged into the ASC payment for the covered surgical procedure.
We update the lists of, and payment rates for, covered surgical procedures and covered ancillary services in ASCs in conjunction with the annual proposed and final rulemaking process to update the OPPS and the ASC payment system (§ 416.173; 72 FR 42535). We base ASC payment and policies for most covered surgical procedures, drugs, biologicals, and certain other covered ancillary services on the OPPS payment policies, and we use quarterly change requests (CRs) to update services covered under the OPPS. We also provide quarterly update CRs for ASC covered surgical procedures and covered ancillary services throughout the year (January, April, July, and October). We release new and revised Level II HCPCS codes and recognize the release of new and revised CPT codes by the AMA and make these codes effective (that is, the codes are recognized on Medicare claims) via these ASC quarterly update CRs. We recognize the release of new and revised Category III CPT codes in the July and January CRs. These updates implement newly created and revised Level II HCPCS and Category III CPT codes for ASC payments and update the payment rates for separately paid drugs and biologicals based on the most recently submitted ASP data. New and revised Category I CPT codes, except vaccine codes, are released only once a year, and are implemented only through the January quarterly CR update. New and revised Category I CPT vaccine codes are released twice a year and are implemented through the January and July quarterly CR updates. We refer readers to Table 41 in the CY 2012 OPPS/ASC proposed rule for an example of how this process, which we finalized in the CY 2012 OPPS/ASC final rule with comment period, is used to update HCPCS and CPT codes (76 FR 42291; 76 FR 74380 through 74381).
In our annual updates to the ASC list of, and payment rates for, covered surgical procedures and covered ancillary services, we undertake a review of excluded surgical procedures (including all procedures newly proposed for removal from the OPPS
Since the implementation of the ASC prospective payment system, we have defined a “surgical” procedure under the payment system as any procedure described within the range of Category I CPT codes that the CPT Editorial Panel of the American Medical Association (AMA) defines as “surgery” (CPT codes 10000 through 69999) (72 FR 42478). We also have included as “surgical,” procedures that are described by Level II HCPCS codes or by Category III CPT codes that directly crosswalk or are clinically similar to procedures in the CPT surgical range that we have determined do not pose a significant safety risk, would not expect to require an overnight stay when performed in an ASC, and are separately paid under the OPPS (72 FR 42478).
As we noted in the CY 2008 final rule that implemented the revised ASC payment system, using this definition of surgery would exclude from ASC payment certain invasive, “surgery-like” procedures, such as cardiac catheterization or certain radiation treatment services that are assigned codes outside the CPT surgical range (72 FR 42477). We stated in that final rule that we believed continuing to rely on the CPT definition of surgery is administratively straightforward, is logically related to the categorization of services by physician experts who both establish the codes and perform the procedures, and is consistent with a policy to allow ASC payment for all outpatient surgical procedures (72 FR 42477).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59402 through 59403), we noted that some stakeholders have suggested that certain procedures that are outside the CPT surgical range but that are similar to surgical procedures currently covered in an ASC setting should be ASC covered surgical procedures. For example, some stakeholders have recommended adding certain cardiovascular procedures to the ASC Covered Procedures List (CPL) due to their similarity to currently covered peripheral endovascular procedures in the surgical code range for surgery and the cardiovascular system. Further, stakeholders also noted that the AMA's CPT code manual states that the listing of a procedure in a specific section of the book may reflect historical or other considerations and should not be interpreted as strictly classifying the procedure as “surgery” or “not surgery” for insurance purposes. As the CPT codebook states: “It is equally important to recognize that as techniques in medicine and surgery have evolved, new types of services, including minimally invasive surgery, as well as endovascular, percutaneous, and endoscopic interventions have challenged the traditional distinction of Surgery vs Medicine.
We also are cognizant of the dynamic nature of ambulatory surgery and the continued shift of services from the inpatient setting to the outpatient setting over the past decade. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59402 through 59403), we responded to public comments that we had solicited regarding services that are described by Category I CPT codes outside of the surgical range, or Level II HCPCS codes or Category III CPT codes that do not directly crosswalk and are not clinically similar to procedures in the CPT surgical range, but that nonetheless may be appropriate to include as covered surgical procedures that are payable when furnished in the ASC setting. Commenters offered mixed views of changing the current definition of surgery; however, most commenters were supportive of changing the definition. Some commenters recommended broadening the definition of surgery to include procedures not described by the CPT surgical range. Another commenter recommended making all surgical codes payable in a hospital outpatient department payable in an ASC and further suggested that CMS at least redefine surgical procedures to include invasive procedures such as percutaneous transluminal angioplasty and cardiac catheterization.
One commenter recommended using a definition of surgery developed by the AMA Specialty Society Relative Value Scale Update Society for use in the agency's Physician Fee Schedule (PFS) professional liability insurance relative values. In calculating the professional liability insurance relative values, certain cardiology codes outside the CPT surgical range are considered surgical codes for both the calculation and assignment of the surgery-specific malpractice risk factors. However, we note that the distinction between “surgical” and “nonsurgical” codes developed by the AMA Specialty Society Relative Value Scale Update Society is used by CMS to calculate professional liability risk factors and not necessarily to define surgery. The codes considered surgeries by the AMA Society Relative Value Scale Update Society were most recently displayed on the CMS website for the CY 2018 Medicare Physician Fee Schedule final rule under the file “Invasive Cardiology Services Outside of Surgical HCPCS Code Range Considered Surgery.” We refer readers to that file, which is available on the CMS website at:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37152), after further consideration of comments we received in response to the CY 2018 OPPS/ASC final rule with comment period, we proposed to revise our definition of “surgery” for CY 2019 to account for “surgery-like” procedures that are assigned codes outside the CPT surgical range (10000 through 69999). We
For CY 2019, we proposed that these newly eligible “surgery-like” procedures are procedures that are described by Category I CPT codes that are not in the surgical range but, like procedures described by Level II HCPCS codes or by Category III CPT codes under our current policy, directly crosswalk or are clinically similar to procedures in the Category I CPT surgical range. These Category I CPT codes would be limited to those that we have determined do not pose a significant safety risk, would not be expected to require an overnight stay when performed in an ASC, and are separately paid under the OPPS.
We invited comments on our proposal to revise the definition of surgery for the ASC prospective payment system. We also solicited comments on whether we should expand our definition of “surgery” to include procedures that fall outside the CPT surgical range, but fall within the definition of “surgery” developed by the AMA Specialty Society Relative Value Scale Update Society for use in the agency's Physician Fee Schedule (PFS) professional liability insurance relative values, that we determine do not pose a significant safety risk, would not be expected to require an overnight stay when performed in an ASC, and are separately paid under the OPPS.
With respect to the commenter's concern that this proposal may expose beneficiaries to significant safety risk, we note that any procedure added to the ASC CPL is evaluated against the existing regulatory criteria and would not be expected pose a significant safety risk, would not be expected to require an overnight stay when performed in an ASC, and is separately paid under the OPPS. In addition, we expect that physicians treating beneficiaries are well-equipped to decide whether the ASC setting would be appropriate based on the clinical needs of the patient, among other factors. Therefore, we do not share the commenter's concern.
After consideration of the public comments we received, we are finalizing our proposal to define a surgical procedure under the ASC payment system as any procedure described within the range of Category I CPT codes that the CPT Editorial Panel of the American Medical Association (AMA) defines as “surgery” (CPT codes 10000 through 69999) (72 FR 42478), as well as procedures that are described by Level II HCPCS codes or by Category I CPT codes or by Category III CPT codes that directly crosswalk or are clinically similar to procedures in the CPT surgical range that we have determined are not expected to pose a significant risk to beneficiary safety when performed in an ASC, for which standard medical practice dictates that the beneficiary would not typically be expected to require an overnight stay following the procedure, and are separately paid under the OPPS.
Category I CPT, Category III CPT, and Level II HCPCS codes are used to report procedures, services, items, and supplies under the ASC payment system. Specifically, we recognize the following codes on ASC claims:
• Category I CPT codes, which describe surgical procedures and vaccine codes;
• Category III CPT codes, which describe new and emerging technologies, services, and procedures; and
• Level II HCPCS codes, which are used primarily to identify items, supplies, temporary procedures, and services not described by CPT codes.
We finalized a policy in the August 2, 2007 final rule (72 FR 42533 through 42535) to evaluate each year all new and revised Category I and Category III CPT codes and Level II HCPCS codes that describe surgical procedures, and to make preliminary determinations during the annual OPPS/ASC rulemaking process regarding whether or not they meet the criteria for payment in the ASC setting as covered surgical procedures and, if so, whether or not they are office-based procedures. In addition, we identify new and revised codes as ASC covered ancillary services based upon the final payment policies of the revised ASC payment system. In prior rulemakings, we refer to this process as recognizing new codes. However, this process has always involved the recognition of new and revised codes. We consider revised codes to be new when they have substantial revision to their code
In the CY 2019 OPPS/ASC proposed rule (83 FR 37152 through 37155), we separated our discussion based on when the codes were released and whether we were soliciting public comments in the proposed rule (and responding to those comments in this CY 2019 OPPS/ASC final rule with comment period) or whether we would be soliciting public comments in this CY 2019 OPPS/ASC final rule with comment period (and responding to those comments in the CY 2020 OPPS/ASC final rule with comment period).
We note that we sought public comments in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59405 through 59406) on the new and revised Level II HCPCS codes effective October 1, 2017 or January 1, 2018. These new and revised codes, with an effective date of October 1, 2017 or January 1, 2018, were flagged with comment indicator “NI” in Addenda AA and BB to the CY 2018 OPPS/ASC final rule with comment period to indicate that we were assigning them an interim payment status and payment rate, if applicable, which were subject to public comment following publication of the CY 2018 OPPS/ASC final rule with comment period. In the CY 2019 OPPS/ASC proposed rule, we stated that we will respond to public comments and finalize the treatment of these codes under the ASC payment system in this CY 2019 OPPS/ASC final rule with comment period.
As we did in Table 33 of the CY 2019 OPPS/ASC proposed rule (83 FR 37153), in Table 52 below, we summarize our process for updating codes through our ASC quarterly update CRs, seeking public comments, and finalizing the treatment of these new codes under the OPPS.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37153), in the April 2018 ASC quarterly update (Transmittal 3996, Change Request 10530, dated March 09, 2018), we added nine new Level II HCPCS codes to the ASC CPL and list of covered ancillary services. Table 34 of the proposed rule (83 FR 37153) listed the new Level II HCPCS codes that were implemented April 1, 2018, along with their proposed payment indicators for CY 2019. We invited public comments on these proposed payment indicators and the proposed payment rates for the new Level II HCPCS codes that were recognized as ASC covered surgical procedures or ancillary services in April 2018 through the quarterly update CRs, as listed in Table 34 of the proposed rule. We proposed to finalize their payment indicators and their payment rates in this CY 2019 OPPS/ASC final rule with comment period.
Further, we also note that HCPCS code C9749 has been assigned a payment indicator of “J8” and is therefore designated as a device-intensive procedure. As discussed in section XII.C.1.b. of this final rule with comment period, under the ASC payment system, device-intensive procedures are paid a higher payment than if the procedure was not designated as device-intensive.
After consideration of the public comments we received, we are adopting as final the CY 2019 proposed payment indicators for new level II HCPCS codes for covered surgical procedures and ancillary services effective on April 1, 2018, as indicated in Table 53. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2019. The replacement codes are listed in Table 53. The final payment rates for these codes can be found in Addendum BB to this final rule with comment period (which is available via the internet on the CMS website). In addition, the payment indicator definitions can be found in Addendum DD1 to this final rule with comment period (which is available via the internet on the CMS website).
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37154), in the July 2018 ASC quarterly update (Transmittal 4076, Change Request 10788, dated June 26, 2018), we added eight new Level II HCPCS codes to the list of covered ancillary services. In Table 35 of the proposed rule (83 FR 37154), we listed the new HCPCS codes that are effective July 1, 2018.
In addition, through the July 2018 quarterly update CR, we also implemented one new Category III CPT code as an ASC covered ancillary service effective July 1, 2018. This code was listed in Table 36 of the proposed rule, along with its proposed payment indicator. The proposed payment rate for this new Category III CPT code was included in Addendum AA to the proposed rule (which is available via the internet on the CMS website).
We invited public comments on these proposed payment indicators and the proposed payment rates for the new Category III CPT code and Level II HCPCS codes that were expected to be newly recognized as ASC covered surgical procedures or covered ancillary services in July 2018 through the quarterly update CRs, as listed in Tables 35 and 36 of the proposed rule. We proposed to finalize their payment indicators and their payment rates in the CY 2019 OPPS/ASC final rule with comment period.
We did not receive any public comments regarding these proposed ASC payment indicators and payment rates. Therefore, we are adopting as final the CY 2019 proposed payment indicators for these codes, as indicated in Tables 54 and 55. We note that several of the HCPCS C-codes have been replaced with HCPCS J-codes, effective January 1, 2019. Their replacement codes are listed in Table 55. The final payment rates for these codes for CY 2019 can be found in Addendum BB to this final rule with comment period (which is available via the internet on the CMS website). In addition, the payment indicator definitions can be found in Addendum DD1 to this final rule with comment period (which is available via the internet on the CMS website).
As has been our practice in the past, we incorporate those new and revised Level II HCPCS codes that are effective January 1 in the final rule with comment period, thereby updating the OPPS and the ASC payment system for the following calendar year. These codes are released to the public via the CMS HCPCS website, and also through the January OPPS quarterly update CRs. In the past, we also released new and revised Level II HCPCS codes that are effective October 1 through the October OPPS quarterly update CRs and incorporated these new codes in the final rule with comment period.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37154), for CY 2019, consistent with our established policy, we proposed that the Level II HCPCS codes that will be effective October 1, 2018 and January 1, 2019 would be flagged with comment indicator “NI” in Addendum B to the CY 2019 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim OPPS payment status for CY 2019. We did not receive any public comments on our proposal. As we stated that we would do in the proposed rule, we are inviting public comments in this CY 2019 OPPS/ASC final rule with comment period on the interim status indicator and APC assignments, and
We generally include the new and revised CPT codes that are effective January 1 of a calendar year in the proposed rule to request public comments on the ASC payment indicator assignments. In addition, these codes are assigned to comment indicator “NP” to indicate that the code is new for the next calendar year or the code is an existing code with substantial revision to its code descriptor in the next calendar year as compared to current calendar year and that comments will be accepted on the proposed payment indicator. There are no existing codes with substantial revision to the code descriptor effective January 1, 2019. However, we inadvertently omitted most of the new Category I and III CPT codes effective January 1, 2019 from ASC Addendum AA, BB, and EE to the CY 2019 OPPS/ASC proposed rule. We did not omit eight new CPT codes that we proposed to designate as temporarily office based effective January 1, 2019. We refer readers to Table 39 of the proposed rule.
Therefore, in addition to the Level II HCPCS codes that will be effective October 1, 2018, and January 1, 2019, we are flagging the new Category I and III CPT codes that will be effective January 1, 2019, that were omitted from the CY 2019 OPPS/ASC proposed rule, with comment indicator “NI” in ASC Addendum AA, BB, and EE to this CY 2019 OPPS/ASC final rule with comment period to indicate that we have assigned the codes an interim ASC payment indicator for CY 2019. We are inviting public comments on the interim ASC payment indicator assignments and payment rates for these codes that we intend to finalize in the CY 2020 OPPS/ASC final rule with comment period. We note that we are finalizing the ASC payment indicators for the eight codes that we proposed to designate as temporarily office based effective January 1, 2019 because we previously sought comments on their ASC payment indicator assignment. Table 58 of this final rule with comment period contains the list of these eight codes and their final ASC payment indicators.
Further, we remind readers that the CPT code descriptors that appear in ASC Addendum AA, BB, and EE are short descriptors and do not fully describe the complete procedure, service, or item described by the CPT code. Therefore, we have included the 5-digit CPT codes and their long descriptors for the new CPT codes in Addendum O (which is available via the internet on the CMS website) so that the public can adequately comment on our interim ASC payment indicator assignments.
In summary, we are soliciting public comments on the interim ASC payment indicators for the new Category I and III CPT codes that will be effective January 1, 2019, which we have assigned to ASC comment indicator “NI” in this CY 2019 OPPS/ASC final rule with comment period. We intend to finalize the interim ASC payment indicators in the CY 2020 OPPS/ASC final rule with comment period. The CPT codes are listed in ASC Addendum AA, BB, and EE with short descriptors only but we list them again in Addendum O with long descriptors.
In the August 2, 2007 ASC final rule, we finalized our policy to designate as “office-based” those procedures that are added to the ASC CPL in CY 2008 or later years that we determine are performed predominantly (more than 50 percent of the time) in physicians' offices based on consideration of the most recent available volume and utilization data for each individual procedure code and/or, if appropriate, the clinical characteristics, utilization, and volume of related codes. In that rule, we also finalized our policy to exempt all procedures on the CY 2007 ASC list from application of the office-based classification (72 FR 42512). The procedures that were added to the ASC CPL beginning in CY 2008 that we determined were office-based were identified in Addendum AA to that rule by payment indicator “P2” (Office-based surgical procedure added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS relative payment weight); “P3” (Office-based surgical procedures added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; payment based on MPFS nonfacility PE RVUs); or “R2” (Office-based surgical procedure added to ASC list in CY 2008 or later without MPFS nonfacility PE RVUs; payment based on OPPS relative payment weight), depending on whether we estimated the procedure would be paid according to the standard ASC payment methodology based on its OPPS relative payment weight or at the MPFS nonfacility PE RVU-based amount.
Consistent with our final policy to annually review and update the ASC CPL eligible for payment in ASCs, each year we identify covered surgical procedures as either temporarily office-based (these are new procedure codes with little or no utilization data that we have determined are clinically similar to other procedures that are permanently office-based), permanently office-based, or nonoffice-based, after taking into account updated volume and utilization data.
In developing the CY 2019 OPPS/ASC proposed rule and this final rule with comment period, we followed our policy to annually review and update the covered surgical procedures for which ASC payment is made and to identify new procedures that may be appropriate for ASC payment, including their potential designation as office-based. We reviewed CY 2017 volume and utilization data and the clinical characteristics for all covered surgical procedures that are assigned payment indicator “G2” (Nonoffice-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight) in CY 2017, as well as for those procedures assigned one of the temporary office-based payment indicators, specifically “P2”, “P3”, or “R2” in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59406 through 59408).
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37155 through 37157), our review of the CY 2017 volume and utilization data resulted in our identification of 4 covered surgical procedures that we believe meet the criteria for designation as office-based. The data indicate that these procedures are performed more than 50 percent of the time in physicians' offices, and we believe that the services are of a level of complexity consistent with other procedures performed routinely in physicians' offices. The CPT codes that we proposed to permanently designate as office-based for CY 2019 were listed in Table 37 of the proposed rule (83 FR 37156).
Some commenters recommended that CMS delay the proposal to designate CPT codes 36902 and 36905 as office-based procedures. Other commenters recommended that CMS permanently exempt such CPT codes from office-based designations, similar to the existing exemptions from the policy governing payment for covered ancillary radiology services for certain nuclear medicine procedures (CPT codes 78000 through 78999) and those covered ancillary radiology services that use a contrast agent as codified under 42 CFR 416.171(d). Commenters believed that such an exemption is warranted because certain vascular access add-on procedures (that is, CPT codes 36907, 36908, and 36909) are often billed with CPT codes 36902 and 36905, which are separately payable under the PFS but are packaged under the OPPS and the ASC payment system. Therefore, the commenters stated, the ASC payment rate for an office-based vascular access procedure with a vascular access add-on procedure may be lower than would otherwise be paid under the PFS.
In response to the comment recommending that we establish a permanent office-based designation exemption for vascular access procedures, we do not believe such an exemption is necessary at this time. However, we would like to study this issue further in future policy development. As stated in the CY 2011 OPPS/ASC final rule with comment period (75 FR 72050), we established an exemption to the policy governing payment for covered ancillary radiology services for certain nuclear medicine procedures (CPT codes 78000 through 78999) because the PFS nonfacility PE RVU amounts did not reflect the diagnostic radiopharmaceutical costs, which are paid separately under the MPFS. In addition, as stated in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74429 through 74430), because the same issue exists for radiology procedures that use contrast agents (the contrast agent is packaged under the ASC payment system but is separately paid under the PFS), we exempted radiology services that use contrast agents from our policy governing payment for covered ancillary radiology services so that payment for these procedures will be based on the OPPS relative payment weight and will, therefore, include the cost for the contrast agent. We did not propose an equivalent exception for vascular access codes for CY 2019, and do not believe permanent exemption would be appropriate at this time. However, we intend to examine whether CPT codes 36902 and 36905 may be subject to circumstances similar to those that led to the exemptions for certain nuclear medicine procedures and radiology procedures that use contrast agents in future rulemaking.
The most recent full year for which we have claims, volume, and utilization data is CY 2017. We believe these data are generally an appropriate source to inform our decisions regarding the predominant site of service for procedures. As stated in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60605 through 60606), when we believe that the available data in our review process are inadequate to make a determination that a procedure should be office-based, we either make no change to the procedure's payment status or make the change temporary and reevaluate our decision using data that become available for our next evaluation. We believe that it is appropriate to continue using our judgment regarding whether the volume of cases and the proportion of cases that are provided in the physicians' office setting indicate that the procedures is an office-based procedure in addition to our medical advisors' clinical judgments, utilization data for procedures that are closely related to the procedures being evaluated, and any other information that is available to us.
While the currently available data for CPT codes 36902 and 36905 support our office-based designation proposal, we agree with the commenters that CY 2017 claims data may not be sufficiently adequate to capture the current volume and utilization for the ASC and physician office sites of service for CPT codes 36902 and 36905. Because we share commenters' concerns that the available data may not be adequate to make a determination that these procedures should be office-based, we believe it is premature to assign office-based payment for these procedures at this time. Therefore, we are not designating CPT codes 36902 and 36905 as office-based procedures for CY 2019. We will reevaluate these procedures in our CY 2020 rulemaking period. For CY 2019, these procedures will retain their current payment indicator, “G2.”
We did not receive any public comments related to our proposal to designate CPT codes 31573 (Laryngoscopy, flexible; with therapeutic injection(s) (
We also reviewed CY 2017 volume and utilization data and other information for 10 procedures designated as temporarily office-based in Tables 84 and 85 in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59408). Of these 10 procedures, there were very few claims in our data and no claims data for 4 procedures described by CPT codes 38222, 65785, 67229, and 0402T. Consequently, we proposed to maintain the temporary office-based designations for these 4 CPT codes for CY 2019. We included codes for which we proposed to maintain the temporary office-based designations for CY 2019 in Table 38 of the proposed rule which listed the covered surgical procedures we designated as temporary office-based in the CY 2018 OPPS/ASC final rule with comment period. The procedures for which the proposed office-based designations for CY 2019 are temporary also were indicated by asterisks in Addendum AA to the proposed rule (which is available via the internet on the CMS website).
The volume and utilization data for 3 procedures that have a temporary office-based designation for CY 2018, described by CPT codes 36473 and 36901 and HCPCS code G0429, are sufficient to indicate that these procedures are performed predominantly in physicians' offices and, therefore, should be assigned an office-based payment indicator in CY 2019. Consequently, we proposed to designate these procedures as permanently office based and assign payment indicator “P2”, “P3”, “R2” to these covered surgical procedure codes in CY 2019. These procedures are displayed above in Table 56. The volume and utilization data for the remaining three procedures that have a temporary office-based designation for CY 2018, described by CPT codes 10030, 64461, and 64463, are sufficient
Because its predecessor code was office-based, we have designated CPT code 36901 as office-based since it was established in CY 2017. As stated in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59407), we reviewed the clinical characteristics, utilization, and volume of related codes and determined that the procedure described by CPT code 36901 would be predominantly performed in physician offices. However, because we did not have utilization data for this procedure, we made the office-based designation temporary rather than permanent for CY 2018. Our review of the CY 2017 volume and utilization data indicates that CPT code 36901 is performed 54 percent of the time in physicians' offices. Our policy is to designate as office-based those procedures that are performed more than 50 percent of the time in physicians' offices. We do not believe that there is a justification for exempting this procedure from office-based status for CY 2019. Therefore, we are designating CPT code 36901 as permanently office-based for CY 2019 as proposed.
While we assigned CPT codes 10030, 64461, and 64463 payment indicators of “G2” (Non-office-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight) in Table 38 of the CY 2019 OPPS/ASC proposed rule, we inadvertently indicated in the preamble of the proposed rule that those were office-based procedures (83 FR 37156). We are not designating CPT codes 10030, 64461, and 64463 as office-based procedures for CY 2019 and are finalizing our payment indicator of “G2” for such procedures. We note that we did not receive any public comments on these codes.
After consideration of the public comment we received, we are finalizing our proposal, with modification, to designate the procedures shown in Table 57 below as temporarily office-based for CY 2019.
For CY 2019, we proposed to designate 8 new CY 2019 CPT codes for ASC covered surgical procedures as temporarily office-based, as displayed in Table 39 of the proposed rule. After reviewing the clinical characteristics, utilization, and volume of related procedure codes, we determined that the procedures described by the new CPT codes would be predominantly performed in physicians' offices. However, because we had no utilization data for the procedures specifically described by these new CPT codes, we proposed to make the office-based designation temporary rather than permanent, and stated that we will reevaluate the procedures when data become available. The procedures for which the proposed office-based designation for CY 2019 is temporary were indicated by asterisks in Addendum AA to the proposed rule (which is available via the internet on the CMS website).
We did not receive any public comments on our proposal. Therefore, we are finalizing our proposal, without modification, to designate the procedures shown in Table 58 below as temporarily office-based. The procedures for which the office-based designation for CY 2019 is temporary are indicated by an asterisk in Addendum AA to this final rule with comment period (which is available via the internet on the CMS website).
As discussed in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79739 through 79740), we implemented a payment methodology for calculating the ASC payment rates for covered surgical procedures that are designated as device-intensive.
According to this ASC payment methodology, we apply the device offset percentage based on the standard OPPS APC ratesetting methodology (which does not include the C-APC methodology) to the OPPS national unadjusted payment to determine the device cost included in the OPPS payment rate for a device-intensive ASC covered surgical procedure, which we then set as equal to the device portion of the national unadjusted ASC payment rate for the procedure. We calculate the service portion of the ASC payment for device-intensive procedures by applying the uniform ASC conversion factor to the service (non-device) portion of the OPPS relative payment weight for the device-intensive procedure. Finally, we sum the ASC device portion and ASC service portion to establish the full payment for the device-intensive procedure under the ASC payment system.
We also finalized in the CY 2017 OPPS/ASC final rule that device-intensive procedures will be subject to all of the payment policies applicable to procedures designated as an ASC device-intensive procedure under our established methodology, including our policies on no cost/full credit and partial credit devices and discontinued procedures.
In addition, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79739 through 79740), we adopted a policy for new HCPCS codes describing procedures involving the implantation of medical devices that do not yet have associated claims data, to designate these procedures as device-intensive with a default device offset set at 41 percent until claims data are available to establish the HCPCS code-level device offset for the procedures. This default device offset amount of 41 percent is not calculated from claims data; instead, it
In the CY 2019 OPPS/ASC proposed rule (83 FR 37158), we noted that, as discussed in section IV.B.2. of the proposed rule, for CY 2019 we proposed to modify our criteria for device-intensive procedures to better capture costs for procedures with significant device costs. We proposed to allow procedures that involve surgically inserted or implanted, high-cost, single-use devices to qualify as device-intensive procedures. In addition, we proposed to modify our criteria to lower the device offset percentage threshold from 40 percent to 30 percent. Specifically, for CY 2019 and subsequent years, we proposed that device-intensive procedures would be subject to the following criteria:
• All procedures must involve implantable devices assigned a CPT or HCPCS code;
• The required devices (including single-use devices) must be surgically inserted or implanted; and
• The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost. Corresponding to this change in the cost criterion we proposed that the default device offset for new codes that describe procedures that involve the implantation of medical devices would be 31 percent beginning in CY 2019. For new codes describing procedures that are payable when furnished in an ASC involving the implantation of a medical device, we proposed that the default device offset would be applied in the same manner as proposed in section IV.B.2. of the proposed rule. We proposed to amend § 416.171(b)(2) of the regulations to reflect these new device criteria.
In addition, as also proposed in section IV.B.2. of the proposed rule, to further align the device-intensive policy with the criteria used for device pass-through status, we proposed to specify, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that:
• Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA in accordance with 42 CFR 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review;
• Is an integral part of the service furnished;
• Is used for one patient only;
• Comes in contact with human tissue;
• Is surgically implanted or inserted (either permanently or temporarily); and
• Is not any of the following:
(a) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker).
Based on our proposed modifications to our device-intensive criteria, for CY 2019, we proposed to update the ASC CPL that are eligible for payment according to our proposed device-intensive procedure payment methodology, reflecting the proposed individual HCPCS code device-offset percentages based on CY 2017 OPPS claims and cost report data available for the proposed rule.
The ASC covered surgical procedures that we proposed to designate as device-intensive, and therefore subject to the device-intensive procedure payment methodology for CY 2019, were assigned payment indicator “J8” and were included in ASC Addendum AA to the proposed rule (which is available on the CMS website). The CPT code, the CPT code short descriptor, and the proposed CY 2019 ASC payment indicator, and an indication of whether the full credit/partial credit (FB/FC) device adjustment policy would apply because the procedure is designated as device intensive also are included in Addendum AA to the proposed rule. In addition, for CY 2019, we proposed to only apply our proposed device-intensive procedure payment methodology to device-intensive procedures under the ASC payment system when the device-intensive procedure is furnished with a surgically inserted or implanted device (including single use medical devices). Under this proposal, the payment rate under the ASC payment system for device-intensive procedures furnished without an implantable or inserted medical device would be calculated by applying the uniform ASC conversion factor to both the device portion and service (nondevice) portion of the OPPS relative payment weight for the device-intensive procedure and summing both portions (device and service) to establish the ASC payment rate.
• Confirm that the ASC device-intensive status as assigned by CMS is based on the offset calculated according to the ASC rate setting methodology;
• Disclose what offset data (meaning the calculation methodology used) appears in the second spreadsheet of Addendum P titled “2019 NPRM HCPCS Offsets”;
• Display the device offsets, in future rulemaking, based on the ASC methodology and not the OPPS methodology if the offset data displayed in the second spreadsheet of Addendum P is based on the OPPS methodology and device-intensive status is based on the ASC methodology; and
• Modify the second worksheet of Addendum P titled “2019 NPRM HCPCS Offsets” to only include the codes for procedures that employ implantable and insertable devices and exclude all of the irrelevant codes that do not employ implantable or insertable devices.
In response to commenter's questions and suggestions relating to Addendum P, we note that the device offset percentages reflected in both worksheets of Addendum P are based upon the OPPS C-APC methodology. We believe this is appropriate as Addendum P is created to display the device offsets, device offset percentages, and device-intensive codes under the OPPS. Specific to the commenter's suggestion that we modify the second worksheet of Addendum P titled “2019 NPRM HCPCS Offsets” to only include the codes for procedures that employ implantable and insertable devices and exclude all of the codes that do not employ implantable or insertable devices, we note that the second worksheet of Addendum P is intended to display the device offsets and device offset percentages for all codes for which we have such data for under the OPPS. The applicable device offset percentages for the ASC payment system are included on the CMS website at:
• 28297 (Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with first metatarsal and medial cuneiform joint arthrodesis, any method);
• 28730 (Arthrodesis, midtarsal or tarsometatarsal, multiple or transverse;);
• 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint);
• 36903 (Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiological supervision and interpretation and image documentation and report; with transcatheter placement of intravascular stent(s), peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis segment);
• 36904 (Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic
• 36906 (Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s); with transcatheter placement of intravascular stent(s), peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis circuit).
Other commenters requested that CMS assign device-intensive status to—
• HCPCS code C9747 (Ablation of prostate, transrectal, high intensity focused ultrasound (hifu), including imaging guidance);
• CPT code 43210 (Esophagogastroduodenoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performed), 0275T (Percutaneous laminotomy/laminectomy (interlaminar approach) for decompression of neural elements, (with or without ligamentous resection, discectomy, facetectomy and/or foraminotomy), any method, under indirect image guidance (
• CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed);
• CPT code 0409T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; pulse generator only);
• CPT code 0410T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; atrial electrode only);
• CPT code 0411T (Insertion or replacement of permanent cardiac contractility modulation system, including contractility evaluation when performed, and programming of sensing and therapeutic parameters; ventricular electrode only); and
• CPT code 0414T (Removal and replacement of permanent cardiac contractility modulation system pulse generator only).
CPT codes 0409T, 0410T, 0411T, and 0414T were inadvertently omitted from the listing of proposed device-intensive procedures in the CY 2019 OPPS/ASC proposed rule. We are including them as device-intensive procedures in this final rule with comment period. CPT code 36904 was proposed as a device-intensive procedure. However, using the most currently available data for this CY 2019 OPPS/ASC final rule with comment period, we determined that its device offset percentage is not above the 30-percent threshold, and therefore this procedure is not eligible to be assigned device-intensive status.
For new codes describing procedures that are payable when furnished in an ASC involving the implantation of a medical device, we proposed that the default device offset would be applied in the same manner as proposed in section IV.B.2. of the proposed rule.
In addition, as also discussed in section IV.B.2. of this final rule with comment period, to further align the device-intensive policy with the criteria used for device pass-through payment status, we are finalizing our proposal to specify, for CY 2019 and subsequent years, that for purposes of satisfying the device-intensive criteria, a device-intensive procedure must involve a device that:
• Has received FDA marketing authorization, has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA in accordance with 42 CFR 405.203 through 405.207 and 405.211 through 405.215, or meets another appropriate FDA exemption from premarket review;
• Is an integral part of the service furnished;
• Is used for one patient only;
• Comes in contact with human tissue;
• Is surgically implanted or inserted (either permanently or temporarily); and
• Is not any of the following:
(a) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for example, a suture, customized surgical kit, scalpel, or clip, other than a radiological site marker).
In conjunction with our modifications to the device-intensive criteria, we are finalizing our proposal, without modification, to amend § 416.171(b)(2) of the regulations to reflect three new device criteria.
After consideration of the public comments we received, we are finalizing our proposal to modify our criteria for device-intensive procedures to better capture costs for procedures with significant device costs. We are finalizing our proposal to allow procedures that involve surgically inserted or implanted, high-cost, single-use devices to qualify as device-intensive procedures. In addition, we are finalizing our proposal to modify our criteria to lower the device offset percentage threshold from 40 percent to 30 percent. Specifically, for CY 2019 and subsequent years, we are finalizing our proposal that device-intensive procedures would be subject to the following criteria:
• All procedures must involve implantable devices assigned a CPT or HCPCS code;
• The required devices (including single-use devices) must be surgically inserted or implanted; and
• The device offset amount must be significant, which is defined as exceeding 30 percent of the procedure's mean cost. Corresponding to this change in the cost criterion we proposed that the default device offset for new codes that describe procedures that involve the implantation of medical devices would be 31 percent beginning in CY 2019.
Further, after consideration of the public comments we received, we are designating the ASC covered surgical procedures displayed in Addendum AA as device-intensive and subject to the device-intensive procedure payment methodology for CY 2019.
Our ASC payment policy for costly devices implanted in ASCs at no cost/full credit or partial credit, as set forth in § 416.179 of our regulations, is consistent with the OPPS policy that was in effect until CY 2014. Specifically, the OPPS policy that was
In the CY 2019 OPPS/ASC proposed rule (83 FR 37159), we noted that, as discussed in section IV.B. of the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 through 75006), we finalized our proposal to modify our former policy of reducing OPPS payment for specified APCs when a hospital furnishes a specified device without cost or with a full or partial credit. Formerly, under the OPPS, our policy was to reduce OPPS payment by 100 percent of the device offset amount when a hospital furnished a specified device without cost or with a full credit and by 50 percent of the device offset amount when the hospital received partial credit in the amount of 50 percent or more (but less than 100 percent) of the cost for the specified device. For CY 2014, we finalized our proposal to reduce OPPS payment for applicable APCs by the full or partial credit a provider receives for a replaced device, capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing payments when a hospital furnishes a specified device without cost or with full or partial credit under the OPPS, in that final rule with comment period (78 FR 75076 through 75080), we finalized our proposal to maintain our ASC policy for reducing payments to ASCs for specified device-intensive procedures when the ASC furnishes a device without cost or with full or partial credit. Unlike the OPPS, there is currently no mechanism within the ASC claims processing system for ASCs to submit to CMS the actual credit received when furnishing a specified device at full or partial credit. Therefore, under the ASC payment system, we finalized our proposal for CY 2014 to continue to reduce ASC payments by 100 percent or 50 percent of the device offset amount when an ASC furnishes a device without cost or with full or partial credit, respectively.
All ASC covered device-intensive procedures are subject to the no cost/full credit and partial credit device adjustment policy. Specifically, when a device-intensive procedure is performed to implant a device that is furnished at no cost or with full credit from the manufacturer, the ASC would append the HCPCS “FB” modifier on the line in the claim with the procedure to implant the device. The contractor would reduce payment to the ASC by the device offset amount that we estimate represents the cost of the device when the necessary device is furnished without cost or with full credit to the ASC. We continue to believe that the reduction of ASC payment in these circumstances is necessary to pay appropriately for the covered surgical procedure furnished by the ASC.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37159 through 37160), for partial credit, we proposed to reduce the payment for a device-intensive procedure for which the ASC receives partial credit by one-half of the device offset amount that would be applied if a device was provided at no cost or with full credit, if the credit to the ASC is 50 percent or more (but less than 100 percent) of the cost of the new device. The ASC would append the HCPCS “FC” modifier to the HCPCS code for the device-intensive surgical procedure when the facility receives a partial credit of 50 percent or more (but less than 100 percent) of the cost of a device. To report that the ASC received a partial credit of 50 percent or more (but less than 100 percent) of the cost of a new device, ASCs would have the option of either: (1) Submitting the claim for the device replacement procedure to their Medicare contractor after the procedure's performance, but prior to manufacturer acknowledgment of credit for the device, and subsequently contacting the contractor regarding a claim adjustment, once the credit determination is made; or (2) holding the claim for the device implantation procedure until a determination is made by the manufacturer on the partial credit and submitting the claim with the “FC” modifier appended to the implantation procedure HCPCS code if the partial credit is 50 percent or more (but less than 100 percent) of the cost of the replacement device. Beneficiary coinsurance would be based on the reduced payment amount. As finalized in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66926), to ensure our policy covers any situation involving a device-intensive procedure where an ASC may receive a device at no cost or receive full credit or partial credit for the device, we apply our “FB”/“FC” modifier policy to all device-intensive procedures.
We did not receive any public comment on these proposals. Therefore, we are finalizing these proposals without modification. Specifically, we will apply the HCPCS “FB”/“FC” modifier policy to all device-intensive procedures in CY 2019. For CY 2019, we will reduce the payment for the procedures in the ASC device adjustment file by the full device offset amount if a device is furnished without cost or with full credit. ASCs must append the HCPCS modifier “FB” to the HCPCS code for a surgical procedure listed in the ASC device adjustment file previously mentioned when the device is furnished without cost or with full credit. In addition, for CY 2019, we will reduce the payment for the procedures listed in the ASC device adjustment file by one-half of the device offset amount if a device is provided with partial credit, if the credit to the ASC is 50 percent or more (but less than 100 percent) of the device cost. The ASC must append the HCPCS “FC” modifier to the HCPCS code for a surgical procedure listed in the ASC device adjustment file when facility receives a partial credit of 50 percent or more (but less than 100 percent) of the cost of a device.
The CPT code, the CPT code short descriptor, the final CY 2019 ASC payment indicator, and an indication of whether the full credit/partial credit (FB/FC) device adjustment policy will apply are included in the ASC policy file labeled “CY 2019 Final ASC Device Offset Percentages and Procedures to which the No Cost/Full Credit and Partial Credit Device Adjustment Policy Applies”, which is available via the internet on the CMS website at:
As discussed in section XII.A.3. of the proposed rule (83 FR 37159), we proposed to revise our definition of surgery for CY 2019 to include certain “surgery-like” procedures that are assigned codes outside the CPT surgical range. For CY 2019, we proposed to include procedures that are described by Category I CPT codes that are not in the surgical range but directly crosswalk or are clinically similar to procedures in
We conducted a review of HCPCS codes that currently are paid under the OPPS, but not included on the ASC CPL, and that meet our proposed definition of surgery to determine if changes in technology and/or medical practice affected the clinical appropriateness of these procedures for the ASC setting. Based on this review, we proposed to update the list of ASC covered surgical procedures by adding 12 cardiac catheterization procedures to the list for CY 2019, as shown in Table 40 of the proposed rule (83 FR 37160). After reviewing the clinical characteristics of these procedures and consulting with stakeholders and our clinical advisors, we determined that these 12 procedures are separately paid under the OPPS, would not be expected to pose a significant risk to beneficiary safety when performed in an ASC, and would not be expected to require active medical monitoring and care of the beneficiary at midnight following the procedure. Our regulation at 42 CFR 416.166(c) lists general exclusions from the list of ASC covered surgical procedures based primarily on factors relating to safety, including procedures that generally result in extensive blood loss, require major or prolonged invasion of body cavities, or directly involve major blood vessels. We have assessed each of the proposed added procedures against the regulatory safety criteria and believe that these procedures meet each of the criteria. Although the proposed cardiac catheterization procedures may involve blood vessels that could be considered major, based on our review of the clinical characteristics of the procedures and their similarity to other procedures that are currently included on the ASC CPL, we believe these procedures may be appropriately performed in an ASC. Therefore, we proposed to include these 12 procedures on the list of ASC covered surgical procedures for CY 2019.
As stated in the August 2, 2007 ASC final rule (72 FR 42481), we believe the involvement of major blood vessels is best considered in the context of the clinical characteristics of individual procedures, and we do not believe that it is logically or clinically consistent to exclude certain cardiac procedures from the list of ASC covered surgical procedures on the basis of the involvement of major blood vessels, yet continue to provide ASC payment for similar procedures involving major blood vessels that have a history of safe performance in ASCs, such as CPT code 36473 (Mechanicochemical destruction of insufficient vein of arm or leg, accessed through the skin using imaging guidance) and CPT code 37223 (Insertion of stents into groin artery, endovascular, accessed through the skin or open procedure). However, in the CY 2019 proposed rule, we stated that we were interested in hearing any specific safety concerns from stakeholders regarding these 12 cardiac catheterization procedures and requested comments on whether these procedures may be safely performed in an ASC in light of the regulatory criteria governing which procedures may be added to the ASC covered procedures list.
Some commenters were concerned that the proposal would expose beneficiaries to significant risks. The commenters noted that certain cardiac catheterization procedures may reveal blockages in the coronary arteries that require an immediate intervention involving hospital-level care. One commenter requested that CMS ensure that the same facility standards that apply to hospital-based cardiac catheterization laboratories also apply to ASCs performing these services. The commenter further stated that CMS should not add any cardiac catheterization procedures to the list of ASC covered services until it has ensured that the conditions of coverage and accreditation requirements that would be applied to ASCs furnishing such services are at least as stringent as the standards applied to hospital cardiac catheterization labs, with additional attention to the issues created by engaging in procedures involving the major vessels and the heart without the immediate accessibility of the facilities of an acute care hospital. In addition, the commenters suggested that the proposal may lead to “cherry-picking” with a sicker, more complex, and higher cost patient population being treated in the hospital outpatient setting.
As stated in the proposed rule, although the proposed cardiac catheterization procedures may involve blood vessels that could be considered major, based on our review of the clinical characteristics of the procedures and their similarity to other procedures that are currently included on the ASC CPL, we believe these procedures may be appropriately performed in an ASC. While we acknowledge that it may be more appropriate for certain beneficiaries to receive these procedures in a hospital-level setting, which typically have a greater range of items and services available when compared
While we agree with commenters that a relatively healthier and less complex Medicare patient population would, in general, be a more ideal patient population to receive cardiac catheterization procedures in an ASC setting, we disagree that we should prohibit such procedures on that basis. We believe that relatively healthy and less complex patients would benefit from the shorter length of stay and reduced cost-sharing that would be expected in an ASC setting.
• CPT code 93566 (Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective right ventricular or right atrial angiography (list separately in addition to code for primary procedure));
• CPT code 93567 Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for supravalvular aortography (list separately in addition to code for primary procedure);
• CPT code 93568 (Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for pulmonary angiography (list separately in addition to code for primary procedure));
• CPT code 93571 Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; initial vessel (list separately in addition to code for primary procedure);
• CPT code 93572 Intravascular doppler velocity and/or pressure derived coronary flow reserve measurement (coronary vessel or graft) during coronary angiography including pharmacologically induced stress; each additional vessel (list separately in addition to code for primary procedure).
However, we do not believe that the remaining procedures displayed in Table 59 above meet the criteria to be added to the ASC CPL. If new evidence, clinical studies, or data become available that may support adding such procedures to the ASC CPL, we will
After consideration of the public comments we received, we are finalizing our proposal to add 12 cardiac catheterization procedures to the list of ASC covered surgical procedures. In addition, based on public comments, we are adding five procedures performed during cardiac catheterization procedures to the list of ASC covered surgical procedures (CPT codes 93566, 93567, 93568, 93571, and 93572). We believe these procedures would not be expected to pose a significant risk to beneficiary safety when performed in an ASC, would not be expected to require active medical monitoring and care of the beneficiary at midnight following the procedure and are separately paid under the OPPS. The 17 procedures that we are adding to the ASC CPL, including the long code descriptors and the final CY 2019 payment indicators, are displayed in Table 60 below.
Section 1833(i)(1) of the Act requires us to specify, in consultation with appropriate medical organizations, surgical procedures that are appropriately performed on an inpatient basis in a hospital but that can be safely performed in an ASC, a CAH, or an HOPD and to review and update the list of ASC procedures at least every 2 years. As noted in section XII.C.1. of the CY 2019 OPPS/ASC proposed rule, we evaluate the ASC covered procedures list (ASC CPL) each year to determine whether procedures should be added or removed from the list, and changes to the list are often made in response to specific concerns raised by stakeholders. Often, when a procedure is added to the ASC CPL, the provider community has limited experience in performing the procedure on the Medicare population, even if providers have greater experience with other patient populations. Because ASCs generally provide a subset of items and services that are offered by hospitals and because Medicare beneficiaries tend to be frailer and exhibit a higher number of comorbidities than other populations, we believe it may be appropriate to reevaluate recently added procedures.
Specifically, in the CY 2019 OPPS/ASC proposed rule (83 FR 37161 through 37162), we proposed to review all procedures that were added to the ASC CPL within the 3 calendar years prior to the year in which we are engaging in rulemaking to assess the safety, effectiveness, and beneficiary experience of these newly added procedures when performed in the ASC setting. Our review began with procedures added to the ASC CPL in CYs 2015, 2016, and 2017, to assess whether newly added procedures continue to meet our criteria, including whether they continue not to be expected to pose a significant safety risk to a Medicare beneficiary when performed in an ASC and continue not to be expected to require active medical monitoring and care of the beneficiary at midnight following the procedure. This review included taking into account recent clinical developments and available safety findings related to the recently added procedures.
We proposed to review all 38 procedures that were added to the ASC CPL for CYs 2015, 2016, and 2017. The 38 procedures that were added to the ASC CPL during this time were displayed in Table 41 of the proposed rule (82 FR 37161 through 37162), along with their HCPCS code long descriptors, the CY 2018 payment indicators, and the calendar year that each procedure was added to the ASC CPL. We also sought public comment about these recently added procedures from members of the public, including Medicare beneficiaries, ASCs, and physicians performing these procedures in the ASC setting. In addition, we sought public comment on whether these procedures continue to meet the criteria to remain on the ASC CPL. We stated our intent to evaluate each of these 38 procedures using all available data, including clinical characteristics, utilization reflected in ASC claims and pricing data, prevailing medical practice, and any public comments we received to determine whether they continue to meet the criteria to be a covered surgical procedure.
In addition, we solicited public comment regarding how our systematic review should be structured in the future, including the length of time procedures should be considered recently added, how frequently reviews should be performed in light of the time required to accumulate meaningful data and whether any future reviews should examine procedures added during a period of time greater or less than the previous 3 completed calendar years.
A number of commenters believed there may not be enough data on the 38 procedures to adequately assess if the procedures continue to meet the criteria to remain on the ASC CPL. The commenters recommended reviewing procedures on the CPL after the procedure has been added to the CPL for a minimum of 3 to 5 years.
Further, commenters requested additional information regarding the methodology and supporting materials that CMS would use to determine that a procedure should no longer remain on the ASC CPL. The commenters requested that stakeholders receive appropriate notice that CMS is
We note that CPT codes 0171T and 0172T were inadvertently included in Table 41 of the proposed rule. These codes were deleted effective January 1, 2017, and no longer remain on the ASC CPL. In our evaluation of the remaining 36 procedures, we did not find any clinical evidence, data, or other materials to justify removing these procedures from the ASC CPL. Therefore, for CY 2019, we are not removing any of the remaining 36 procedures displayed in Table 41 of the proposed rule from the ASC CPL.
In response to commenters' recommendation to wait a minimum of 3 to 5 years to assess whether a procedure meets our criteria to remain on the ASC CPL, we agree that a longer timeframe may provide better data to adequately determine whether or not the procedure meets our criteria. We will consider the commenters' recommendations in future rulemaking.
In response to the commenters' request for additional information regarding the methodology and supporting materials that we would use to determine that a procedure no longer meets the criteria to remain on the ASC CPL, we note that in the CY 2019 OPPS/ASC proposed rule (83 FR 37161), we stated our intent to evaluate each of the procedures using all available data, including clinical characteristics, utilization reflected in ASC claims and pricing data, prevailing medical practice, and any public comments we receive.
After consideration of the public comments we received, we are retaining the procedures displayed in Table 61 on the ASC CPL for CY 2019, with the exception of CPT codes 0171T and 0172T, which were deleted from the ASC CPL effective January 1, 2017 and, therefore, will not be included on the ASC CPL for CY 2019. However, based on the public comments we received about the re-review process generally, we do not believe it is necessary to finalize any proposal regarding ongoing reviews of recently added procedures at this time. Rather, we will take all commenters' suggestions into account as we consider future refinements to our review of the ASC CPL.
In the CY 2019 OPPS/ASC proposed rule (83 FE 37163), consistent with the established ASC payment system policy (72 FR 42497), we proposed to update the ASC list of covered ancillary services to reflect the payment status for the services under the CY 2019 OPPS. Maintaining consistency with the OPPS may result in proposed changes to ASC payment indicators for some covered ancillary services because of changes that we proposed under the OPPS for CY 2019. For example, if a covered ancillary service was separately paid under the ASC payment system in CY 2018, but is proposed for packaged status under the CY 2019 OPPS, to maintain consistency with the OPPS, we also proposed to package the ancillary service under the ASC payment system for CY 2019. We proposed to continue this reconciliation of packaged status for subsequent calendar years. Comment indicator “CH”, which is discussed in section XII.F. of the proposed rule, was used in Addendum BB to the proposed rule (which is available via the internet on the CMS website) to indicate covered ancillary services for which we proposed a change in the ASC payment indicator to reflect a proposed change in the OPPS treatment of the service for CY 2019.
All ASC covered ancillary services and their proposed payment indicators for CY 2019 were included in Addendum BB to the proposed rule (which is available via the internet on the CMS website).
We did not receive any public comments on these proposals. Therefore, we are finalizing, without modification, our proposal to update the ASC list of covered ancillary services to reflect the payment status for the services under the OPPS. All CY 2019 ASC covered ancillary services and their final payment indicators are included in Addendum BB to this final rule with comment period (which is available via the internet on the CMS website).
Our ASC payment policies for covered surgical procedures under the revised ASC payment system are fully described in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66828 through 66831). Under our established policy, we use the ASC standard ratesetting methodology of multiplying the ASC relative payment weight for the procedure by the ASC conversion factor for that same year to calculate the national unadjusted payment rates for procedures with payment indicators “G2” and “A2”. Payment indicator “A2” was developed to identify procedures that were included on the list of ASC covered surgical procedures in CY 2007 and, therefore, were subject to transitional payment prior to CY 2011. Although the 4-year transitional period has ended and payment indicator “A2” is no longer required to identify surgical procedures subject to transitional payment, we retained payment indicator “A2” because it is used to identify procedures that are exempted from the application of the office-based designation.
The rate calculation established for device-intensive procedures (payment indicator “J8”) is structured so that the packaged device payment amount is the same as under the OPPS, and only the service portion of the rate is subject to the ASC standard ratesetting methodology. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79732 through 79753), we updated the CY 2016 ASC payment rates for ASC covered surgical procedures with payment indicators of “A2”, “G2”, and “J8” using CY 2015 data, consistent with the CY 2017 OPPS update. We also updated payment rates for device-intensive procedures to incorporate the CY 2017 OPPS device offset percentages calculated under the standard APC ratesetting methodology, as discussed earlier in this section.
Payment rates for office-based procedures (payment indicators “P2”, “P3”, and “R2”) are the lower of the PFS nonfacility PE RVU-based amount (we refer readers to the CY 2018 PFS proposed and final rules) or the amount calculated using the ASC standard rate setting methodology for the procedure. In the CY 2018 OPPS/ASC final rule with comment period, we updated the payment amounts for office-based procedures (payment indicators “P2”, “P3”, and “R2”) using the most recent available MPFS and OPPS data. We compared the estimated CY 2018 rate for each of the office-based procedures, calculated according to the ASC standard rate setting methodology, to the PFS nonfacility PE RVU-based amount to determine which was lower and, therefore, would be the CY 2018 payment rate for the procedure under our final policy for the revised ASC payment system (§ 416.171(d)).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75081), we finalized our proposal to calculate the CY 2014 payment rates for ASC covered surgical procedures according to our established methodologies, with the exception of device removal procedures. For CY 2014, we finalized a policy to conditionally package payment for device removal codes under the OPPS. Under the OPPS, a conditionally packaged code (status indicators “Q1” and “Q2”) describes a HCPCS code where the payment is packaged when it is provided with a significant procedure but is separately paid when the service appears on the claim without a significant procedure. Because ASC services always include a covered surgical procedure, HCPCS codes that are conditionally packaged under the OPPS are always packaged (payment indicator “N1”) under the ASC payment system. Under the OPPS, device removal procedures are conditionally packaged and, therefore, would be packaged under the ASC payment system. There would be no Medicare payment made when a device removal procedure is performed in an ASC without another surgical procedure included on the claim; therefore, no Medicare payment would be made if a device was removed but not replaced. To address this concern, for the device removal procedures that are conditionally packaged in the OPPS (status indicator “Q2”), we assigned the current ASC payment indicators associated with these procedures and continued to provide separate payment since CY 2014.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37163 through 37164), we proposed to update ASC payment rates for CY 2019 and subsequent years using the established rate calculation methodologies under § 416.171 and using our definition of device-intensive procedures, as discussed in section XII.C.1.b. of the proposed rule. Because the proposed OPPS relative payment weights are based on geometric mean costs, the ASC system would use geometric means to determine proposed relative payment weights under the ASC standard methodology. We proposed to continue to use the amount calculated under the ASC standard ratesetting methodology for procedures assigned payment indicators “A2” and “G2”.
We proposed to calculate payment rates for office-based procedures (payment indicators “P2”, “P3”, and “R2”) and device-intensive procedures (payment indicator “J8”) according to our established policies and, for device-intensive procedures, using our modified definition of device-intensive procedures, as discussed in section XII.C.1.b. of the proposed rule. Therefore, we proposed to update the payment amount for the service portion of the device-intensive procedures using the ASC standard rate setting methodology and the payment amount for the device portion based on the proposed CY 2019 OPPS device offset percentages that have been calculated using the standard OPPS APC ratesetting methodology. Payment for office-based procedures would be at the lesser of the proposed CY 2019 MPFS nonfacility PE RVU-based amount or the proposed CY 2018 ASC payment amount calculated according to the ASC standard ratesetting methodology.
As we did for CYs 2014 through 2018, for CY 2019, we proposed to continue our policy for device removal procedures, such that device removal procedures that are conditionally packaged in the OPPS (status indicators “Q1” and “Q2”) would be assigned the current ASC payment indicators associated with these procedures and would continue to be paid separately under the ASC payment system.
• CPT code 22513 (Injection of bone cement into body of middle spine bone accessed through the skin using imaging guidance);
• CPT code 22514 (Injection of bone cement into body of lower spine bone accessed through the skin using imaging guidance);
• CPT code 43210 (Diagnostic examination of esophagus, stomach, and/or upper small bowel with repair of muscle at esophagus and stomach using an endoscope);
• CPT code 62264 (Injection or mechanical removal of spinal canal scar tissue, percutaneous procedure, accessed through the skin, multiple sessions in 1 day);
• CPT code 62321 (Injection of substance into spinal canal of upper or middle back using imaging guidance);
• CPT code 62323 (Injection of substance into spinal canal of lower back or sacrum using imaging guidance);
• CPT code 62380 (Decompression of spinal cord and/or nerve root in lower back using endoscope);
• CPT code 63650 (Implantation of spinal neurostimulator electrodes, accessed through the skin);
• CPT code 63685 (Insertion of spinal neurostimulator pulse generator or receiver); and
• HCPCS code C9749 (Repair of nasal vestibular lateral wall stenosis with implant(s)).
Some commenters noted that payment rates for some of these procedures are lower than their payment levels from several years ago. Other commenters suggested that the cost of the procedure significantly exceeds Medicare's payment and questioned the validity of some of the hospital cost data on which the ASC payment rates were based.
After consideration of the public comments we received, we are finalizing our proposed policies, without modification, to calculate the CY 2019 payment rates for ASC covered surgical procedures according to our established methodologies using the modified definition of device-intensive procedures. For those covered office-based surgical procedures where the payment rate is the lower of the final rates under the ASC standard ratesetting methodology and the PFS nonfacility PE RVU-based amount, the final payment indicators and rates set forth in this final rule with comment period are based on a comparison using the PFS PE RVUs and the conversion factor effective January 1, 2019. For a discussion of the PFS rates, we refer readers to the CY 2019 PFS final rule with comment period.
Our payment policies under the ASC payment system for covered ancillary services vary according to the particular type of service and its payment policy under the OPPS. Our overall policy provides separate ASC payment for certain ancillary items and services integrally related to the provision of ASC covered surgical procedures that are paid separately under the OPPS and provides packaged ASC payment for other ancillary items and services that are packaged or conditionally packaged (status indicators “N”, “Q1”, and “Q2”) under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 FR 68457 through 68458), we further clarified our policy regarding the payment indicator assignment of codes that are conditionally packaged in the OPPS (status indicators “Q1” and “Q2”). Under the OPPS, a conditionally packaged code describes a HCPCS code where the payment is packaged when it is provided with a significant procedure but is separately paid when the service appears on the claim without a significant procedure. Because ASC services always include a surgical procedure, HCPCS codes that are conditionally packaged under the OPPS are generally packaged (payment indictor “N1”) under the ASC payment system (except for device removal codes, as discussed in section IV. of the proposed rule). Thus, our policy
Our ASC payment policies generally provide separate payment for drugs and biologicals that are separately paid under the OPPS at the OPPS rates. We generally pay for separately payable radiology services at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the ASC standard ratesetting methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/ASC final rule with comment period (75 FR 72050), payment indicators for all nuclear medicine procedures (defined as CPT codes in the range of 78000 through 78999) that are designated as radiology services that are paid separately when provided integral to a surgical procedure on the ASC list are set to “Z2” so that payment is made based on the ASC standard ratesetting methodology rather than the MPFS nonfacility PE RVU amount (“Z3”), regardless of which is lower. 42 CFR 416.171(d)(1).
Similarly, we also finalized our policy to set the payment indicator to “Z2” for radiology services that use contrast agents so that payment for these procedures will be based on the OPPS relative payment weight using the ASC standard ratesetting methodology and, therefore, will include the cost for the contrast agent. 42 CFR 416.171(d)(2).
ASC payment policy for brachytherapy sources mirrors the payment policy under the OPPS. ASCs are paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS or, if OPPS rates are unavailable, at contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs have been paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS.
Our ASC policies also provide separate payment for: (1) Certain items and services that CMS designates as contractor-priced, including, but not limited to, the procurement of corneal tissue; and (2) certain implantable items that have pass-through payment status under the OPPS. These categories do not have prospectively established ASC payment rates according to ASC payment system policies (72 FR 42502 and 42508 through 42509; 42 CFR 416.164(b)). Under the ASC payment system, we have designated corneal tissue acquisition and hepatitis B vaccines as contractor-priced. Corneal tissue acquisition is contractor-priced based on the invoiced costs for acquiring the corneal tissue for transplantation. Hepatitis B vaccines are contractor-priced based on invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS are separately paid under the ASC payment system and are contractor-priced. Under the revised ASC payment system (72 FR 42502), payment for the surgical procedure associated with the pass-through device is made according to our standard methodology for the ASC payment system, based on only the service (non-device) portion of the procedure's OPPS relative payment weight if the APC weight for the procedure includes other packaged device costs. We also refer to this methodology as applying a “device offset” to the ASC payment for the associated surgical procedure. This ensures that duplicate payment is not provided for any portion of an implanted device with OPPS pass-through payment status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 through 66934), we finalized that, beginning in CY 2015, certain diagnostic tests within the medicine range of CPT codes for which separate payment is allowed under the OPPS are covered ancillary services when they are integral to an ASC covered surgical procedure. We finalized that diagnostic tests within the medicine range of CPT codes include all Category I CPT codes in the medicine range established by CPT, from 90000 to 99999, and Category III CPT codes and Level II HCPCS codes that describe diagnostic tests that crosswalk or are clinically similar to procedures in the medicine range established by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also finalized our policy to pay for these tests at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the ASC standard ratesetting methodology (79 FR 66933 through 66934). We finalized that the diagnostic tests for which the payment is based on the ASC standard ratesetting methodology be assigned to payment indicator “Z2” and revised the definition of payment indicator “Z2” to include a reference to diagnostic services and those for which the payment is based on the PFS nonfacility PE RVU-based amount be assigned payment indicator “Z3,” and revised the definition of payment indicator “Z3” to include a reference to diagnostic services.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37164 through 37165), for CY 2019 and subsequent years, we proposed to update the ASC payment rates and to make changes to ASC payment indicators, as necessary, to maintain consistency between the OPPS and ASC payment system regarding the packaged or separately payable status of services and the proposed CY 2019 OPPS and ASC payment rates and subsequent year payment rates. We also proposed to continue to set the CY 2019 ASC payment rates and subsequent year payment rates for brachytherapy sources and separately payable drugs and biologicals equal to the OPPS payment rates for CY 2019 and subsequent year payment rates.
Covered ancillary services and their proposed payment indicators for CY 2019 were listed in Addendum BB to the proposed rule (which is available via the internet on the CMS website). For those covered ancillary services where the payment rate is the lower of the proposed rates under the ASC standard rate setting methodology and the PFS proposed rates, the proposed payment indicators and rates set forth in the proposed rule are based on a comparison using the proposed PFS rates effective January 1, 2019. For a discussion of the PFS rates, we refer readers to the CY 2019 PFS proposed rule that is available on the CMS website at:
In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the framework of existing packaging categories, such as drugs that function as supplies in a surgical procedure or diagnostic test or procedure, we requested stakeholder feedback on common clinical scenarios involving currently packaged items and services described by HCPCS codes that stakeholders believe should not be packaged under the OPPS. We also expressed interest in stakeholder feedback on common clinical scenarios involving separately payable HCPCS codes for which payment would be most appropriately packaged under the OPPS. Commenters expressed a variety of views on packaging under the OPPS. In the CY 2018 OPPS/ASC final rule with comment period, we summarized the comments received in response to our request (82 FR 59255). The comments ranged from requests to unpackage most items and services that are either conditionally or unconditionally packaged under the OPPS, including drugs and devices, to specific requests for separate payment for a specific drug or device. We stated in the CY 2018 OPPS/ASC final rule with comment period that CMS would continue to explore and evaluate packaging policies under the OPPS and consider these policies in future rulemaking.
In addition to stakeholder feedback regarding OPPS packaging policies, the President's Commission on Combating Drug Addiction and the Opioid Crisis (the Commission) recently recommended that CMS examine payment policies for certain drugs that function as a supply, specifically non-opioid pain management treatments. The Commission was established in 2017 to study ways to combat and treat drug abuse, addiction, and the opioid crisis. The Commission's report
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37067 through 37071), in response to stakeholder comments on the CY 2018 OPPS/ASC proposed rule and in light of the recommendations regarding payment policies for certain drugs, we recently evaluated the impact of our packaging policy for drugs that function as a supply when used in a surgical procedure on the utilization of these drugs in both the hospital outpatient department and the ASC setting. Currently, as noted above, drugs that function as a supply are packaged under the OPPS and the ASC payment system, regardless of the costs of the drugs. The costs associated with packaged drugs that function as a supply are included in the ratesetting methodology for the surgical procedures with which they are billed and the payment rate for the associated procedure reflects the costs of the packaged drugs and other packaged items and services to the extent they are billed with the procedure. In our evaluation, we used currently available data to analyze the utilization patterns associated with specific drugs that function as a supply over a 5-year time period (CYs 2013 through 2017) to determine whether this packaging policy has reduced the use of these drugs. If the packaging policy discouraged the use of drugs that function as a supply or impeded access to these products, we would expect to see a significant decline in utilization of these drugs over time, although we note that a decline in utilization could also reflect other factors, such as the availability of alternative products. We did not observe significant declines in the total number of units used in the hospital outpatient department for a majority of the drugs included in our analysis.
In fact, under the OPPS, we observed the opposite effect for several drugs that function as a supply, including Exparel (HCPCS code C9290). Exparel is a liposome injection of bupivacaine, an amide local anesthetic, indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. In 2011, Exparel was approved by the FDA for administration into the postsurgical site to provide postsurgical analgesia.
From CYs 2013 through 2017, there was an overall increase in the OPPS Medicare utilization of Exparel of approximately 229 percent (from 2.3 million units to 7.7 million units) during this 5-year time period. The total number of claims reporting Exparel
Thus, we have not found evidence to support the notion that the OPPS packaging policy has had an unintended consequence of discouraging the use of non-opioid treatment for postsurgical pain management in the hospital outpatient department. Therefore, based on this data analysis, we stated in the CY 2019 OPPS/ASC proposed rule that we did not believe that changes were necessary under the OPPS for the packaged drug policy for drugs that function as a surgical supply when used in a surgical procedure in this setting at this time.
In terms of Exparel in particular, we have received several requests to pay separately for the drug rather than packaging payment for it as a surgical supply. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66874 and 66875), in response to comments from stakeholders requesting separate payment for Exparel, we stated that we considered Exparel to be a drug that functions as a surgical supply because it is indicated for the alleviation of postoperative pain. We also stated that we consider all items related to the surgical outcome and provided during the hospital stay in which the surgery is performed, including postsurgical pain management drugs, to be part of the surgery for purposes of our drug and biological surgical supply packaging policy. In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59345), we reiterated our position with regard to payment for Exparel, stating that we believed that payment for this drug is appropriately packaged with the primary surgical procedure. In addition, we have reviewed recently available literature with respect to Exparel, including a briefing document
We also stated in the proposed rule that, although we found increases in utilization for Exparel when it is paid under the OPPS, we did notice different effects on Exparel utilization when examining the effects of our packaging policy under the ASC payment system. In particular, during the same 5-year period of CYs 2013 through 2017, the total number of units of Exparel used in the ASC setting decreased by 25 percent (from 98,160 total units to 73,595 total units) and the total number of claims reporting Exparel decreased by 16 percent (from 527 claims to 441 claims). In the ASC setting, after the pass-through payment period ended for Exparel at the end of CY 2014, the total number of units of Exparel used decreased by 70 percent (from 244,757 units to 73,595 units) between CYs 2015 and 2017. The total number of claims reporting Exparel also decreased during this time period by 62 percent (from 1,190 claims to 441 claims). However, there was an increase of 238 percent (from 98,160 total units to 331,348 total units) in the total number of units of Exparel used in the ASC setting during the time period of CYs 2013 and 2014 when the drug received pass-through payments, indicating that the payment rate of ASP+6 percent for Exparel may have an impact on its usage in the ASC setting. The total number of claims reporting Exparel also increased during this time period from 527 total claims to 1,540 total claims, an increase of 192 percent.
While several variables may contribute to this difference between utilization and claims reporting in the hospital outpatient department and the ASC setting, one potential explanation is that, in comparison to hospital outpatient departments, ASCs tend to provide specialized care and a more limited range of services. Also, ASCs are paid, in aggregate, approximately 55 percent of the OPPS rate. Therefore, fluctuations in payment rates for specific services may impact these providers more acutely than hospital outpatient departments, and therefore, ASCs may be less likely to choose to furnish non-opioid postsurgical pain management treatments, which are typically more expensive than opioids, as a result. Another possible contributing factor is that ASCs do not typically report packaged items and services and, accordingly, our analysis may be undercounting the number of Exparel units utilized in the ASC setting.
In light of the results of our evaluation of packaging policies under the OPPS and the ASC payment system, which showed decreased utilization for certain drugs that function as a supply in the ASC setting in comparison to the hospital outpatient department setting, as well as the Commission's recommendation to examine payment
We have stated previously (82 FR 59250) that our packaging policies are designed to support our strategic goal of using larger payment bundles in the OPPS to maximize hospitals' incentives to provide care in the most efficient manner. The packaging policies established under the OPPS also typically apply when services are provided in the ASC setting, and the policies have the same strategic goals in both settings. While the CY 2019 proposal is a departure from our current ASC packaging policy for drugs (specifically, non-opioid pain management drugs) that function as a supply when used in a surgical procedure, we stated in the proposed rule we believe that the proposed change will incentivize the use of non-opioid pain management drugs and is responsive to the Commission's recommendation to examine payment policies for non-opioid pain management drugs that function as a supply, with the overall goal of combating the current opioid addiction crisis. As previously noted, a discussion of the CY 2019 proposal for payment of non-opioid pain management drugs in the ASC setting was presented in further detail in the proposed rule, and we include a further discussion of the final policy for CY 2019 below. However, we also stated in the CY 2019 OPPS/ASC proposed rule that we were interested in peer-reviewed evidence that demonstrates that non-opioid alternatives, such as Exparel, in the outpatient setting actually do lead to a decrease in prescription opioid use and addiction and invited public comments containing evidence that demonstrate whether and how such non-opioid alternatives affect prescription opioid use during or after an outpatient visit or procedure.
As noted above, for CY 2019, we proposed to pay separately at average sales price (ASP)+6 percent for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in the ASC setting. As described in section V.A.1. of the proposed rule, section 1847A of the Act establishes the ASP methodology, which is used for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. The ASP methodology, as applied under the OPPS, uses several sources of data as a basis for payment, including the ASP, the wholesale acquisition cost (WAC), and the average wholesale price (AWP) (82 FR 59337). As noted in section V.B.2.b. of the proposed rule, since CY 2013, our policy has been to pay for separately payable drugs and biologicals at ASP+6 percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act (the statutory default) (82 FR 59350).
In the proposed rule (83 FR 37167), we did not propose a change to the packaging policy under the OPPS for CY 2019. However, we proposed to pay separately at ASP+6 percent for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in the ASC setting for CY 2019. Because the ASC payment rate also includes packaged payment for non-opioid pain management drugs, we intend to remove the packaged costs attributable to non-opioid pain management drugs—at this time, only Exparel qualifies—from the applicable OPPS rates prior to establishing the ASC rates in order to prevent potential overpayment of these procedures when separate payment is provided in the ASC setting.
Of the drugs that are currently packaged in the ASC setting, this policy would apply to Exparel. Exparel is the only non-opioid pain management drug that functions as a supply when used in a surgical procedure that is covered under Medicare Part B. While there are other non-opioid pain management drugs available that are also administered post-surgically, such as non-steroidal anti-inflammatory drugs (“NSAIDs”), Exparel is the currently the only drug used in the ASC setting that is both covered under Medicare Part B and policy packaged as a drug that functions as a supply in a surgical procedure. To the extent that other non-opioid drugs that function as surgical supplies come onto the U.S. market, we proposed that this policy would apply to them as well in CY 2019.
This proposal was also presented in section II.A.3.b. of the proposed rule for the OPPS. We proposed several conforming changes to the ASC regulation to implement this proposal. Specifically, at 42 CFR 416.164(a)(4), we proposed a change to exclude non-opioid pain management drugs that function as a supply when used in a surgical procedure from our policy to package drugs and biologicals for which separate payment is not allowed under the OPPS into the ASC payment for a covered surgical procedure. Similarly, we proposed to add 42 CFR 416.164(b)(6) to include non-opioid pain management drugs that function as a supply when used in a surgical procedure as a covered ancillary service. Finally, we proposed a conforming change to 42 CFR 416.171(b)(1) to exclude non-opioid pain management drugs that function as a supply when used in a surgical procedure from our policy to pay for ASC covered ancillary services an amount derived from the payment rate for the equivalent item or service set under the OPPS.
Other commenters, including MedPAC, did not support this proposal and stated that the policy was counter to the OPPS packaging policies created to encourage efficiencies and could set a precedent for unpackaging services. One commenter stated that Exparel is more costly, but not more effective than bupivacaine, a less costly non-opioid alternative. Other commenters expressed concerns that the proposal may have the unintended consequence of limiting access to opioid prescriptions for beneficiaries for whom an opioid prescription would be appropriate. The commenters noted that some non-opioid pain management treatments may pose other risks for patients and patient safety.
In addition, as noted in section XII.D.3. of the proposed rule, we sought comments on whether the proposed policy would decrease the dose, duration, and/or number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure (especially for beneficiaries at high-risk for opioid addiction) as well as whether there are other non-opioid pain management alternatives that would have similar effects and may warrant separate payment. For example, we stated we were interested in identifying whether single post-surgical analgesic injections, such as Exparel, or other non-opioid drugs or devices that are used during an outpatient visit or procedure are associated with decreased opioid prescriptions and/or reduced cases of associated opioid addiction following such an outpatient visit or procedure. We also requested comments that provide evidence (such as published peer-reviewed literature) we could use to determine whether these products help to deter or avoid prescription opioid use and addiction as well as evidence that the current packaged payment for such non-opioid alternatives presents a barrier to access to care and, therefore, warrants separate payment under either or both the OPPS and the ASC payment system. We stated that any evidence demonstrating the reduction or avoidance of prescription opioids would be the criteria we use to determine whether separate payment is warranted for CY 2019. We also stated that, should evidence change over time, we would consider whether a reexamination of any policy adopted in the final rule would be necessary.
Several commenters identified other non-opioid pain management drugs that they believe decrease the dose, duration, and/or number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure (especially for beneficiaries at high-risk for opioid addiction) and may warrant separate payment for CY 2019. Several commenters submitted supporting studies which claimed that a non-opioid intrathecal infusion drug indicated for the management of severe chronic pain reduced opioid use in patients with chronic pain.
Other commenters representing hospitals, hospital associations, and clinical specialty organizations requested separate payment for IV acetaminophen, IV ibuprofen, and epidural steroid injections. In addition, one commenter, the manufacturers of a non-opioid analgesic containing bupivacaine hcl, but not currently approved by FDA, requested clarification regarding whether the proposal would also apply to this drug once it receives FDA approval. Several commenters requested separate payment for a drug which treats post-operative pain after cataract surgery, currently has drug pass-through status, and therefore is not packaged under the OPPS or ASC. The commenters requested that CMS explicitly state this drug will also be paid for separately in the ASC setting after pass-through status ends for the drug in 2020. Lastly, one commenter requested that a diagnostic drug that is not a non-opioid receive separate payment.
As noted above, we stated in the proposed rule that we were interested in comments regarding other non-opioid treatments besides Exparel that might be affected by OPPS and ASC packaging policies, including alternative, non-opioid pain treatments, such as devices or therapy services that are not currently separable payable. We stated that we were specifically interested in comments regarding whether CMS should consider separate payment for items and services for which payment is currently packaged under the OPPS and the ASC payment system that are effective non-opioid alternatives as well as evidence that demonstrates such items and services lead to a decrease in prescription opioid use and/or
Currently, all devices are packaged under the OPPS and the ASC payment system unless they have pass-through payment status. However, we stated in the proposed rule that, in light of the Commission's recommendation to review and modify ratesetting policies that discourage the use of non-opioid treatments for pain, we were interested in comments from stakeholders regarding whether, similar to the goals of the proposed payment policy for non-opioid pain management drugs that function as a supply when used in a surgical procedure, a policy of providing separate payment (rather than packaged payment) for these products, indefinitely or for a specified period of time, would also incentivize the use of alternative non-opioid pain management treatments and improve access to non-opioid alternatives, particularly for innovative and low-volume items and services.
We also stated that we were interested in comments regarding whether we should provide separate payment for non-opioid pain management treatments or products using a mechanism such as an equitable payment adjustment under our authority at section 1833(t)(2)(E) of the Act, which states that the Secretary shall establish, in a budget neutral manner, other adjustments as determined to be necessary to ensure equitable payments. For example, we stated in the proposed rule that we were considering whether an equitable payment adjustment in the form of an add-on payment for APCs that use a non-opioid pain management drug, device, or service would be appropriate. We indicated that, to the extent that commenters provided evidence to support this approach, we would consider adopting a final policy in this final rule with comment period, which could include regulatory changes that would allow for an exception to the packaging of certain nonpass-through devices that represent non-opioid alternatives for acute or chronic pain that have evidence to demonstrate that their use leads to a decrease in opioid prescriptions and/or addictions during or after an outpatient visit or procedure to effectuate such change.
Other commenters requested separate payments for various non-opioid pain management treatments such as: Continuous nerve blocks (including a disposable elastomeric pump that delivers non-opioid local anesthetic to a surgical site or nerve); cooled thermal radiofrequency ablation for non-surgical, chronic nerve pain; and physical therapy services. These commenters also stated that while “certainly not a solution to the opioid epidemic, unpackaging appropriate non-opioid therapies, like Exparel, is a low-cost tactic that could change long-standing practice patterns without major negative consequences.” One commenter suggested that Medicare consider separate payment for Polar ice devices for post-operative pain relief after knee procedures. The commenter also noted that therapeutic massage, topically applied THC oil, acupuncture, and dry needling procedures are very effective therapies for relief of both post-operative pain and long-term and chronic pain.
Commenters suggested various mechanisms through which separate payment or a higher paying APC assignment for the primary service could be made. Commenters offered reports, studies and anecdotal evidence to support why the items or services about which the commenters believed offered alternatives to or reduction of the need for opioid prescriptions.
We also invited comments on whether a reorganization of the APC structure for procedures involving non-opioid products or establishing more granular APC groupings for specific procedure and device combinations to ensure that the payment rate for such services is aligned with the resources associated with procedures involving specific devices would better achieve our goal of incentivizing increased use of non-opioid alternatives, with the aim of reducing opioid use and subsequent addiction. For example, we stated we would consider finalizing a policy to establish new APCs for procedures involving non-opioid pain management packaged items or services if such APCs would better recognize the resources involved in furnishing such items and services and decrease or eliminate the need for prescription opioids. In addition, given the general desire to encourage provider efficiency through creating larger bundles of care and packaging items and services that are integral, ancillary, supportive, dependent, or adjunctive to a primary service, we also invited comments on how such alternative payment structures would continue to balance the goals of incentivizing provider efficiencies with encouraging the use of non-opioid alternatives to pain management.
Furthermore, because patients may receive opioid prescriptions following receipt of a non-opioid drug or implantation of a device, we stated that we were interested in identifying any cost implications for the patient and the Medicare program caused by this potential change in policy. We also stated that the implications of incentivizing use of non-opioid pain management drugs available for postsurgical acute pain relief during or after an outpatient visit or procedure are of interest. The goal is to encourage appropriate use of such non-opioid alternatives. As previously stated, this comment solicitation is also discussed in section XII.D.3. of this final rule with comment period.
In addition, we invited the public to submit ideas on regulatory, subregulatory, policy, practice, and procedural changes to help prevent opioid use disorders and improve access to treatment under the Medicare program. We stated that we were interested in identifying barriers that may inhibit access to non-opioid alternatives for pain treatment and management or access to opioid use disorder treatment, including those barriers related to payment methodologies or coverage. In addition, consistent with our “Patients Over Paperwork” Initiative, we stated that we were interested in suggestions to improve existing requirements in order to more effectively address the opioid epidemic.
After consideration of the public comments that we received, we are finalizing the policy to unpackage and pay separately at ASP+6 percent for the cost of non-opioid pain management drugs that function as surgical supplies when they are furnished in the ASC setting for CY 2019 as proposed. We also are finalizing our conforming changes to the ASC regulation as proposed. Specifically, we are finalizing our proposed conforming changes to 42 CFR 416.164(a)(4) to exclude non-opioid pain management drugs that function as a supply when used in a surgical procedure from our policy to package payment for drugs and biologicals for which separate payment is not allowed under the OPPS into the ASC payment for the covered surgical procedure. We also are adding a new paragraph (6) to 42 CFR 416.164(b) to include non-opioid pain management drugs that function as a supply when used in a surgical procedure as covered ancillary services that are integral to a covered surgical procedure. Finally, we are
We will continue to analyze this issue on access to non-opioid alternatives in the OPPS and ASC settings as we implement section 6082 of the Substance Use—Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271) enacted on October 24, 2018. This policy is also discussed in section II.A.3.b. of this final rule with comment period.
New Technology Intraocular Lenses (NTIOLs) are intraocular lenses that replace a patient's natural lens that has been removed in cataract surgery and that also meet the requirements listed in 42 CFR 416.195.
1. NTIOL Application CycleOur process for reviewing applications to establish new classes of NTIOLs is as follows:
• Applicants submit their NTIOL requests for review to CMS by the annual deadline. For a request to be considered complete, we require submission of the information that is found in the guidance document entitled “Application Process and Information Requirements for Requests for a New Class of New Technology Intraocular Lenses (NTIOLs) or Inclusion of an IOL in an Existing NTIOL Class” posted on the CMS website at:
• We announce annually, in the proposed rule updating the ASC and OPPS payment rates for the following calendar year, a list of all requests to establish new NTIOL classes accepted for review during the calendar year in which the proposal is published. In accordance with section 141(b)(3) of Public Law 103-432 and our regulations at 42 CFR 416.185(b), the deadline for receipt of public comments is 30 days following publication of the list of requests in the proposed rule.
• In the final rule updating the ASC and OPPS payment rates for the following calendar year, we—
++ Provide a list of determinations made as a result of our review of all new NTIOL class requests and public comments;
++ When a new NTIOL class is created, identify the predominant characteristic of NTIOLs in that class that sets them apart from other IOLs (including those previously approved as members of other expired or active NTIOL classes) and that is associated with an improved clinical outcome.
++ Set the date of implementation of a payment adjustment in the case of approval of an IOL as a member of a new NTIOL class prospectively as of 30 days after publication of the ASC payment update final rule, consistent with the statutory requirement.
++ Announce the deadline for submitting requests for review of an application for a new NTIOL class for the following calendar year.
We did not receive any requests for review to establish a new NTIOL class for CY 2019 by March 1, 2018, the due date published in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59416).
The current payment adjustment for a 5-year period from the implementation date of a new NTIOL class is $50 per lens. Since implementation of the process for adjustment of payment amounts for NTIOLs in 1999, we have not revised the payment adjustment amount, and we are not proposing to revise the payment adjustment amount for CY 2019.
In accordance with § 416.185(a) of our regulations, CMS announces that in order to be considered for payment effective beginning in CY 2020, requests for review of applications for a new class of new technology IOLs must be received at CMS by 5:00 p.m. EST, on March 1, 2019. Send requests to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews must include the information requested on the CMS website at:
In addition to the payment indicators that we introduced in the August 2, 2007 final rule, we created final comment indicators for the ASC payment system in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66855). We created Addendum DD1 to define ASC payment indicators that we use in Addenda AA and BB to provide payment information regarding covered surgical procedures and covered ancillary services, respectively, under the revised ASC payment system. The ASC payment indicators in Addendum DD1 are intended to capture policy-relevant characteristics of HCPCS codes that may receive packaged or separate payment in ASCs, such as whether they were on the ASC CPL prior to CY 2008; payment designation, such as device-intensive or office-based, and the corresponding ASC payment methodology; and their classification as separately payable ancillary services, including radiology services, brachytherapy sources, OPPS pass-through devices, corneal tissue acquisition services, drugs or biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators. The ASC comment indicators used in Addenda AA and BB to the proposed rules and final rules with comment period serve to identify, for the revised ASC payment system, the status of a specific HCPCS code and its payment indicator with respect to the timeframe when comments will be accepted. The comment indicator “NP” is used in the OPPS/ASC proposed rule to indicate new codes for the next calendar year for which the interim payment indicator assigned is subject to comment. The comment indicator “NP” also is assigned to existing codes with substantial revisions to their descriptors, such that we consider them to be describing new services, as discussed in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60622). In the CY 2017 OPPS/ASC final rule with comment period, we responded to public comments and finalized the ASC treatment of all codes that were labeled with comment indicator “NP” in Addenda AA and BB to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70497).
The “CH” comment indicator is used in Addenda AA and BB to the proposed rule (which are available via the internet on the CMS website) to indicate that the payment indicator assignment has changed for an active HCPCS code in the current year and the next calendar year, for example if an active HCPCS code is newly recognized as payable in ASCs; or an active HCPCS code is discontinued at the end of the current calendar year. The “CH” comment
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79748 through 79749), for CY 2017 and subsequent years, we finalized our policy to continue using the current comment indicators of “NP” and “CH”.
In the CY 2019 OPPS/ASC proposed rule, for CY 2019, there were proposed new and revised Category I and III CPT codes as well as new and revised Level II HCPCS codes. Therefore, proposed Category I and III CPT codes that are new and revised for CY 2018 and any new and existing Level II HCPCS codes with substantial revisions to the code descriptors for CY 2019 compared to the CY 2018 descriptors that were included in ASC Addenda AA and BB to the proposed rule are labeled with proposed comment indicator “NP” to indicate that these CPT and Level II HCPCS codes are open for comment as part of the proposed rule. Proposed comment indicator “NP” means a new code for the next calendar year or an existing code with substantial revision to its code descriptor in the next calendar year, as compared to current calendar year; and denotes that comments will be accepted on the proposed ASC payment indicator for the new code.
In the proposed rule, we stated that we would respond to public comments on ASC payment and comment indicators and finalize their ASC assignment in this CY 2019 OPPS/ASC final rule with comment period. We refer readers to Addenda DD1 and DD2 to the proposed rule (which are available via the internet on the CMS website) for the complete list of ASC payment and comment indicators proposed for the CY 2019 update.
We did not receive any public comments on the ASC payment and comment indicators. Therefore, we are finalizing their use as proposed without modification. Addenda DD1 and DD2 to this final rule with comment period (which are available via the internet on the CMS website) contain the complete list of ASC payment and comment indicators for the CY 2019 update.
In the August 2, 2007 final rule (72 FR 42493), we established our policy to base ASC relative payment weights and payment rates under the revised ASC payment system on APC groups and the OPPS relative payment weights. Consistent with that policy and the requirement at section 1833(i)(2)(D)(ii) of the Act that the revised payment system be implemented so that it would be budget neutral, the initial ASC conversion factor (CY 2008) was calculated so that estimated total Medicare payments under the revised ASC payment system in the first year would be budget neutral to estimated total Medicare payments under the prior (CY 2007) ASC payment system (the ASC conversion factor is multiplied by the relative payment weights calculated for many ASC services in order to establish payment rates). That is, application of the ASC conversion factor was designed to result in aggregate Medicare expenditures under the revised ASC payment system in CY 2008 being equal to aggregate Medicare expenditures that would have occurred in CY 2008 in the absence of the revised system, taking into consideration the cap on ASC payments in CY 2007, as required under section 1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the system budget neutral in subsequent calendar years (72 FR 42532 through 42533; 42 CFR 416.171(e)).
We note that we consider the term “expenditures” in the context of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of the Act to mean expenditures from the Medicare Part B Trust Fund. We do not consider expenditures to include beneficiary coinsurance and copayments. This distinction was important for the CY 2008 ASC budget neutrality model that considered payments across the OPPS, ASC, and MPFS payment systems. However, because coinsurance is almost always 20 percent for ASC services, this interpretation of expenditures has minimal impact for subsequent budget neutrality adjustments calculated within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857 through 66858), we set out a step-by-step illustration of the final budget neutrality adjustment calculation based on the methodology finalized in the August 2, 2007 final rule (72 FR 42521 through 42531) and as applied to updated data available for the CY 2008 OPPS/ASC final rule with comment period. The application of that methodology to the data available for the CY 2008 OPPS/ASC final rule with comment period resulted in a budget neutrality adjustment of 0.65.
For CY 2008, we adopted the OPPS relative payment weights as the ASC relative payment weights for most services and, consistent with the final policy, we calculated the CY 2008 ASC payment rates by multiplying the ASC relative payment weights by the final CY 2008 ASC conversion factor of $41.401. For covered office-based surgical procedures, covered ancillary radiology services (excluding covered ancillary radiology services involving certain nuclear medicine procedures or involving the use of contrast agents, as discussed in section XII.D.2. of this final rule with comment period), and certain diagnostic tests within the medicine range that are covered ancillary services, the established policy is to set the payment rate at the lower of the MPFS unadjusted nonfacility PE RVU-based amount or the amount calculated using the ASC standard ratesetting methodology. Further, as discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66841 through 66843), we also adopted alternative ratesetting methodologies for specific types of services (for example, device-intensive procedures).
As discussed in the August 2, 2007 final rule (72 FR 42517 through 42518) and as codified at § 416.172(c) of the regulations, the revised ASC payment system accounts for geographic wage variation when calculating individual ASC payments by applying the pre-floor and pre-reclassified IPPS hospital wage indexes to the labor-related share, which is 50 percent of the ASC payment amount based on a GAO report of ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted for geographic wage variation in labor costs when calculating individual ASC payments by applying the pre-floor and pre-reclassified hospital wage index values that CMS calculates for payment under the IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB in June 2003.
The reclassification provision in section 1886(d)(10) of the Act is specific to hospitals. We believe that using the most recently available pre-floor and pre-reclassified IPPS hospital wage indexes results in the most appropriate adjustment to the labor portion of ASC costs. We continue to believe that the unadjusted hospital wage indexes, which are updated yearly and are used by many other Medicare payment systems, appropriately account for geographic variation in labor costs for ASCs. Therefore, the wage index for an ASC is the pre-floor and pre-reclassified hospital wage index under the IPPS of the CBSA that maps to the CBSA where the ASC is located.
On February 28, 2013, OMB issued OMB Bulletin No. 13-01, which provides the delineations of all Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, and New England City and Town Areas in the United States and Puerto Rico based on the standards published on June 28, 2010 in the
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. On July 15, 2015, OMB issued OMB Bulletin No. 15-01, which provides updates to and supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013. The attachment to OMB Bulletin No. 15-01 provides detailed information on the update to statistical areas since February 28, 2013. The updates provided in OMB Bulletin No. 15-01 are 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. The complete list of statistical areas incorporating these changes is provided in the attachment to OMB Bulletin No. 15-01. According to OMB, “[t]his bulletin establishes revised delineations for the Nation's Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas. The bulletin also provides delineations of Metropolitan Divisions as well as delineations of New England City and Town Areas.” (A copy of this bulletin may be obtained at:
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79750) for a discussion of these changes and our implementation of these revisions.
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 at:
Other than the previously described wage index, for CY 2019, the final CY 2019 ASC wage indexes fully reflect the OMB labor market area delineations (including the revisions to the OMB labor market delineations discussed above, as set forth in OMB Bulletin Nos. 15-01 and 17-01).
We note that, in certain instances, there might be urban or rural areas for which there is no IPPS hospital that has wage index data that could be used to set the wage index for that area. For these areas, our policy has been to use the average of the wage indexes for CBSAs (or metropolitan divisions as applicable) that are contiguous to the area that has no wage index (where “contiguous” is defined as sharing a border). For example, for CY 2014, we applied a proxy wage index based on this methodology to ASCs located in CBSA 25980 (Hinesville-Fort Stewart, GA) and CBSA 08 (Rural Delaware).
When all of the areas contiguous to the urban CBSA of interest are rural and there is no IPPS hospital that has wage index data that could be used to set the wage index for that area, we determine the ASC wage index by calculating the average of all wage indexes for urban areas in the State (75 FR 72058 through 72059). (In other situations, where there are no IPPS hospitals located in a relevant labor market area, we continue our current policy of calculating an urban or rural area's wage index by calculating the average of the wage indexes for CBSAs (or metropolitan
We update the ASC relative payment weights each year using the national OPPS relative payment weights (and PFS nonfacility PE RVU-based amounts, as applicable) for that same calendar year and uniformly scale the ASC relative payment weights for each update year to make them budget neutral (72 FR 42533). In the CY 2019 OPPS/ASC proposed rule (83 FR 37171), consistent with our established policy, we proposed to scale the CY 2019 relative payment weights for ASCs according to the following method. Holding ASC utilization, the ASC conversion factor, and the mix of services constant from CY 2017, we proposed to compare the total payment using the CY 2018 ASC relative payment weights with the total payment using the CY 2019 ASC relative payment weights to take into account the changes in the OPPS relative payment weights between CY 2018 and CY 2019. We proposed to use the ratio of CY 2018 to CY 2019 total payments (the weight scalar) to scale the ASC relative payment weights for CY 2019. The proposed CY 2019 ASC weight scalar was 0.8854 and scaling would apply to the ASC relative payment weights of the covered surgical procedures, covered ancillary radiology services, and certain diagnostic tests within the medicine range of CPT codes, which are covered ancillary services for which the ASC payment rates are based on OPPS relative payment weights.
Scaling would not apply in the case of ASC payment for separately payable covered ancillary services that have a predetermined national payment amount (that is, their national ASC payment amounts are not based on OPPS relative payment weights), such as drugs and biologicals that are separately paid or services that are contractor-priced or paid at reasonable cost in ASCs. Any service with a predetermined national payment amount would be included in the ASC budget neutrality comparison, but scaling of the ASC relative payment weights would not apply to those services. The ASC payment weights for those services without predetermined national payment amounts (that is, those services with national payment amounts that would be based on OPPS relative payment weights) would be scaled to eliminate any difference in the total payment between the current year and the update year.
For any given year's ratesetting, we typically use the most recent full calendar year of claims data to model budget neutrality adjustments. At the time of the proposed rule, we had available 98 percent of CY 2017 ASC claims data.
To create an analytic file to support calculation of the weight scalar and budget neutrality adjustment for the wage index (discussed below), we summarized available CY 2017 ASC claims by ASC and by HCPCS code. We used the National Provider Identifier for the purpose of identifying unique ASCs within the CY 2017 claims data. We used the supplier zip code reported on the claim to associate State, county, and CBSA with each ASC. This file, available to the public as a supporting data file for the proposed rule, is posted on the CMS website at:
Under the OPPS, we typically apply a budget neutrality adjustment for provider level changes, most notably a change in the wage index values for the upcoming year, to the conversion factor. Consistent with our final ASC payment policy, for the CY 2017 ASC payment system and subsequent years, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79751 through 79753), we finalized our policy to calculate and apply a budget neutrality adjustment to the ASC conversion factor for supplier level changes in wage index values for the upcoming year, just as the OPPS wage index budget neutrality adjustment is calculated and applied to the OPPS conversion factor. For CY 2019, we calculated the proposed adjustment for the ASC payment system by using the most recent CY 2017 claims data available and estimating the difference in total payment that would be created by introducing the proposed CY 2019 ASC wage indexes. Specifically, holding CY 2017 ASC utilization, service-mix, and the proposed CY 2019 national payment rates after application of the weight scalar constant, we calculated the total adjusted payment using the CY 2018 ASC wage indexes (which would fully reflect the new OMB delineations) and the total adjusted payment using the proposed CY 2019 ASC wage indexes. We used the 50-percent labor-related share for both total adjusted payment calculations. We then compared the total adjusted payment calculated with the CY 2018 ASC wage indexes to the total adjusted payment calculated with the proposed CY 2019 ASC wage indexes and applied the resulting ratio of 1.0003 (the proposed CY 2019 ASC wage index budget neutrality adjustment) to the CY 2018 ASC conversion factor to calculate the proposed CY 2019 ASC conversion factor.
Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary has not updated amounts established under the revised ASC payment system in a calendar year, the payment amounts shall be increased by the percentage increase in the Consumer Price Index for all urban consumers (CPI-U), U.S. city average, as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved. The statute does not mandate the adoption of any particular update mechanism, but it requires the payment amounts to be increased by the CPI-U in the absence of any update. Because the Secretary updates the ASC payment amounts annually, we adopted a policy, which we codified at 42 CFR 416.171(a)(2)(ii)), to update the ASC conversion factor using the CPI-U for CY 2010 and subsequent calendar years.
In the CY 2018 OPPS/ASC rulemaking (82 FR 33668 through 33670; 59422 through 59424), we solicited and discussed comments regarding our current policy, codified at 42 CFR 416.171(a)(2)(ii), to update the ASC conversion factor using the CPI-U for CY 2010 and subsequent calendar years. In the CY 2018 OPPS/ASC final rule with comment period, we noted that in 2008 facilities paid under the ASC payment system received approximately 65 percent of the payment that hospitals paid under the OPPS received for an average service. The differential between ASC facility payment and OPPS provider payment has continued to increase since 2008, and by 2017, facilities paid under the ASC payment system received approximately 56 percent of the payment that hospitals paid under the OPPS received for an average service. At the same time, indicators of ASC payment adequacy, such as capacity and supply of providers and providers' access to capital, suggest that Medicare beneficiaries have adequate access to ASC services.
The Administration recognizes the value that ASCs may bring to the Medicare Program that results in the delivery of efficient, high-quality care to beneficiaries at a lower cost. The Administration is promoting greater
As articulated in the FY 2019 President's Budget, the Administration supports payment reforms that base payment on patient characteristics rather than the site of care. To that end, we are exploring ways to align payments with the costs of care and to incentivize use of the most efficient and clinically appropriate sites of care including hospital outpatient departments, ASCs, and physician offices, to the extent feasible, in future rulemaking. In the near term, however, there is concern by some stakeholders that the differential between payment updates for HOPDs and ASCs is resulting in inefficient and unnecessary shifts of care to the hospital outpatient setting and away from ASCs. We are concerned about the potential unintended consequences of using the CPI-U to update payments for ASCs, such as consolidation of ASCs or fewer physician-owned ASCs, which may contribute to higher prices; stagnation in number of ASC facilities and number of multispecialty ASC facilities; and payments being misaligned with the cost of treatment for complex patients.
We recognize prior public commenters' belief that ASCs may incur some of the same costs that hospitals incur, which may be better reflected in the hospital market basket update than the CPI-U. Nevertheless, we recognize also that ASCs are among the only health care facilities in Medicare that do not submit cost information and therefore their rates are not updated based on a related market basket. We do not believe that the ASC cost structure is identical to the hospital cost structure for a few reasons (these differences are illustrative and not exhaustive). First, the majority of ASCs are single specialty (61 percent based on 2016 data), whereas hospitals provide a wider variety of services, and also provide inpatient care and room and board. Second, the vast majority of ASCs are for-profit and located in urban areas, whereas hospital ownership is varied and hospitals are located in more geographically diverse locations. Third, compliance with certain laws, such as the Emergency Medical Treatment and Labor Act (EMTALA), apply to hospitals and do not apply to ASCs. These differences illustrate why there is reason to believe there is a measure of misalignment between the HOPD and ASC cost structure, and should be considered when assessing the suitability of using the hospital market basket as a better proxy for ASC costs than the CPI-U.
According to commenters on the CY 2018 OPPS/ASC proposed rule, only 8.5 percent of the CPI-U inputs are related to health care, and even those inputs are based on a consumer's experience purchasing health care items, rather than a provider's experience purchasing the items necessary to furnish a health care service, and do not measure whether a facility's costs increase, such as the cost of purchasing supplies and equipment or personnel labor costs.
We also acknowledge prior public commenters' concern that the disparity in payments between the OPPS and the ASC payment system may reduce the migration of services from the HOPD setting to the less costly ASC setting. For example, one study looked at the impact of the difference in facility fees paid to ASCs versus hospital outpatient departments on ASC growth using a fixed effects model.
If a migration of services from the hospital setting to ASCs occurred, it may potentially yield savings to the Medicare program and beneficiaries if the savings from the migration of services net of any increases in total volume of services does not exceed the cost of a higher rate update factor. ASC payment rates would still generally be significantly less than under the OPPS.
To the extent that it is clinically appropriate for a beneficiary to receive services in a lower cost setting, we believe it would be appropriate to continue to develop payment incentives and remove payment disincentives to facilitate this choice. While there are several factors that contribute to the divergence in payment between the two systems (which were identified in the comment solicitation on ASC payment reform in the CY 2018 OPPS/ASC rulemaking), such as different distribution of costs between hospitals and ASCs and different ratesetting methodologies between the OPPS and the ASC payment system, we believe that an alternative update factor could stabilize the differential between the OPPS payment and the ASC payment, to the extent that the CPI-U has been lower than the hospital market basket, and encourage the migration of services to lower cost settings as clinically appropriate (82 FR 59422 through 59424). In addition, we note that there are many services that can safely be performed in either the hospital setting or the ASC setting and a common rate update factor recognizes that the two provider types often compete for the same patients though patient acuity is likely higher in hospitals.
Therefore, we believe providing ASCs with the same rate update mechanism as hospitals could encourage the migration of services from the hospital setting to the ASC setting and increase the presence of ASCs in health care markets or geographic areas where previously there were none or few, thus promoting better beneficiary access to care. However, because physicians have a financial interest in ASCs, higher payments could also lead to greater utilization of services.
We proposed that the hospital market basket update applied to ASC payment rates would be derived using the same hospital inpatient market basket percentage increase that we proposed to use to derive the OPD fee increase factor as described in section II.B. of the CY 2019 OPPS/ASC proposed rule and would be adjusted for multifactor productivity. We proposed this payment update methodology for a 5-year period, during which we proposed to assess whether there is a migration of procedures from the hospital setting to the ASC setting as a result of the use of a hospital market basket update, as well as whether there are any unintended consequences (for example, an unnecessary increase in the overall volume of services or beneficiaries' out-of-pocket costs). We believed that 5 years would be an appropriate number of years to assess changes in the migration of services, as it should provide us enough time to confirm that trends in the data are consistent over time. In the proposed rule, we welcomed comment on whether implementing the hospital market basket update for a different number of years might be more appropriate.
In the proposed rule, we stated that we were interested in commenter feedback on additional ways we can evaluate the impacts of this payment change over the 5-year period. For example, we welcomed input on how we should delineate between changes in the volume of a particular service due to the higher update, versus changes in the volume of a service due to changes in enrollment, patient acuity, or utilization, and what would be an appropriate interval to measure such migration of services.
During this 5-year period, we intend to assess the feasibility of collaborating with stakeholders to collect ASC cost data in a minimally burdensome manner and could propose a plan to collect such information. As previously mentioned, in response to the comment solicitation in the CY 2018 OPPS/ASC proposed rule, stakeholders indicated a willingness to work with CMS to collect cost information in the least burdensome manner (82 FR 59422 through 59424).
Therefore, for CY 2019 through 2023, in response to stakeholder concerns described in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59420 through 59421) that ASCs may incur some of the same costs that hospitals incur and that are better reflected in the hospital market basket update than the CPI-U, and including the concern that the payment differentials between the different settings of care due to the use of the CPI-U may stagnate the migration of services from hospitals to the ASC setting, even though those services can be safely performed in ASCs, we proposed to update ASC payment rates using the hospital market basket and to revise our regulations under 42 CFR 416.171(a)(2), which address the annual update to the ASC conversion factor, to reflect this proposal. In addition, we requested comments and evidence to assess whether the hospital market basket is an appropriate proxy for ASC costs. Under this proposal, for CY 2019, we proposed to use the FY 2019 hospital market basket update as published in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20381). This proposed update to ASC payment rates was derived using the same hospital inpatient market basket percentage increase that we proposed to use to derive the OPD fee increase factor as described in section II.B. of the CY 2019 OPPS/ASC proposed rule. We also sought comments on an alternative proposal to maintain using the CPI-U for the annual ASC payment update while collecting evidence to justify a different payment update, or adopting the new proposed payment update based on the hospital market basket permanently. We requested comments on what type of evidence should be used to justify a different payment update and how CMS should go about collecting that information in the least burdensome way possible.
Section 1833(t)(3)(G)(v) of the Act applies an additional adjustment of 0.75 for CY 2019 to hospitals. We noted that such adjustment was authorized by the Affordable Care Act and that, while the Affordable Care Act authorized a productivity adjustment for ASCs (as it did for hospitals), it expressly did not authorize the “additional adjustment” that was mandated for hospitals. The additional adjustment is separate and distinct from the productivity adjustment that already applies to both hospitals and ASCs and there does not appear to be a correlation between the productivity adjustment and the additional adjustment. Further, application of the additional adjustment may be contrary to the goals we have articulated that led us to propose to apply the hospital market basket to the ASC payment system in the first place; that is, we believe that proposing to apply the hospital market basket to ASC rates may encourage the migration of services from the hospital setting to the ASC setting. However, if we had proposed to apply the additional adjustment, the ASC rate update would have been 1.25 percent, instead of the proposed 2.0 percent. The 1.25 percent was lower than applying the CPI-U rate update factor, which at the time of the CY 2019 OPPS/ASC proposed rule would have been 1.3 percent for CY 2019. This lower update would appear contrary to the goals set forth earlier in this section. However, we sought comment on whether applying this additional adjustment may nonetheless be appropriate.
While we expect this policy will increase spending, by both the government and beneficiaries, relative to the current update factor over the 5-year period, as previously stated, we also believe that the proposal could encourage the migration of services that are currently performed in the hospital outpatient setting to the ASC setting, which could result in savings to beneficiaries and the Medicare program. We believe that it is important to maximize patient choice to obtain services at a lower cost to the extent feasible. We believe also that without cost data from ASCs to examine their cost structure and adequacy of payment, we lack key data that may help inform the development of payment policies that are based on patients' clinical needs rather than the site of care.
In the proposed rule, we stated that, if, after review of all comments and all available evidence, we chose to finalize this proposal, we would continue to monitor site-of-service shifts for the duration of this policy to determine if services move safely to lower cost settings and to explore collecting additional data that may help inform further development of the ASC payment system. We proposed to continue to use the adjusted hospital market basket update through CY 2023 (for 5 years total). We proposed that we intend to reassess whether application of the hospital market basket update to ASC rates has provided more patient choice to obtain services at a lower cost beginning with the CY 2024 rulemaking period, or sooner if appropriate.
Section 3401(k) of the Affordable Care Act amended section 1833(i)(2)(D) of the Act by adding a new clause (v), which requires that any annual update under the ASC payment system for the year,
In the CY 2012 OPPS/ASC final rule with comment period (76 FR 74516), we finalized a policy that ASCs begin submitting data on quality measures for services beginning on October 1, 2012 for the CY 2014 payment determination under the ASC Quality Reporting (ASCQR) Program. In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 through 68500), we finalized a methodology to calculate reduced national unadjusted payment rates using the ASCQR Program reduced update conversion factor that would apply to ASCs that fail to meet their quality reporting requirements for the CY 2014 payment determination and subsequent years. The application of the 2.0 percentage point reduction to the annual update factor, which we proposed to be the hospital market basket update, may result in the update to the ASC payment system being less than zero for a year for ASCs that fail to meet the ASCQR Program requirements. We amended §§ 416.160(a)(1) and 416.171 to reflect these policies.
In prior years, in accordance with section 1833(i)(2)(C)(i) of the Act, before applying the MFP adjustment, the Secretary first determined the “percentage increase” in the CPI-U, which we interpreted cannot be a negative percentage. Thus, in the instance where the percentage change in the CPI-U for a year was negative, we would hold the CPI-U update factor for the ASC payment system to zero (75 FR 72062). Consistent with past practice, in the instance where the percentage change in the hospital market basket for a year is negative, we proposed to hold the hospital market basket update factor for the ASC payment system to zero. For the CY 2014 payment determination and subsequent years, under section 1833(i)(2)(D)(iv) of the Act, we would reduce the annual update by 2.0 percentage points for an ASC that fails to submit quality information under the policies established by the Secretary in accordance with section 1833(i)(7) of the Act. Section 1833(i)(2)(D)(v) of the Act, as added by section 3401(k) of the Affordable Care Act, requires that the Secretary reduce the annual update factor, after application of any quality reporting reduction, by the MFP adjustment, and states that application of the MFP adjustment to the annual update factor after application of any quality reporting reduction may result in the update being less than zero for a year. If the application of the MFP adjustment to the annual update factor after application of any quality reporting reduction would result in an MFP-adjusted update factor that is less than zero, the resulting update to the ASC payment rates would be negative and payments would decrease relative to the prior year. We refer readers to the CY 2011 OPPS/ASC final rule with comment period (75 FR 72062 through 72064) for examples of how the MFP adjustment is applied to the ASC payment system.
For the CY 2019 OPPS/ASC proposed rule, the hospital market basket update for CY 2019 was projected to be 2.8 percent, as published in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20381), based on IHS Global Inc.'s (IGI's) 2017 fourth quarter forecast with historical data through the third quarter of 2017. For this final rule with comment period, as published in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41395), based on IGI's 2018 second quarter forecast with historical data through the first quarter of 2018, the hospital market basket update for CY 2019 is 2.9 percent.
We finalized the methodology for calculating the MFP adjustment in the CY 2011 PFS final rule with comment period (75 FR 73394 through 73396) and revised it in the CY 2012 PFS final rule with comment period (76 FR 73300 through 73301) and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70500 through 70501). For the CY 2019 OPPS/ASC proposed rule, the proposed MFP adjustment for CY 2019 was projected to be 0.8 percentage point, as published in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20382) based on IGI's 2017 fourth quarter forecast. For this final rule with comment period, as published in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41395) based on IGI's 2018 second quarter forecast, the final MFP adjustment for CY 2019 is 0.8 percentage point.
We note that the update factor for CY 2019 under the current policy, which is to increase the payment amounts by the percentage increase in the CPI-U, U.S. city average, as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved, is currently projected to be 2.6 percent (based on IGI's third quarter 2018 forecast). The MFP adjustment that aligns with this payment update under current policy (ending with the midpoint of the year involved) is 0.8 percentage point, resulting in an update amount under the current policy of 1.8 percent (CPI-U of 2.6 percent less MFP adjustment of 0.8 percentage point).
For CY 2019, we proposed to utilize the hospital market basket update of 2.8 percent minus the MFP adjustment of 0.8 percentage point, resulting in an MFP-adjusted hospital market basket update factor of 2.0 percent for ASCs meeting the quality reporting requirements. Therefore, we proposed to apply a 2.0 percent MFP-adjusted hospital market basket update factor to the CY 2018 ASC conversion factor for ASCs meeting the quality reporting requirements to determine the CY 2019 ASC payment amounts. The ASCQR Program affected payment rates beginning in CY 2014 and, under this program, there is a 2.0 percentage point reduction to the update factor for ASCs that fail to meet the ASCQR Program requirements. We proposed to utilize the hospital market basket update of 2.8 percent reduced by 2.0 percentage points for ASCs that do not meet the quality reporting requirements and then subtract the 0.8 percentage point MFP adjustment. Therefore, we proposed to apply a 0.0 percent MFP-adjusted hospital market basket update factor to the CY 2018 ASC conversion factor for ASCs not meeting the quality reporting requirements. We also proposed that if more recent data were subsequently available (for example, a more recent estimate of the hospital market basket update and MFP), we would use such data, if appropriate, to determine the CY 2019 ASC update for the final rule with comment period.
For CY 2019, we proposed to adjust the CY 2018 ASC conversion factor ($45.575) by the proposed wage index budget neutrality factor of 1.0003 in addition to the MFP-adjusted hospital market basket update factor of 2.0 percent discussed above, which resulted in a proposed CY 2019 ASC conversion
Other commenters in support of the proposal suggested that ASCs may incur some of the same costs that hospitals incur. In addition, commenters suggested that utilizing the hospital market basket update as the update mechanism would promote site neutrality and help restore relativity of average ASC payment rates to average HOPD payment rates. Some commenters recommended that CMS establish the hospital market basket update permanently as the ASC rate update mechanism rather than on an interim basis over 5 years.
Commenters also supported the proposal to not apply the additional adjustment of 0.75 percentage points that applies to hospitals under section 1833(t)(3)(G)(v) of the Act.
However, some commenters, including MedPAC, disagreed with the proposal and recommended collecting cost data from ASCs to inform an ASC-specific market basket index for updating payment rates under the ASC payment system. MedPAC noted that ASCs are fully capable of submitting cost report data, similar to other providers, such as ESRD facilities, hospices, and home health agencies. In addition, MedPAC suggested that, to minimize burden on ASCs and CMS, CMS could require all ASCs to submit streamlined cost reports or require a random sample of ASCs to submit cost data.
In addition, we acknowledge commenters recommendations regarding the collection of ASC cost data to inform an ASC-specific market basket index for updating payment rates under the ASC payment system. We appreciate these comments and will take these comments into consideration in future policy development.
After consideration of the public comments we received, we are finalizing our proposal to apply the hospital market basket update to ASC payment system rates for an interim period of 5 years (CY 2019 through CY 2023), during which we will assess whether there is a migration of the performance of procedures from the hospital setting to the ASC setting as a result of the use of a hospital market basket update, as well as whether there are any unintended consequences, such as less than expected migration of the performance of procedures from the hospital setting to the ASC setting. In addition, we are finalizing our proposal to revise our regulations under 42 CFR 416.171(a)(2), which address the annual update to the ASC conversion factor.
Therefore, as proposed, to determine the CY 2019 ASC update for this final rule with comment period, we are incorporating a more recent estimate of the hospital market basket update and the MFP adjustment. For this CY 2019 OPPS/ASC final rule with comment period, as published in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41395), based on IGI's 2018 second quarter forecast with historical data through the first quarter of 2018, the MFP-adjusted hospital market basket update for CY 2019 is 2.1 percent (that is, the hospital market basket increase of 2.9 percent minus the MFP adjustment of 0.8 percentage point). Therefore, we are finalizing the application of a 2.1 percent MFP-adjusted hospital market basket update factor to the CY 2018 ASC conversion factor for ASCs meeting the quality reporting requirements to determine the CY 2019 ASC payment amounts. The ASCQR Program affected payment rates beginning in CY 2014 and, under this program, there is a 2.0 percentage point reduction to the update factor for ASCs that fail to meet the ASCQR Program requirements. We are finalizing to utilize the hospital market basket update of 2.9 percent reduced by 2.0 percentage points for ASCs that do not meet the quality reporting requirements and then subtract the 0.8 percentage point MFP adjustment. Therefore, we are applying a 0.1 percent MFP-adjusted hospital market basket update factor to the CY 2018 ASC conversion factor for ASCs not meeting the quality reporting requirements.
For CY 2019, we are adjusting the CY 2018 ASC conversion factor ($45.575) by the proposed wage index budget neutrality factor of 1.0004 in addition to the MFP-adjusted hospital market basket update factor of 2.1 percent
Addenda AA and BB to this final rule with comment period (which are available on the CMS website) display the final updated ASC payment rates for CY 2019 for covered surgical procedures and covered ancillary services, respectively. For those covered surgical procedures and covered ancillary services where the payment rate is the lower of the final rates under the ASC standard ratesetting methodology and the MPFS final rates, the final payment indicators and rates set forth in this final rule with comment period are based on a comparison using the final PFS rates that will be effective January 1, 2019. For a discussion of the PFS rates, we refer readers to the CY 2019 PFS final rule with comment period.
The final payment rates included in these addenda reflect the full ASC payment update and not the reduced payment update used to calculate payment rates for ASCs not meeting the quality reporting requirements under the ASCQR Program. These addenda contain several types of information related to the final CY 2019 payment rates. Specifically, in Addendum AA, a “Y” in the column titled “To be Subject to Multiple Procedure Discounting” indicates that the surgical procedure would be subject to the multiple procedure payment reduction policy. As discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66829 through 66830), most covered surgical procedures are subject to a 50-percent reduction in the ASC payment for the lower-paying procedure when more than one procedure is performed in a single operative session.
Display of the comment indicator “CH” in the column titled “Comment Indicator” indicates a change in payment policy for the item or service, including identifying discontinued HCPCS codes, designating items or services newly payable under the ASC payment system, and identifying items or services with changes in the ASC payment indicator for CY 2018. Display of the comment indicator “NI” in the column titled “Comment Indicator” indicates that the code is new (or substantially revised) and that comments will be accepted on the interim payment indicator for the new code. Display of the comment indicator “NP” in the column titled “Comment Indicator” indicates that the code is new (or substantially revised) and that comments will be accepted on the ASC payment indicator for the new code.
The values displayed in the column titled “Final CY 2019 Payment Weight” are the final relative payment weights for each of the listed services for CY 2019. The final relative payment weights for all covered surgical procedures and covered ancillary services where the ASC payment rates are based on OPPS relative payment weights were scaled for budget neutrality. Therefore, scaling was not applied to the device portion of the device-intensive procedures, services that are paid at the MPFS nonfacility PE RVU-based amount, separately payable covered ancillary services that have a predetermined national payment amount, such as drugs and biologicals and brachytherapy sources that are separately paid under the OPPS, or services that are contractor-priced or paid at reasonable cost in ASCs.
To derive the final CY 2019 payment rate displayed in the “Final CY 2019 Payment Rate” column, each ASC payment weight in the “Final CY 2019 Payment Weight” column was multiplied by the final CY 2019 conversion factor of $46.551. The final conversion factor includes a budget neutrality adjustment for changes in the wage index values and the annual update factor as reduced by the productivity adjustment (as discussed in section XII.G.2.b. of this final rule with comment period).
In Addendum BB, there are no relative payment weights displayed in the “Final CY 2019 Payment Weight” column for items and services with predetermined national payment amounts, such as separately payable drugs and biologicals. The “Final CY 2019 Payment” column displays the final CY 2019 national unadjusted ASC payment rates for all items and services. The final CY 2019 ASC payment rates listed in Addendum BB for separately payable drugs and biologicals are based on ASP data used for payment in physicians' offices in October 2018.
Addendum EE provides the HCPCS codes and short descriptors for surgical procedures that are to be excluded from payment in ASCs for CY 2019.
CMS seeks to promote higher quality and more efficient healthcare for Medicare beneficiaries. Consistent with these goals, CMS has implemented quality reporting programs for multiple care settings including the quality reporting program for hospital outpatient care, known as the Hospital Outpatient Quality Reporting (OQR) Program, formerly known as the Hospital Outpatient Quality Data Reporting Program (HOP QDRP). The Hospital OQR Program is generally aligned with the quality reporting program for hospital inpatient services known as the Hospital Inpatient Quality Reporting (IQR) Program (formerly known as the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Program). In addition to the Hospital IQR and Hospital OQR Programs, CMS has implemented quality reporting programs as well as value-based purchasing programs for other care settings.
We refer readers to section I.A.2. of this final rule with comment period where we discuss our new Meaningful Measures Initiative and our approach in evaluating quality program measures.
We refer readers to the CY 2011 OPPS/ASC final rule with comment period (75 FR 72064 through 72065) for a detailed discussion of the statutory history of the Hospital OQR Program.
We refer readers to the CY 2008 through 2018 OPPS/ASC final rules with comment period (72 FR 66860 through 66875; 73 FR 68758 through 68779; 74 FR 60629 through 60656; 75 FR 72064 through 72110; 76 FR 74451 through 74492; 77 FR 68467 through 68492; 78 FR 75090 through 75120; 79 FR 66940 through 66966; 80 FR 70502 through 70526; and 81 FR 79753 through 79797; 82 FR 59424 through 59445). We have also codified certain requirements under the Hospital OQR Program at 42 CFR 419.46.
In the CY 2019 OPPS/ASC proposed rule, we proposed a number of new policies for the Hospital OQR Program (83 FR 37179). We developed these proposals after conducting an overall review of the program under our new
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74458 through 74460) for a detailed discussion of the priorities we consider for the Hospital OQR Program quality measure selection. In the CY 2019 OPPS/ASC proposed rule (83 FR 37176) we did not propose any changes to these policies.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59425 through 59427), we discussed the importance of improving beneficiary outcomes including reducing health disparities. We also discussed our commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level as determined by HHS, belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.
In the FY 2018 and CY 2018 proposed rules for our quality reporting and value-based purchasing programs, we solicited feedback on which social risk factors provide the most valuable information to stakeholders and the methodology for illuminating differences in outcomes rates among patient groups within a hospital or facility that would also allow for a comparison of those differences, or disparities, across facilities. Feedback we received through our quality reporting programs included encouraging CMS to explore whether factors that could be used to stratify or risk adjust the measures (beyond dual eligibility); considering the full range of differences in patients' backgrounds that might affect outcomes; exploring risk adjustment approaches; and offering careful consideration of what type of information display would be most useful to the public. We also sought public comment on confidential reporting and future public reporting of some of our measures stratified by patient dual eligibility. In general, commenters noted that stratified measures could serve as tools for hospitals to identify gaps in outcomes for different groups of patients, improve the quality of health care for all patients, and empower beneficiaries and other consumers to make informed decisions about health care. Commenters encouraged us to stratify measures by other social risk factors such as age, income, and educational attainment. With regard to value-based purchasing programs, commenters also cautioned to balance fair and equitable payment while avoiding payment penalties that mask health disparities or discourage the provision of care to more medically complex patients. Commenters also noted that value-based purchasing program measure selection, domain
As a next step, CMS is considering options to reduce health disparities among patient groups within and across health care settings by increasing the transparency of disparities as shown by quality measures. We also are considering how this work applies to other CMS quality programs in the future. We refer readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38403 through 38409) for more details, where we discuss the potential stratification of certain Hospital IQR Program outcome measures. Furthermore, we continue to consider options to address equity and disparities in our value-based purchasing programs.
We plan to continue working with ASPE, the public, and other key stakeholders on this important issue to identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.
While we did not specifically request comment on social risk factors in the CY 2019 proposed rule, we received several comments with respect to social risk factors. We thank commenters for sharing their views and their willingness to support the efforts of CMS and NQF on this important issue. We take this feedback seriously and will continue to review social risk factors on an on-going and continuous basis. In addition, we both welcome and appreciate stakeholder feedback as we continue our work on these issues.
We previously adopted a policy to retain measures from a previous year's Hospital OQR Program measure set for subsequent years' measure sets in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68471). Thus, quality measures adopted in a previous year's rulemaking are retained in the Hospital OQR Program for use in subsequent years unless otherwise specified. We refer readers to that final rule with comment period for more information. In the CY 2019 OPPS/ASC proposed rule (83 FR 37177), we did not propose any changes to our retention policy; however, we proposed to codify this policy at 42 CFR 419.46(h)(1).
We did not receive any public comments and are finalizing our proposal to codify at 42 CFR 419.46(h)(1) our policy to retain measures from a previous year's Hospital OQR Program measure set for subsequent years' measure sets as proposed.
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60315), we finalized a process to use the regular rulemaking process to remove a measure for circumstances for which we do not believe that continued use of a measure raises specific patient safety concerns.
We did not receive any public comments and are finalizing our proposal to codify at 42 CFR 419.46(h)(3) our policy to use the regular rulemaking process to remove a measure for circumstances for which we do not believe that continued use of a measure raises specific patient safety concerns as proposed.
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60634 through 60635), we finalized a process for immediate retirement, which we later termed “removal,” of Hospital OQR Program measures, based on evidence that the continued use of the measure as specified raise patient safety concerns.
We did not receive any public comments and are finalizing our proposal to codify at 42 CFR 419.46(h)(2) our policy to immediately remove measures as a result of patient safety concerns as proposed.
In the CY 2013 OPPS/ASC final rule with comment period, we finalized a set of factors
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In addition, we refer readers to the CY 2015 OPPS/ASC final rule with comment period where we finalized the criteria for determining when a measure is “topped-out” (79 FR 66769). In that final rule with comment period, we finalized two criteria for determining when a measure is “topped out” under the Hospital OQR Program: (1) When there is statistically indistinguishable performance at the 75th and 90th percentiles of national facility performance; and (2) when the measure's truncated coefficient of variation (TCOV) is less than or equal to 0.10 (79 FR 66942).
The benefits of removing a measure from the Hospital OQR Program are assessed on a case-by-case basis (79 FR 66941 through 66942). In the proposed rule, we noted that, under this case-by-case approach, a measure will not be removed solely on the basis of meeting any specific factor. We also noted that in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66967), a similar measure removal policy was finalized for the ASCQR Program.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37177 through 37178), we
As shown above, Factor 7 under the Hospital OQR Program states, “collection or public reporting of a measure leads to negative unintended consequences
After consideration of the public comments we received, we are finalizing our proposal as proposed to revise measure removal Factor 7 to read, “collection or public reporting of a measure leads to negative unintended consequences other than patient harm.”
In the CY 2019 OPPS/ASC proposed rule (83 FR 37178 through 37179), we proposed to adopt an additional factor to consider when evaluating measures for removal from the Hospital OQR Program measure set:
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As we discuss in section I.A.2. of the proposed rule and this final rule with comment period with respect to our new Meaningful Measures Initiative, we are engaging in efforts to ensure that the Hospital OQR Program measure set continues to promote improved health outcomes for beneficiaries while minimizing the overall costs associated with the program. We believe these costs are multifaceted and include not only the burden associated with reporting, but also the costs associated with implementing and maintaining the program. We have identified several different types of costs, including, but not limited to: (1) Facility information collection burden and related costs and burden associated with the submission/reporting of quality measures to CMS; (2) the facility cost associated with complying with other programmatic requirements; (3) the facility cost associated with participating in multiple quality programs and tracking multiple similar or duplicative measures within or across those programs; (4) the CMS cost associated with the program oversight of the measure including measure maintenance and public display; and (5) the facility cost associated with compliance with other Federal and State regulations (if applicable). For example, it may be needlessly costly and/or of limited benefit to retain or maintain a measure which our analyses show no longer meaningfully supports program objectives (for example, informing beneficiary choice or payment scoring). It may also be costly for health care providers to track confidential feedback, preview reports, and publicly reported information on a measure where we use the measure in more than one program. CMS may also have to expend unnecessary resources to maintain the specifications for the measure, as well as the tools needed to collect, validate, analyze, and publicly report the measure data. Furthermore, beneficiaries may find it confusing to see public reporting on the same measure in different programs.
In weighing the costs against the benefits, we evaluate the benefits of the measure, but, we assess the benefits through the framework of our Meaningful Measures Initiative, as we discussed in section I.A.2. of the proposed rule and this final rule with comment period. One key aspect of patient benefits is assessing the improved beneficiary health outcomes if a measure is retained in our measure set. We believe that these benefits are multifaceted and are illustrated through the Meaningful Measures framework's 6 domains and 19 areas. For example, we assessed the Healthcare Worker Influenza Vaccination and patient Influenza Vaccination measures categorized in the Quality Priority “Promote Effective Prevention and Treatment of Chronic Disease” in the meaningful measure area of “Preventive Care” across multiple CMS programs, and considered: Patient outcomes, such as mortality and hospitalizations associated with influenza; CMS measure performance in a program; and other available and reported influenza process measures, such as population influenza vaccination coverage.
When these costs outweigh the evidence supporting the benefits to patients with the continued use of a measure in the Hospital OQR Program, we believe it may be appropriate to remove the measure from the program. Although we recognize that one of the main goals of the Hospital OQR Program is to improve beneficiary outcomes by incentivizing health care facilities to focus on specific care issues and making public data related to those issues, we also recognize that those goals can have limited utility where, for example, the publicly reported data (including percentage payment adjustment data) is of limited use because it cannot be easily interpreted by beneficiaries, and used to inform their choice of facility. In these cases, removing the measure from the Hospital OQR Program may better accommodate the costs of program administration and compliance without sacrificing improved health outcomes and beneficiary choice.
We proposed that we would remove measures based on this factor assessing costs versus benefits on a case-by-case basis. We might, for example, decide to retain a measure that is burdensome for health care facilities to report if we conclude that the benefit to beneficiaries justifies the reporting burden. Our goal is to move the program forward in the least burdensome manner possible, while maintaining a parsimonious set of meaningful quality measures and continuing to incentivize improvement in the quality of care provided to patients.
We refer readers to section XIII.B.4.b. of the proposed rule (83 FR 37179 through 37186), where we proposed to remove two measures based on this proposed measure removal factor. In the proposed rule, we noted that we also proposed this same removal factor for the ASCQR Program in section XIV.B.3.b. of the proposed rule (83 FR 37195 through 37196), as well as for other quality reporting and value-based purchasing programs for FY 2019 including: The Hospital Value-Based Purchasing (VBP) Program (83 FR 20409), the Hospital IQR Program (83 FR 20472); the PPS-exempt Cancer
We invited public comment on our proposal to adopt an additional measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program, beginning with the effective date of the CY 2019 OPPS/ASC final rule with comment period and for subsequent years.
We thank commenters for their suggestions regarding additional costs to consider. We will use this feedback as well as input from all stakeholders as we apply measure removal Factor 8 in future rulemaking.
We believe that various stakeholders may have different perspectives on how to define costs as well as benefits. Because of these challenges, we intend to evaluate each measure on a case-by-case basis, while considering input from a variety of stakeholders, including, but not limited to: Patients, caregivers, patient and family advocates, providers, provider associations, healthcare researchers, healthcare purchasers, data vendors, and other stakeholders with insight into the direct and indirect benefits and costs (financial and otherwise) of maintaining any specific measure in the Hospital OQR Program. However, we also believe that while a measure's use in the Hospital OQR Program may benefit many entities, the primary benefit is to patients and their caregivers through incentivizing high-quality care and providing publicly reported data regarding the quality of care available. We note that we intend to assess the costs and benefits to program stakeholders, including but not limited to, those listed above. Therefore, we intend to consider the benefits, especially those to patients and their families, when evaluating measures under this measure removal factor. As noted above, we have offered a definition of costs. However, this was not intended to be a complete list of the potential factors to consider in evaluating measures and we intend to consider the additional examples of cost described in public comment, including the costs and benefits to beneficiaries and the public, as recommended by some commenters.
After consideration of the public comments we received, we are finalizing our proposal to adopt measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program, for the Hospital OQR Program beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, as proposed.
As a result of the finalization of our proposals to update measure removal Factor 7 and add new removal Factor 8 as proposed, the new measure removal factors list for the Hospital OQR Program consists of the following:
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In the CY 2019 OPPS/ASC proposed rule (83 FR 37179), we proposed to codify our measure removal policies, including proposals made in the proposed rule, if finalized, at 42 CFR 419.46(h)(2) and (3).
We did not receive any public comments and are finalizing our proposal to codify our measure removal policies, at 42 CFR 419.46(h)(2) and (3) as proposed.
As noted above, we refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66769), where we finalized the criteria for determining when a measure is “topped-out.” In that final rule with comment period, we finalized two criteria for determining when a measure is “topped out” under the Hospital OQR Program: (1) When there is statistically indistinguishable performance at the 75th and 90th percentiles of national facility performance; and (2) when the measure's truncated coefficient of variation (TCOV) is less than or equal to 0.10 (79 FR 66942).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37179), we clarified our process for calculating the truncated coefficient of variation (TCOV), particularly for two of the measures (OP-11 and OP-14) proposed for removal from the Hospital OQR Program. In accordance with our finalized methodology (79 FR 66942), we determine the truncated coefficient of variation (TCOV) by calculating the truncated standard deviation (SD) divided by the truncated mean. As discussed above, our finalized removal criteria state that to be considered “topped-out,” a measure must have a truncated TCOV of less than 0.10. We utilize the TCOV because it is generally a good measure of variability and provides a relative methodology for comparing different types of measures.
Unlike the majority of the measures, for which a higher rate (indicating a higher proportion of a desired event) is the preferred outcome, some measures—in particular, OP-11 and OP-14—assess the rate of rare, undesired events for which a lower rate is preferred. For example, OP-11 assesses the use of both a contrast and non-contrast CT Thorax study at the same time, which is not recommended, as no clinical guidelines or peer-reviewed literature supports such CT Thorax “combined studies.” However, when determining the TCOV for a measure assessing rare, undesired events, the mean—or average rate of event occurrence—is very low, and the result is a TCOV that increases rapidly and approaches infinity as the proportion of rare events declines.
In the proposed rule, we proposed to remove two measures that assess the rate of rare, undesired events for which a lower rate is preferred—OP-11 and OP-14—and refer readers to section XIII.B.4.b.(2)(c) of the proposed rule and this final rule with comment period, where these proposals are discussed in detail. Because by design these measures have maintained very low rates of rare, undesired events (indicating the preferred outcomes), we utilized the mean of
In the CY 2019 OPPS/ASC proposed rule (83 FR 37179 through 37186), we proposed to remove a total of 10 measures from the Hospital OQR Program measure set across the CY 2020 and CY 2021 payment determinations. Specifically, beginning with the CY 2020 payment determination, we proposed to remove (1) OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431); and beginning with the CY 2021 payment determination, we proposed to remove—(2) OP-5: Median Time to ECG (NQF #0289); (3) OP 31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536); (4) OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658); (5) OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use (NQF #0659); (6) OP-9: Mammography Follow-up Rates (no NQF number); (7) OP-11: Thorax Computed Tomography
These proposed measure-specific removals are discussed in detail further below. We also received several general comments regarding these proposals as a whole and are discussing those first.
For the CY 2020 payment determination and subsequent years, we proposed to remove one NHSN measure under proposed measure removal Factor 8, the costs associated with this measure outweigh the benefit of its continued use in the program.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75099), where we adopted OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431), beginning with the CY 2016 payment determination and for subsequent years. This process-of-care measure, also a National Healthcare Safety Network (NHSN) measure, assesses the percentage of healthcare personnel who have been immunized for influenza during the flu season. We initially adopted this measure based on our recognition that influenza immunization is an important public health issue and vital component to preventing healthcare associated infections. We believe that the measure addresses this public health concern by assessing influenza vaccination in the HOPD among health care personnel (HCP), who can serve as vectors for influenza transmission.
In the proposed rule, we proposed to remove OP-27, beginning with the CY 2020 payment determination under our proposed measure removal Factor 8 because we have concluded that the costs associated with this measure outweigh the benefit of its continued use in the program.
The information collection burden for the Influenza Vaccination Coverage Among Healthcare Personnel measure is less than for measures that require chart-abstraction of patient data because influenza vaccination among healthcare personnel can be calculated through review of records maintained in
Furthermore, as we stated in section XIII.B.4.a. of the proposed rule and this final rule with comment period, costs are multi-faceted and include not only the burden associated with reporting, but also the costs associated with implementing and maintaining the program. For example, it may be costly for health care providers to maintain general administrative knowledge to report these measures. In addition, CMS must expend resources in maintaining information collection systems, analyzing reported data, and providing public reporting of the collected information.
In our analysis of the Hospital OQR Program measure set, we recognized that some facilities face challenges with respect to the administrative requirements of the NHSN in their reporting of the Influenza Vaccination Coverage Among Healthcare Personnel measure. These administrative requirements (which are unique to NHSN) include annually completing NHSN system user authentication. Enrolling in NHSN is a five-step process that the Centers for Disease Control and Prevention (CDC) estimates takes an average of 263 minutes per facility.
Furthermore, submission via NHSN requires the system security administrator of participating facilities to re-consent electronically, ensure that contact information is kept current, ensure that the hospital has an active facility administrator account, keep Secure Access Management Service (SAMS) credentials active by logging in approximately every two months and changing their password, create a monthly reporting plan, and ensure the facility's CCN information is up-to-date. Unlike acute care hospital which participate in other quality programs, such as the Hospital IQR and HAC Reduction Programs, HOPDs are only required to participate in NHSN to submit data for this one measure.
In our assessment, we also considered that the vast majority (99.7 percent) of Hospital OQR Program eligible hospitals already report this measure in the Hospital IQR Program for workers providing any services to inpatient care. The Hospital IQR Program measure includes the vast majority of all hospital personnel since many workers in outpatient departments provide services to both inpatient and outpatient departments (adopted at 76 FR 51631 through 51633). These workers include most emergency department clinicians, specialists such as pharmacists and imaging professionals, and custodians and other support staff working across the hospital.
We continue to believe that the OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) measure provides the benefit of protecting patients against influenza. However, we believe that these benefits are offset by other efforts to reduce influenza infection among patients, such as numerous healthcare employer requirements for health care personnel to be vaccinated against influenza.
We wish to minimize the level of cost of our programs for participating facilities, as discussed under the Meaningful Measures Initiative, described in section I.A.2. of the proposed rule and this final rule with comment period. In our assessment of the Hospital OQR Program measure set, we prioritized measures that align with this Initiative's framework as the most important to the Hospital OQR Program's population. Our assessment concluded that while the OP-27 measure continues to provide benefits, these benefits are diminished by other factors and are outweighed by the costs and burdens of reporting this chart-abstracted measure.
For these reasons, we proposed to remove OP-27: NHSN Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) from the Hospital OQR Program beginning with the CY 2020 payment determination and for subsequent years. In the proposed rule, we noted that if proposed measure removal Factor 8 is not finalized, removal of this measure would also not be finalized. We also noted that a similar measure was also proposed for removal from the ASCQR Program in section XIV.B.3.c. of the proposed rule and the IPFQR Program in the FY 2019 IPF PPS proposed rule (83 FR 21104).
However, while we agree that Medicare beneficiaries may have additional risk of contracting influenza, as noted in our proposal, we believe the effects of removing this measure from the Hospital OQR Program are mitigated as the issue is addressed by other initiatives such as State laws and employer programs that require influenza vaccination of healthcare workers. Because of this, we do not believe that retaining this measure would result in lower rates of vaccination coverage among healthcare personnel. Further, we have retained the measure in the Hospital IQR Program (83 FR 41579), thus requiring reporting in the short-term, acute care hospital setting. In addition, we believe that the burden of this measure on hospitals outweighs the limited benefit of addressing this topic again under the Hospital OQR Program in addition to the many other vaccination initiatives.
As we noted above, the burden of reporting this measure is greater for outpatient hospitals compared to the relative burden for hospitals participating in the Hospital IQR and HAC Reduction Programs. The entire burden of registering for and maintaining access to the CDC's NHSN system is due to this one measure; whereas hospitals paid under IPPS, participating in the Hospital IQR Program, the HAC Reduction Program and the Hospital VBP Program, for example, must register and maintain NHSN access for several healthcare safety measures, not just one. However, we note that, beyond the Hospital OQR Program, HOPDs may independently choose to voluntarily report data to NHSN on vaccination rates using the NHSN Healthcare Personnel Safety Component.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to remove OP-27: NHSN Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) from the Hospital OQR Program beginning with the CY 2020 payment determination and for subsequent years.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37181 through 37186), for the CY 2021 payment determination and subsequent years, we proposed to remove: Four measures under proposed measure removal Factor 8; one measure under measure removal Factor 3; two measures under removal Factor 1; and two measures under measure removal Factor 2.
In the proposed rule, we proposed to remove four measures under measure removal Factor 8, which is being finalized in this final rule with comment period, for the CY 2021 payment determination and subsequent years: OP-5, OP-29, OP-30, and OP-31. In the proposed rule, we noted that if proposed measure removal Factor 8 was not finalized, removal of these measures would also not be finalized.
The proposals are discussed in more detail below. In the proposed rule, we noted that in crafting our proposals, we considered removing these measures beginning with the CY 2020 payment determination, but we decided on proposing to delay removal until the CY 2021 payment determination to be sensitive to facilities' planning and operational procedures given that data collection for this measure begins during CY 2018 for the CY 2020 payment determination.
We refer readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66865) where we adopted OP-5: Median Time to ECG (NQF #0289) beginning with the CY 2009 payment determination.
We proposed to remove the OP-5 measure beginning with the CY 2021 payment determination under our proposed measure removal Factor 8, the costs associated with the measure outweigh the benefit of its continued use in the program. As noted above, OP-5 is a chart-abstracted measure, which can be potentially more challenging for facilities to report than claims-based or structural measures. Chart-abstraction requires facilities to select a sample population, access historical records from several clinical data quarters past, and interpret that patient data. This process is typically more time and resource-consuming than for other measure types. As described in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden, and we believe that removing this chart-abstracted measure from the Hospital OQR Program would reduce program complexity.
However, we do not believe the use of chart-abstracted measure data alone is sufficient justification for removal of a measure under proposed measure
We believe that the minimal variation in hospital performance does not help beneficiaries to make informed care decisions, since distinguishing meaningful differences in hospital performance on this measure is difficult. As such, the measure benefit is limited, and no longer meaningfully supports program objectives of informing beneficiary choice.
Thus, we believe that costs and burdens to both facilities and CMS such as program oversight, measure maintenance, and public display, associated with keeping this measure in the program outweigh the limited benefit associated with the measure's continued use. Therefore, we proposed to remove OP-5: Median Time to ECG from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to remove OP-5: Median Time to ECG from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75099 through 75100) where we adopted OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0659) beginning with the CY 2016 payment determination. This chart-abstracted process measure assesses the “[p]ercentage of patients aged 50 years and older receiving a screening colonoscopy without biopsy or polypectomy who had a recommended follow-up interval of at least 10 years for repeat colonoscopy documented in their colonoscopy report.” (78 FR 75099). This measure aims to assess whether average risk patients with normal colonoscopies receive a recommendation to receive a repeat colonoscopy in an interval that is less than the recommended amount of 10 years.
In the proposed rule, we proposed to remove OP-29: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients beginning with the CY 2021 payment determination and for subsequent years under our proposed measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program. We adopted OP-29: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75099 through 75100) noting that performing colonoscopy too frequently increases patients' exposure to procedural harm. However, we noted concern in the proposed rule that the costs of this measure outweigh the benefit of its continued use in the program.
Chart-abstraction requires facilities to select a sample population, access historical records from several current and historic clinical data quarters, and
However, we also acknowledged that we do not believe the use of chart-abstracted measure data alone is sufficient justification for removal of a measure under proposed measure removal Factor 8. The costs of collection and submission of chart-abstracted measure data is burdensome for facilities especially when taking into consideration the availability of other CMS quality measures that are relevant in the clinical condition and highly correlated in performance across measures. In the proposed rule, we noted another colonoscopy-related measure required in the Hospital OQR Program, OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (NQF #2539), which measures all-cause, unplanned hospital visits (admissions, observation stays, and emergency department visits) within 7 days of an outpatient colonoscopy procedure (79 FR 66949). This claims-based outcomes measure does not require chart-abstraction, and similarly contributes data on quality of care related to colonoscopy procedures, although the measure does not specifically track processes such as follow-up intervals. When we adopted OP-32, we believed this measure would reduce adverse patient outcomes associated with preparation for colonoscopy, the procedure itself, and follow-up care by capturing and making more visible to facilities and patients all unplanned hospital visits following the procedure (79 FR 66949). Furthermore, in the proposed rule, we noted our belief that the potential benefits of keeping OP-29 in the program are mitigated by the existence of the same measure (Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients)
Furthermore, we seek to align our quality reporting work with the Patients Over Paperwork and the Meaningful Measures Initiatives described in section I.A.2. of the proposed rule and this final rule with comment period. The purpose of this effort is to hold providers accountable for only the measures that are most important to patients and clinicians and those that are focused on patient outcomes in particular, because outcome measures evaluate the actual results of care. As described in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden, and we believe that removing this chart-abstracted measure from the Hospital OQR Program would reduce program complexity. In addition, as we discussed in section XIV.B.3.b. of the proposed rule, where we proposed to adopt measure removal Factor 8, we noted that beneficiaries may find it confusing to see public reporting on the same measure in different programs.
Therefore, due to the combination of factors of the costs of collecting data for this chart-abstracted measure, the preference for an outcomes measure in the Hospital OQR Program that provides valuable data for the same procedure, and the existence of the same measure in another CMS program, we noted in the proposed rule that the burdens and costs associated with this measure outweigh the limited benefit to beneficiaries. As a result, we proposed to remove OP-29: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients beginning with the CY 2021 payment determination and for subsequent years. In the proposed rule, we noted that we also proposed to remove a similar measure in the ASCQR Program in section XIV.B.3.c. of the proposed rule.
Furthermore, while OP-29 and OP-32 assess the topic of colonoscopies generally, we acknowledge that they assess distinct clinical areas. OP-32 tracks adverse patient outcomes that result in unplanned hospital visits, whereas, OP-29 provides information about colonoscopies occurring at inappropriate intervals that may increase costs to beneficiaries and to CMS, a priority of our Meaningful Measures Initiative. While OP-32 provides vital data about patient outcomes after colonoscopies, OP-29 focuses on adherence to guideline recommendations for screening colonoscopy follow-up intervals, as noted by NQF's evaluation report.
Despite the costs and burdens of chart-abstraction or the presence of other measures assessing a similar clinical topic, after considering incoming comments and reevaluating our data, we now believe OP-29 is a more critical measure for the Hospital OQR Program than initially perceived in the proposed rule. Specifically, as discussed above, upon reviewing the measure set as a whole, we now believe that OP-29 assesses a distinct clinical area not addressed by OP-32. Further, although we noted that OP-29 requires the burden of chart-abstraction to report, we believe this measure is significantly less burdensome than OP-30 due to the significant burden of obtaining patient histories required for that measure. We also appreciate commenters' feedback that OP-29 is not overly burdensome to report. Because this measure tracks the number of patients who had a recommended follow-up interval of at least 10 years for repeat colonoscopy documented in their colonoscopy report, we believe it provides important information to beneficiaries on the avoidance of inappropriate endoscopies/colonoscopies. OP-29 evaluates overutilization that can lead to the overuse of resources and unnecessary risks to beneficiaries from possible procedural complications and harms.
Accordingly, after considering the public comments we received and upon further review of the benefits of the measure, we no longer believe that the costs associated with this measure outweigh the benefit of its continued use in the Hospital OQR Program.
In section I.A.2. of the proposed and this final rule with comment period, we describe our Meaningful Measures Initiative that is intended to reduce costs and minimize burden. We believe that while removing this chart-abstracted measure from the Hospital OQR Program would reduce program complexity, retaining it provides pertinent information about colonoscopies occurring at inappropriate intervals that may contribute to increased costs to beneficiaries and to CMS, a priority of our Meaningful Measures Initiative. Therefore, we are not finalizing our proposal to remove this measure. We believe retaining this measure is responsive to those comments as it is a valuable process measure and assesses a distinct clinical area.
After consideration of the public comments we received, we are not finalizing our proposal to remove OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years. This measure will remain in the program under our measure retention policies, unless we take future action under our measure removal policies. We note that we also are not finalizing our proposal to remove ASC-9 under the ASCQR Program, and we refer readers to section XIV.B.3.c. of this final rule with comment period for more information.
We refer readers to CY 2014 OPPS/ASC final rule with comment period (78 FR 75102) where we adopted OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use (NQF #0659) beginning with the CY 2016 payment determination. This chart-abstracted process measure assesses the percentage of patients aged 18 years and older receiving a surveillance colonoscopy, with a history of a prior colonic polyp in previous colonoscopy findings, who had a follow-up interval of three or more years since their last colonoscopy documented in the colonoscopy report.
In the proposed rule, we proposed to remove OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use beginning with the CY 2021 payment determination and for subsequent years under our proposed measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program.
We adopted OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75102) noting that colonoscopy screening for high risk patients is recommended based on risk factors and one such factor is a history of adenomatous polyps. The frequency of colonoscopy screening varies depending on the size and amount of polyps found, with the general recommendation of a 3-year follow-up. We stated that this measure is appropriate for the measurement of quality of care furnished by hospital outpatient departments because colonoscopy screening is commonly performed in these settings (78 FR 75102). However, we now believe that the costs of this measure outweigh the benefit of its continued use in the program.
Chart-abstraction requires facilities to select a sample population, access historical records from several clinical data quarters past, and interpret that patient data. This process is typically more time and resource-consuming than for other measure types. In addition to submission of manually chart-abstracted data, we take all burden and costs into account when evaluating a measure. Removing OP-30 would reduce the burden and cost to facilities associated with collection of information and reviewing their data and performance associated with the measure.
However, we do not believe the use of chart-abstracted measure data alone is sufficient justification for removal of a measure under proposed measure removal Factor 8. The costs of collection and submission of chart-abstracted measure data is burdensome for facilities especially when taking into consideration the availability of other CMS quality measures. Another colonoscopy-related measure required in the Hospital OQR Program, OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (NQF #2539) measures all-cause, unplanned hospital visits (admissions, observation stays, and emergency department visits) within 7 days of an outpatient colonoscopy procedure (79 FR 66949). This claims-based outcome measure does not require chart-abstraction, and similarly contributes data on quality of care related to colonoscopy procedures, although the measure does not specifically track processes such as follow-up intervals. When we adopted OP-32, we believed this measure would reduce adverse patient outcomes associated with preparation for colonoscopy, the procedure itself, and follow-up care by capturing and making more visible to facilities and patients all unplanned hospital visits following the procedure (79 FR 66949). Furthermore, the potential benefits of keeping OP-30 in the program are mitigated by the existence of the same measure for gastroenterologists in the Merit-Based Incentive Payment System (MIPS) for the 2019 performance period in the QPP (82 FR 30292). Thus, we believe the issue of preventing harm to patients from colonoscopy procedures that are performed too frequently is adequately addressed through MIPS in the QPP because we expect a portion of MIPS-eligible clinicians reporting on the measure nationwide to provide meaningful data to CMS. Although MIPS-eligible clinicians may voluntarily select measures from a list of options, HOPD providers that are MIPS-eligible will have the opportunity to continue collecting information for the measure without being penalized if they determine there is value for various quality improvement efforts.
Furthermore, we seek to align our quality reporting work with the Patients
Therefore, due to the combination of factors of the costs of collecting data for this chart-abstracted measure, the preference for an outcomes measure in OQR that provides valuable data for the same procedure, and the existence of the same measure in the MIPS program, we believe that the burdens and costs associated with manual chart abstraction outweigh the limited benefit to beneficiaries of receiving this information. As a result, we proposed to remove OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use beginning with the CY 2021 payment determination and for subsequent years. In the proposed rule, we noted that we also proposed to remove a similar measure in the ASCQR Program in section XIV.B.3.c. of the proposed rule.
A primary goal of our Meaningful Measures Initiative is to reduce provider burden through the deduplication of measures across quality reporting programs. As discussed above, after considering comments and revaluating our measure sets as a whole, we are not finalizing our proposal to remove OP-29 in order to retain a measure assessing inappropriate use of endoscopies/colonoscopies in the Hospital OQR Program. We believe there may be a measurement gap if both OP-29 and OP-30 are removed and because of the unique burden associated with OP-30, we are finalizing its removal while retaining OP-29. Removing OP-30 while retaining OP-29 best enables us to assess this important clinical area while ensuring that the costs of measure do not outweigh the benefits. Thus, due in part to the duplication of this measure through MIPS in the QPP and the additional burden to hospitals of obtaining patient records, we are finalizing our proposal to remove OP-30 from the Hospital OQR Program measure set beginning with the CY 2021 payment determination, as proposed.
After consideration of the public comments we received, we are finalizing our proposal to remove OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use beginning with the CY 2021 payment determination and for subsequent years. We refer readers to section XIV.B.3.c. of this final rule with comment period where we are removing a similar measure from the ASCQR Program.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75103) where we adopted OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536) beginning with the CY 2016 payment determination and subsequent years. This measure assesses the rate of patients 18 years and older (with a diagnosis of uncomplicated cataract) in a sample who had improvement in visual function achieved within 90 days following cataract surgery based on completing both a pre-operative and post-operative visual function survey.
Since the adoption of this measure, we came to believe that it can be operationally difficult for facilities to collect and report the measure (79 FR 66947). Specifically, we were concerned that the results of the survey used to assess the pre-operative and post-operative visual function of the patient may not be shared across clinicians and facilities, making it difficult for facilities to have knowledge of the visual function of the patient before and after surgery (79 FR 66947). We were also concerned about the surveys used to assess visual function; the measure allows for the use of any validated survey and results may be inconsistent should clinicians use different surveys (79 FR 66947). Therefore, on December 31, 2013, we issued guidance stating that we would delay data collection for OP-31 for 3 months (data collection would commence with April 1, 2014 encounters) for the CY 2016 payment determination (
In the proposed rule, we proposed to remove OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery beginning with the CY 2021 and for subsequent years under our proposed measure removal Factor 8, the costs associated with the measure outweigh the benefit of its continued use in the program. We originally adopted OP-31 because we believe facilities should be a partner in care with physicians and other clinicians using their facility and that this measure would provide an opportunity to do so (79 FR 66947). However, in light of the history of complications and upon reviewing this measure within our Meaningful Measures framework, we have concluded that it is overly burdensome for facilities to report this measure due
In order to report on this measure to CMS, a facility would need to obtain the visual function assessment results from the appropriate ophthalmologist and ensure that the assessment utilized is validated for the population for which it is being used. If the assessment is not able to be used or is not available, the facility would then need to administer the survey directly and ensure that the same visual function assessment tool is utilized preoperatively and postoperatively. There is no simple, preexisting means for information sharing between ophthalmologists and facilities, so a facility would need to obtain assessment results from each individual patient's ophthalmologist both preoperatively and postoperatively. The high administrative costs of the technical tracking of this information presents an undue cost, and also burden associated with submission and reporting of OP-31 to CMS, especially for small facilities with limited staffing capacity.
Furthermore, this measure currently provides limited benefits. Since making the measure voluntary, only 59
Thus, we stated that we believed the high technical and administrative costs of this measure, coupled with the high technical and administrative burden, outweigh the limited benefit associated with the measure's continued use in the Hospital OQR Program. As discussed in section I.A.2. of the proposed rule and this final rule with comment period, above, our Meaningful Measures Initiative is intended to reduce costs and minimize burden. We believed that removing this measure from the Hospital OQR Program will reduce program burden, costs, and complexity. Therefore, we proposed to remove OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery beginning with the CY 2021 payment determination and for subsequent years. In the proposed rule, we noted that we also proposed to remove a similar measure under the ASCQR Program in section XIV.B.3.c. of the proposed rule.
Furthermore, this is the only measure in the Hospital OQR Program measure set that deals with cataract surgery, which is commonly performed in the HOPD setting. If it is removed, the program will have a gap in coverage for this clinical area. As a result, we now believe that this measure maintains coverage in an important clinical area in the Hospital OQR Program and meaningful information can be provided to consumers regarding those facilities. In addition, when this measure was made voluntary in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66947 through 66948), commenters expressed support, indicating that some stakeholders value the measure.
Furthermore, we have reassessed our evaluation that the costs of this measure outweigh the benefits. Due to the voluntary nature of the measure, we believe that it is inherently not more burdensome than valuable. Because hospitals are not required to submit data, those that do not have the capacity to report, do not have to, thus creating no extra burden. Those that do report, do so voluntarily and have continued to report over the years—specifically since the CY 2015 reporting period—despite any burdens. Because of this, we believe the measure is meaningful to the core group of facilities that do consistently report.
After consideration of public comments and reassessing our analysis, we are not finalizing our proposal to remove OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years. This measure will remain in the program under our measure retention policies, unless we take future action under our measure removal policies.
In addition, we believe it is important for HOPDs to be active partners in care with physicians and other clinicians using their facility and this measure is an opportunity for hospitals to demonstrate this capability if they choose to report data. Further, as noted above, we no longer believe that the costs of this measure outweigh the benefits, as the measure is meaningful to the core group of outpatient hospitals that do consistently report and can provide valuable data to consumers on those specific facilities. While data collection for this measure can be difficult, those facilities that choose to report do so because they have systems in place to data from ophthalmologists' medical records. We agree that as a voluntary measure, only a subset of hospitals report on the measure, but note it is a meaningful measure to beneficiaries given that our analyses show that a consistent group of facilities report data on this measure. So, while data is not available for all facilities, the data that is available is meaningful. In addition, this measure has been appropriately validated for the population for which it being used, even acknowledging that various survey methods can be used.
This same measure is available through MIPS in the QPP and, although MIPS-eligible clinicians may voluntarily select measures from a list of options, we expect a portion of MIPS-eligible clinicians reporting on the measure nationwide to provide meaningful data to CMS about this important outcome for beneficiaries.
After consideration of the public comments we received and reassessing our analysis, we are not finalizing our proposal to remove OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery beginning with the CY 2021 payment determination and for subsequent years. We are also retaining a similar measure in the ASCQR Program (ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery) in section XIV.B.3.b. of this final rule with comment period.
We refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68766) where we adopted OP-9: Mammography Follow-up Rates beginning with the CY 2010 payment determination. This claims-based measure assesses the percentage of patients with mammography screening studies that are followed by a diagnostic mammography, ultrasound, or MRI of the breast in an outpatient or office setting within 45 days. In the proposed rule (83 FR 37184 through 37185), we proposed to remove this measure under measure removal Factor 3, a measure does not align with current clinical guidelines or practice.
An examination of the measure specifications
As currently specified, the measure does not adequately capture this shift in clinical practice. Thus, we believe this measure as specified does not align with current clinical guidelines or practice, and we proposed to remove OP-9: Mammography Follow-up Rates from the program for the CY 2021 payment determination and subsequent years. We intend to investigate respecification of this measure and consider it for adoption to the program through future rulemaking. Specifically, we will consider ways to capture a broader, more comprehensive spectrum of mammography services including adding diagnostic digital breast tomosynthesis. In the proposed rule, we noted that, in crafting our proposal, we considered removing this measure beginning with the CY 2020 payment determination, but decided on proposing to delay removal until the CY 2021 payment determination and subsequent years to be sensitive to facilities' planning and operational procedures given that data collection for this measure begins during CY 2018 for the CY 2020 payment determination.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to remove OP-9: Mammography Follow-up Rates from the program for the CY 2021 payment determination and subsequent years.
In the proposed rule (83 FR 37185 through 37186), for the CY 2021 payment determination and subsequent years, we proposed to remove OP-11 and OP-14 under removal Factor 1, measure performance among providers is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made. The Hospital OQR Program previously finalized two criteria for determining when a measure is “topped-out”: (1) When there is statistically indistinguishable performance at the 75th and 90th percentiles of national facility performance; and (2) when the measure's truncated coefficient of variation is less than or equal to 0.10 (79 FR 66968 through 66969). We refer readers to section XIII.B.4.a.(6) of the proposed rule, where we clarified and discussed how we calculate the TCOV for measures that assess the rate of rare, undesired events for which a lower rate is preferred such as OP-11 and OP-14.
For each of these measures, we believe that removal from the Hospital OQR Program measure set is appropriate as there is little room for improvement. In addition, as discussed in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden. We believe that removing these measures from the Hospital OQR Program will reduce program burden, costs, and complexity. As such, we believe the burden associated with reporting these measures outweighs the benefits of keeping them in the Hospital OQR Program.
Each measure is discussed in more detail below. In the proposed rule, we also noted that in crafting our proposals, we considered removing these measures beginning with the CY 2020 payment determination but decided on proposing to delay removal until the CY 2021 payment determination and subsequent years to be sensitive to providers' planning and operational procedures given that data collection for the measures begins during CY 2018 for the CY 2020 payment determination.
We refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68766) where we adopted OP-11: Thorax CT Use of Contrast Material (NQF #0513) beginning with the CY 2010 payment determination. This claims-based measure assesses the percentage of thorax studies that are performed with and without contrast out of all thorax studies performed.
Based on our analysis of Hospital OQR Program measure data, we have determined that this measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the table above, there is a statistically indistinguishable difference in hospital performance between the 75th and 90th percentiles, and the truncated coefficient of variation has been below 0.10 since 2012.
We refer readers to the CY 2010 OPPS/ASC final rule with comment period (75 FR 72082) where we adopted OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT beginning with the CY 2012 payment determination and for subsequent years. This claims-based measure assesses the extent to which patients with a headache who have a brain CT also have a sinus CT performed on the same date at the same facility.
Based on our analysis of Hospital OQR Program measure data, we have determined that this measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the table above, there is a statistically indistinguishable difference in hospital performance between the 75th and 90th percentiles, and the truncated coefficient of variation has been below 0.10 since 2012.
Therefore, we invited public comment on our proposals to remove: (1) OP-11: Thorax CT Use of Contrast Material, and (2) OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT measure for the CY 2021 payment determination and subsequent years as discussed above.
We have previously finalized our policy to consider measures for removal if they meet topped-out status (79 FR 66769) and accordingly, we disagree with commenters that topped-out status is not sufficient grounds for measure removal. In addition, “topped-out” status is only one of many factors we consider in removing measures. We consider the removal of each topped-out measure on a case-by-case basis, as appropriate, and determine whether a clinical or other quality improvement need for the measure justifies the retention of a topped-out measure that otherwise meets our criteria. We also note that the measures have been topped-out for four years. However, if it becomes evident that performance on this measure topic declines over time, we will consider re-introducing this or similar measures and will do so through the rulemaking process. While slight variation may exist in measure performance, our analyses demonstrate that this variation is statistically indistinguishable.
The Hospital OQR Program has finalized the “topped-out” methodology to evaluate variation in performance among HOPDs (79 FR 66769), in line with other quality reporting and value-based purchasing programs including the ASCQR (79 FR 66968), Hospital IQR (80 FR 49641 through 49643), Hospital VBP (79 FR 50055), IPFQR (82 FR 38463 through 38465), and PCHQR (81 FR 57182 through 57183) Programs. Our topped-out methodology does not evaluate variation at the State level, but rather at the level of individual ASCs. Our analyses demonstrate that the variation in performance among HOPDs for these measures is statistically indistinguishable. As shown in the tables above, hospitals performing at the 90th vs. 75th percentile have a rate of 98.5 percent as compared to a rate of 97.4 percent for OP-11 and a rate of 98.8 percent vs. 98.5 percent for OP-14.
After consideration of the public comments we received, we are finalizing our proposals, as proposed, to remove: (1) OP-11: Thorax CT Use of Contrast Material, and (2) OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT measure for the CY 2021 payment determination and subsequent years.
In the proposed rule (83 FR 37186), for the CY 2021 payment determination and subsequent years, we proposed to remove two measures under our measure removal Factor 2, performance or improvement on a measure does not result in better patient outcomes: OP-12 and OP-17. The proposals are discussed in more detail below. As discussed in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden. We believe that removing these measures from the Hospital OQR Program will reduce program burden, costs, and complexity. In addition, we noted that in crafting our proposals, we considered removing these measures beginning with the CY 2020 payment determination but decided on proposing to delay removal until the CY 2021 payment determination to be sensitive to facilities' planning and operational procedures given that data collection for this measure begins during CY 2018 for the CY 2020 payment determination.
We refer readers to CY 2011 OPPS/ASC final rule with comment period (75 FR 72076) where we adopted OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data
OP-12 is a process measure that tracks the transmittal of data but does not directly assess quality or patient outcomes. In the CY 2011 OPPS/ASC final rule with comment period (75 FR 72075), commenters expressed concern that the measure only assesses HIT functionality and does not assess the quality of care provided. As discussed in section I.A.2. of the proposed rule and this final rule with comment period, one of the goals of our Meaningful Measures Initiative is to reduce burden associated with payment policy, quality measures, documentation requirements, conditions of participation, and health information technology. As also discussed in section I.A.2. of the proposed rule and this final rule with comment period, one of the goals of our Meaningful Measures Initiative is to utilize measures that are “outcome-based where possible.” We do not believe OP-12 adds to these goals. In fact, we believe that provider performance in the measure is not an indicator for patient outcomes and continued collection provides little benefit.
Therefore, we proposed to remove OP-12 from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to remove OP-12 beginning with the CY 2021 payment determination and for subsequent years.
We refer readers to CY 2011 OPPS/ASC final rule with comment period (75 FR 72085) where we adopted OP-17: Tracking Clinical Results between Visits beginning with the CY 2013 payment determination. This web-based measure assesses the extent to which a provider uses a certified/qualified EHR system to track pending laboratory tests, diagnostic studies (including common preventive screenings), or patient referrals. In the proposed rule, we proposed to remove OP-17 beginning with the CY 2021 payment determination and for subsequent years under our measure removal Factor 2, performance or improvement on a measure does not result in better patient outcomes.
OP-17 is a process measure that tabulates only the ability for transmittal of data but does not directly assess quality or patient outcomes. In the CY 2011 OPPS/ASC final rule with comment period (75 FR 72075), commenters expressed concern that the measure only assesses HIT functionality and does not assess the quality of care provided. As discussed in section I.A.2. of the proposed rule and this final rule with comment period, one of the goals of our Meaningful Measures Initiative is to reduce burden associated with payment policy, quality measures, documentation requirements, conditions of participation, and health information technology. As also discussed in section I.A.2. of the proposed rule and this final rule with comment period, one of the goals of our Meaningful Measures Initiative is to utilize measures that “outcome-based where possible.” We do not believe OP-17 supports this goal. In fact, we believe that provider performance in the measure does not improve patient outcomes and continued collection provides little benefit. Therefore, we proposed to remove OP-17 from the Hospital OQR Program beginning with the CY 2021 payment determination and for subsequent years.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to remove OP-17 beginning with the CY 2021 payment determination and for subsequent years.
In the proposed rule, we did not propose any new measures for the Hospital OQR Program. We refer readers to the CY 2018 OPPS/ASC final rule
The tables below summarize the Hospital OQR Program measure sets as finalized in this final rule with comment period for the CY 2020 and 2021 payment determinations and subsequent years (including previously adopted measures and excluding measures removed in this final rule with comment period).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37188), we requested public comment on future measure topics for the Hospital OQR Program. We seek to develop a comprehensive set of quality measures to be available for widespread use for informed decision-making and quality improvement in the hospital outpatient setting. The current measure set for the Hospital OQR Program includes measures that assess process of care, imaging efficiency patterns, care transitions, ED throughput efficiency, Health Information Technology (health IT) use, care coordination, and patient safety. Measures are of various types, including those of process, structure, outcome, and efficiency. Through future rulemaking, we intend to propose new measures that help us further our goal of achieving better health care and improved health for Medicare beneficiaries who receive health care in hospital outpatient settings, while
We are moving towards greater use of outcome measures and away from use of clinical process measures across our Medicare quality reporting and value-based purchasing programs. We invited public comments on possible measure topics for future consideration in the Hospital OQR Program. We specifically requested comment on any outcome measures that would be useful to add to as well as any process measures that should be eliminated from the Hospital OQR Program.
CMS maintains technical specifications for previously adopted Hospital OQR Program measures. These specifications are updated as we modify the Hospital OQR Program measure set. The manuals that contain specifications for the previously adopted measures can be found on the QualityNet website at:
We refer readers to the CY 2014 and CY 2017 OPPS/ASC final rules with comment period (78 FR 75092 and 81 FR 79791 respectively) for our previously finalized policies regarding public display of quality measures. In the CY 2019 OPPS/ASC proposed rule (83 FR 37188), we did not propose any changes to our previously finalized public display policies.
The previously finalized QualityNet security administrator requirements, including setting up a QualityNet account and the associated timelines, are described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75108 through 75109). In that final rule with comment period, we codified these procedural requirements at 42 CFR 419.46(a). In the CY 2019 OPPS/ASC proposed rule (83 FR 37188), we did not propose any changes to our requirements for the QualityNet account and security administrator.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37188), we proposed to update our requirements related to the Notice of Participation (NOP) form.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75108 through 75109) and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70519) for requirements for participation and withdrawal from the Hospital OQR Program. We also codified these procedural requirements at 42 CFR 419.46(a) and (b).
We finalized in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75108 through 75109) that participation in the Hospital OQR Program requires that hospitals must: (1) Register on the QualityNet website before beginning to report data; (2) identify and register a QualityNet security administrator; and (3) complete and submit an online participation form, the Notice of Participation (NOP) form, available at the QualityNet website if this form has not been previously completed, if a hospital has previously withdrawn, or if the hospital acquires a new CMS Certification Number (CCN). In addition, in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75108 through 75109), we finalized the requirement that that hospitals must submit the NOP according to the below deadlines. These requirements are also codified at 42 CFR 419.46(a).
• If a hospital has a Medicare acceptance date before January 1 of the year prior to the affected annual payment update, the hospital must complete and submit to CMS a completed Hospital OQR Notice of Participation Form by July 31 of the calendar year prior to the affected annual payment update.
• If a hospital has a Medicare acceptance date on or after January 1 of the year prior to the affected annual payment update, the hospital must submit a completed participation form no later than 180 days from the date identified as its Medicare acceptance date.
In the proposed rule (83 FR 37188), beginning with the CY 2018 reporting period/CY 2020 payment determination, we proposed to remove submission of the NOP form as a requirement for the Hospital OQR Program. After reevaluating program requirements, we have concluded that this form does not provide CMS with any unique information, and as such, we believe it is unnecessarily burdensome for
After consideration of the public comments we received, we are finalizing our proposals, as proposed, to no longer require hospitals to submit the NOP form, and update 42 CFR 419.46(a) to reflect these changes.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75110 through 75111) and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70519 through 70520), we specified our data submission deadlines. We also codified our submission requirements at 42 CFR 419.46(c).
We refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70519 through 70520), where we finalized our proposal to shift the quarters upon which the Hospital OQR Program payment determinations are based, beginning with the CY 2018 payment determination. The finalized deadlines for the CY 2020 payment determination and subsequent years are illustrated in the table below.
In the CY 2018 OPPS/ASC final rule with comment period, we finalized a policy to align the initial data submission timeline for all hospitals that did not participate in the previous year's Hospital OQR Program and made conforming revisions at 42 CFR 419.46(c)(3). In the CY 2019 OPPS/ASC proposed rule (83 FR 37188 through 37189), we did not propose any changes to these policies.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37189), we proposed to change the frequency of the Hospital Outpatient Quality Reporting Specifications Manual release beginning with CY 2019 and for subsequent years. In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68766 through 68767), we established a subregulatory process for making updates to the measures we have adopted for the Hospital OQR Program. As stated in CY 2014 OPPS/ASC final rule with comment period (78 FR 75091), we believe that a measure can be updated through this subregulatory process provided it is a nonsubstantive change. We expect to continue to make the determination of what constitutes a substantive versus a nonsubstantive change on a case-by-case basis. Examples of nonsubstantive changes to measures might include updated diagnosis or procedure codes, medication updates for categories of medications, broadening of age ranges, and exclusions for a measure (such as the addition of a hospice exclusion to the 30-day mortality measures). We believe that nonsubstantive changes may include updates to measures based upon changes to guidelines upon which the measures are based.
For a history of our policies regarding maintenance of technical specifications for quality measures, we refer readers to the CY 2010 OPPS/ASC final rule with comment period (74 FR 60631), the CY 2011 OPPS/ASC final rule with comment period (75 FR 72069), and the CY 2013 OPPS/ASC final rule with comment period (77 FR 68469 through 68470). In the proposed rule, we noted that we will continue to use rulemaking to adopt substantive updates to measures we have adopted for the Hospital OQR Program. We believe that this policy adequately balances our need to incorporate nonsubstantive updates to Hospital OQR Program measures in the most expeditious manner possible, while preserving the public's ability to comment on updates that so fundamentally change an endorsed measure that it is no longer the same measure that we originally adopted. We also noted that the NQF process incorporates an opportunity for public comment and engagement in the measure maintenance process.
As stated in CY 2014 OPPS/ASC final rule with comment period (78 FR 75091), under current policy, technical specifications for the Hospital OQR Program measures are listed in the Hospital Outpatient Quality Reporting Specifications Manual, which is posted on the CMS QualityNet website at:
However, we believe that unnecessarily releasing two manuals a year has the potential to cause confusion for Hospital OQR Program participants. Therefore, in the proposed rule, we proposed to update the frequency with which we release Hospital Outpatient Quality Reporting Specifications Manuals, such that instead of every 6 months, we would release Specifications Manuals every six to 12 months beginning with CY 2019 and for subsequent years. Under this proposal, we would release a Hospital Outpatient Quality Reporting Specifications Manual (Specifications Manual) one to two times per calendar year, depending on the need for an updated release and consideration of our policy to provide at least six months' notice for substantive changes.
After consideration of the public comments we received, we are finalizing a modification of our proposal, beginning with CY 2019 and for subsequent years, to release Specifications Manuals every six to 12 months, such that we will instead release a manual once every 12 months and release addenda as necessary.
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68481 through 68484) for a discussion of the form, manner, and timing for data submission requirements of chart-abstracted measures for the CY 2014 payment determination and subsequent years. In the CY 2019 OPPS/ASC proposed rule (83 FR 37189), we did not propose any changes to our policies regarding the submission of chart-abstracted measure data where patient-level data are submitted directly to CMS.
We note that, in section XIII.B.4.b.(2)(a) of this final rule with comment period, we are finalizing our proposal to remove OP-5: Median Time to ECG for the CY 2021 payment determination and subsequent years. Therefore, the following previously finalized Hospital OQR Program chart-abstracted measures will require patient-level data to be submitted for the CY 2021 payment determination and subsequent years:
• OP-2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival (NQF #0288);
• OP-3: Median Time to Transfer to Another Facility for Acute Coronary Intervention (NQF #0290);
• OP-18: Median Time from ED Arrival to ED Departure for Discharged ED Patients (NQF #0496); and
• OP-23: Head CT Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke Patients who Received Head CT Scan Interpretation Within 45 Minutes of ED Arrival (NQF #0661).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37189 through 37191), we proposed to extend the reporting period
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75111 through 75112) for a discussion of the general claims-based measure data submission requirements for the CY 2015 payment determination and subsequent years. In the proposed rule, we did not propose changes to our general requirements for claims-based measure data but refer readers to the section below for discussion regarding our proposal specific to OP-32.
We note that, in section XIII.B.4.b. of the proposed rule, we proposed to remove OP-9: Mammography Follow-up Rates, OP-11: Thorax CT Use of Contrast Material, and OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT for the CY 2021 payment determination and subsequent years. As discussed in section XIII.B.4.b. of this final rule with comment period, we are finalizing the removals of all of these measures as proposed. Accordingly, the following previously finalized Hospital OQR Program claims-based measures will be required for the CY 2021 payment determination and subsequent years:
• OP-8: MRI Lumbar Spine for Low Back Pain (NQF #0514);
• OP-10: Abdomen CT—Use of Contrast Material;
• OP-13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low Risk Surgery (NQF #0669);
• OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (NQF #2539);
• OP-35: Admissions and Emergency Department Visits for Patients Receiving Outpatient Chemotherapy; and
• OP-36: Hospital Visits after Hospital Outpatient Surgery (NQF #2687).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66949), we finalized the adoption of OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy into the Hospital OQR Program for the CY 2018 payment determination and subsequent years, with public display to begin on or after December 1, 2017. This measure is calculated with data obtained from paid Medicare FFS claims (79 FR 66950). For this reason, facilities are not required to submit any additional information. In that final rule with comment period, we also finalized the reporting period for measure calculation as claims data from two calendar years prior to the payment determination year. Specifically, for the CY 2018 payment determination, we stated we would use paid Medicare FFS claims from January 1, 2016 to December 31, 2016 to calculate measure results (79 FR 66955). We finalized a 1-year reporting period, as it adequately balanced competing interests of measure reliability and timeliness for payment determination purposes and explained that we would continue to assess this during the dry run (79 FR 66955).
We noted we would complete a dry run of the measure in 2015 using three or four years of data, and, from the results of this dry run, we would review the appropriate volume cutoff for facilities to ensure statistical reliability in reporting the measure score (79 FR 66953). Our analyses of the 2015 dry run using data from July 2011 through June 2014 showed that a reporting period of one year had moderate to high reliability for measure calculation. Specifically, using data from July 2013 through June 2014, we calculated facility-level reliability estimates as the ratio of true variance to observed variance.
However, after the 2015 dry run, CMS calculated the HOPD and ASC scores separately to compare similar types of providers to each other. During subsequent analysis of the 1-year period July 2013 through June 2014, we confirmed that a 1-year reporting period with separate calculations for HOPDs and ASCs was sufficient but did result in lower reliability and decreased precision compared to these measures calculated from longer reporting periods (two or three years). Based on analyses conducted using data from July 2013 through June 2014 (1-year reporting period) and 2017 measure specifications,
Using three years of data, compared to just one year, is estimated to increase the number of HOPDs with eligible cases for OP-32 by 5 percent, adding approximately 235 additional facilities to the measure calculation. Facilities reporting the measure would increase their sample sizes and, in turn, increase the precision and reliability of their measure scores. Thus, we believe extending the reporting period to three years from one year for purposes of increasing reliability would be beneficial for providing better information to beneficiaries regarding the quality of care associated with low-risk outpatient colonoscopy procedures. In crafting our proposal, we considered extending the reporting period to two years beginning with the CY 2020 payment determinations and subsequent years, but decided on proposing three years instead, because a higher level of reliability is achieved with a 3-year reporting period compared to two years.
Therefore, we proposed to change the reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination (which would use claims data from January 1, 2016 through December 31, 2018) and for subsequent years. Under this proposal, the annual reporting requirements for facilities would not change, because this is a claims-based measure. However, with a 3-year reporting period, the most current year of data would be supplemented by the addition of two prior years. For example, for the CY 2020 payment determination, we would use a reporting period of CY 2018 data plus 2 prior years of data (CYs 2016 and 2017). In the proposed rule, we noted that since implementation of this measure began with the CY 2018 payment determination, we have already used paid Medicare fee-for-service claims from January 1, 2016 to December 31, 2016 to calculate measure scores, which have been previously previewed by facilities and publicly displayed. In crafting our proposal, we also considered timeliness related to payment determinations and public display. Because we would utilize data already collected to supplement current data, our proposal to use three years of data would not disrupt payment determinations or public display. We refer readers to the table below for example reporting periods and public display dates corresponding to the CY 2020, CY 2021, and CY 2022 payment determinations:
We refer readers to section XIV.D.4.b. of the proposed rule, where we discussed a similar proposal under the ASCQR Program.
After consideration of the public comments we received, we are finalizing our proposal, as proposed, to change the reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination and for subsequent years. We refer readers to section XIV.D.4.b. of this final rule with comment period, where we are finalizing a similar policy under the ASCQR Program.
We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79792 through 79794) for a discussion of the previously finalized requirements related to survey administration and vendors for the OAS CAHPS Survey-based measures. In addition, we refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59432 through 59433), where we finalized a policy to delay implementation of the OP-37a-e OAS CAHPS Survey-based measures beginning with the CY 2020 payment determination (2018 reporting period) until further action in future rulemaking. In the CY 2019 OPPS/ASC proposed rule (83 FR 37191), we did not propose any changes to the previously finalized requirements related to survey administration and vendors for the OAS CAHPS Survey-based measures.
We refer readers to the CY 2014 OPPS/ASC final rule with comment
We note that, in section XIII.B.4.b.(1) of the proposed rule, we proposed to remove of OP-27: Influenza Vaccination Coverage Among Healthcare Personnel beginning with the CY 2020 payment determination and for subsequent years. Because we are finalizing this removal as proposed, for the CY 2020 payment determination, the following web-based quality measures will be required:
• OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into their ONC-Certified EHR System as Discrete Searchable Data (via CMS' QualityNet website);
• OP-17: Tracking Clinical Results between Visits (NQF #0491) (via CMS' QualityNet website);
• OP-22: Left Without Being Seen (NQF #0499) (via CMS' QualityNet website);
• OP-29: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658) (via CMS' QualityNet website);
• OP-30: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use (NQF #0659) (via CMS' QualityNet website);
• OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536) (via CMS' QualityNet website); and
• OP-33: External Beam Radiotherapy (EBRT) for Bone Metastases (NQF #1822) (via CMS' QualityNet website).
Furthermore, we note that in section XIII.B.4.b.(2) of the proposed rule, for the CY 2021 payment determination and subsequent years, we proposed to remove: OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; OP-17: Tracking Clinical Results between Visits; OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use; and OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery beginning with the CY 2021 payment determination and for subsequent years. In section XIII.B.4.b.(2) of this final rule with comment period, we are finalizing the removal of OP-30 as proposed. However, as discussed in section XIII.B.4.b.(2)(a) of this final rule with comment period, we are not finalizing the removal of OP-29 or OP-31. Accordingly, the following web-based quality measures will require data to be submitted via a web-based tool for the CY 2021 payment determination and subsequent years:
• OP-22: Left Without Being Seen (NQF #0499) (via CMS' QualityNet website);
• OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658) (via CMS' QualityNet website);
• OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536) (via CMS' QualityNet website); and
• OP-33: External Beam Radiotherapy (EBRT) for Bone Metastases (NQF #1822) (via CMS' QualityNet website).
We refer readers to the CY 2011 OPPS/ASC final rule with comment period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74482 through 74483) for discussions of our population and sampling requirements. In the CY 2019 OPPS/ASC proposed rule (83 FR 37191), we did not propose any changes to our population and sampling requirements for chart-abstracted measures.
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66964 through 66965), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70524), and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59441 through 59443), and 42 CFR 419.46(e) for our policies regarding validation. In the CY 2019 OPPS/ASC proposed rule (83 FR 37191 through 37192), we did not propose any changes to these policies.
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79795), the CY 2018 OPPS/ASC final rule with comment period (82 FR 59444), and 42 CFR 419.46(d) for a complete discussion of our extraordinary circumstances exception (ECE) process under the Hospital OQR Program. In the CY 2019 OPPS/ASC proposed rule (83 FR 37192), we did not propose any changes to our ECE policy.
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with comment period (81 FR 79795), and 42 CFR 419.46(f) for our reconsideration and appeals procedures. In the CY 2019 OPPS/ASC proposed rule (83 FR 37192), we did not propose any changes to our reconsideration and appeals procedures.
Section 1833(t)(17) of the Act, which applies to subsection (d) hospitals (as defined under section 1886(d)(1)(B) of the Act), states that hospitals that fail to report data required to be submitted on measures selected by the Secretary, in
The application of a reduced OPD fee schedule increase factor results in reduced national unadjusted payment rates that apply to certain outpatient items and services provided by hospitals that are required to report outpatient quality data in order to receive the full payment update factor and that fail to meet the Hospital OQR Program requirements. Hospitals that meet the reporting requirements receive the full OPPS payment update without the reduction. For a more detailed discussion of how this payment reduction was initially implemented, we refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68769 through 68772).
The national unadjusted payment rates for many services paid under the OPPS equal the product of the OPPS conversion factor and the scaled relative payment weight for the APC to which the service is assigned. The OPPS conversion factor, which is updated annually by the OPD fee schedule increase factor, is used to calculate the OPPS payment rate for services with the following status indicators (listed in Addendum B to this final rule with comment period, which is available via the internet on the CMS website): “J1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “R”, “S”, “T”, “V”, or “U”. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79796), we clarified that the reporting ratio does not apply to codes with status indicator “Q4” because services and procedures coded with status indicator “Q4” are either packaged or paid through the Clinical Laboratory Fee Schedule and are never paid separately through the OPPS. Payment for all services assigned to these status indicators will be subject to the reduction of the national unadjusted payment rates for hospitals that fail to meet Hospital OQR Program requirements, with the exception of services assigned to New Technology APCs with assigned status indicator “S” or “`T”. We refer readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68770 through 68771) for a discussion of this policy.
The OPD fee schedule increase factor is an input into the OPPS conversion factor, which is used to calculate OPPS payment rates. To reduce the OPD fee schedule increase factor for hospitals that fail to meet reporting requirements, we calculate two conversion factors—a full market basket conversion factor (that is, the full conversion factor), and a reduced market basket conversion factor (that is, the reduced conversion factor). We then calculate a reduction ratio by dividing the reduced conversion factor by the full conversion factor. We refer to this reduction ratio as the “reporting ratio” to indicate that it applies to payment for hospitals that fail to meet their reporting requirements. Applying this reporting ratio to the OPPS payment amounts results in reduced national unadjusted payment rates that are mathematically equivalent to the reduced national unadjusted payment rates that would result if we multiplied the scaled OPPS relative payment weights by the reduced conversion factor. For example, to determine the reduced national unadjusted payment rates that applied to hospitals that failed to meet their quality reporting requirements for the CY 2010 OPPS, we multiplied the final full national unadjusted payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule with comment period by the CY 2010 OPPS final reporting ratio of 0.980 (74 FR 60642).
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771 through 68772), we established a policy that the Medicare beneficiary's minimum unadjusted copayment and national unadjusted copayment for a service to which a reduced national unadjusted payment rate applies would each equal the product of the reporting ratio and the national unadjusted copayment or the minimum unadjusted copayment, as applicable, for the service. Under this policy, we apply the reporting ratio to both the minimum unadjusted copayment and national unadjusted copayment for services provided by hospitals that receive the payment reduction for failure to meet the Hospital OQR Program reporting requirements. This application of the reporting ratio to the national unadjusted and minimum unadjusted copayments is calculated according to § 419.41 of our regulations, prior to any adjustment for a hospital's failure to meet the quality reporting standards according to § 419.43(h). Beneficiaries and secondary payers thereby share in the reduction of payments to these hospitals.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68772), we established the policy that all other applicable adjustments to the OPPS national unadjusted payment rates apply when the OPD fee schedule increase factor is reduced for hospitals that fail to meet the requirements of the Hospital OQR Program. For example, the following standard adjustments apply to the reduced national unadjusted payment rates: The wage index adjustment; the multiple procedure adjustment; the interrupted procedure adjustment; the rural sole community hospital adjustment; and the adjustment for devices furnished with full or partial credit or without cost. Similarly, OPPS outlier payments made for high cost and complex procedures will continue to be made when outlier criteria are met. For hospitals that fail to meet the quality data reporting requirements, the hospitals' costs are compared to the reduced payments for purposes of outlier eligibility and payment calculation. We established this policy in the OPPS beginning in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60642). For a complete discussion of the OPPS outlier calculation and eligibility criteria, we refer readers to section II.G. of this final rule with comment period.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37193), we proposed to continue our established policy of applying the reduction of the OPD fee schedule increase factor through the use of a reporting ratio for those hospitals that fail to meet the Hospital OQR Program requirements for the full CY 2019 annual payment update factor. For the CY 2019 OPPS, the proposed reporting ratio was 0.980, calculated by dividing the proposed reduced conversion factor of 77.955 by the proposed full conversion factor of 79.546. We proposed to continue to apply the reporting ratio to all services calculated using the OPPS conversion factor. For the CY 2019 OPPS, we proposed to apply the reporting ratio, when applicable, to all HCPCS codes to which we have proposed status indicator assignments of “J1”, “J2”, “P”, “Q1”, “Q2”, “Q3”, “R”, “S”, “T”, “V”, and “U” (other than new technology APCs to which we have proposed status indicator assignment of “S” and “T”). We proposed to continue to exclude services paid under New Technology APCs. We proposed to continue to apply the reporting ratio to the national unadjusted payment rates and the minimum unadjusted and national unadjusted copayment rates of all applicable services for those hospitals that fail to meet the Hospital OQR
We did not receive any public comments on these proposals. For the CY 2019 OPPS, the final reporting ratio is 0.980, calculated by dividing the final reduced conversion factor of 77.900 by the final full conversion factor of 79.490. We also are finalizing the remainder of our proposals regarding the payment reduction for hospitals that fail to meet the Hospital OQR Program requirements for CY 2019 payment determination without modification.
We refer readers to section XIII.A.1. of the proposed rule for a general overview of our quality reporting programs and to section I.A.2. of the proposed rule and this final rule with comment period for a discussion of our new Meaningful Measures Initiative.
We refer readers to section XIV.K.1. of the CY 2012 OPPS/ASC final rule with comment period (76 FR 74492 through 74494) for a detailed discussion of the statutory history of the ASCQR Program.
We seek to promote higher quality and more efficient health care for beneficiaries. This effort is supported by the adoption of widely-agreed-upon quality measures. We have worked with relevant stakeholders to define measures of quality in almost every healthcare setting and currently measure some aspect of care for almost all Medicare beneficiaries. These measures assess structural aspects of care, clinical processes, patient experiences with care, and outcomes. We have implemented quality measure reporting programs for multiple settings of care. To measure the quality of ASC services and to make such information publicly available, we implemented the ASCQR Program. We refer readers to section XV.A.3. of the CY 2014 OPPS/ASC final rule with comment period (78 FR 75122), section XIV. of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66966 through 66987), section XIV. of the CY 2016 OPPS/ASC final rule with comment period (80 FR 70526 through 70538), section XIV. of the CY 2017 OPPS/ASC final rule with comment period (81 FR 79797 through 79826) and section XIV. of the CY 2018 OPPS/ASC final rule with comment period (82 FR 59445 through 59476) for an overview of the regulatory history of the ASCQR Program.
In the proposed rule, we proposed a number of new policies for the ASCQR Program. We developed these proposals after conducting an overall review of the Program under our new Meaningful Measures Initiative, which is discussed in more detail in section I.A.2. of the proposed rule and this final rule with comment period. The proposals reflected our efforts to ensure that the ASCQR Program measure set continues to promote improved health outcomes for our beneficiaries while minimizing costs, which can consist of several different types of costs, including, but not limited to: (1) Facility information collection burden and related cost and burden associated with the submitting/reporting of quality measures to CMS; (2) the facility cost associated with complying with other quality programmatic requirements; (3) the facility cost associated with participating in multiple quality programs, and tracking multiple similar or duplicative measures within or across those programs; (4) the CMS cost associated with the program oversight of the measure, including measure maintenance and public display; and (5) the facility cost associated with compliance with other federal and/or State regulations (if applicable). These proposals also reflected our efforts to improve the usefulness of the data that we publicly report in the ASCQR Program. Our goal is to improve the usefulness and usability of CMS quality program data by streamlining how facilities are reporting and accessing data, while maintaining or improving consumer understanding of the data publicly reported on a
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68493 through 68494) for a detailed discussion of the priorities we consider for ASCQR Program quality measure selection. In the CY 2019 OPPS/ASC proposed rule (83 FR 37193), we did not propose any changes to these policies.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59445 through 59447), we discussed the importance of improving beneficiary outcomes including reducing health disparities. We also discussed our commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level as determined by HHS, belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.
In the FY 2018 and CY 2018 proposed rules for our quality reporting and value-based purchasing programs, we solicited feedback on which social risk factors provide the most valuable information to stakeholders and the methodology for illuminating differences in outcomes rates among patient groups within a hospital or facility that would also allow for a comparison of those differences, or disparities, across facilities. Feedback we received through our quality reporting programs included encouraging CMS to explore whether factors that could be used to stratify or risk adjust the measures (beyond dual eligibility); considering the full range of differences in patients' backgrounds that might affect outcomes; exploring risk adjustment approaches; and offering careful consideration of what type of information display would be most useful to the public. We also sought public comment on confidential reporting and future public reporting of some of our measures stratified by patient dual eligibility. In general, commenters noted that stratified measures could serve as tools for facilities to identify gaps in outcomes for different groups of patients, improve the quality of health care for all patients, and empower beneficiaries and other consumers to make informed decisions about health care. Commenters encouraged us to stratify measures by other social risk factors such as age, income, and educational attainment. With regard to value-based purchasing programs, commenters also cautioned to balance fair and equitable payment while avoiding payment penalties that mask health disparities or discourage the provision of care to more medically complex patients. Commenters also noted that value-based payment program measure selection, domain weighting, performance scoring, and payment methodology must account for social risk.
As a next step, CMS is considering options to reduce health disparities among patient groups within and across healthcare settings by increasing the transparency of disparities as shown by quality measures. We also are considering how this work applies to other CMS quality programs in the future. We refer readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38403 through 38409) for more details, where we discuss the potential stratification of certain Hospital Inpatient Quality Reporting Program outcome measures. Furthermore, we continue to consider options to address equity and disparities in our value-based purchasing programs.
We plan to continue working with ASPE, the public, and other key stakeholders on this important issue to identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.
We previously adopted a policy that quality measures adopted for an ASCQR Program measure set for a previous payment determination year be retained in the ASCQR Program for measure sets for subsequent payment determination years, except when they are removed, suspended, or replaced as indicated (76 FR 74494 and 74504; 77 FR 68494 through 68495; 78 FR 75122; and 79 FR 66967 through 66969). In the CY 2019 OPPS/ASC proposed rule (83 FR 37194), we did not propose any changes to this policy.
We refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66967 through 66969) and 42 CFR 416.320 for a detailed discussion of the process for removing adopted measures from the ASCQR Program. In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66967 through 66969), we finalized the ASCQR Program measure removal factors
• Factor 1. Measure performance among ASCs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made (“topped-out” measures).
• Factor 2. Availability of alternative measures with a stronger relationship to patient outcomes.
• Factor 3. A measure does not align with current clinical guidelines or practice.
• Factor 4. The availability of a more broadly applicable (across settings, populations, or conditions) measure for the topic.
• Factor 5. The availability of a measure that is more proximal in time to desired patient outcomes for the particular topic.
• Factor 6. The availability of a measure that is more strongly associated with desired patient outcomes for the particular topic.
• Factor 7. Collection or public reporting of a measure leads to negative unintended consequences other than patient harm.
In that final rule with comment period, we stated that the benefits of removing a measure from the ASCQR Program will be assessed on a case-by-case basis (79 FR 66969). Under this case-by-case approach, a measure will not be removed solely on the basis of meeting any specific factor. We noted that in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68472 through 68473), similar measure removal factors were finalized for the Hospital OQR Program.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37194 through 37197), we proposed to: (1) Remove one factor; (2) add two new measure removal factors,
In the CY 2019 OPPS/ASC proposed rule (83 FR 37195), we proposed to remove the ASCQR Program's measure removal Factor 2, availability of alternative measures with a stronger relationship to patient outcomes. We received comments in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66967) remarking on the duplicative nature of the ASCQR Program's measure removal Factor 2, availability of alternative measures with a stronger relationship to patient outcomes, with measure removal Factor 6, the availability of a measure that is more strongly associated with desired patient outcomes for the particular topic. In that final rule with comment period, we stated that “criterion (2) applies when there is more than one alternative measure with a stronger relationship to patient outcomes that is available, and criterion (6) applies where there is only one measure that is strongly and specifically associated with desired patient outcomes for the particular topic that is available” (79 FR 66967). Since reevaluating those comments, we have now come to agree that ASCQR measure removal Factor 2 is repetitive with Factor 6. Therefore, we proposed to remove Factor 2, “availability of alternative measures with a stronger relationship to patient outcomes,” beginning with the effective date of the CY 2019 OPPS/ASC final rule with comment period. We invited public comment on our proposal as discussed above.
After consideration of the public comments we received, we are finalizing our proposal to remove measure removal Factor 2, “availability of alternative measures with a stronger relationship to patient outcomes,” from the ASCQR Program beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, as proposed.
We want the ASCQR Program measure removal factors to be fully aligned with the Hospital OQR Program to provide consistency across these two outpatient setting quality reporting programs. We believe it is important to evaluate the appropriateness of measures across programs using similar standards. In evaluating the two programs' removal factors, we became aware that the Hospital OQR Program includes one factor not currently in the ASCQR Program. The Hospital OQR Program's second measure removal factor specifies “performance or improvement on a measure does not result in better patient outcomes” (75 FR 50185).
Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37195), we proposed to add “performance or improvement on a measure does not result in better patient outcomes” as the new removal Factor 2 for the ASCQR Program (replacing the previously adopted factor removed above). We believe that this factor is applicable in evaluating the ASCQR Program quality measures for removal because we have found it useful for evaluating measures in the Hospital OQR Program, which also evaluates the outpatient setting. In the proposed rule, we also noted that this proposed factor is already included in the Hospital IQR (80 FR 49641 through 49642), the PCHQR (82 FR 38411), the LTCH QRP (77 FR 53614 through 53615), and the IPFQR (82 FR 38463) Programs. We proposed to add a new removal factor to the ASCQR Program: “performance or improvement on a measure does not result in better patient outcomes” beginning with the effective date of the CY 2019 OPPS/ASC final rule with comment period. We invited public comments on our proposal, as discussed above.
After consideration of the public comments we received, we are finalizing our proposal to add a new removal factor to the ASCQR Program, “performance or improvement on a measure does not result in better patient outcomes” beginning with the effective date of the CY 2019 OPPS/ASC final rule with comment period, as proposed.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37195), we proposed to adopt an additional factor to consider when evaluating measures for removal from the ASCQR Program measure set:
• Factor 8. The costs associated with a measure outweigh the benefit of its continued use in the program.
As we discuss in section I.A.2. of the proposed rule and this final rule with comment period with respect to our new Meaningful Measures Initiative, we are engaging in efforts to ensure that the ASCQR Program measure set continues to promote improved health outcomes for beneficiaries while minimizing the overall costs associated with the program. We believe these costs are multifaceted and include not only the burden associated with reporting, but also the costs associated with implementing and maintaining the program. We have identified several different types of costs, including, but not limited to: (1) Facility information collection burden and related costs and burden associated with the submission/reporting of quality measures to CMS; (2) the facility cost associated with complying with other programmatic requirements; (3) the facility cost associated with participating in multiple quality programs, and tracking multiple similar or duplicative measures within or across those programs; (4) the CMS cost associated with the program oversight of the measure including measure maintenance and public display; and (5) the facility cost associated with compliance with other federal and/or State regulations (if applicable). For example, it may be needlessly costly and/or of limited benefit to retain or maintain a measure which our analyses show no longer meaningfully supports program objectives (for example, informing beneficiary choice or payment scoring). It may also be costly for ASCs to track confidential feedback, preview reports, and publicly reported information on a measure where we use the measure in more than one program. CMS may also have to expend unnecessary resources to maintain the specifications for the measure, as well as the tools needed to collect, validate, analyze, and publicly report the measure data. Furthermore, beneficiaries may find it confusing to see public reporting on the same measure in different programs.
In weighing the costs against the benefits, we evaluate the benefits of the measure as a whole, but in particular, we assess the benefits through the framework of our Meaningful Measures Initiative, as we discussed in section I.A.2. of the proposed rule and this final rule with comment period. One key aspect of patient benefits is assessing the improved beneficiary health
When these costs outweigh the evidence supporting the benefits to patients with the continued use of a measure in the ASCQR Program, we believe it may be appropriate to remove the measure from the Program. Although we recognize that one of the main goals of the ASCQR Program is to improve beneficiary outcomes by incentivizing health care facilities to focus on specific care issues and making public data related to those issues, we also recognize that those goals can have limited utility where, for example, the publicly reported data (including percentage payment adjustment data) is of limited use because it cannot be easily interpreted by beneficiaries and used to inform their choice of facility. In these cases, removing the measure from the ASCQR Program may better accommodate the costs of program administration and compliance without sacrificing improved health outcomes and beneficiary choice.
We proposed that we would remove measures based on this factor assessing costs versus benefits on a case-by-case basis. We might, for example, decide to retain a measure that is burdensome for ASCs to report if we conclude that the benefit to beneficiaries justifies the reporting burden. Our goal is to move the program forward in the least burdensome manner possible, while maintaining a parsimonious set of meaningful quality measures and continuing to incentivize improvement in the quality of care provided to patients.
We invited public comment on our proposal to adopt an additional measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program, beginning with the effective date of the CY 2019 OPPS/ASC final rule with comment period and for subsequent years.
We referred readers to section XIV.B.3.c. of the proposed rule, where we proposed to remove four measures based on this proposed measure removal factor. We noted that we had also proposed this same measure removal factor for the Hospital OQR Program in section XIII.B.4.a.(4) of the proposed rule, as well as for other quality reporting and value-based purchasing programs for FY 2019 including: the Hospital VBP Program (83 FR 41442), the Hospital IQR Program (83 FR 41544); the PCHQR Program (83 FR 41609 through 41610); the LTCH QRP (83 FR 41625 through 41627); the HQRP (83 FR 41625 through 41627); the IRF QRP (83 FR 38556 through 38557); the SNF QRP (83 FR 39267 through 39269); and the IPFQR Program (83 FR 38591 through 38593).
We thank commenters for their suggestions regarding additional costs to consider. We will use this feedback, as well as input from all stakeholders, as we apply measure removal Factor 8 in future rulemaking.
With respect to the commenter that suggested that costs and benefits should be defined as only costs and benefits to beneficiaries and the public, we believe that various stakeholders may have different perspectives on how to define costs as well as benefits. Because of these challenges, we intend to evaluate costs and benefits for each measure on a case-by-case basis, while considering input from a variety of stakeholders, including, but not limited to: Patients, caregivers, patient and family advocates, providers, provider associations, healthcare researchers, healthcare purchasers, data vendors, and other stakeholders with insight into the direct and indirect benefits and costs (financial and otherwise) of maintaining any specific measure in the ASCQR Program. However, we believe that while a measure's use in the ASCQR Program may benefit many entities, the primary benefit is to patients and their caregivers through incentivizing high-quality care and providing publicly reported data regarding the quality of care available. We note that we intend to assess the costs and benefits to program stakeholders, including but not limited to, those listed in the proposed rule. Therefore, we intend to consider the benefits, especially those to patients and their families, when evaluating measures under this measure removal factor. As noted above, we have offered
After consideration of the public comments we received, we are finalizing our proposal to adopt measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program, for the ASCQR Program beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, as proposed.
As a result of the finalization of our proposals to remove one and add two new removal factors as proposed, the new measure removal factors list for the ASCQR Program consists of the following:
• Factor 1. Measure performance among ASCs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made (“topped-out” measures).
• Factor 2. Performance or improvement on a measure does not result in better patient outcomes.
• Factor 3. A measure does not align with current clinical guidelines or practice.
• Factor 4. The availability of a more broadly applicable (across settings, populations, or conditions) measure for the topic.
• Factor 5. The availability of a measure that is more proximal in time to desired patient outcomes for the particular topic.
• Factor 6. The availability of a measure that is more strongly associated with desired patient outcomes for the particular topic.
• Factor 7. Collection or public reporting of a measure leads to negative unintended consequences other than patient harm.
• Factor 8. The costs associated with a measure outweigh the benefit of its continued use in the program.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37196), we proposed to revise 42 CFR 416.320(c) to better reflect our considerations for removing measures policy in light of the above proposals.
We did not receive any comments on our proposal. Therefore, we are finalizing our proposal to revise 42 CFR 416.320(c), as proposed.
We refer readers to the CY 2015 OPPS/ASC final rule with comment period where we finalized the criteria for determining when a measure is “topped-out” (79 FR 66968). In that final rule with comment period, we finalized two criteria for determining when a measure is “topped-out” under the ASCQR Program: (1) When there is statistically indistinguishable performance at the 75th and 90th percentiles of national facility performance; and (2) when the measure's truncated coefficient of variation (TCOV) is less than or equal to 0.10 (79 FR 66968 through 66969).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37196), we did not propose any changes to this policy; however, we clarified our process for calculating the truncated coefficient of variation (TCOV) for four of the measures (ASC-1, ASC-2, ASC-3, and ASC-4) proposed for removal from the ASCQR Program. Utilizing our finalized methodology (79 FR 66968), we determine the truncated coefficient of variation (TCOV) by calculating the truncated standard deviation (SD) divided by the truncated mean. As discussed above, our finalized removal criteria state that to be considered “topped-out,” a measure must have a TCOV of less than 0.10. We utilize the TCOV because it is generally a good measure of variability and provides a relative methodology for comparing different types of measures.
Unlike the majority of our measures, for which a higher rate (indicating a higher proportion of a desired event) is the preferred outcome, some measures—in particular, ASC-1, ASC-2, ASC-3, and ASC-4—assess the rate of rare, undesired events for which a lower rate is preferred. For example, ASC-1 assesses the occurrence of patient burns, a patient safety issue. However, when determining the TCOV for a measure assessing rare, undesired events, the mean, or average rate of event occurrence, is very low and the result is a TCOV that increases rapidly and approaches infinity as the proportion of rare events declines.
In the proposed rule, we proposed to remove a number of measures that assess the rate of rare, undesired events for which a lower rate is preferred—ASC-1, ASC-2, ASC-3, and ASC-4—and referred readers to section XIV.B.3.c. of the proposed rule where these proposed measure removals are discussed in detail. Because by design
In the CY 2019 OPPS/ASC proposed rule (83 FR 37197 through 37202), we proposed to remove a total of eight measures from the ASCQR Program measure set across the CY 2020 and CY 2021 payment determinations. Specifically, beginning with the CY 2020 payment determination, we proposed to remove: (1) ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431); and beginning with the CY 2021 payment determination, we proposed to remove: (2) ASC-1: Patient Burn (NQF #0263); (3) ASC-2: Patient Fall (NQF #0266); (4) ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant (NQF #0267); (5) ASC-4: All-Cause Hospital Transfer/Admission (NQF #0265); (6) ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658); (7) ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use (NQF #0659); and (8) ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536). We proposed to remove these measures under the following measure removal factors: Factor 1—measure performance among ASCs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made (“topped-out” measures); and Factor 8—the costs associated with a measure outweigh the benefit of its continued use in the program.
We are finalizing the removal of two measures out of the eight measure removals we proposed. The proposed measure-specific removals are discussed in detail further below. However, because we received several general comments regarding all eight proposals as a whole, we are discussing those first.
For the CY 2020 payment determination and subsequent years, we proposed to remove one NHSN measure under proposed measure removal Factor 8, the costs associated with this measure outweigh the benefit of its continued use in the program.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74510), where we adopted ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431), beginning with the CY 2016 payment determination and for subsequent years. This process of care measure, also a National Healthcare Safety Network (NHSN) measure, assesses the percentage of healthcare personnel who have been immunized for influenza during the flu season. We initially adopted this measure based on our recognition that influenza immunization is an important public health issue and vital component to preventing healthcare associated infections. We believe that the measure addresses this public health concern by assessing influenza vaccination in the ASC among healthcare personnel (HCP), who can serve as vectors for influenza transmission.
In the proposed rule, we proposed to remove ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel beginning with the CY 2020 payment determination under proposed measure removal Factor 8, because we have concluded that the costs associated with this measure outweigh the benefit of its continued use in the program.
The information collection burden for the Influenza Vaccination Coverage Among Healthcare Personnel measure is less than for measures that require chart abstraction of patient data because influenza vaccination among health care personnel can be calculated through review of records maintained in administrative systems and because facilities have fewer health care personnel than patients. As such, ASC-8 does not require review of as many records. However, this measure does still pose information collection burden on facilities due to the requirement to identify personnel who have been
Furthermore, as we stated in section XIV.B.3.b. of the proposed rule, costs are multifaceted and include not only the burden associated with reporting, but also the costs associated with implementing and maintaining the program. For example, it may be costly for health care providers to maintain general administrative knowledge to report these measures. In addition, CMS must expend resources in maintaining information collection systems, analyzing reported data, and providing public reporting of the collected information.
In our analysis of the ASCQR Program measure set, we recognized that some ASCs face challenges with respect to the administrative requirements of the NHSN in their reporting of the Influenza Vaccination Coverage Among Healthcare Personnel measure. These administrative requirements (which are unique to NHSN) include annually completing NHSN system user authentication. Enrolling in NHSN is a five-step process that the CDC estimates takes an average of 263 minutes per ASC.
Unlike short-term acute care hospitals which participate in other quality programs, such as the Hospital IQR and HAC Reduction Programs, ASCs are only required to participate in NHSN to submit data for this one measure. This may unduly disadvantage smaller ASCs, specifically those that are not part of larger hospital systems, because these ASCs do not have NHSN access for other quality reporting or value-based payment programs. It is our goal to ensure that the ASCQR Program is equitable to all ASCs and this measure may disproportionately affect small, independent ASCs. Especially for these small, independent ASCs, the incremental costs of this measure, as compared to other measures in the ASCQR Program measure set, are significant because of the requirements imposed by NHSN participation.
We continue to believe that the Influenza Vaccination Coverage Among Healthcare Personnel measure provides the benefit of protecting ASC patients against influenza. However, we believe that these benefits are offset by other efforts to reduce influenza infection among ASC patients, such as numerous healthcare employer requirements for healthcare personnel to be vaccinated against influenza.
We wish to minimize the level of cost of our programs for participating facilities, as discussed under the Meaningful Measures Initiative described in section I.A.2. of the proposed rule and this final rule with comment period. In our assessment of the ASCQR Program measure set, we prioritized measures that align with this Framework as the most important to the ASC population. Our assessment concluded that while the Influenza Vaccination Coverage Among Healthcare Personnel measure continues to provide benefits, these benefits are diminished by other factors and are outweighed by the costs and burdens of reporting this measure.
For these reasons, we proposed to remove ASC-8: Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) from the ASCQR Program beginning with the CY 2020 payment determination and for subsequent years because the costs associated with the measure outweigh the benefit of its continued use in the program. We noted that if proposed measure removal Factor 8 is not finalized, removal of this measure would also not be finalized. We also noted that a similar measure was also proposed for removal from the Hospital OQR Program in section XIII.B.4.b.(1) of the proposed rule and the IPFQR Program in the FY 2019 IPF PPS proposed rule (83 FR 21104). We invited public comments on our proposal to remove ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel from the ASCQR Program beginning with the CY 2020 payment determination under measure removal Factor 8, because we have concluded that the costs associated with this measure outweigh the benefit of its continued use in the program, as discussed above.
However, while we agree that Medicare beneficiaries may have additional risk of contracting influenza, as noted in our proposal, we believe the effects of removing this measure from the ASCQR Program are mitigated as the issue is addressed in other initiatives such as State laws and employer programs that require influenza vaccination of healthcare workers.
As we noted above, the burden of reporting this measure is greater for ASCs compared to the relative burden for hospitals participating in the Hospital IQR and HAC Reduction Programs. The entire burden of registering for and maintaining access to the CDC's NHSN system for ASCs, especially independent or freestanding ASCs, is due to this one measure; whereas, hospitals paid under the IPPS, participating in the Hospital IQR Program, the HAC Reduction Program, and the Hospital VBP Program, for example, must register and maintain NHSN access for several healthcare safety measures, not just one.
After consideration of the public comments we received, we are finalizing our proposal to remove ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel from the ASCQR Program beginning with the CY 2020 payment determination, as proposed.
For the CY 2021 payment determination and subsequent years, we proposed to remove: (1) Four claims-based measures under measure removal Factor 1, “topped-out” status; as well as (2) two chart-abstracted measures and (3) one web-based tool measure under proposed measure removal Factor 8.
In the proposed rule, beginning with the CY 2021 payment determination and subsequent years, we proposed to remove ASC-1, ASC-2, ASC-3, and ASC-4 under measure removal Factor 1, measure performance among ASCs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made. The ASCQR Program previously finalized two criteria for determining when a measure is “topped-out”: (1) When there is statistically indistinguishable performance at the 75th and 90th percentiles of national facility performance; and (2) when the measure's truncated coefficient of variation is less than or equal to 0.10 (79 FR 66968 through 66969). In the proposed rule, we referred readers to section XIV.B.3.b. of the proposed rule, where we clarified and discussed how we calculate the TCOV for measures that assess the rate of rare, undesired events for which a lower rate is preferred, such as ASC-1, ASC-2, ASC-3, and ASC-4.
For each of these measures, we stated that we believed that removal from the ASCQR Program measure set is appropriate as there is little room for improvement. In addition, removal would alleviate the maintenance costs and administrative burden to ASCs associated with retaining the measures. As such, we stated that we believed the burden associated with reporting these measures outweighs the benefits of keeping them in the program.
We also note that in crafting our proposals, we considered removing these measures beginning with the CY 2020 payment determination, but opted to delay removal until the CY 2021 payment determination to be sensitive to facilities' planning and operational procedures given that data collection for the measures begins during CY 2018 for the CY 2020 payment determination. Each measure is discussed in more detail further below. However, because we received several general comments regarding these proposals as a whole, we are discussing those first.
Due to public comments, we have reevaluated our data. In the proposed rule, we believed that the measures' performance among ASCs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made and that the measures met the criteria for being topped-out. However, we have reviewed many studies, in addition to the public comments we received, that show the importance of measuring and reporting the data for these measures, as discussed in each proposal below. Therefore, we have now come to believe that these measures may be more valuable to stakeholders than we initially perceived in the proposed rule. We agree that it is important to continue to monitor these types of events considering the potential negative impacts to patients' morbidity and mortality, in order to continue to prevent their occurrence and ensure that they remain rare. We acknowledge that these measures provide critical data to beneficiaries and further transparency for care provided in the ASC setting that would be useful in choosing an ASC for care, and that these measures are valuable to the ASC community. Despite little room for improvement, these measures provide beneficiaries and ASCs with vital information about patient burns, patient falls, wrong site, wrong side, wrong patient, wrong procedure, wrong implant events, and hospital transfers/admissions that take place in the ASC setting and we believe it would be prudent to keep them in the program at this time in order to continue to detect and prevent these events. Further, we acknowledge that having measures that apply to all ASCs provides beneficiaries with the most comprehensive patient safety data to use when making decisions about a site of care. ASC-1, ASC-2, ASC-3, and ASC-4 are measures for which all ASCs, regardless of specialty area, can submit data in contrast to other measures, such as ASC-14: Unplanned Anterior Vitrectomy, which would only apply to ASCs where specialty-specific procedures are performed, such as ophthalmology procedures in the case of ASC-14. Therefore, we are not finalizing our proposals to remove ASC-1, ASC-2, ASC-3, and ASC-4. These measures will remain in the program under our measure retention policies, unless we take future action under our measure removal policies.
Currently, ASCs are only able to report adverse events for Medicare fee-for-service beneficiaries and that adverse events that have occurred to patients with other payers are not reflected in the currently reported data. As such, it is possible for an ASC to report zero adverse events via the ASCQR Program because no adverse events occurred to Medicare FFS beneficiaries within the reporting period. In addition, we thank the commenters for their suggestions regarding redeveloping the measure to capture all payers and to submit via QualityNet to reduce burden. We note that because the data for these measures are currently collected via Medicare FFS claims, as specified in the Specifications Manual,
We thank the commenters for the feedback and note that we are also concerned about some of the data submitted for these measures. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53641), we finalized our policy that the minimum threshold for successful reporting be that at least 50 percent of claims meeting measure specifications contain QDCs. At that time, we believed that 50 percent was a reasonable minimum threshold for the initial implementation years of the ASCQR Program, because ASCs were not yet familiar with how to report quality data under the ASCQR Program and because many ASCs are relatively small and may have needed more time to set up reporting systems. We stated in that final rule that we intended to propose to increase this percentage for subsequent years' payment determinations as ASCs become more familiar with reporting requirements for the ASCQR Program. We have assessed this reporting threshold annually and have found that over 78 percent of reporting ASCs report data for at least 90 percent of eligible claims. However, we believe that the current data submission method for these measures may impact the completeness and accuracy of the data due to the inability of ASCs to correct the QDC codes that are used to calculate these measures from Medicare FFS claims. Currently, a facility that identifies an erroneous or missing QDC code is unable to correct or add a QDC code if the claim has already been submitted to Medicare. We believe that revising the data submission method for the measures, such as via QualityNet, would address this issue and allow facilities to correct any data submissions errors, resulting in more complete and accurate data. Further, we will conduct additional empirical analyses to identify any other potential issues with the data submitted for these measures. We refer readers to section XIV.B.6. of this final rule with comment period, where we discuss public comments received about the potential future validation of ASCQR Program measures.
We are committed to work with stakeholders to ensure the ASCQR Program measure set does not place an inappropriate amount of burden on facilities while addressing and providing information about these types of patient safety, adverse, rare events to patients and other consumers. As such, while we will retain ASC-1, ASC-2, ASC-3, and ASC-4 in the program as discussed above, after considering public comments and reevaluating our concerns about data submission, we will also suspend their data collection beginning with the CY 2019 reporting period/CY 2021 payment determination until further action in rulemaking with the goal of updating the data submission method for the measures. In other words, starting with the CY 2021 payment determination, facilities would not be required to submit data for these four measures as part of ASCQR Program requirements although the measures would remain in the ASCQR Program measure set. As we develop future revisions for the data collected for these measures, we will take into consideration other data submission methods that may allow for the reporting of adverse events across payers and will consider commenters' feedback toward the future updates to the measures.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74497 through 74498) where we adopted ASC-1: Patient Burn beginning with the CY 2014 payment determination (NQF #0263). This claims-based outcome measure assesses the percentage of ASC admissions experiencing a burn prior to discharge.
Based on our analysis of ASCQR Program measure data for CYs 2013 to 2017 encounters, the ASC-1 measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the analysis above, there is no distinguishable difference in ASC performance between the 75th and 90th percentiles, and the truncated coefficient of variation has been below 0.10 since 2013. In the proposed rule, we also noted that NQF endorsement of this measure (NQF #0263) was removed on May 24, 2016.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74498) where we adopted ASC-2: Patient Fall beginning with the CY 2014 payment determination. This NQF-endorsed (NQF #0266), claims-based measure assesses the percentage of ASC admissions experiencing a fall in the ASC.
Based on our analysis of ASCQR Program measure data for CYs 2013 to 2017 encounters, the ASC-2 measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the analysis above, there is no distinguishable difference in ASC performance between the 75th and 90th percentiles and the truncated coefficient of variation has been below 0.10 since 2013.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74498 through 74499) where we adopted ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant beginning with the CY 2014 payment determination (NQF #0267). This claims-based outcome measure assesses the percentage of ASC admissions experiencing a wrong site, wrong side, wrong patient, wrong procedure, or wrong implant.
Based on our analysis of ASCQR Program measure data for CYs 2013 to 2017 encounters, the ASC-3 measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the analysis above, there is no distinguishable difference in ASC performance between the 75th and 90th percentiles and the truncated coefficient of variation has been below 0.10 since 2013. In the proposed rule, we also noted that NQF endorsement of this measure (NQF #0267) was removed on May 24, 2016.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74499) where we adopted ASC-4: All-Cause Hospital Transfer/Admission beginning with the CY 2014 payment determination (NQF #0265). This claims-based outcome measure assesses the rate of ASC admissions requiring a hospital transfer or hospital admission upon discharge from the ASC.
Based on our analysis of ASCQR Program measure data for CYs 2013 to 2017 encounters, the ASC-4 measure meets our measure removal Factor 1. These analyses are captured in the table below.
As displayed in the analysis above, there is no distinguishable difference in ASC performance between the 75th and 90th percentiles and the truncated coefficient of variation has been below 0.10 since 2013. In the proposed rule, we also noted that NQF endorsement of this measure (NQF #0265) was removed on February 4, 2016.
Currently, 42 CFR 416.41(b)(3)(i) and (ii) requires ASCs to have a written transfer agreement with a hospital that meets certain Medicare requirements or ensure all physicians performing surgery in the ASC have admitting privileges in a hospital that meets certain Medicare requirements. A written transfer agreement and physician admitting privileges are intended to ensure there is a relationship between the ASC and local hospital that would serve the patient in the event of a medical emergency. We note that changes to these requirements were proposed in the Medicare and Medicaid Programs; Regulatory Provisions To Promote Program Efficiency, Transparency, and Burden Reduction proposed rule (83 FR 47686) due to the difficulty of obtaining these agreements.
Over the past 5 years, we have heard from the largest ASC trade association and multiple ASCs that we need to address the widespread issue of the growing number of hospitals that are declining to work with ASCs (either by declining to sign a transfer agreement or by declining to allow admitting privileges to the hospital by physicians who work in ASCs) due to competition between hospital outpatient surgery departments and ASCs. We have continually worked with the ASCs and hospitals directly to resolve this requirement issue. However, we are aware that several facilities have not been able to reach a positive outcome.
On September 20, 2018, we issued a proposed rule in the
Another commenter recommended that CMS expand ASC-4 to include patients who visit a hospital for an inpatient admission or emergency department visit in the days following their ASC procedure.
In the proposed rule, we proposed to remove three measures (ASC-9, ASC-10, and ASC-11) under proposed measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program, for the CY 2021 payment determination and subsequent years. In the proposed rule, we noted that if proposed measure removal Factor 8 is not finalized, removal of these measures would also not be finalized.
The proposals are discussed in more detail below. We note that in crafting our proposals, we considered removing these measures beginning with the CY 2020 payment determination but opted to delay removal until the CY 2021 payment determination to be sensitive to facilities' planning and operational procedures given that data collection for these measures begins during CY 2018 for the CY 2020 payment determination.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75127 through 75128) where we adopted ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients (NQF #0659) beginning with the CY 2016 payment determination. This chart-abstracted process measure assesses the “[p]ercentage of patients aged 50 years and older receiving a screening colonoscopy without biopsy or polypectomy who had a recommended follow-up interval of at least ten (10) years for repeat colonoscopy documented in their colonoscopy report.” (78 FR 75127). This measure aims to assess whether average risk patients with normal colonoscopies receive a recommendation to receive a repeat colonoscopy in an interval that is less than the recommended amount of ten (10) years.
In the proposed rule, we proposed to remove ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients beginning with the CY 2021 payment determination and for subsequent years under our measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program. We adopted ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75127 through 75128) noting that performing colonoscopy too frequently increases patients' exposure to procedural harm. However, we noted concern in the proposed rule that the costs of this measure outweigh the benefit of its continued use in the program.
Chart-abstraction requires facilities to select a sample population, access historical records from several current and historic clinical data quarters and interpret that patient data. This process is typically more time and resource-consuming than for other measure types. In addition to submission of manually chart-abstracted data, we take all burden and costs into account when evaluating a measure. We noted in the proposed rule that removing ASC-9 would reduce the burden and cost to facilities associated with collection of information and reviewing their data and performance associated with the measure.
However, we also acknowledged that we do not believe the use of chart-abstracted measure data alone is sufficient justification for removal of a measure under proposed measure removal Factor 8. The costs of collection and submission of chart-abstracted measure data is burdensome for facilities, especially when taking into consideration the availability of other CMS quality measures that are relevant in the clinical condition and highly correlated in performance across measures. In the proposed rule we noted another colonoscopy-related measure required in the ASCQR Program, ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (NQF #2539) which measures all-cause, unplanned hospital visits (admissions, observation stays, and emergency department visits) within seven (7) days of an outpatient colonoscopy procedure (79 FR 66970). This claims-based outcome measure does not require chart-abstraction, and similarly contributes data on quality of care related to colonoscopy procedures, although the measure does not specifically track processes such as follow-up intervals. When we adopted ASC-12, we believed this measure would reduce adverse patient outcomes associated with preparation for colonoscopy, the procedure itself, and follow-up care by capturing and making more visible to facilities and patients all unplanned hospital visits following the procedure (79 FR 66970). Furthermore, in the proposed rule we noted our belief that the potential benefits of keeping ASC-9 in the program are mitigated by the existence of the same measure (Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients)
Furthermore, we seek to align our quality reporting work with the Patients Over Paperwork and the Meaningful Measures Initiatives described in section I.A.2. of the proposed rule and this final rule with comment period. The purpose of this effort is to hold providers accountable for only the measures that are most important to patients and clinicians and those that are focused on patient outcomes in particular, because outcome measures evaluate the actual results of care. As described in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden, and we believe that removing this chart-abstracted measure from the ASCQR Program would reduce program complexity. In addition, as we discussed in section XIV.B.3.b. of the proposed rule, where we proposed to adopt measure removal Factor 8, we noted that beneficiaries may find it confusing to see public reporting on the same measure in different programs.
Therefore, due to the combination of factors of the costs of collecting data for this chart-abstracted measure, the preference for an outcomes measure in the ASCQR Program that provides valuable data for the same procedure, and the existence of the same measure in another CMS program, we noted in the proposed rule that the burdens and costs associated with this measure outweigh the limited benefit to beneficiaries. As a result, we proposed to remove ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients beginning with the CY 2021 payment determination and for subsequent years. We note that the Hospital OQR Program proposed to remove a similar measure, OP-29: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients in section XIII.B.4.b. of the proposed rule.
Furthermore, while ASC-9 and ASC-12 assess the topic of colonoscopies generally, we acknowledge that they assess distinct clinical areas. ASC-12 tracks adverse patient outcomes that result in unplanned hospital visits; ASC-9 provides information about colonoscopies occurring at inappropriate intervals that may contribute to increased costs to beneficiaries and to CMS, a priority of our Meaningful Measures Initiative. While ASC-12 provides vital data about patient outcomes after colonoscopies, ASC-9 focuses on adherence to guideline recommendations for screening colonoscopy follow-up intervals, as noted by NQF's evaluation report.
In section I.A.2. of the proposed rule and this final rule with comment period, we describe our Meaningful Measures Initiative that is intended to reduce costs and minimize burden. We believe that although removing this chart-abstracted measure from the ASCQR Program would reduce program complexity, retaining it provides pertinent information about colonoscopies occurring at inappropriate intervals that may contribute to increased costs to beneficiaries and to CMS, a priority of our Meaningful Measures Initiative.
Despite the costs and burdens of chart-abstraction or the presence of other measures assessing a similar clinical topic, after considering incoming comments and reevaluating our data, we now believe ASC-9 is a more critical measure for the ASCQR Program than we initially perceived in the proposed rule. Accordingly, upon further review of the benefits of the measure, we no longer believe that the costs associated with this measure outweigh the benefit of its continued use in the program. Therefore, we are not finalizing our proposal to remove this measure. This measure will remain in the program under our measure retention policies, unless we take future action under our measure removal policies.
In section XIV.B.6. of this final rule with comment period, we discuss public comments we received on the possible future validation of ASCQR Program measures and will include this comment in our consideration of that request for information. As discussed in detail above, after consideration of the public comments we received, we are not finalizing our proposal to remove ASC-9.
After consideration of the comments we received, we are not finalizing our proposal to remove ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients from the ASCQR Program beginning with the CY 2021 payment determination and for subsequent years. This measure will remain in the program under our measure retention policies, unless we take future action under our measure removal policies. We note that we are also not finalizing our proposal to remove OP-29 under the Hospital OQR Program, and we refer readers to section XIII.B.4.b. of this final
We refer readers to CY 2014 OPPS/ASC final rule with comment period (78 FR 75128) where we adopted ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use (NQF #0659) beginning with the CY 2016 payment determination. This chart-abstracted process measure assesses the percentage of patients aged 18 years and older receiving a surveillance colonoscopy, with a history of a prior colonic polyp in previous colonoscopy findings, who had a follow-up interval of 3 or more years since their last colonoscopy documented in the colonoscopy report.
In the proposed rule, we proposed to remove ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use beginning with the CY 2021 payment determination and for subsequent years under our proposed measure removal Factor 8, the costs associated with a measure outweigh the benefit of its continued use in the program.
We adopted ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75128) noting that colonoscopy screening for high risk patients is recommended based on risk factors, and one such factor is a history of adenomatous polyps. The frequency of colonoscopy screening varies depending on the size and amount of polyps found, with the general recommendation of a 3-year follow-up. We stated that this measure is appropriate for the measurement of quality of care furnished by ASCs, because colonoscopy screening is commonly performed in these settings (78 FR 75128). However, we now believe that the costs of this measure outweigh the benefit of its continued use in the program.
Chart-abstraction requires facilities to select a sample population, access historical records from several clinical data quarters past, and interpret that patient data. This process is typically more time and resource-consuming than for other measure types. In addition to submission of manually chart-abstracted data, we take all burden and costs into account when evaluating a measure. Removing ASC-10 would reduce the burden and cost to facilities associated with collection of information and reporting on their performance associated with the measure.
However, we do not believe the use of chart-abstracted measure data alone is sufficient justification for removal of a measure under proposed measure removal Factor 8. The costs of collection and submission of chart-abstracted measure data is burdensome for facilities especially when taking into consideration the availability of other CMS quality measures. Another colonoscopy-related measure required in the ASCQR Program, ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (NQF #2539) measures all-cause, unplanned hospital visits (admissions, observation stays, and emergency department visits) within seven (7) days of an outpatient colonoscopy procedure (79 FR 66970). This claims-based outcome measure does not require chart-abstraction, and similarly contributes data on quality of care related to colonoscopy procedures, although the measure does not specifically track processes such as follow-up intervals. When we adopted ASC-12, we believed this measure would reduce adverse patient outcomes associated with preparation for colonoscopy, the procedure itself, and follow-up care by capturing and making more visible to facilities and patients all unplanned hospital visits following the procedure (79 FR 66970). Furthermore, the potential benefits of keeping ASC-10 in the ASCQR Program are mitigated by the existence of the same measure (Colonoscopy Interval for Patients with a History of Adenomatous Polyps-Avoidance of Inappropriate Use)
Furthermore, we seek to align our quality reporting work with the Patients Over Paperwork and the Meaningful Measures Initiatives described in section I.A.2. of the proposed rule and this final rule with comment period. The purpose of this effort is to hold providers accountable for only the measures that are most important to patients and clinicians and that are focused on patient outcomes in particular, because outcome measures evaluate the actual results of care. As described in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden, and we believe that removing this chart-abstracted measure from the ASCQR Program would reduce program complexity. In addition, as we discussed in section XIV.B.3.b. of the proposed rule, where we proposed to adopt measure removal Factor 8, beneficiaries may find it confusing to see public reporting on the same measure in different programs.
Therefore, due to the combination of factors of the costs of collecting data for this chart-abstracted measure, the preference for an outcomes measure in the ASCQR Program that provides valuable data for the same procedure, and the existence of the same measure in the MIPS program, we believe that the burdens and costs associated with manual chart abstraction outweigh the limited benefit to beneficiaries of receiving this information. As a result, we proposed to remove ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use from the ASCQR Program beginning with the CY 2021 payment determination and for subsequent years. We note that we proposed to remove a similar measure from the Hospital OQR Program in section XIII.B.4.b. of the proposed rule.
As discussed above, we are retaining ASC-9 in order to retain a measure assessing inappropriate use of endoscopies/colonoscopies in the ASCQR Program. After reconsideration, we believe there may be a measurement gap if both ASC-9 and ASC-10 are removed and because of the unique burden associated with ASC-10, we are finalizing our removal of this measure but retaining ASC-9. A primary goal of our Meaningful Measures Initiative is to reduce provider burden through the deduplication of measures across quality reporting programs. Thus, due in part to the duplication of this measure through MIPS in the QPP and the additional burden to ASCs of obtaining patient records, we believe ASC-10 is the more appropriate measure to be removed from the ASCQR Program measure set. Removing ASC-10 while retaining ASC-9 best enables us to assess this important clinical area while ensuring that the costs of measure do not outweigh the benefits.
Further, due to the unique documentation burden specifically for ASC-10, we believe it adds undue burden to ASCs, particularly small ASCs and those that do not have EHRs and is more burdensome than ASC-9. After review of public comments we received, we reevaluated our data and our measure set as a whole. To balance the clinical value of measures with the costs, we believe it is appropriate to retain ASC-9 while finalizing our proposal to remove ASC-10.
After consideration of the public comments we received, we are finalizing our proposal to remove ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use from the ASCQR Program beginning with the CY 2021 payment determination and for subsequent years, as proposed. We refer readers to section XIII.B.4.b. of this final rule with comment period where we are removing a similar measure from the Hospital OQR Program.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75129) where we adopted ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (NQF #1536) beginning with the CY 2016 payment determination. This measure assesses the rate of patients 18 years and older (with a diagnosis of uncomplicated cataract) in a sample who had improvement in visual function achieved within 90 days following cataract surgery based on completing both a preoperative and postoperative visual function survey.
Since the adoption of this measure, we came to believe that it can be operationally difficult for ASCs to collect and report the measure (79 FR 66984). Specifically, we were concerned that the results of the survey used to assess the preoperative and post-operative visual function of the patient may not be shared across clinicians and facilities, making it difficult for ASCs to have knowledge of the visual function of the patient before and after surgery (79 FR 66984). We were also concerned about the surveys used to assess visual function; the measure allows for the use of any validated survey and results may be inconsistent should clinicians use different surveys (79 FR 66984). Therefore, on December 31, 2013, we issued guidance stating that we would delay data collection for ASC-11 for three (3) months (data collection would commence with April 1, 2014 encounters) for the CY 2016 payment determination (
In the proposed rule, we proposed to remove ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery from the ASCQR Program beginning with the CY 2021 payment determination under proposed measure removal Factor 8, the costs associated with the measure outweigh the benefit of its continued use in the program. We originally adopted ASC-11 because we believe ASCs should be a partner in care with physicians and other clinicians using their facility and that this measure would provide an opportunity to do so (79 FR 66984). However, in light of the history of complications and upon reviewing this measure within our Meaningful Measures framework, we have concluded that it is overly burdensome for ASCs to report this measure due to the difficulty of tracking care that occurs outside of the ASC setting.
In order to report on this measure to CMS, a facility would need to obtain the visual function assessment results from the appropriate ophthalmologist and ensure that the assessment utilized is validated for the population for which it is being used. If the assessment is not able to be used or is not available, the ASC would then need to administer the survey directly and ensure that the same visual function assessment tool is utilized preoperatively and postoperatively. There is no simple, preexisting means for information sharing between ophthalmologists and ASCs, so an ASC would need to obtain assessment results from each individual patient's ophthalmologist both preoperatively and postoperatively. The high administrative costs of the technical tracking of this information presents an undue cost, and also burden associated with submission and reporting of ASC-11 to CMS, especially for small ASCs with limited staffing capacity.
Furthermore, this measure currently provides limited benefits. Since making the measure voluntary, only 118 ASCs have reported this measure to CMS, compared to approximately 5,121 total ASCs for all other measures, resulting in only 2.3 percent of ASC reporting.
Therefore, we stated that we believed the high technical and administrative costs of this measure outweigh the limited benefit associated with its continued use in the ASCQR Program. As discussed in section I.A.2. of the proposed rule and this final rule with comment period, our Meaningful Measures Initiative is intended to reduce costs and minimize burden. We believed that removing this measure from the ASCQR Program will reduce program burden, costs, and complexity. As a result, we proposed to remove ASC-11 beginning with the CY 2021 payment determination and for subsequent years. We also proposed to remove a similar measure under the Hospital OQR Program in section XIII.B.4.b. of the proposed rule.
Furthermore, this is the only measure in the ASCQR Program measure set that deals with cataract surgery, which is commonly performed in the ASC setting. If it is removed, the program will have a gap in coverage for this clinical area. As a result, we now believe that meaningful information can be provided to consumers regarding those facilities. In addition, when this measure was made voluntary in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66984) commenters stated that the measure would promote and improve care coordination among providers.
Furthermore, we have reassessed our evaluation that the costs of this measure outweigh the benefits. Due to the voluntary nature of the measure, we believe that it is inherently not more burdensome than valuable. Because ASCs are not required to submit data, those that do not have the capacity to report, do not have to, thus creating no extra burden. Those that do report, do so voluntarily and have continued to report over the years—specifically since the CY 2015 reporting period—despite any burdens. Because of this, we believe the measure is meaningful to the core group of facilities that do consistently report.
Therefore, we are not finalizing our proposal to remove ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery from the ASCQR Program beginning with the CY 2021 payment determination and for subsequent years. This measure will remain in the program under our measure retention policies, unless we take future action under our measure removal policies.
After consideration of the public comments we received, we are not finalizing our proposal to remove ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery from the ASCQR Program beginning with the CY 2021 payment determination and for subsequent years. We also note that we are retaining a similar measure under the Hospital OQR Program, OP-31: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery in section XIII.B.4.b.(2)(a) of this final rule with comment period.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59470) for the previously finalized ASCQR Program measure set for the CY 2020 payment determination and subsequent years.
In the CY 2019 OPPS/ASC proposed rule, we did not propose any new measures for the ASCQR Program. The tables below summarize the ASCQR Program measure sets as finalized in this final rule with comment period for the CY 2020, 2021, and 2022 payment determinations (including previously adopted measures and measures finalized for removal in this final rule with comment period). We note that the tables reflect that we are finalizing our proposal to change the reporting period for one previously adopted measure, ASC-12, and we refer readers to section
In the CY 2019 OPPS/ASC proposed rule (83 FR 37204), we requested public comment on the possible future validation of ASCQR Program measures. There is currently no validation of ASCQR measure data, and we believe ASCs may benefit from the opportunity to better understand their data and examine potential discrepancies. We believe the ASCQR Program may similarly benefit from the opportunity to produce a more reliable estimate of whether an ASC's submitted data have been abstracted correctly and provide more statistically reliable estimates of the quality of care delivered in each selected ASC as well as at the national level. We believe the Hospital OQR Program validation policy could be a good model for the ASCQR Program and are requesting comment on the validation methodology and identifying one measure with which to start.
The Hospital OQR Program requires validation of its chart-abstracted measures. We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68484 through 68487) and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66964 through 66965) for a discussion of finalized policies regarding Hospital OQR Program validation requirements, which are also codified at 42 CFR 419.46(e). Under the Hospital OQR Program, CMS selects a random sample of 450 hospitals and an additional 50 hospitals based on the following criteria: (1) The hospital failing of the validation requirement that applies to the previous year's payment determination; or (2) the hospital having an outlier value for a measure based on data that it submits. An “outlier value” is defined as a measure value that is greater than 5 standard deviations from the mean of the measure values for other hospitals, and indicates a poor score. Then, CMS or its contractor provides written requests to the randomly selected hospitals by requesting
Specifically, for the ASCQR Program, we are interested in the validation of chart-abstracted measures. We believe it would be beneficial to start with validation of just one measure, such as ASC-13: Normothermia Outcome, prior to expanding to more measures. ASC-13: Normothermia Outcome was finalized in the 2017 OPPS/ASC final rule with comment period (81 FR 79798 through 79801) and assesses the percentage of patients having surgical procedures under general or neuraxial anesthesia of 60 minutes or more in duration who are normothermic within 15 minutes of arrival in the post-anesthesia care unit. We also considered starting with ASC-14: Unplanned Anterior Vitrectomy instead, which was finalized in the 2017 OPPS/ASC final rule with comment period (81 FR 79801 through 79803) and assesses the percentage of cataract surgery patients who have an unplanned anterior vitrectomy. However, we believe ASC-13 would be the most feasible measure for validation because it assesses surgical cases and would have a larger population of cases from which to sample. ASC-14, which assesses rare, unplanned events that are less common, would have a smaller population of cases from which to sample.
Therefore, we invited public comment on the possible future validation of ASCQR Program measures. We specifically request comment on whether Hospital OQR Program's validation policies could be an appropriate model for the ASCQR Program, the possible ASC sample size, sampling methodology, number of cases to sample, validation score methodology, and reduced annual payment updates for facilities that do not pass validation requirements. We also requested comment on possibly starting with only one measure, specifically ASC-13, before expanding to more measures.
We thank the commenters for their views and will take them into consideration as we determine future policy regarding validation in the ASCQR Program.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74513 through 74514), where we finalized our proposal to follow the same process for updating the ASCQR Program measures that we adopted for the Hospital OQR Program measures, including the subregulatory process for updating adopted measures. In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68496 through 68497), the CY 2014 OPPS/ASC final rule (78 FR 75131), and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66981), we provided additional clarification regarding the ASCQR Program policy in the context of the previously finalized Hospital OQR Program policy, including the processes for addressing nonsubstantive and substantive changes to adopted measures. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70531), we provided clarification regarding our decision to not display the technical specifications for the ASCQR Program on the CMS website, but stated that we will continue to display the technical specifications for the ASCQR Program on the QualityNet website. In addition, our policies regarding the maintenance of technical specifications for the ASCQR Program are codified at 42 CFR 416.325. In the CY 2019 OPPS/ASC proposed rule (83 FR 37204), we did not propose any changes to our policies regarding the maintenance of technical specifications for the ASCQR Program.
In the CY 2012 OPPS/ASC final rule with comment period (76 FR 74514 through 74515), we finalized a policy to make data that an ASC submitted for the ASCQR Program publicly available on a CMS website after providing an ASC an opportunity to review the data to be made public. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70531 through 70533), we finalized our policy to publicly display data by the National Provider Identifier (NPI) when the data are submitted by the NPI and to publicly display data by the CCN when the data are submitted by the CCN. In addition, we codified our policies regarding the public reporting of ASCQR Program data at 42 CFR 416.315 (80 FR 70533). In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79819 through 79820), we formalized our current public display practices regarding timing of public display and the preview period by finalizing our proposals to: Publicly display data on the
In the CY 2019 OPPS/ASC proposed rule (83 FR 37204 through 37205), we did not propose any changes to our public reporting policies.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75132 through 75133) for a detailed discussion of the QualityNet security administrator requirements, including setting up a QualityNet account, and the associated timelines, for the CY 2014 payment determination and subsequent years. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70533), we codified the administrative requirements regarding maintenance of a QualityNet account and security administrator for the ASCQR Program at 42 CFR 416.310(c)(1)(i). In the CY 2018 OPPS/ASC final rule (82 FR 59473), we finalized expanded submission via the CMS online tool to also allow for batch data submission and made corresponding changes to the 42 CFR 416.310(c)(1)(i). In the CY 2019 OPPS/ASC proposed rule (83 FR 37205), we did not propose any changes to these policies.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75133 through 75135) for a complete discussion of the participation status requirements for the CY 2014 payment determination and subsequent years. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70533 and 70534), we codified these requirements regarding participation status for the ASCQR Program at 42 CFR 416.305. In the CY 2019 OPPS/ASC proposed rule (83 FR 37205), we did not propose any changes to these policies.
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75135) for a complete summary of the data processing and collection periods for the claims-based measures using QDCs for the CY 2014 payment determination and subsequent years. In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70534), we codified the requirements regarding data processing and collection periods for claims-based measures using QDCs for the ASCQR Program at 42 CFR 416.310(a)(1) and (2).
In the CY 2019 OPPS/ASC proposed rule (83 FR 37205), we did not propose any changes to these requirements. However, in the proposed rule we noted that in section XIV.B.3.c. of the proposed rule, beginning with the CY 2021 payment determination and for subsequent years, we proposed to
• ASC-1: Patient Burn;
• ASC-2: Patient Fall;
• ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and
• ASC-4: Hospital Transfer/Admission.
We are not finalizing our proposals to remove ASC-1, ASC-2, ASC-3, and ASC-4, as described further in section XIV.B.3.c.(2)(a) of this final rule with comment period, and are instead retaining the measures in the ASCQR Program and suspending their data collection beginning with the CY 2019 reporting period/CY 2021 payment determination until further action in rulemaking with the goal of updating the measures. However, we did not propose any changes to our requirements regarding data processing and collection periods for these types of measures. These requirements will apply to any future claims-based measures using QDCs adopted in the program.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59472) (and the previous rulemakings cited therein), as well as 42 CFR 416.310(a)(3) and 42 CFR 416.305(c) for our policies about minimum threshold, minimum case volume, and data completeness for claims-based measures using QDCs. In the CY 2019 OPPS/ASC proposed rule (83 FR 37205), we did not propose any changes to these policies.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59472) (and the previous rulemakings cited therein) and 42 CFR 416.310(c) for our previously finalized policies for data submitted via an online data submission tool. For more information on data submission using QualityNet, we refer readers to:
We refer readers to the CY 2014 OPPS/ASC final rule with comment period (78 FR 75139 through 75140) and the CY 2015 OPPS/ASC final rule with comment period (79 FR 66985 through 66986) for our requirements regarding data submitted via a non-CMS online data submission tool (that is, the CDC NHSN website). We codified our existing policies regarding the data collection time periods for measures involving online data submission and the deadline for data submission via a non-CMS online data submission tool at 42 CFR 416.310(c)(2).
Currently, we only have one measure (ASC-8: Influenza Vaccination Coverage among Healthcare Personnel) that is submitted via a non-CMS online data submission tool. In the proposed rule, we noted that we proposed this measure for removal for the CY 2020 payment determination and subsequent years in section XIV.B.3.c. of the proposed rule. Because we are finalizing the removal of ASC-8 as proposed, no measures submitted via a non-CMS online data submission tool will remain in the ASCQR Program beginning with the CY 2020 payment determination. However, we did not propose any changes to our non-CMS online data submission tool reporting requirements; these requirements would apply to any future non-CMS online data submission tool measures adopted in the program.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59473) (and the previous rulemakings cited therein) and 42 CFR 416.310(c)(1) for our requirements regarding data submitted via a CMS online data submission tool. We are currently using the QualityNet website as our CMS online data submission tool:
In the CY 2019 OPPS/ASC proposed rule (83 FR 37205 through 37206), we did not propose any changes to this policy. However, in the proposed rule we noted that in sections XIV.B.3.c. of the proposed rule, we proposed to remove three measures collected via a CMS online data submission tool—ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients, ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use, and ASC-11: Cataracts: Improvement in Patients' Visual Function within 90 Days Following Cataract Surgery
In the CY 2019 OPPS/ASC proposed rule (83 FR 37206 through 37207), we did not propose any changes to our requirements for non-QDC based, claims-based measures. However, in the proposed rule we proposed to change the reporting period for the previously adopted measure, ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy. This proposal is discussed in more detail further below.
We refer readers to the CY 2015 OPPS/ASC final rule with comment period (79 FR 66985) and the CY 2016 OPPS/ASC final rule with comment period (80 FR 70536) for our previously adopted policies regarding data processing and reporting periods for claims-based measures for the CY 2018 payment determination and subsequent years. In addition, in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70536), we codified these policies at 42 CFR 416.310(b). In the proposed rule, we did not propose any changes to these policies. We note that the non-QDC, claims-based measures in the program are as follows:
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66970 through 66978), we finalized the adoption of ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy into the ASCQR Program for the CY 2018 payment determination and subsequent years, with public display to begin on or after December 1, 2017. This measure is calculated with data obtained from paid Medicare FFS claims (79 FR 66978). For this reason, facilities are not required to submit any additional information. In that final rule with comment period, we also finalized the reporting period for measure calculation as claims data from two calendar years prior to the payment determination year. Specifically, for the CY 2018 payment determination, we stated we would use paid Medicare FFS claims from January 1, 2016 to December 31, 2016 to calculate measure results (79 FR 66985). We finalized a 1-year reporting period as it adequately balanced competing interests of measure reliability and timeliness for payment determination purposes, and explained that we would continue to assess this during the dry run (79 FR 66973).
We noted we would complete a dry run of the measure in 2015 using three or four years of data, and, from the results of this dry run, we would review the appropriate volume cutoff for facilities to ensure statistical reliability in reporting the measure score (79 FR 66974). Our analyses of the 2015 dry run using data from July 2011 through June 2014 showed that a reporting period of one year had moderate to high reliability for measure calculation. Specifically, using data from July 2013 through June 2014, we calculated facility-level reliability estimates as the ratio of true variance to observed variance.
However, after the 2015 dry run, CMS calculated the HOPD and ASC scores separately to compare similar types of facilities to each other. During subsequent analysis of the 1-year reporting period of July 2013 through June 2014, we confirmed that a 1-year reporting period with separate calculations for HOPDs and ASCs was sufficient, but did result in lower reliability and decreased precision, compared to results calculated with longer reporting periods (two or three years). Based on analyses conducted using data from July 2013 through June 2014 (1-year reporting period) and 2017 measure specifications,
Using three years of data, compared to just one year, is estimated to increase the number of ASCs with eligible cases for ASC-12 by 10 percent, adding approximately 235 additional ASCs to the measure calculation. ASCs reporting the measure would increase their sample sizes and, in turn, increase the precision and reliability of their measure scores. Thus, we believe extending the reporting period to three years from one year for purposes of increasing reliability would be beneficial for providing better information to beneficiaries regarding the quality of care associated with low-risk outpatient colonoscopy procedures. In crafting our proposal, we considered extending the reporting period to two years beginning with the CY 2020 payment determinations and subsequent years, but decided on proposing three years instead, because a higher level of reliability is achieved with a 3-year reporting period compared to two years.
Therefore, in the CY 2019 OPPS/ASC proposed rule (83 FR 37206 through 37207), we proposed to change the reporting period for ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination (which would use claims data from January 1, 2016 through December 31, 2018) and for subsequent years. Under this proposal, the annual reporting requirements for ASCs would not change because this is a claims-based measure. However, with a 3-year reporting period, the most current year of data would be supplemented by the addition of two prior years. For example, for the CY 2020 payment determination, we would use a reporting period of CY 2018 data plus two prior years of data (CYs 2016 and 2017). In the proposed rule, we noted that since implementation of this measure began with the CY 2018 payment determination, we have already used paid Medicare FFS claims from January 1, 2016 to December 31, 2016 to calculate the measure scores, which have been previously previewed by ASCs and publicly displayed. In crafting our proposal, we also considered timeliness related to payment determinations and public display. Because we would utilize data already collected to supplement current data, our proposal to use three years of data would not disrupt payment determinations or public display. We refer readers to the table below for example reporting periods and public display dates corresponding to the CY 2020, CY 2021, and CY 2022 payment determinations:
We refer readers to section XIII.D.4.b. of the proposed rule, where we discussed a similar proposal under the Hospital OQR Program.
In addition, we measure all-cause hospital visits (including Emergency department visits) to encourage OPDs and ASCs to minimize all types of risks that may lead to hospital visits after a colonoscopy. Measuring only hospital visits that are narrow procedural complications of colonoscopy, such as gastrointestinal bleeding, would limit the measure's impact on quality improvement efforts and miss events such as dehydration, pain, dizziness, and urinary retention that are often related to the colonoscopy or the preparation for the colonoscopy and present to the ED. From the patient's perspective, these events reflect the quality of care for the full episode of care. Measuring all-cause patient outcomes encourages facilities and their clinicians minimizes the risk of a broad range of outcomes. We have structured the measure so that OPDs and ASCs that most effectively minimize patient risk of these outcomes will perform better.
While we employ a conservative approach to categorizing facility performance relative to the national rate, the distribution of measure scores for both ASC-12 and OP-32 demonstrate meaningful variation. This variation provides valuable information to facilities about their performance and the possibility for reducing complications following low risk colonoscopies. Using claims from January 1, 2016 through December 31, 2016, we characterize the degree of variability by calculating the median odds ratio (MOR). The median odds ratio represents the median increase in odds of a hospital visit if a procedure on a single patient was performed at a higher risk facility compared to a lower risk facility. Both median odds ratios indicate the impact of quality on the outcome rate is substantial at both ASCs and HOPDs.
• For HOPDs, a value of 1.23 indicates that a patient has a 23 percent increase in the odds of a hospital visit if the same procedure was performed at higher risk HOPD compared to a lower risk HOPD.
• For ASCs, a value of 1.19 indicates that a patient has a 19 percent increase in the odds of a hospital visit if the same procedure was performed at higher risk ASC compared to a lower risk ASC.
After consideration of the public comments we received, we are finalizing our proposal to change the reporting period for ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination and for subsequent years, as proposed. We refer readers to section XIII.D.4.b. of this final rule with comment period, where we are finalizing a similar policy under the Hospital OQR Program.
We refer readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 79822 through 79824) for our previously finalized policies regarding survey administration and vendor requirements for the CY 2020 payment determination and subsequent years. In addition, we codified these policies at 42 CFR 416.310(e). However, in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59450 through 59451), we delayed implementation of the ASC-15a-e: OAS CAHPS Survey-based measures beginning with the CY 2020 payment determination (CY 2018 data submission) until further action in future rulemaking, and we refer readers to that discussion for more details. In the CY 2019 OPPS/ASC proposed rule (83 FR 37207), we did not propose any changes to this policy.
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59474 through 59475) (and the previous rulemakings cited therein) and 42 CFR 416.310(d) for the ASCQR Program's policies for extraordinary circumstance exceptions (ECE) requests.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59474 through 59475), we: (1) Changed the name of this policy from “extraordinary circumstances extensions or exemption” to “extraordinary circumstances exceptions” for the ASCQR Program, beginning January 1, 2018; and (2) revised 42 CFR 416.310(d) of our regulations to reflect this change. We also clarified that we will strive to complete our review of each request within 90 days of receipt. In the CY 2019 OPPS/ASC proposed rule (83 FR 37207), we did not propose any changes to these policies.
We refer readers to the CY 2016 OPPS/ASC final rule with comment period (82 FR 59475) (and the previous rulemakings cited therein) and 42 CFR 416.330 for the ASCQR Program's reconsideration policy. In the CY 2019 OPPS/ASC proposed rule (83 FR 37207), we did not propose any changes to this policy.
We refer readers to section XVI.D.1. of the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499) for a detailed discussion of the statutory background regarding payment reductions for ASCs that fail to meet the ASCQR Program requirements.
The national unadjusted payment rates for many services paid under the ASC payment system equal the product of the ASC conversion factor and the scaled relative payment weight for the APC to which the service is assigned. For CY 2019, the ASC conversion factor we are finalizing is equal to the conversion factor calculated for the previous year updated by the multifactor productivity (MFP)-adjusted hospital market basket update factor. The MFP adjustment is set forth in section 1833(i)(2)(D)(v) of the Act. The MFP-adjusted hospital market basket update is the annual update for the ASC payment system for an interim 5-year period (CY 2019 through CY 2023). As discussed in the CY 2011 OPPS/ASC final rule with comment period (75 FR 72062), if the CPI-U update factor is a negative number, the CPI-U update factor would be held to zero. In the CY 2019 OPPS/ASC proposed rule (83 FR 37207), consistent with past practice, in the event the percentage change in the hospital market basket for a year is negative, we proposed to hold the hospital market basket update factor for the ASC payment system to zero. Under the ASCQR Program in accordance with section 1833(i)(7)(A) of the Act and as discussed in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499), any annual increase shall be reduced by 2.0 percentage points for ASCs that fail to meet the reporting requirements of the ASCQR Program. This reduction applied beginning with the CY 2014 payment rates (77 FR 68500). For a complete discussion of the calculation of the ASC conversion factor and our proposal to update the ASC payment rates using the inpatient hospital market basket update for CYs
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 through 68500), in order to implement the requirement to reduce the annual update for ASCs that fail to meet the ASCQR Program requirements, we finalized our proposal that we would calculate two conversion factors: A full update conversion factor and an ASCQR Program reduced update conversion factor. We finalized our proposal to calculate the reduced national unadjusted payment rates using the ASCQR Program reduced update conversion factor that would apply to ASCs that fail to meet their quality reporting requirements for that calendar year payment determination. We finalized our proposal that application of the 2.0 percentage point reduction to the annual update may result in the update to the ASC payment system being less than zero prior to the application of the MFP adjustment.
The ASC conversion factor is used to calculate the ASC payment rate for services with the following payment indicators (listed in Addenda AA and BB to the proposed rule, which are available via the internet on the CMS website): “A2”, “G2”, “P2”, “R2” and “Z2”, as well as the service portion of device-intensive procedures identified by “J8” (77 FR 68500). We finalized our proposal that payment for all services assigned the payment indicators listed above would be subject to the reduction of the national unadjusted payment rates for applicable ASCs using the ASCQR Program reduced update conversion factor (77 FR 68500).
The conversion factor is not used to calculate the ASC payment rates for separately payable services that are assigned status indicators other than payment indicators “A2”, “G2”, “J8”, “P2”, “R2” and “Z2.” These services include separately payable drugs and biologicals, pass-through devices that are contractor-priced, brachytherapy sources that are paid based on the OPPS payment rates, and certain office-based procedures, radiology services and diagnostic tests where payment is based on the PFS nonfacility PE RVU-based amount, and a few other specific services that receive cost-based payment (77 FR 68500). As a result, we also finalized our proposal that the ASC payment rates for these services would not be reduced for failure to meet the ASCQR Program requirements because the payment rates for these services are not calculated using the ASC conversion factor and, therefore, not affected by reductions to the annual update (77 FR 68500).
Office-based surgical procedures (generally those performed more than 50 percent of the time in physicians' offices) and separately paid radiology services (excluding covered ancillary radiology services involving certain nuclear medicine procedures or involving the use of contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-based amounts or the amount calculated under the standard ASC ratesetting methodology. Similarly, in section XII.D.2.b. of the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 through 66934), we finalized our proposal that payment for certain diagnostic test codes within the medical range of CPT codes for which separate payment is allowed under the OPPS and when they are integral to covered ASC surgical procedures will be at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the standard ASC ratesetting methodology. In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68500), we finalized our proposal that the standard ASC ratesetting methodology for this type of comparison would use the ASC conversion factor that has been calculated using the full ASC update adjusted for productivity. This is necessary so that the resulting ASC payment indicator, based on the comparison, assigned to these procedures or services is consistent for each HCPCS code, regardless of whether payment is based on the full update conversion factor or the reduced update conversion factor.
For ASCs that receive the reduced ASC payment for failure to meet the ASCQR Program requirements, we believe that it is both equitable and appropriate that a reduction in the payment for a service should result in proportionately reduced coinsurance liability for beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68500), we finalized our proposal that the Medicare beneficiary's national unadjusted coinsurance for a service to which a reduced national unadjusted payment rate applies will be based on the reduced national unadjusted payment rate.
In that final rule with comment period, we finalized our proposal that all other applicable adjustments to the ASC national unadjusted payment rates would apply in those cases when the annual update is reduced for ASCs that fail to meet the requirements of the ASCQR Program (77 FR 68500). For example, the following standard adjustments would apply to the reduced national unadjusted payment rates: The wage index adjustment; the multiple procedure adjustment; the interrupted procedure adjustment; and the adjustment for devices furnished with full or partial credit or without cost (77 FR 68500). We believe that these adjustments continue to be equally applicable to payment for ASCs that do not meet the ASCQR Program requirements (77 FR 68500).
In the CY 2015, CY 2016, CY 2017, and CY 2018 OPPS/ASC final rules with comment period (79 FR 66981 through 66982; 80 FR 70537 through 70538; 81 FR 79825 through 79826; and 82 FR 59475 through 59476, respectively), we did not make any other changes to these policies. We did not propose any changes to these existing policies for CY 2019 in the CY 2019 OPPS/ASC proposed rule (83 FR 37207 through 37208).
We did not receive any public comments on our proposal that, in the event the percentage change in the hospital market basket for a year is negative, we would hold the hospital market basket update factor for the ASC payment system to zero. We also did not receive any public comments on our existing policies for all other applicable adjustments to the ASC national unadjusted payment rates discussed earlier. Therefore, we are finalizing our proposal without modification and continuing the existing policies for CY 2019.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37208 through 37217), we included three requests for information (RFIs). We stated in the proposed rule that the RFIs were issued solely for information and planning purposes; none of the RFIs constituted a Request for Proposal (RFP), application, proposal abstract, or quotation. In addition, we stated that the RFIs did not commit the U.S. Government to contract for any supplies or services or make a grant award. Further, we stated that CMS was not seeking proposals through these RFIs and would not accept unsolicited proposals. Responders were advised that the U.S. Government will not pay for any information or administrative costs incurred in response to these RFIs; all costs associated with responding to these RFIs would be solely at the interested party's expense. In addition, we stated in the proposed rule that failing to respond to either RFI would not
In the CY 2019 OPPS/ASC proposed rule (83 FR 37209 through 37211), we included a Request for Information (RFI) related to promoting interoperability and electronic health care information exchange. We received over 60 timely pieces of correspondence on this RFI. We appreciate the input provided by commenters.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37211 and 37212), we included a Request for Information (RFI) related to improving beneficiary access to provider and supplier charge information as part of our price transparency initiatives. We received over 90 timely pieces of correspondence on this RFI. We appreciate the input provided by commenters.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37212 through 37217), we included a Request for Information (RFI) related to leveraging the authority for the Competitive Acquisition Program (CAP) for Part B drugs and biologicals for a potential CMS Innovation Center Model. We received approximately 80 timely pieces of correspondence on this RFI. We appreciate the input provided by commenters.
We refer readers to the FY 2010 IPPS/LTCH PPS final rule (74 FR 43860 through 43861) and the FY 2011 IPPS/LTCH PPS final rule (75 FR 50180 through 50181) for detailed discussions of the history of the Hospital IQR Program, including the statutory history, and to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50217 through 50249), the FY 2016 IPPS/LTCH PPS final rule (80 FR 49660 through 49692), the FY 2017 IPPS/LTCH PPS final rule (81 FR 57148 through 57150), and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38323 through 38411) for the measures and program policies we have adopted for the Hospital IQR Program through the FY 2020 payment determination and subsequent years. In addition to the proposed and finalized policies discussed in this section, we also refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41537 through 41609) for a full discussion of the Hospital IQR Program and its policies.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37218), CMS partnered with the Agency for Healthcare Research and Quality (AHRQ) to develop the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experience of care survey (NQF #0166)
The HCAHPS Survey (OMB control number 0938-0981) is the first national, standardized, publicly reported survey of patients' experience of hospital care and asks discharged patients 32 questions about their recent hospital stay. The HCAHPS Survey is administered to a random sample of adult patients who receive medical, surgical, or maternity care between 48 hours and 6 weeks (42 calendar days) after discharge and is not restricted to Medicare beneficiaries.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38328 through 38342), out of an abundance of caution, in the face of a nationwide epidemic of opioid overprescription, we finalized a refinement to the HCAHPS Survey measure as used in the Hospital IQR Program by removing the previously adopted pain management questions and incorporating new Communication About Pain questions beginning with patients discharged in January 2018, for the FY 2020 payment determination and subsequent years.
• HP1: “During this hospital stay, did you have any pain?”
□ Yes
□ No →
• HP2: “During this hospital stay, how often did hospital staff talk with you about how much pain you had?”
□ Never
□ Sometimes
□ Usually
□ Always
• HP3: “During this hospital stay, how often did hospital staff talk with you about how to treat your pain?”
□ Never
□ Sometimes
□ Usually
□ Always
In addition, we finalized public reporting on the Communication About Pain questions, such that hospital performance data on those questions would be publicly reported on the
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37218), since we finalized the Communication About Pain questions, we have received feedback that some stakeholders are concerned that, although the revised questions focus on communications with patients about their pain and treatment of that pain, rather than how well their pain was controlled, the questions still could potentially impose pressure on hospital staff to prescribe more opioids in order to achieve higher scores on the HCAHPS Survey. In addition, in its final report, the President's Commission on Combating Drug Addiction and the Opioid Crisis recommended removal of the HCAHPS Pain Management questions in order to ensure providers are not incentivized to offer opioids to raise their HCAHPS Survey score.
Other potential factors outside the control of CMS quality program requirements may contribute to the perception of a link between the Communication About Pain questions and opioid prescribing practices, including: misuse of the HCAHPS Survey (such as using it for outpatient emergency room care instead of inpatient care, or using it for determining individual physician performance); failure to recognize that the HCAHPS Survey excludes certain populations from the sampling frame (such as those with a primary substance use disorder diagnosis); and the addition of supplemental pain-related survey questions by the hospital that are not formally part of the HCAHPS Survey or otherwise required by CMS.
Because some hospitals have identified patient experience of care as a potential source of competitive advantage, we have heard from stakeholders that some hospitals may be disaggregating their raw HCAHPS Survey data to compare, assess, and incentivize individual physicians, nurses, and other hospital staff. Some hospitals also may be using the HCAHPS Survey to assess their emergency and outpatient departments. To be clear, the HCAHPS Survey was never designed or intended to be used in these ways.
As we stated in the CY 2019 OPPS/ASC proposed rule, we continue to believe that pain management is a critical part of routine patient care on which hospitals should focus and an important concern for patients, their families, and their caregivers. It is important to reiterate that the HCAHPS Survey does not specify any particular type of pain control method. The revised questions focus entirely on communication about pain with patients and do not refer to, recommend, or imply that any particular type of treatment is appropriate (82 FR 38333). In addition, appropriate pain management includes communication with patients about pain-related issues, setting expectations about pain, shared decision-making, proper prescription practices, and alternative treatments for pain management.
Although we are not aware of any scientific studies that support an association between scores on the prior or current iterations of the Communication About Pain questions and opioid prescribing practices, out of an abundance of caution and to avoid any potential unintended consequences, in the CY 2019 OPPS/ASC proposed rule (83 FR 37218), we proposed to update the HCAHPS Survey by removing the Communication About Pain questions effective with January
In proposing removal of the Communication About Pain questions, we did not propose to change how performance scores are calculated for the remaining questions on the HCAHPS Survey. The Hospital IQR Program is a quality data reporting program; payments to hospitals will not be affected so long as hospitals timely submit data on required measures and meet all other program requirements. We stated in the proposed rule that we would continue to use the remaining 29 questions of the HCAHPS Survey to assess patients' experience of care, and would continue to publicly report hospital scores on those questions in order to ensure patients and consumers have access to these data while making decisions about their care. Patients and providers can continue to review data from responses to the remaining 29 questions of the HCAHPS Survey on the
In crafting our proposal, we considered whether the Communication About Pain questions should be retained in both the HCAHPS Survey and the Hospital IQR Program but with a further delay in public reporting. For example, instead of public reporting starting in October 2020 as previously finalized, we could have proposed to delay public reporting of the Communication About Pain questions until October 2021. We stated we were interested in feedback on whether the Communication About Pain questions should be retained in both the HCAHPS Survey and the Hospital IQR Program but with a further delay in public reporting. Delay in public reporting would allow further time to engage a broad range of stakeholders and assess their feedback regarding use of the Communication About Pain questions in the HCAHPS Survey and the Hospital IQR Program and to assess the impact of the new Communication About Pain questions. However, we chose to propose to remove the Communication About Pain questions as discussed above instead, so providers would not perceive that there are incentives for prescribing opioids to increase HCAHPS Survey scores.
In crafting our proposal, we also considered proposing earlier removal of the Communication About Pain questions from the HCAHPS Survey effective as early as January 2020 discharges, for the FY 2022 payment determination and subsequent years. However, we stated that removing the questions effective with January 2020 discharges would not allow sufficient time to make necessary updates to the data collection tools, including the CMS data submission warehouse and associated reporting tools, as well as to update the HCAHPS Survey administration protocols and the survey tool itself. In addition, our proposal to make these updates effective later, with January 2022 discharges, would allow time to assess the potential impact of using the Communication About Pain questions while monitoring unintended consequences. It would also allow time for empirical testing for any potential effect the removal of the Communication About Pain questions might have on responses to the remaining non-pain related survey items.
We invited public comment on our proposal as discussed above and whether the questions should be removed from the HCAHPS Survey and Hospital IQR Program. We stated that we were particularly interested in receiving feedback on any potential implications on patient care related to removing these questions. We also expressed interest in receiving feedback from stakeholders on: (1) The importance of receiving feedback from patients related to communication about pain management and the importance of publicly reporting this information for use both by patients in healthcare decision-making and by hospitals in focusing their quality improvement efforts; (2) additional analyses demonstrating a relationship between the use of pain questions in patient surveys and prescribing behavior, including unpublished data, if available; (3) input from clinicians and other providers concerning whether it would be valuable for CMS to issue guidance suggesting that hospitals do not administer any surveys with pain-related questions, including adding hospital-specific supplemental items to the HCAHPS Survey, as well as the potential implementation of a third party quality assurance program to assure that hospitals are not misusing survey data by creating pressure on individual clinicians to provide inappropriate clinical care; (4) information from clinicians and other providers concerning instances of hospital administrators using results from the HCAHPS Survey to compare individual clinician performance directly to other clinicians at the same facility or institution and examples where, as a result, clinicians have felt pressured to prescribe opioids inappropriately (in terms of either quantity or appropriateness for particular patients); (5) suggestions for other measures that would capture facets of pain management and related patient education, for instance, collecting data about a hospital's pain management plan, and provide that information back to consumers; and (6) how other measures could take into account provider-supplied information on appropriate pain management and whether patients are informed about the risks of opioid use and about non-opioid pain management alternatives.
During annual survey vendor training for HCAHPS and in the HCAHPS Quality Assurance Guidelines, we clearly state the purpose and the proper use of HCAHPS data: Official HCAHPS Survey scores are published on the
Other commenters recommended that CMS remove the Communication About Pain questions as soon as feasible, with one commenter specifically recommending removal effective with January 2020 discharges, due to the potential unintended consequences associated with continued use of the questions. These commenters further recommended that CMS first remove the Communication About Pain questions, then evaluate alternate methods of determining the impacts of removal and the value of collecting pain management data, rather than delaying removal in order to collect more data.
In addition, section 6104 of the Substance Use—Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT for Patients and Communities Act) (Pub. L. 115-271) enacted on October 24, 2018, prohibits HCAHPS Surveys conducted on or after January 1, 2020 from including questions about communication by hospital staff with an individual about such individual's pain, unless such questions take into account, as applicable, whether an individual experiencing pain was informed about risks associated with the use of opioids and about non-opioid alternatives for the treatment of pain. Section 6104 of the SUPPORT for Patients and Communities Act also states that the Secretary shall not include any measures based on the pain communication questions on the HCAHPS Survey in 2018 or 2019 on the
We proposed to remove the Communication About Pain questions beginning with January 2022 discharges for the FY 2024 payment determination in an effort to avoid imposing undue burden on providers or their survey vendors to make necessary updates to surveys and data collection tools while also providing us additional time to assess the potential impact of using these questions in the HCAHPS Survey and the impact removal may have on responses to subsequent survey items (83 FR 37218 through 38220). Based on the stakeholder comments supporting removal of these questions, particularly those who requested we remove them immediately or as soon as possible, we assessed the feasibility of removing the questions as soon as operationally possible.
Upon further review of the operational timelines for making necessary updates to the HCAHPS Survey administration protocols, including conducting associated training of survey vendors and hospitals, and making updates to the CMS data submission warehouse and associated reporting tools, we found that it would be operationally feasible to remove the Communication About Pain questions earlier than we proposed. Furthermore, because the SUPPORT for Patients and Communities Act prohibits use of the Communication About Pain questions in HCAHPS Surveys conducted on or after January 1, 2020, it is appropriate to remove these questions from the HCAHPS Survey sooner than proposed—effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years. We also note that removing these questions effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years is responsive to commenters who recommended that we remove the Communication About Pain questions immediately or as soon as possible. Although we are removing the Communication About Pain questions, we will continue to consider the value of collecting data that relates to pain management. We will examine the effect of the absence of the Communication About Pain items on subsequent survey items once these items have been removed.
Therefore, in response to stakeholder feedback, to comply with the requirements of the SUPPORT for Patients and Communities Act, and upon further review of the operational considerations involved in removing the Communication About Pain questions, we are finalizing a modification to our proposal and will remove the questions effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years.
We are finalizing a modification of our public display proposal that we publicly reporting the Communication about Pain questions on
We note that in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38342), we finalized a delay in public reporting, such that hospital performance data on the refined Communication About Pain composite measure questions would not be publicly reported on the
However, we still plan to provide performance results based on these data to hospitals in confidential preview reports upon the availability of four quarters of CY 2018 data, as early as July 2019. Updated confidential reports will be provided on a quarterly basis with the availability of each new calendar quarter of data. The last confidential preview report containing the Communication About Pain questions data will reflect data from the fourth quarter of 2018 (October 1, 2018) through the third quarter of 2019 (September 30, 2019). We also note that the data collected from these questions will not be scored for purposes of CMS payments to hospitals, because the Hospital IQR Program is a pay-for-reporting, not pay-for-performance quality program and these questions are not part of the Hospital VBP Program.
Several commenters supported removal of the Communication About Pain questions because the commenters' believe pain is subjective and is therefore, difficult to measure using a standardized set of survey questions. A number of other commenters supported removal of these questions due to their concern the questions correlate pain treatment with patient satisfaction, thereby creating unrealistic patient expectations regarding pain management. These commenters also expressed concern the questions contribute to an environment in which patients expect to be pain free, whereas the goal of pain therapy should be to appropriately manage, not eliminate, pain. One commenter specifically supported removal of these questions because the commenter believed the questions elevate pain too highly as a factor in patient satisfaction and, thereby, in hospital reimbursement. Another commenter supported removing the Communication About Pain questions because the commenter believed the approach to pain management is too complicated and unclear to be assessed using survey questions.
One commenter supported removal of the Communication About Pain questions to preserve the Survey's integrity. Another commenter supported removal of the Communication About Pain questions due to concerns that the subjective nature of the HCAHPS Survey, and the Communication About Pain questions, may not accurately represent hospital performance. A third commenter expressed concern that including any questions about pain might cause patients who were unhappy about their pain treatment to provide negative responses to other, unrelated questions.
Some commenters who did not support removal of the pain questions urged CMS not to overlook the need to measure and evaluate how patient care is delivered and the role of appropriate communication about pain management during a hospital stay, including legitimate pain management using opioids in addition to other pain management methods. Other commenters asserted that removal of the pain questions would be tantamount to CMS refusing to acknowledge, or avoiding, the legitimate pain management needs of patients.
In addition, we disagree with commenters' assertions that removal of the Communication About Pain questions might lead hospitals and providers to place less importance on communication with their patients about their pain and pain management, or might lead to a negative impact on appropriate pain treatment, including treatment for pain associated with complex chronic and end-of-life illnesses. As a number of commenters noted, pain management is an appropriate part of routine patient care upon which hospitals should focus and an important concern for patients, their families, and their caregivers, and we do not believe removal of the Communication About Pain questions will necessarily result in hospitals no longer focusing on maintaining a high level of performance. Rather, we remain confident that hospitals will continue to focus on appropriate pain management, including communicating with their patients about pain, as part of their commitment to the patient experience and ongoing quality improvement efforts. In addition, as one commenter noted, engaging patients in treatment decisions about their pain management is required under the enhanced pain assessment and management requirements, applicable to all Joint Commission-accredited hospitals, effective January 1, 2018.
With respect to commenters' requests that we not overlook the need to measure and evaluate how patient care is delivered and the role of appropriate communication about pain management during a hospital stay, including legitimate pain management using opioids in addition to other pain management methods, we reiterate that we remain dedicated to improving the quality of care provided to patients, including patients' experience in receiving care, and continue to consider the appropriate management of pain and communication between patients and their providers regarding pain as important aspects of care quality. As previously stated, we believe that removing the Communication About Pain questions will relieve any potential undue pressure on clinicians to prescribe opioids in order to achieve high patient satisfaction scores. We also believe that removing any such potential pressure on clinicians to prescribe opioids will ensure that providers can use their best judgment regarding pain management methods most appropriate for their patients, which may include non-opioid
Finally, we disagree with commenters' assertion that removing the Communication About Pain questions is tantamount to CMS' refusal to acknowledge, or avoiding, the legitimate pain management needs of patients. In the CY 2019 OPPS/ASC proposed rule (83 FR 37220), we solicited feedback regarding suggestions for other measures that would capture facets of pain management and related patient education, for instance, for collecting data about a hospital's pain management plan and providing that information back to consumers, and how other measures could take into account provider-supplied information on appropriate pain management and whether patients are informed about the risks of opioid use and about non-opioid pain management alternatives. Numerous commenters responded to our requests for feedback, and we summarize these responses later in this discussion. We will take commenters' suggestions into consideration as we continue to consider how best to capture and assess facets of pain management through quality measurement.
A few commenters noted that removal of the questions would force hospitals to rely on their vendors for any pain communication composite calculations or benchmarks for internal assessment purposes, as opposed to the national and State averages provided by CMS under the HCAHPS Survey. These commenters recommended that CMS furnish providers with important care experience metrics by making current pain communication scores, along with national and State benchmarks, available through hospital preview reports, from October 2019 onward. Commenters further requested CMS include these scores in CMS data files for providers' benchmarking and analysis.
As described above, we will provide each hospital with feedback on its own performance in confidential preview reports starting with four quarters of CY 2018 Communication About Pain question data, and then on a rolling four-quarter basis through the final quarter of CY 2019 Communication About Pain question data (that is, the 3rd quarter of 2019). These confidential reports will include State and national averages for the reporting periods when this measure is collected.
Other commenters recommended against CMS disallowing administration of supplemental pain management related questions alongside the HCAHPS Survey. These commenters noted pain remains one of the most important aspects of a patient's experience of care, that hospitals rely on this survey-based information for research and evaluation regarding their quality and efficacy of care, and that disallowing these supplemental questions would effectively omit a critical care experience factor from hospitals' quality improvement efforts.
Several commenters recommended that CMS engage in further research on the current version of the Communication About Pain questions, including assessing the potential tie between the questions and opioid prescribing practices. A few commenters provided specific recommendations for improving pain management assessment within the HCAHPS Survey. Some commenters recommended that CMS revise the current pain management questions to focus more on alternative pain management methods, such as ice packs and over-the-counter pain medication, and to better assess whether the patient was given sufficient guidance on how to manage pain post-discharge. Another commenter recommended that CMS develop new pain management questions focused on pain management processes and evidence-based standards of care rather than patient-reported outcomes. A third commenter recommended that CMS develop alternate questions assessing the role and behaviors of different clinicians in a patient's pain management because the commenter believed these alternatives are more objective than the current Communication About Pain questions and would provide a better picture of the assessment and treatment undertaken by the clinician for the patient's pain. Another commenter encouraged CMS to conduct additional research on pain-related survey questions and prescribing practices in emergency departments. One commenter recommended that CMS continue to collect the current Communication About Pain questions while evaluating potential new measures due to the importance of continuing to collect data on hospitals' communication about pain management as a critical component of patient experience and because more time is needed to collect feedback on potential alternatives.
One commenter suggested CMS evaluate assessing communication about pain management within the context of specific care episodes because these
After consideration of the public comments we received, and as required by the SUPPORT for Patients and Communities Act, we are finalizing a modified version of our proposals regarding removal of the Communication About Pain questions from the HCAHPS Survey in the Hospital IQR Program. Instead of removing the questions effective with January 2022 discharges, for the FY 2024 payment determination and subsequent years as proposed, we are finalizing removing them effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years. In addition, instead of publicly reporting the data from October 2020 until October 2022 and then subsequently discontinuing public reporting as proposed, we are finalizing that we will not publicly report the data collected from the Communication About Pain questions at all.
Section 1866(k)(1) of the Act requires that, for FY 2014 and each subsequent fiscal year, hospitals described in section 1886(d)(1)(B)(v) of the Act (referred to as “PPS-Exempt Cancer Hospitals” or “PCHs”) submit data to the Secretary in accordance with section 1866(k)(2) of the Act with respect to such fiscal year.
The PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program strives to put patients first by ensuring they, along with their clinicians, are empowered to make decisions about their own health care using data-driven insights that are increasingly aligned with meaningful quality measures. To this end, we support technology that reduces burden and allows clinicians to focus on providing high quality health care to their patients. We also support innovative approaches to improve the quality, accessibility, and affordability of care, while paying particular attention to improving clinicians' and beneficiaries' experiences when participating in CMS programs. In combination with other efforts across the Department of Health and Human Services (HHS), we believe the PCHQR Program incentivizes PCHs to improve their health care quality and value, while giving patients the tools and information needed to make the best decisions.
For additional background information, including previously finalized measures and other policies for the PCHQR Program, we refer readers to the following final rules: The FY 2013 IPPS/LTCH PPS final rule (77 FR 53556 through 53561); the FY 2014 IPPS/LTCH PPS final rule (78 FR 50838 through 50846); the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277 through 50288); the FY 2016 IPPS/LTCH PPS final rule (80 FR 49713 through 49723); the FY 2017 IPPS/LTCH PPS final rule (81 FR 57182 through 57193); the FY 2018 IPPS/LTCH PPS final rule (82 FR 38411 through 38425); and the FY 2019 IPPS/LTCH PPS final rule (83 FR 41609 through 41624).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41611 through 41616), we finalized the removal of four previously finalized measures and finalized one new quality measure for the FY 2021 program year and subsequent years. We also discussed our proposal in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20503) to remove two National Healthcare Safety Network (NHSN) chart-abstracted measures from the PCHQR Program beginning with the FY 2021 program year under proposed removal Factor 8, “the costs associated with the measure outweigh the benefit of its continued use in the program.” The measures we had proposed to remove under this removal factor are:
• NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (PCH-5/NQF #0138); and
• NHSN Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (PCH-4/NQF #0139).
We noted that we had first adopted the CAUTI and CLABSI measures for the FY 2014 program year in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53557 through 53559), and we referred readers to that final rule for a detailed discussion of the measures. We also stated that we had proposed to remove these measures from the PCHQR Program based on our belief that removing these measures would reduce program costs and complexities associated with the use of these data by patients in decision-making. We also believed the costs, coupled with the high technical and administrative burden on PCHs associated with collecting and reporting this measure data, outweighed the benefits of the continued use of the CAUTI and CLABSI measures in the program. Further, we noted that it has become difficult to publicly report these measures due to the low volume of data produced and reported by the small number of facilities participating in the PCHQR Program and the corresponding lack of an appropriate methodology to publicly report these data.
We stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41613) that we had invited public comment on our proposals to remove the CAUTI and CLABSI measures from the PCHQR Program beginning with the FY 2021 program year. We also stated that we would defer making a final decision on the removal or retention of the CAUTI and CLABSI measures from the PCHQR Program in order to conduct additional data analyses to assess measure performance based on new information provided by the CDC which was not available at the time we had proposed the removal of these measures. Lastly, we stated that we wished to evaluate those data for trends that link positive improvements (that is, a decrease in the reporting burden and/or cost, and/or demonstrated feasibility for public reporting) to these measures. We also noted that we would reconcile the public comments we received in future rulemaking.
At the time that we proposed to remove the CAUTI and CLABSI measures from the PCHQR Program, the available performance data did not enable us to assess PCH performance relative to oncology unit performance in other care settings. In addition, CDC's previous analytic work used to develop the rebaselined predictive models had demonstrated that PCH status was not a significant predictor for either CAUTIs or CLABSIs. Since that time, we have conducted our own updated analyses regarding the continued use of the CAUTI and CLABSI measures in the PCHQR Program using updated CDC data. Although CDC had previously believed that oncology unit locations, including those in PCHs, had a higher incidence of infections than other types of units in acute care hospitals, CDC now believes, after controlling for location type, that oncology unit locations in PCHs do not have a higher incidence of infection than oncology units within other acute care hospitals. CDC's updated analysis also produced a consistent finding that cancer hospital status was not a significant risk factor in any of the device-associated HAI risk models, including those used for CLABSI and CAUTI.
We are aware that the CLABSI and CAUTI measures specifications were recently updated to use new standard infection ratio (SIR) calculations that can be applied to cancer hospitals, including PCHs. This SIR calculation method is different than the current CLABSI and CAUTI measure methodology, which provides raw location-stratified rates. We are also aware that there may be concern that the CAUTI and CLABSI data calculated under the current methodology may inaccurately appear to show lower performance among PCHs than the performance reported by acute care hospitals that are reporting CLABSI and CAUTI data under the newly updated methodology. We believe this recent update
After consideration of the public comments we received, and consideration of the most recent information provided by the CDC, we are not finalizing our proposals to remove the Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (PCH-5/NQF #0138) and Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (PCH-4/NQF #0139) from the PCHQR measures beginning with the FY 2021 program year. We agree with the conclusions drawn from the CDC's data analyses, which demonstrate that reporting PCH CAUTI and CLABSI performance measure data is just as important as reporting acute care hospital CAUTI and CLABSI performance measure data. Further, we believe that these measures have the potential to provide beneficiaries with valuable information on PCH performance in avoiding hospital-acquired infections and improving patient safety. However, for the reasons discussed in section XVII.C.2. of this final rule with comment period, we are continuing to defer public reporting of these measure data.
We believe this approach most effectively balances the needs of the PCHQR Program and the importance of collecting patient safety data while taking into consideration the impact on the 11 PCHs of reporting raw data to CMS. We hope to introduce the refined CAUTI and CLABSI measures with adequate risk adjustment into the PCHQR Program in the near future. We note any such change will be made via rulemaking, and that we will solicit input from the Measures Application Partnership (MAP) to garner multi-stakeholder input on the updated versions prior to proposing to adopt these refined measures.
The table below summarizes the PCHQR Program measure set for the FY 2021 program year:
Under section 1866(k)(4) of the Act, we are required to establish procedures for making the data submitted under the PCHQR Program available to the public. Such procedures must ensure that a PCH has the opportunity to review the data that are to be made public with respect to the PCH prior to such data being made public. Section 1866(k)(4) of the Act also provides that the Secretary must report quality measures of process, structure, outcome, patients' perspective on care, efficiency, and costs of care that relate to services furnished in such hospitals on the CMS website.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41622), we indicated that all PCHs are reporting Colon and Abdominal Hysterectomy SSI, MRSA, CDI, and HCP data to the NHSN under the PCHQR Program. In 2016, the CDC announced that HAI data reported to NHSN for 2015 will be used as the new baseline, serving as a new “reference point” for comparing progress.
As discussed above, we are not finalizing our proposal to remove the CAUTI and CLABSI measures. However, we will continue to defer public reporting for the CAUTI and CLABSI measures as indicated in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38423). Based on our intent to propose to adopt the revised versions of the measures in the PCQHR Program in future rulemaking, we are continuing to evaluate the performance data for the updated versions of the CAUTI and CLABSI measures to draw conclusions about their statistical significance, in accordance with current risk adjustment methods defined by CDC. For these reasons, we are finalizing that we will provide stakeholders with performance data for the CAUTI and CLABSI measures as soon as practicable.
In the FY 2017 IPPS/LTCH PPS final rule (81 FR 57187 through 57188), we stated that we would publicly report the risk-standardized admission rate (RSAR) and risk-standardized ED visit rate (RSEDR) for the Admissions and Emergency Department (ED) Visits for the Patients Receiving Outpatient Chemotherapy measure for all participating PCHs with 25 or more eligible patients per measurement period to maintain a reliability of at least 0.4 (as measured by the interclass correlation coefficient, (ICC)). We also noted that if a PCH did not meet the 25-eligible patient threshold, we would include a footnote on the
We recently completed the confidential national reporting (dry run) for this measure and are currently assessing the results to ensure data accuracy and completeness. We intend to propose a timeframe for public reporting of this measure in the FY 2020 IPPS/LTCH PPS proposed rule.
Our public display policies for the FY 2021 program year are shown in the following table:
The Addenda to the OPPS/ASC proposed rules and the final rules with comment period are published and available via the internet on the CMS website. In the CY 2019 OPPS/ASC proposed rule (83 FR 37220), for CY 2019, we proposed to change the format of the OPPS Addenda A, B, and C, by adding a column entitled “Copayment Capped at the Inpatient Deductible of $1,364.00” where we would flag, through use of an asterisk, those items and services with a copayment that is equal to or greater than the inpatient hospital deductible amount for any given year (the copayment amount for a procedure performed in a year cannot exceed the amount of the inpatient hospital deductible established under section 1813(b) of the Act for that year). We requested public comments on this proposed change to the OPPS Addenda A, B, and C for CY 2019.
We did not receive any public comments regarding the proposed CY 2019 format changes for the OPPS Addenda A, B, and C. Therefore, for CY 2019, we are finalizing our proposal to add an additional column entitled “Copayment Capped at the Inpatient Deductible of $1,364.00” where we flag, through use of an asterisk, those items and services with a copayment that is equal to or greater than the inpatient hospital deductible amount for any given year for which the copayment will be capped at the inpatient deductible amount.
To view the Addenda to this final rule with comment period pertaining to CY 2019 payments under the OPPS, we refer readers to the CMS website at:
Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37720), we solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs).
The Hospital OQR Program is generally aligned with the CMS quality reporting program for hospital inpatient services known as the Hospital IQR Program. We refer readers to the CY 2011 through CY 2018 OPPS/ASC final rules with comment periods (75 FR 72111 through 72114; 76 FR 74549 through 74554; 77 FR 68527 through 68532; 78 FR 75170 through 75172; 79 FR 67012 through 67015; 80 FR 70580 through 70582; 81 FR 79862 through 79863; and 82 FR 59476 through 59479, respectively) for detailed discussions of Hospital OQR Program information collection requirements we have previously finalized. The information collection requirements associated with the Hospital OQR Program are currently approved under OMB control number 0938-1109. Below we discuss only the changes in burden that will result from the newly finalized policies in this final rule with comment period.
In section XIII.B.4.b. of the proposed rule, we proposed to remove a total of 10 measures. Specifically, beginning with the CY 2020 payment determination, we proposed to remove: (1) OP-27: Influenza Vaccination Coverage Among Healthcare Personnel; and beginning with the CY 2021 payment determination, we proposed to remove: (2) OP-5: Median Time to ECG; (3) OP-9: Mammography Follow-up Rates; (4) OP-11: Thorax CT Use of Contrast Material; (5) OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; (6) OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT; (7) OP-17: Tracking Clinical Results between Visits; (8) OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; (9) OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use; and (10) OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. However, after consideration of public comments we received, in this final rule with comment period we are not finalizing our proposals to remove two measures: OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; and OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery beginning with the CY 2021 payment determination. The reduction in burden associated with our finalized policies is discussed below in sections XIX.B.3. and 4. of this final rule with comment period.
In section XIII.D.2. of this final rule with comment period, we are finalizing our proposal to update the frequency with which we will release HOPD Specifications Manuals, with modification, such that instead of releasing the full manual once or twice a year, as proposed, we would release specifications manuals every 12 months beginning with CY 2019 and for subsequent years and release addenda (specific updates rather than full manual releases) as necessary. In section XIII.C.2. of this final rule with comment period, beginning with the CY 2020 payment determination, we are finalizing our proposal to remove the Notice of Participation (NOP) form as a requirement for the Hospital OQR Program and to update 42 CFR 419.46(a) to reflect these policies. As discussed below, we do not expect these finalized policies to affect our collection of information burden estimates.
In section XIII.D.2. of this final rule with comment period, we are finalizing our proposal, with modification, to update the frequency with which we will release Hospital Outpatient Quality Reporting Specifications Manuals, with modification such that instead of releasing the full manual once or twice each year, as proposed, we will release the Specifications Manuals once every 12 months and release addenda as necessary, beginning with CY 2019 and for subsequent years. We anticipate that this change will reduce hospital confusion, as releasing fewer manuals per year reduces the need to review updates as frequently as was previously necessary. However, because this change does not affect Hospital OQR Program participation requirements or data reporting requirements, we do not expect a change in the information collection burden experienced by hospitals.
In section XIII.C.2.b. of this final rule with comment period, beginning with the CY 2020 payment determination, we are finalizing our proposal to remove the NOP form as a requirement. As a result, to be a participant in the Hospital OQR Program, hospitals will need to: (1) Register on the QualityNet website; (2) identify and register a QualityNet security administrator, and (3) submit data. In addition, we are finalizing our proposal to update 42 CFR 419.46(a) to reflect these policies. We have previously estimated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75171) that the burden associated with administrative requirements including completing program requirements, system requirements, and managing facility operations is 42 hours per hospital or 138,600 hours across 3,300 hospitals. We believe that removal of the NOP requirement will reduce administrative burden experienced by hospitals by only a nominal amount, as it is not required every year, but only at the start of a hospital's participation. As a result, this finalized policy does not influence our information collection burden estimates.
In section XIII.B.4.b. of this final rule with comment period, we are finalizing our proposal to remove the OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) measure beginning with the CY 2020 payment determination and for subsequent years. The burden associated with OP-27, a National Healthcare Safety Network (NHSN) measure, is accounted for under a separate information collection request, OMB control number 0920-0666. Because burden associated with submitting data for this measure is captured under a separate OMB control number, we are not providing an estimate of the information collection burden associated with this measure for the Hospital OQR Program.
In section XIII.B.4.b. of this final rule with comment period, we are finalizing our proposal to remove one chart-abstracted measure for the CY 2021 payment determination and subsequent years: OP-5: Median Time to ECG. With regard to chart-abstracted measures for which patient-level data is submitted directly to CMS, we have previously estimated it would take 2.9 minutes, or 0.049 hours, per measure to collect and submit the data for each submitted case (80 FR 70582). In addition, based on the most recent data, we estimate that 947 cases are reported per hospital for chart-abstracted measures. Therefore, we estimate that it will take approximately 46 hours (0.049 hours × 947 cases) to collect and report data for each chart-abstracted measure. Accordingly, we believe that the removal of this chart-abstracted measure for the CY 2021 payment determination will reduce burden by 151,800 hours (46 hours × 3,300 hospitals) and $5.6 million (151,800 hours × $36.58
While we proposed to remove five measures submitted via a web-based tool beginning with the CY 2021 payment determination and for subsequent years, in section XIII.B.4.b. of this final rule with comment period, we are only finalizing our proposals to remove three measures: (1) OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; (2) OP-17: Tracking Clinical Results between Visits; and (3) OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. In section XIII.B.4.b. of this final rule with comment period, we are not finalizing our proposals to remove the following web-based measures for the CY 2021 payment determination and subsequent years: OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; and OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. Therefore, we are revising the initially estimated burden reduction from the CY 2019 OPPS/ASC proposed rule.
As we stated in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70582), we estimate that hospitals spend approximately 10 minutes, or 0.167 hours, per measure to report web-based measures. Accordingly, we believe that the removal of OP-12, OP-17, and OP-30 for the CY 2021 payment determination will reduce burden by 0.501 hours per hospital (3 measures × 0.167 hours per measure) and 1,653 hours (0.501 hours × 3,300 hospitals) across 3,300 hospitals. In addition, we estimate that OP-30 requires 25 additional minutes (0.417 hours) per case per measure to chart-abstract and that hospitals would each abstract 384 cases per year for this measure. This number is based on previous analysis (78 FR 75171) where we estimated that each of the approximately 3,300 responding hospitals will have a case volume adequate to support quarterly sample sizes of 96 cases, for a total of 384 cases (96 cases per quarter × 4 quarters) to be abstracted by each hospital annually. Therefore, we estimate an additional burden reduction of 528,422 hours (3,300 hospitals × 0.417 hours × 384 cases per measure) for all participating hospitals for OP-30. In total, we estimate a burden reduction of 530,075 hours (1,653 hours for web submission + 528,422 hours for chart-abstraction of OP-30) and $19.4 million (530,075 hours × $36.58) due to the removal of three web-based measures from the Hospital OQR Program for the CY 2021 payment determination and for subsequent years.
In section XIII.B.4.b. of this final rule with comment period, we are finalizing our proposals to remove three claims-based measures beginning with the CY 2021 payment determination: OP-9: Mammography Follow-up Rates; OP-11: Thorax CT Use of Contrast Material; and OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT. Claims-based measures are derived through analysis of administrative claims data and do not require additional effort or burden on hospitals. As a result, we do not expect these removals to affect collection of information burden for the CY 2021 payment determination.
In total for the CY 2021 payment determination, we expect the information collection burden will be reduced by 151,800 hours due to the removal of one chart-abstracted measure, and 530,075 hours due to the removal of three measures submitted via a web-based tool. In total, we estimate an information collection burden reduction of 681,875 hours (151,800 hours for the removal of one chart-abstracted measure + 530,075 hours for the removal of three web-based measures) and $24.9 million (681,875 hours × $36.58) for the CY 2021 payment determination.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74554), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53672), and the CY 2013, CY 2014, CY 2015, CY 2016, CY 2017, and CY 2018 OPPS/ASC final rules with comment period (77 FR 68532 through 68533; 78 FR 75172 through 75174; 79 FR 67015 through 67016; 80 FR 70582 through 70584; 81 FR 79863 through 79865; and 82 FR 59479 through 59481, respectively) for detailed discussions of the ASCQR Program information collection requirements we have previously finalized. The information collection requirements associated with the ASCQR Program are currently approved under OMB control number 0938-1270. Below we discuss only the changes in burden that would result from the newly finalized provisions in this final rule with comment period.
While we proposed to remove eight measures, in section XIV.B.3.c. of this final rule with comment period, we are only finalizing the removal of two measures: One measure beginning with the CY 2020 payment determination, ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel, and one measure beginning with the CY 2021 payment determination: ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. We expect these finalized policies will reduce the overall burden of reporting data for the ASCQR Program, as discussed below. In section XIV.B.3.c. of this final rule with comment period, we are not finalizing our proposal to remove ASC-9: Endoscopy/Polyp
In section XIV.B.3.c. of this final rule with comment period, we are finalizing the removal of one measure beginning with the CY 2020 payment determination, ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel. Data for ASC-8 are submitted via a non-CMS online data submission tool, to the NHSN. However, we note that the information collection burden associated with ASC-8, a NHSN measure, is accounted for under a separate information collection request, OMB control number 0920-0666. As such, we are not providing an estimate of the information collection burden associated with this measure under the ASCQR Program OMB control number.
While we proposed to remove seven measures beginning with the CY 2021 payment determination, in section XIV.B.3.c. of this final rule with comment period, we are only finalizing our proposal to remove one measure: ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. In section XIV.B.3.c. of this final rule with comment period we are not finalizing our proposals to remove ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients and ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. In addition, we are not finalizing our proposals to remove ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and ASC-4: All-Cause Hospital Transfer/Admission, but are instead retaining the measures in the ASCQR Program and suspending their data collection beginning with the CY 2019 reporting period/CY 2021 payment determination until further action in rulemaking with the goal of updating the measures. Therefore, we are revising the estimated information collection burden changes from the estimates included in the CY 2019 OPPS/ASC proposed rule (83 FR 37222).
In section XIV.B.3.c. of this final rule with comment period, we are finalizing the removal of one chart-abstracted measure from the ASCQR Program measure set beginning with the CY 2021 payment determination: ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. We believe 3,937 ASCs will experience a reduction in information collection burden associated with our finalized policy to remove ASC-10 from the ASCQR Program measure set.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79864), we finalized our estimates that each participating ASC would spend 0.25 hours (15 minutes) per case per measure per year to collect and submit the required data for ASC-10. We estimate that the average number of patients per ASC is 63 based on the historic average. In addition, we estimate the total annual information collection burden per ASC to be 15 hours and 45 minutes (15.75 hours) per measure (0.25 hours × 63 cases). Therefore, for ASC-10, we estimate the total annualized information collection burden to be 62,008 hours (3,937 ASCs × 15.75 hours per ASC) and $2,268,244 (3,937 ASCs × 15.75 hours per ASC × $36.58 per hour
As described in section XVI. of this final rule with comment period, we are finalizing a modified version of our proposals regarding the Communication About Pain questions from the HCAHPS Survey in the Hospital IQR Program. Instead of removing the questions effective with January 2022 discharges, for the FY 2024 payment determination and subsequent years as proposed, we are finalizing to remove them effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years. In addition, instead of publicly reporting the data in October 2022 and then subsequently discontinuing as proposed, we are finalizing that we will not publicly report the data collected from the Communication About Pain questions at all.
While we anticipate that the removal of these questions will reduce the burden associated with reporting this measure, as further discussed below, the burden estimate for the Hospital IQR Program excludes the burden associated with the HCAHPS Survey measure, which is submitted under a separate information collection request and approved under OMB control number 0938-0981. For discussion of the burden estimate for the Hospital IQR Program under OMB control number 0938-1022, we refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41689 through 41694). For details on the burden estimate specifically for the HCAHPS Survey, including use of the Communication About Pain questions, we refer readers to the notice published in the
As noted above, the removal of the Communication About Pain questions does not change the estimated burden for the Hospital IQR Program under the program's OMB control number 0938-1022. However, we believe that overall cost and burden will change slightly for hospitals and HCAHPS Survey respondents. Under HCAHPS Survey
Under HCAHPS Survey OMB control number 0938-0981, the average time for a respondent to answer the 32 question survey is estimated at 8 minutes, which we estimate to be 0.25 minutes per question (8 minutes/32 questions = 0.25 minutes per question). In addition, under this OMB control number, the number of respondents is estimated at 3,104,200 respondents. In this final rule with comment period, we are finalizing a modified version of our proposal to remove 3 questions, which we estimate would reduce the time burden by 0.75 minutes (0.25 minutes per question × 3 questions), or 0.0125 hours (0.75 minutes/60 minutes) per respondent. We anticipate a total hourly burden reduction for respondents of 38,803 hours (0.0125 hours × 3,104,200 respondents). Further, under OMB control number 0938-0981, the cost of respondent time is based on the average hourly earnings of $26.71 per hour, as reported by the U.S. Bureau of Labor Statistics final January 2018 estimates available on the website at:
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20503), we proposed to remove two NHSN measures, Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (PCH-5/NQF #0138) and Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (PCH-4/NQF #0139), from the PCHQR Program beginning with the FY 2021 program year. In section VIII.B.3.b.(2) of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41613), we indicated that we would take final action regarding our proposals to remove the CAUTI and CLABSI measures in a future 2018 final rule. In section XVII. of this final rule with comment period, after consideration of the public comments received, and consideration of the most recent information provided by the CDC, we are not finalizing our proposals to remove the CAUTI and CLABSI measures. We note that this CDC information was not available at the time when we proposed the removal of these measures from the PCHQR Program.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41695) we reconciled the burden estimates associated with the NHSN measures (CLABSI, CAUTI, CDI, HCP, MRSA and Colon and Abdominal Hysterectomy SSI) included in the PCHQR Program, which were formerly accounted for under both the PCHQR Program's estimates OMB control number 0938-1175 and the CDC's estimates under OMB control number 0920-0666. Because the CDC maintains the NHSN system used to collect this data and captures the burden associated with this data collection under its estimates in OMB control number 0920-0666, we removed the duplicative burden estimate from the PCHQR Program's OMB Control Number, 0938-1175. As a result, there is no change in burden under the PCHQR Program associated with not finalizing removal of the CLABSI and CAUTI measures.
In summary, our decisions not to remove the CAUTI and CLABSI measures in the PCHQR Program for FY 2021 program year and subsequent years does not change the information collection estimates for the PCHQR Program. We refer readers to section XIV.B.4 of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41694 through 41695) for more detail on the information collection calculations for the finalized policies in the PCHQR Program.
Below is a chart reflecting the total burden and associated costs for the provisions included in this final rule with comment period.
Because of the large number of public comments we normally receive on
This final rule with comment period is necessary to make updates to the Medicare hospital OPPS rates. It is necessary to make changes to the payment policies and rates for outpatient services furnished by hospitals and CMHCs in CY 2019. We are required under section 1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion factor used to determine the payment rates for APCs. We also are required under section 1833(t)(9)(A) of the Act to review, not less often than annually, and revise the groups, the relative payment weights, and the wage and other adjustments described in section 1833(t)(2) of the Act. We must review the clinical integrity of payment groups and relative payment weights at least annually. We are revising the APC relative payment weights using claims data for services furnished on and after January 1, 2017, through and including December 31, 2017, and processed through June 30, 2018, and updated cost report information.
We note that we are finalizing our proposal to control unnecessary increases in the volume of covered outpatient department services by paying for clinic visits furnished at off-campus PBDs at an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate). The site-specific PFS payment rate for clinic visits furnished in excepted off-campus PBDs is the OPPS rate reduced to the amount paid for clinic visits furnished by nonexcepted off-campus PBDs under the PFS, which is 40 percent of the OPPS rate. We expect that, by removing the payment differential, we will control unnecessary volume increases both in terms of the number of covered outpatient services furnished and the costs of those services. We are implementing this policy with a 2-year phase-in. In CY 2019, the payment reduction will be transitioned by applying 50 percent of the total reduction in payment that would apply if these off-campus PBDs were paid the site-specific PFS payment rate for the clinic visit service. In other words, these excepted off-campus PBDs will be paid 70 percent of the OPPS rate for the clinic visit service in CY 2019. In CY 2020, we will complete the transition to paying the PFS-equivalent amount for clinic visits furnished in excepted off-campus PBDs. In other words, these excepted off-campus PBDs will be paid 40 percent of the OPPS rate for the clinic visit service in CY 2020.
This final rule with comment period also is necessary to make updates to the ASC payment rates for CY 2019, enabling CMS to make changes to payment policies and payment rates for covered surgical procedures and covered ancillary services that are performed in an ASC in CY 2019. Because ASC payment rates are based on the OPPS relative payment weights for most of the procedures performed in ASCs, the ASC payment rates are updated annually to reflect annual changes to the OPPS relative payment weights. In addition, we are required under section 1833(i)(1) of the Act to review and update the list of surgical procedures that can be performed in an ASC, not less frequently than every 2 years.
For CYs 2019 through 2023, we are finalizing our proposal to update the ASC payment system rates using the hospital market basket update instead of the CPI-U. We believe that this finalized proposal could stabilize the differential between OPPS payments and ASC payments, given that the CPI-U has been generally lower than the hospital market basket, and encourage the
We have examined the impacts of this final rule with comment period, as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017). This section of this final rule with comment period contains the impact and other economic analyses for the provisions we are finalizing for CY 2019.
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule with comment period has been designated as an economically significant rule under section 3(f)(1) of Executive Order 12866 and a major rule under the Congressional Review Act. Accordingly, this final rule with comment period has been reviewed by the Office of Management and Budget. We have prepared a regulatory impact analysis that, to the best of our ability, presents the costs and benefits of the provisions of this final rule with comment period. In the CY 2019 OPPS/ASC proposed rule (83 FR 37224), we solicited public comments on the regulatory impact analysis in the proposed rule, and we address any public comments we received in this final rule with comment period, as appropriate.
We estimate that the total increase in Federal government expenditures under the OPPS for CY 2019, compared to CY 2018, due only to the changes to the OPPS in this final rule with comment period, will be approximately $440 million. Taking into account our estimated changes in enrollment, utilization, and case-mix for CY 2019, we estimate that the OPPS expenditures, including beneficiary cost-sharing, for CY 2019 will be approximately $74.1 billion; approximately $5.8 billion higher than estimated OPPS expenditures in CY 2018. We note that these spending estimates include the final CY 2019 final policy to control for unnecessary increases in the volume of covered outpatient department services by paying for clinic visits furnished at excepted off-campus PBDs at a rate that will be 70 percent of the OPPS rate for a clinic visit service. Because the provisions of the OPPS are part of a final rule that is economically significant, as measured by the threshold of an additional $100 million in expenditures in 1 year, we have prepared this regulatory impact analysis that, to the best of our ability, presents its costs and benefits. Table 62 of this final rule with comment period displays the distributional impact of the CY 2019 changes in OPPS payment to various groups of hospitals and for CMHCs.
As noted in sections V.B.7. and X.C.2. of this final rule with comment period, we are finalizing our proposal for CY 2019 to pay for separately payable drugs and biological products that do not have pass-through payment status and are not acquired under the 340B program at WAC+3 percent instead of WAC+6 percent, if ASP data are unavailable for payment purposes. If WAC data are not available for a drug or biological product, we will continue our policy to pay separately payable drugs and biological products at 95 percent of the AWP. Drugs and biologicals that are acquired under the 340B Program will continue to be paid at ASP minus 22.5 percent, WAC minus 22.5 percent, or 69.46 percent of AWP, as applicable.
We estimate that the update to the conversion factor and other adjustments (not including the effects of outlier payments, the pass-through payment estimates, the application of the frontier State wage adjustment for CY 2019, and the finalized proposal to control for unnecessary increases in the volume of covered outpatient department services described in section X.B. of this final rule with comment period) will increase total OPPS payments by 1.3 percent in CY 2019. The changes to the APC relative payment weights, the changes to the wage indexes, the continuation of a payment adjustment for rural SCHs, including EACHs, and the payment adjustment for cancer hospitals will not increase OPPS payments because these changes to the OPPS are budget neutral. However, these updates will change the distribution of payments within the budget neutral system. We estimate that the total change in payments between CY 2018 and CY 2019, considering all budget neutral payment adjustments, changes in estimated total outlier payments, pass-through payments, the application of the frontier State wage adjustment, and the finalized proposal to control unnecessary increases in the volume of outpatient services as described in section X.B. of this final rule with comment period, in addition to the application of the OPD fee schedule increase factor after all adjustments required by sections 1833(t)(3)(F), 1833(t)(3)(G), and 1833(t)(17) of the Act, will increase total estimated OPPS payments by 0.6 percent.
We estimate the total increase (from changes to the ASC provisions in this final rule with comment period as well as from enrollment, utilization, and case-mix changes) in Medicare expenditures (not including beneficiary cost-sharing) under the ASC payment system for CY 2019 compared to CY 2018, to be approximately $200 million. Because the provisions for the ASC payment system are part of a final rule that is economically significant, as measured by the $100 million threshold, we have prepared a regulatory impact analysis of the changes to the ASC payment system that, to the best of our ability, presents the costs and benefits of this portion of this final rule with comment period. Tables 63 and 64 of this final rule with comment period display the redistributive impact of the CY 2019 changes regarding ASC payments, grouped by specialty area and then grouped by procedures with the greatest ASC expenditures, respectively.
The distributional impacts presented here are the projected effects of the CY 2019 policy changes on various hospital groups. We post on the CMS website our hospital-specific estimated payments for CY 2019 with the other supporting documentation for this final rule with comment period. To view the hospital-specific estimates, we refer readers to the CMS website at:
We estimate the effects of the individual policy changes by estimating payments per service, while holding all other payment policies constant. We use the best data available, but do not attempt to predict behavioral responses to our policy changes in order to isolate the effects associated with specific policies or updates, but any policy that changes payment could have a behavioral response. In addition, we have not made adjustments for future changes in variables, such as service volume, service-mix, or number of encounters.
In section X.B. of this final rule with comment period, we discuss our CY 2019 finalized proposal to control for unnecessary increases in the volume of outpatient department services by paying for clinic visits furnished at an off-campus PBD at an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate). Specifically, we are finalizing our proposal to pay for HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) when billed with modifier “PO” at an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD (the PFS payment rate), with a 2-year transition period. For a discussion of the PFS payment amount for outpatient clinic visits furnished at nonexcepted off-campus PBDs, we refer readers to the CY 2018 PFS final rule with comment period discussion (82 FR 53023 through 53024), as well as the CY 2019 PFS final rule.
To develop an estimated impact of this policy, we began with CY 2017 outpatient claims data used in ratesetting for the CY 2019 OPPS. We then flagged all claim lines for HCPCS code G0463 that contained modifier “PO” because the presence of this modifier indicates that such claims were billed for services furnished by an off-campus department of a hospital paid under the OPPS. Next, we excluded those that were billed as a component of C-APC 8011 (Comprehensive Observation Services) or packaged into another C-APC because in those instances OPPS payment is made for a broader package of services. We then simulated payment for the remaining claim lines as if they were paid at the PFS-equivalent rate. An estimate of the policy that includes the effects of estimated changes in enrollment, utilization, and case-mix based on the FY 2019 President's budget approximates the estimated decrease in total payment under the OPPS at $380 million, with Medicare OPPS payments decreasing by $300 million and beneficiary copayments decreasing by $80 million in CY 2019. This estimate is utilized for the accounting statement displayed in Table 65 of this final rule with comment period because the impact of this CY 2019 policy, which is not budget neutral, is combined with the impact of the OPD update, which is also not budget neutral, to estimate changes in Medicare spending under the OPPS as a result of the changes in this final rule with comment period. The estimated decrease in payment due to this policy is not as great as in the proposed rule because we are proposing to transition the application of this policy over 2 years.
We note that our estimates may differ from the actual effect of the policy due to offsetting factors, such as changes in provider behavior. We note that, by removing this payment differential that may influence site-of-service decision-making, we anticipate an associated decrease in the volume of clinic visits provided in the excepted off-campus PBD setting. In the proposed rule, we reminded readers that this estimate could change in this final rule with comment period based on a number of factors such as the availability of updated data, changes in the final payment policy, and/or the method of assessing the payment impact in the final rule with comment period. This estimate changed due to the final policy of establishing a 2-year phase-in. As discussed in more detail in section X.B. of the proposed rule, we sought public comment on both our proposed payment policy for clinic visits furnished at off-campus PBDs as well as how to apply methods for controlling overutilization of services more broadly. We refer readers to section X.B. of this final rule with comment period for our discussion of the public comments we received.
In section X.C. of this final rule with comment period, we discuss the proposal we are finalizing to pay average sales price (ASP) minus 22.5 percent under the PFS for separately payable 340B-acquired drugs furnished by nonexcepted, off-campus PBDs beginning in CY 2019. This is consistent with the payment methodology adopted in CY 2018 for 340B-acquired drugs furnished in hospital departments paid under the OPPS.
To develop an estimated impact of this finalized proposal, we began with CY 2017 outpatient claims data used in ratesetting for the CY 2019 OPPS. We then flagged all claim lines that contained modifier “PN” because the presence of this modifier indicates that such claims were billed for services furnished by a nonexcepted off-campus department of a hospital paid under the PFS. We further subset this population by identifying 340B hospitals that billed for status indicator “K” drugs or biologicals (that is, nonpass-through, separately payable drugs) because such drugs may have been subject to the 340B discount. We found 117 unique nonexcepted off-campus PBDs associated with 340B hospitals billed for status indicator “K” drugs. Their “K” billing represents approximately $183 million in Medicare payments (including beneficiary copayments) based on a payment rate of ASP+6 percent. Based on our adjustment, for CY 2019, we estimate that the Medicare Program and beneficiaries will save approximately $49.1 million, under the PFS. This estimate represents an upper bound of potential savings under the PFS for this policy change and does not include adjustments for beneficiary enrollment, case-mix, or potential offsetting behaviors. We noted in the proposed rule that the estimated effect of the proposed policy could change in this final rule with comment period based on a number of factors such as the availability of updated data, changes in the final payment policy, and/or the method of assessing the payment impact in the final rule.
Table 62 below shows the estimated impact of this final rule with comment period on hospitals. Historically, the first line of the impact table, which estimates the change in payments to all
We present separate impacts for CMHCs in Table 62, and we discuss them separately below, because CMHCs are paid only for partial hospitalization services under the OPPS and are a different provider type from hospitals. In CY 2019, we are paying CMHCs for partial hospitalization services under APC 5853 (Partial Hospitalization for CMHCs), and we are paying hospitals for partial hospitalization services under APC 5863 (Partial Hospitalization for Hospital-Based PHPs).
The estimated increase in the total payments made under the OPPS is determined largely by the increase to the conversion factor under the statutory methodology. The distributional impacts presented do not include assumptions about changes in volume and service-mix. The conversion factor is updated annually by the OPD fee schedule increase factor, as discussed in detail in section II.B. of this final rule with comment period.
Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee schedule increase factor is equal to the market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act, which we refer to as the IPPS market basket percentage increase. The IPPS market basket percentage increase for FY 2019 is 2.9 percent (83 FR 41395). Section 1833(t)(3)(F)(i) of the Act reduces that 2.9 percent by the multifactor productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act, which is 0.8 percentage point for FY 2019 (which is also the MFP adjustment for FY 2019 in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41395)), and sections 1833(t)(3)(F)(ii) and 1833(t)(3)(G)(v) of the Act further reduce the market basket percentage increase by 0.75 percentage point, resulting in the OPD fee schedule increase factor of 1.35 percent. We are using the OPD fee schedule increase factor of 1.35 percent in the calculation of the CY 2019 OPPS conversion factor. Section 10324 of the Affordable Care Act, as amended by HCERA, further authorized additional expenditures outside budget neutrality for hospitals in certain frontier States that have a wage index less than 1.0000. The amounts attributable to this frontier State wage index adjustment are incorporated in the CY 2019 estimates in Table 62 of this final rule with comment period.
To illustrate the impact of the CY 2019 changes, our analysis begins with a baseline simulation model that uses the CY 2018 relative payment weights, the FY 2018 final IPPS wage indexes that include reclassifications, and the final CY 2018 conversion factor. Table 62 shows the estimated redistribution of the increase or decrease in payments for CY 2019 over CY 2018 payments to hospitals and CMHCs as a result of the following factors: The impact of the APC reconfiguration and recalibration changes between CY 2018 and CY 2019 (Column 2); the wage indexes and the provider adjustments (Column 3); the combined impact of all of the changes described in the preceding columns plus the 1.35 percent OPD fee schedule increase factor update to the conversion factor (Column 4); the finalized off-campus PBD clinic visits payment policy (Column 5), and the estimated impact taking into account all payments for CY 2019 relative to all payments for CY 2018, including the impact of changes in estimated outlier payments, the frontier State wage adjustment, and changes to the pass-through payment estimate (Column 6).
We did not model an explicit budget neutrality adjustment for the rural adjustment for SCHs because we are maintaining the current adjustment percentage for CY 2019. Because the updates to the conversion factor (including the update of the OPD fee schedule increase factor), the estimated cost of the rural adjustment, and the estimated cost of projected pass-through payment for CY 2019 are applied uniformly across services, observed redistributions of payments in the impact table for hospitals largely depend on the mix of services furnished by a hospital (for example, how the APCs for the hospital's most frequently furnished services will change), and the impact of the wage index changes on the hospital. However, total payments made under this system and the extent to which this final rule with comment period will redistribute money during implementation also will depend on changes in volume, practice patterns, and the mix of services billed between CY 2018 and CY 2019 by various groups of hospitals, which CMS cannot forecast.
Overall, we estimate that the rates for CY 2019 will increase Medicare OPPS payments by an estimated 0.6 percent. Removing payments to cancer and children's hospitals because their payments are held harmless to the pre-OPPS ratio between payment and cost and removing payments to CMHCs results in an estimated 0.6 percent increase in Medicare payments to all other hospitals. These estimated payments will not significantly impact other providers.
The first line in Column 1 in Table 62 shows the total number of facilities (3,840), including designated cancer and children's hospitals and CMHCs, for which we were able to use CY 2017 hospital outpatient and CMHC claims data to model CY 2018 and CY 2019 payments, by classes of hospitals, for CMHCs and for dedicated cancer hospitals. We excluded all hospitals and CMHCs for which we could not plausibly estimate CY 2018 or CY 2019 payment and entities that are not paid under the OPPS. The latter entities include CAHs, all-inclusive hospitals, and hospitals located in Guam, the U.S. Virgin Islands, Northern Mariana Islands, American Samoa, and the State of Maryland. This process is discussed in greater detail in section II.A. of this final rule with comment period. At this time, we are unable to calculate a DSH variable for hospitals that are not also paid under the IPPS because DSH payments are only made to hospitals paid under the IPPS. Hospitals for which we do not have a DSH variable are grouped separately and generally include freestanding psychiatric hospitals, rehabilitation hospitals, and long-term care hospitals. We show the total number of OPPS hospitals (3,727), excluding the hold-harmless cancer and children's hospitals and CMHCs, on the second line of the table. We excluded cancer and children's hospitals because section 1833(t)(7)(D) of the Act permanently holds harmless cancer hospitals and children's hospitals to their “pre-BBA amount” as specified under the terms of the statute, and therefore, we removed them from our impact analyses. We show the isolated impact on the 46 CMHCs at the bottom of the impact table and discuss that impact separately below.
Column 2 shows the estimated effect of APC recalibration. Column 2 also reflects any changes in multiple procedure discount patterns or conditional packaging that occur as a result of the changes in the relative magnitude of payment weights. As a result of APC recalibration, we estimate that urban hospitals will experience no change, with the impact ranging from an increase of 0.4 percent to a decrease of 0.1 percent, depending on the number of beds. Rural hospitals will experience
Column 3 demonstrates the combined budget neutral impact of the APC recalibration; the updates for the wage indexes with the FY 2019 IPPS post-reclassification wage indexes; the rural adjustment; and the cancer hospital payment adjustment. We modeled the independent effect of the budget neutrality adjustments and the OPD fee schedule increase factor by using the relative payment weights and wage indexes for each year, and using a CY 2018 conversion factor that included the OPD fee schedule increase and a budget neutrality adjustment for differences in wage indexes.
Column 3 reflects the independent effects of the updated wage indexes, including the application of budget neutrality for the rural floor policy on a nationwide basis. This column excludes the effects of the frontier State wage index adjustment, which is not budget neutral and is included in Column 6. We did not model a budget neutrality adjustment for the rural adjustment for SCHs because we are continuing the rural payment adjustment of 7.1 percent to rural SCHs for CY 2019, as described in section II.E. of this final rule with comment period. We also did not model a budget neutrality adjustment for the cancer hospital payment adjustment because we are using a payment-to-cost ratio target for the cancer hospital payment adjustment in CY 2019 of 0.89, which is the same ratio that was reported for the CY 2018 OPPS/ASC final rule with comment period (82 FR 59266). We note that, in accordance with section 16002 of the 21st Century Cures Act, we are applying a budget neutrality factor calculated as if the cancer hospital adjustment target payment-to-cost ratio was 0.89, not the 0.88 target payment-to-cost ratio we are applying in section II.F. of this final rule with comment period.
We modeled the independent effect of updating the wage indexes by varying only the wage indexes, holding APC relative payment weights, service-mix, and the rural adjustment constant and using the CY 2019 scaled weights and a CY 2018 conversion factor that included a budget neutrality adjustment for the effect of the changes to the wage indexes between CY 2018 and CY 2019. The FY 2019 wage policy results in modest redistributions.
Column 4 demonstrates the combined impact of all of the changes previously described and the update to the conversion factor of 1.35 percent. Overall, these changes will increase payments to urban hospitals by 1.4 percent and to rural hospitals by 1.3 percent. Urban hospitals will receive an increase in line with the 1.4 percent overall increase for all facilities after the update is applied to the budget neutrality adjustments. The increase for classes of rural hospitals will be more variable with sole community hospitals receiving a 1.1 percent increase and other rural hospitals receiving an increase of 1.6 percent.
Column 5 displays the estimated effect of our finalized CY 2019 volume control method to pay for clinic visit HCPCS code G0463 ((Hospital outpatient clinic visit for assessment and management of a patient) when billed with modifier “PO” by an excepted off-campus PBD at a rate that will be 70 percent of the OPPS rate for a clinic visit service for CY 2019. We note that the numbers provided in this column isolate the estimated effect of this policy adjustment relative to the numerator of Column 4. Therefore, the numbers reported in Column 5 show how much of the difference between the estimates in Column 4 and the estimates in Column 6 are a result of the finalized off-campus PBD visits policy.
Column 6 depicts the full impact of the CY 2019 policies on each hospital group by including the effect of all changes for CY 2019 and comparing them to all estimated payments in CY 2018. Column 6 shows the combined budget neutral effects of Columns 2 through 3; the OPD fee schedule increase; the effect of the finalized off-campus PBD visits policy, the impact of the frontier State wage index adjustment; the impact of estimated OPPS outlier payments, as discussed in section II.G. of this final rule with comment period; the change in the Hospital OQR Program payment reduction for the small number of hospitals in our impact model that failed to meet the reporting requirements (discussed in section XIII. of this final rule with comment period); and the difference in total OPPS payments dedicated to transitional pass-through payments.
Of those hospitals that failed to meet the Hospital OQR Program reporting requirements for the full CY 2018 update (and assumed, for modeling purposes, to be the same number for CY 2019), we included 72 hospitals in our model because they had both CY 2017 claims data and recent cost report data. We estimate that the cumulative effect of all changes for CY 2019 will increase payments to all facilities by 0.6 percent for CY 2019. We modeled the independent effect of all changes in Column 6 using the final relative payment weights for CY 2018 and the relative payment weights for CY 2019. We used the final conversion factor for CY 2018 of $78.636 and the final CY 2019 conversion factor of $79.490 discussed in section II.B. of this final rule with comment period.
Column 6 contains simulated outlier payments for each year. We used the 1-year charge inflation factor used in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41722) of 4.3 percent (1.04338) to increase individual costs on the CY 2017 claims, and we used the most recent overall CCR in the October 2018 Outpatient Provider-Specific File (OPSF) to estimate outlier payments for CY 2018. Using the CY 2017 claims and a 4.3 percent charge inflation factor, we currently estimate that outlier payments for CY 2018, using a multiple threshold of 1.75 and a fixed-dollar threshold of $4,150, will be approximately 1.01 percent of total payments. The estimated current outlier payments of 1.01 percent are incorporated in the comparison in Column 6. We used the same set of claims and a charge inflation factor of 8.9 percent (1.08864) and the CCRs in the October 2018 OPSF, with an adjustment of 0.981397, to reflect relative changes in cost and charge inflation between CY 2017 and CY 2019, to model the CY 2019 outliers at 1.0 percent of estimated total payments using a multiple threshold of 1.75 and a fixed-dollar threshold of $4,825. The charge inflation and CCR inflation factors are discussed in detail in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41722).
Overall, we estimate that facilities will experience an increase of 0.6 percent under this final rule with comment period in CY 2019 relative to total spending in CY 2018. This projected increase (shown in Column 6) of Table 62 reflects the 1.35 percent OPD fee schedule increase factor, minus 0.6 percent for the off-campus PBD visits policy, minus 0.10 percent for the change in the pass-through payment estimate between CY 2018 and CY 2019, plus a decrease of 0.01 percent for the difference in estimated outlier payments
Among hospitals, by teaching status, we estimate that the impacts resulting from the combined effects of all changes will include an increase of 0.4 percent for major teaching hospitals and an increase of 0.9 percent for nonteaching hospitals. Minor teaching hospitals will experience an estimated increase of 0.5 percent.
In our analysis, we also have categorized hospitals by type of ownership. Based on this analysis, we estimate that voluntary hospitals will experience an increase of 0.6 percent, proprietary hospitals will experience an increase of 1.0 percent, and governmental hospitals will experience an increase of 0.5 percent.
The last line of Table 62 demonstrates the isolated impact on CMHCs, which furnish only partial hospitalization services under the OPPS. In CY 2018, CMHCs are paid under APC 5853 (Partial Hospitalization (3 or more services) for CMHCs). We modeled the impact of this APC policy assuming CMHCs will continue to provide the same number of days of PHP care as seen in the CY 2017 claims used for ratesetting in this final rule with comment period. We excluded days with 1 or 2 services because our policy only pays a per diem rate for partial hospitalization when 3 or more qualifying services are provided to the beneficiary. We estimate that CMHCs will experience an overall 15.1 percent decrease in payments from CY 2018 (shown in Column 6). We note that this includes the trimming methodology described in section VIII.B. of this final rule with comment period.
Column 3 shows that the estimated impact of adopting the FY 2019 wage index values will result in an increase of 0.7 percent to CMHCs. Column 4 shows that combining this OPD fee schedule increase factor, along with changes in APC policy for CY 2019 and the FY 2019 wage index updates, will result in an estimated decrease of 15.0 percent. Column 5 shows that the off-campus PBD clinic visits payment policy has no effect on CMHCs. Column 6 shows that adding the changes in outlier and pass-through payments will result in a total 15.1 percent decrease in payment for CMHCs. This reflects all changes to CMHCs for CY 2019.
For services for which the beneficiary pays a copayment of 20 percent of the payment rate, the beneficiary's payment will increase for services for which the OPPS payments will rise and will decrease for services for which the OPPS payments will fall. For further discussion on the calculation of the national unadjusted copayments and minimum unadjusted copayments, we refer readers to section II.I. of this final rule with comment period. In all cases, section 1833(t)(8)(C)(i) of the Act limits beneficiary liability for copayment for a procedure performed in a year to the hospital inpatient deductible for the applicable year.
We estimate that the aggregate beneficiary coinsurance percentage will be 18.5 percent for all services paid under the OPPS in CY 2019. The estimated aggregate beneficiary coinsurance reflects general system adjustments, including the CY 2019 comprehensive APC payment policy discussed in section II.A.2.b. of this final rule with comment period. The aggregate coinsurance percentage reflects changes that we have made for the CY 2019 OPPS. Total estimated copayments over total estimated payments results in 18.6 percent. Under the C-APC payment methodology, the copayment is based on the claim level for the C-APC rather than the service line level. Because outpatient copayment is capped at the inpatient deductible, this can lead to an aggregate cost-sharing below 20 percent.
The relative payment weights and payment amounts established under the OPPS affect the payments made to ASCs, as discussed in section XII. of this final rule with comment period. We do not anticipate that any types of providers or suppliers other than hospitals, CMHCs, and ASCs will be affected by the changes in this final rule with comment period. However, we are interested in exploring how these Medicare changes may affect others in the health care marketplace.
The effect on the Medicare program is expected to be an increase of $440 million in program payments for OPPS services furnished in CY 2019. The effect on the Medicaid program is expected to be limited to copayments that Medicaid may make on behalf of Medicaid recipients who are also Medicare beneficiaries. We estimate that the changes in this final rule with comment period will increase these Medicaid beneficiary payments by approximately $35 million in CY 2019. Currently, there are approximately 10 million dual-eligible beneficiaries, which represents approximately one third of Part B FFS beneficiaries. The impact on Medicaid was determined by taking one-third of the beneficiary cost-sharing impact. The national average split of Medicaid payments is 57 percent Federal payments and 43 percent State payments. Therefore, for the estimated $35 million Medicaid increase, approximately $20 million would be from the Federal Government and $15 million would be from State government.
Alternatives to the OPPS changes we are making and the reasons for our selected alternatives are discussed throughout this final rule with comment period.
We refer readers to section X.B. of this final rule with comment period for a discussion of our policy to use our authority under section 1833(t)(2)(F) of the Act to apply an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD for the clinic visit service, as described by HCPCS code G0463, when provided at an off-campus PBD excepted from section 1833(t)(21) of the Act. For 2019, we proposed to apply a PFS-equivalent payment rate for this service. However, after consideration of public comments received, we are phasing in the application of the reduction in payment for HCPCS code G0463 in this setting over 2 years. In CY 2019, the payment reduction will be transitioned by applying 50 percent of the total reduction in payment that would apply if these departments were paid the site-specific PFS rate for the clinic visit service. We also considered, but did not finalize, fully applying this payment reduction in CY 2019. Had we done so, total Medicare and beneficiary copayments in CY 2019 would have decreased by $750 million, compared to the decrease of $380 million as a result of the phase-in.
We refer readers to section V.B.1.d. of this final rule with comment period for a discussion of our policy to assign any skin substitute product that was assigned to the high cost group in CY 2018 to the high cost group in CY 2019, regardless of whether the product's mean unit cost (MUC) or the product's per day cost (PDC) exceeds or falls below the overall CY 2019 MUC or PDC threshold. We will continue to assign products that exceed either the overall CY 2019 MUC or PDC threshold to the high cost group. We also considered, but did not propose, reinstating our methodology from CY 2017 and assigning skin substitutes to the high cost group based on whether an individual product's MUC or PDC exceeded the overall CY 2019 MUC or PDC threshold based on calculations done for either the proposed rule or the final rule with comment period.
We refer readers to sections II.A.3.b. and XII.D.3. of the proposed rule and this final rule with comment period for a discussion of our change in the packaging policy for certain drugs when administered in the ASC setting and policy provide separate payment for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in an ASC. In those sections of the proposed rule, we also solicited comments on whether we should pay separately for other non-opioid treatments for pain under the OPPS and the ASC payment system. We discuss the comments we received in those sections of this final rule with comment period. In the proposed rule, we also considered and solicited comments on an alternative policy that would use our equitable adjustment authority under section 1833(t)(2)(E) of the Act to establish an incentive payment for non-opioid alternatives that would apply to drugs and devices under
Most ASC payment rates are calculated by multiplying the ASC conversion factor by the ASC relative payment weight. As discussed fully in section XII. of this final rule with comment period, we are setting the CY 2019 ASC relative payment weights by scaling the CY 2019 OPPS relative payment weights by the ASC scalar of 0.8792. The estimated effects of the updated relative payment weights on payment rates are varied and are reflected in the estimated payments displayed in Tables 63 and 64 below.
Beginning in CY 2011, section 3401 of the Affordable Care Act requires that the annual update to the ASC payment system (which will be the hospital market basket for CY 2019) after application of any quality reporting reduction be reduced by a productivity adjustment. The Affordable Care Act defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period, ending with the applicable fiscal year, year, cost reporting period, or other annual period). For ASCs that fail to meet their quality reporting requirements, the CY 2019 payment determinations will be based on the application of a 2.0 percentage point reduction to the annual update factor, which will be the hospital market basket for CY 2019. We calculated the CY 2019 ASC conversion factor by adjusting the CY 2018 ASC conversion factor by 1.0004 to account for changes in the pre-floor and pre-reclassified hospital wage indexes between CY 2018 and CY 2019 and by applying the CY 2019 MFP-adjusted hospital market basket update factor of 2.1 percent (hospital market basket update of 2.9 percent minus a projected productivity adjustment of 0.8 percentage point). The CY 2019 ASC conversion factor is $46.555 for ASCs that successfully meet the quality reporting requirements.
Presented here are the projected effects of the changes for CY 2019 on Medicare payment to ASCs. A key limitation of our analysis is our inability to predict changes in ASC service-mix between CY 2017 and CY 2019 with precision. We believe the net effect on Medicare expenditures resulting from the CY 2019 changes will be small in the aggregate for all ASCs. However, such changes may have differential effects across surgical specialty groups, as ASCs continue to adjust to the payment rates based on the policies of the revised ASC payment system. We are unable to accurately project such changes at a disaggregated level. Clearly, individual ASCs will experience changes in payment that differ from the aggregated estimated impacts presented below.
Some ASCs are multispecialty facilities that perform a wide range of surgical procedures from excision of lesions to hernia repair to cataract extraction; others focus on a single specialty and perform only a limited range of surgical procedures, such as eye, digestive system, or orthopedic procedures. The combined effect on an individual ASC of the update to the CY 2019 payments will depend on a number of factors, including, but not limited to, the mix of services the ASC provides, the volume of specific services provided by the ASC, the percentage of its patients who are Medicare beneficiaries, and the extent to which an ASC provides different services in the coming year. The following discussion presents tables that display estimates of the impact of the CY 2019 updates to the ASC payment system on Medicare payments to ASCs, assuming the same mix of services, as reflected in our CY 2017 claims data. Table 63 depicts the estimated aggregate percent change in payment by surgical specialty or ancillary items and services group by comparing estimated CY 2018 payments to estimated CY 2019 payments, and Table 64 shows a comparison of estimated CY 2018 payments to estimated CY 2019 payments for procedures that we estimate will receive the most Medicare payment in CY 2018.
In Table 63, we have aggregated the surgical HCPCS codes by specialty group, grouped all HCPCS codes for covered ancillary items and services into a single group, and then estimated the effect on aggregated payment for surgical specialty and ancillary items and services groups. The groups are sorted for display in descending order by estimated Medicare program payment to ASCs. The following is an explanation of the information presented in Table 63.
• Column 1—Surgical Specialty or Ancillary Items and Services Group indicates the surgical specialty into which ASC procedures are grouped and the ancillary items and services group which includes all HCPCS codes for covered ancillary items and services. To group surgical procedures by surgical specialty, we used the CPT code range definitions and Level II HCPCS codes and Category III CPT codes, as appropriate, to account for all surgical procedures to which the Medicare program payments are attributed.
• Column 2—Estimated CY 2018 ASC Payments were calculated using CY 2017 ASC utilization data (the most recent full year of ASC utilization) and CY 2018 ASC payment rates. The surgical specialty and ancillary items and services groups are displayed in descending order based on estimated CY 2018 ASC payments.
• Column 3—Estimated CY 2019 Percent Change is the aggregate percentage increase or decrease in Medicare program payment to ASCs for each surgical specialty or ancillary items and services group that are attributable to updates to ASC payment rates for CY 2019 compared to CY 2018.
As shown in Table 63, for the six specialty groups that account for the most ASC utilization and spending, we estimate that the update to ASC payment rates for CY 2019 will result in a 1-percent decrease in aggregate payment amounts for eye and ocular adnexa procedures, a 3-percent increase in aggregate payment amounts for nervous system procedures, 3-percent increase in aggregate payment amounts for digestive system procedures, a 3-percent increase in aggregate payment amounts for musculoskeletal system procedures, a 1-percent increase in aggregate payment amounts for genitourinary system procedures, and a 1-percent decrease in aggregate payment amounts for integumentary system procedures. We note that these changes can be a result of different factors, including updated data, payment weight changes, and changes in policy. In general, spending in each of these categories of services is increasing due to the 2.1 percent payment rate update. After the payment rate update is accounted for, aggregate payment increases or decreases for a category of services can be higher or lower than a 2.1 percent increase, depending on if payment weights in the OPPS APCs that correspond to the applicable services
Also displayed in Table 63 is a separate estimate of Medicare ASC payments for the group of separately payable covered ancillary items and services. The payment estimates for the covered surgical procedures include the costs of packaged ancillary items and services. We estimate that aggregate payments for these items and services will increase by 79 percent for CY 2019. This is largely attributed to the introduction of utilization data for HCPCS code C9447 (Inj, phenylephrine ketorolac), Omidria®, and HCPCS code Q4172 (Puraply or puraply am), a high-cost skin substitute.
Table 64 below shows the estimated impact of the updates to the revised ASC payment system on aggregate ASC payments for selected surgical procedures during CY 2019. The table displays 30 of the procedures receiving the greatest estimated CY 2018 aggregate Medicare payments to ASCs. The HCPCS codes are sorted in descending order by estimated CY 2018 program payment.
• Column 1—CPT/HCPCS code.
• Column 2—Short Descriptor of the HCPCS code.
• Column 3—Estimated CY 2018 ASC Payments were calculated using CY 2017 ASC utilization (the most recent full year of ASC utilization) and the CY 2018 ASC payment rates. The estimated CY 2018 payments are expressed in millions of dollars.
• Column 4—Estimated CY 2019 Percent Change reflects the percent differences between the estimated ASC payment for CY 2018 and the estimated payment for CY 2019 based on the update.
We estimate that the CY 2019 update to the ASC payment system will be generally positive (that is, result in lower cost-sharing) for beneficiaries with respect to the new procedures we are adding to the ASC list of covered surgical procedures, the existing covered surgical procedures we reviewed as safe to perform in an ASC, and for those surgical procedures we are designating as office-based for CY 2019. For example, using 2017 utilization data and CY 2019 OPPS and ASC payment rates, we estimate that if 5 percent of
Alternatives to the ASC changes we are making and the reasons for our selected alternatives are discussed throughout this final rule with comment period.
As discussed in section XII. of this final rule with comment period, for CY 2019 through CY 2023 (5 years total), in response to stakeholder concerns regarding the application of CPI-U to update ASC payment rates, we are updating ASC payment rates using the hospital market basket and revising our regulations under 42 CFR 416.171(a), which address the annual update to the ASC conversion factor, to reflect this policy.
As an alternative proposal, we considered whether to continue applying the CPI-U as the update factor. If we were to update ASC payment rates for CY 2019 with an update factor based on CPI-U, the update would have been 1.8 percent (the 2.6 percentage point CPI-U less the 0.8 percentage point MFP adjustment). This update factor would have resulted in increased payments to ASCs in CY 2019 of approximately $60 million, compared to the increased payments to ASCs in CY 2019 of approximately $80 million as a result of the 2.1 percent update based on the hospital market basket.
As required by OMB Circular A-4 (available on the Office of Management and Budget website at:
We refer readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR 59492 through 59494), for the previously estimated effects of changes to the Hospital OQR Program for the CY 2018, CY 2019, and CY 2020 payment determinations. Of the approximately 3,300 hospitals that met eligibility requirements for the CY 2018 payment determination, we determined that 36 hospitals did not meet the requirements to receive the full OPD fee schedule increase factor. Many of these hospitals (18 of the 36), chose not to participate in the Hospital OQR Program for the CY 2018 payment determination. In the proposed rule, we did not propose to add any quality measures to the Hospital OQR Program measure set for the CY 2020 or CY 2021 payment determinations, and, in this final rule with comment period we are finalizing our proposals to remove eight measures from the program measure set; we are not finalizing our proposals to remove two measures, as discussed in section XIII.B.4.b. of this final rule with comment period. We do not believe that the finalized policies will increase the number of hospitals that do not receive a full annual payment update for the CY 2020 or CY 2021 payment determinations.
In section XIII.B.4.b. of this final rule with comment period, we are finalizing our proposals to remove a total of eight measures. Specifically, beginning with the CY 2020 payment determination, we are finalizing the removal of: (1) OP-27: Influenza Vaccination Coverage Among Healthcare Personnel; and beginning with the CY 2021 payment determination, we are removing: (2) OP-5: Median Time to ECG; (3) OP-9: Mammography Follow-up Rates; (4) OP-11: Thorax CT Use of Contrast Material; (5) OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; (6) OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT; (7) OP-17: Tracking Clinical Results between Visits; and (8) OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. However, we are not finalizing our proposals to remove two measures: OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; and OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery for the CY 2021 payment determination and subsequent years. Therefore, we are revising the estimated burden changes found in the CY 2019 OPPS/ASC proposed rule (83 FR 37234 through 32736). The reduction in burden associated with our finalized policies is discussed below.
In section XIII.B.4.a. of this final rule with comment period, beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, we are updating one removal factor and adding one removal factor. We are also codifying our measure removal policies and factors at 42 CFR 419.46(h) effective upon finalization of this CY 2019 OPPS/ASC final rule with comment period and for subsequent years. In addition, in section XIII.D.2. of this final rule with comment period, we are updating the frequency with which we will release Hospital Outpatient Quality Reporting Specifications Manuals, such that instead of releasing the full manual once or twice each year, as proposed, we will release the Specifications Manuals once every 12 months and release addenda as necessary, beginning with CY 2019 and for subsequent years. In section XIII.C.2. of this final rule with comment period, beginning with the CY 2020 payment determination, we are removing the Notice of Participation (NOP) form as a requirement for the Hospital OQR Program and updating 42 CFR 419.46(a)(3) to reflect this policy. Finally, in section XIII.D.4.b. of this final rule with comment period, we are changing the data reporting period for OP-32: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination. As discussed below, we do not expect these policies to affect our burden estimates. However, as further explained in section XIX.B. of this final rule with comment period, we believe that there will be an overall decrease in the estimated information collection burden for hospitals due to the other finalized policies. We refer readers to section XIX.B. of this final rule with comment
In section XIII.B.4.a. of this final rule with comment period, we are: (1) Updating measure removal Factor 7; (2) adding one new removal factor; and (3) codifying our removal factors policy at 42 CFR 419.46(h). We do not expect a change in the information collection burden or other costs experienced by hospitals because these changes do not affect Hospital OQR Program participation requirements or data reporting requirements.
In section XIII.D.2. of this final rule with comment period, we are finalizing with modification our proposal to update the frequency with which we will release a Hospital Outpatient Quality Reporting Specifications Manual such that instead of releasing a full manual once or twice each year, as proposed, we will release the Specifications Manuals once every 12 months and release addenda as necessary, beginning with CY 2019 and for subsequent years. We anticipate that this change will reduce hospital confusion, as potentially releasing fewer manuals per year reduces the need to review updates as frequently as was previously necessary. However, because this change does not affect Hospital OQR Program participation requirements or data reporting requirements, we do not estimate a change in our calculation of the information collection burden experienced by hospitals.
In section XIII.C.2. of this final rule with comment period, beginning with the CY 2020 payment determination, we are removing the NOP form as a requirement. As a result, to be a participant in the Hospital OQR Program, hospitals will need to: (1) Register on the QualityNet website, (2) identify and register a QualityNet security administrator, and (3) submit data. In addition, we are updating 42 CFR 419.46(a) to reflect these policies. We believe that the finalized policy to remove the NOP will reduce administrative burden experienced by hospitals by only a nominal amount. As a result, this finalized policy does not influence our information collection burden estimates. We refer readers to section XIX.B. of this final rule with comment period, where our burden calculations for the Hospital OQR Program are discussed in detail. In addition, we anticipate that this finalized proposal will reduce the possibility of hospitals failing to meet Hospital OQR Program requirements due to a failure to submit the NOP.
In section XIII.D.4.b. of this final rule with comment period, we are increasing the data reporting period for OP-32: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination. We expect this policy to increase the reliability of OP-32 data allowing better information to be publicly reported. However, the policy does not change our data reporting requirements, such that hospitals will be required to continue reporting claims data that are used to calculate this measure. Therefore, we do not expect a change in the information collection burden experienced by hospitals.
In section XIII.B.4.b. of this final rule with comment period, we are removing OP-27: Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) beginning with the CY 2020 payment determination and for subsequent years. The burden associated with OP-27, a NHSN measure, is accounted for under a separate Paperwork Reduction Act Package, OMB control number 0920-0666. Because burden associated with submitting data for this measure is captured under a separate OMB control number, we are not providing an estimate of the information collection burden associated with this measure for the Hospital OQR Program. Aside from burden associated with information collection however, we also anticipate that hospitals will experience a general burden and cost reduction associated with this proposal stemming from no longer having to review and track program requirements associated with this measure.
In section XIII.B.4.b. of this final rule with comment period, we are removing OP-5: Median Time to ECG, a chart-abstracted measure, for the CY 2021 payment determination and subsequent years. We believe that the removal of this chart-abstracted measure for the CY 2021 payment determination will reduce collection of information burden by 151,800 hours and $5.6 million (151,800 hours × $36.58), as discussed in section XIX.B. of this final rule with comment period. Aside from burden associated with information collection however, we also anticipate that hospitals will experience a general burden and cost reduction associated with this proposal stemming from no longer having to review and track program requirements associated with this measure.
In section XIII.B.4.b. of this final rule with comment period, while we proposed to remove five measures, we are only finalizing the removal of three measures submitted via a web-based tool beginning with the CY 2021 payment determination and for subsequent years: OP-12: The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data; OP-17: Tracking Clinical Results between Visits; and OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. We are not finalizing the removal of OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up Interval for Normal Colonoscopy in Average Risk Patients; and OP-31: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. Therefore, we are revising the estimated burden changes found in the CY 2019 OPPS/ASC proposed rule (83 FR 37234 through 32736). As discussed in section XIX.B. of this final rule with comment period, we anticipate a burden
In section XIII.B.4.b. of this final rule with comment period, we are removing three claims-based measures beginning with the CY 2021 payment determination: OP-9: Mammography Follow-up Rates; OP-11: Thorax CT Use of Contrast Material; and OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT. These claims-based measures are calculated using only data already reported to the Medicare program for payment purposes, therefore, we do not believe removing these measures will affect the information collection burden on hospitals. Nonetheless, we anticipate that hospitals will experience a general burden reduction associated with these proposals stemming from no longer having to review and track various associated program requirements.
In total for the CY 2021 payment determination, we expect information collection burden will be reduced by 151,800 hours due to our removal of one chart-abstracted measure, and 530,075 hours due to our removal of three measures submitted via a web-based tool. In total, we estimate an information collection burden reduction of 681,875 hours (151,800 hours for the removal of one chart-abstracted measure + 530,075 hours for the removal of three web-based measures) and $24.9 million (681,875 hours × $36.58) for the CY 2021 payment determination.
In section XIV. of this final rule with comment period, we discuss our adopted policies affecting the ASCQR Program. For the CY 2018 payment determination, of the 6,683 ASCs that met eligibility requirements for the ASCQR Program, 233 ASCs did not meet the requirements to receive the full annual payment update. We note that, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79874), we used the CY 2016 payment determination numbers as a baseline, and estimated that approximately 200 ASCs will not receive the full annual payment update in CY 2019 due to failure to meet the ASCQR Program requirements (CY 2017 and CY 2018 payment determination information were not yet available). In the proposed rule, we did not propose to add any new quality measures to the ASCQR Program measure set for the CY 2020 payment determination and subsequent determinations, and we do not believe that the other measures we previously adopted will cause any additional ASCs to fail to meet the ASCQR Program requirements. Therefore, we do not believe that our finalized proposals will increase the number of ASCs that do not receive a full annual payment update for the CY 2020 payment determination. Below we discuss only the effects that will result from the newly finalized provisions in this final rule with comment period.
In section XIV.B.3.c. of this final rule with comment period, we are removing one measure beginning with the CY 2020 payment determination (ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel) and removing one measure beginning with the CY 2021 payment determination (ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use). We expect these measure removals will reduce the overall burden of reporting data for the ASCQR Program, as discussed further below. In section XIV.B.3.c. of this final rule with comment period, we are not finalizing our proposals to remove ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients and ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. In addition, we are not finalizing our proposals to remove ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and ASC-4: All-Cause Hospital Transfer/Admission, but are instead retaining the measures in the ASCQR Program and suspending their data collection beginning with the CY 2019 reporting period/CY 2021 payment determination until further action in rulemaking with the goal of updating the measures. Therefore, we are revising the estimated burden changes found in the CY 2019 OPPS/ASC proposed rule (83 FR 37236 through 32737).
In sections XIV.B.3.b. and XIV.D.4.b. of this final rule with comment period, beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, we are finalizing our proposals to: (1) Remove one measure removal factor; (2) adding two new measure removal factors, and (3) update 42 CFR 416.320(c) to better reflect our measure removal policies; we are also: (4) Extend the reporting period for ASC-12: Facility Seven-Day Risk Standardized Hospital Visit Rate after Outpatient Colonoscopy from 1 to 3 years beginning with the CY 2020 payment determination. As discussed below, we do not expect these policies will affect our burden estimates. However, as further explained in section XIX.C. of this final rule with comment period, we believe that there will be an overall decrease in the estimated information collection burden for ASCs due to the other finalized policies. We refer readers to section XIX.C. of this final rule with comment period for a summary of our information collection burden estimate calculations. The effects of these policies are discussed in more detail below.
In section XIV.B.3.a. of this final rule with comment period, we are, beginning with the effective date of this CY 2019 OPPS/ASC final rule with comment period, removing one measure removal factor, adding two new measure removal factors, and updating 42 CFR 416.320(c) to better reflect our measure removal policies for the ASCQR Program. Because these changes do not affect ASCQR Program participation requirements or data reporting requirements, we do not expect these newly finalized policies to change the information collection burden or other costs experienced by ASCs.
In section XIV.D.4.b. of this final rule with comment period, we are extending the data reporting period for ASC-12: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy from one year to three years beginning with the CY 2020 payment determination. We expect this newly finalized policy to increase the
In section XIV.B.3.c. of this final rule with comment period, we are removing one measure from the ASCQR Program measure set beginning with the CY 2020 payment determination, ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel. As discussed in section XIX.C.3.b. of this final rule with comment period, the information collection burden associated with ASC-8, a NHSN measure, is accounted for under a separate information collection request, OMB control number 0920-0666. As such, we are not providing an estimate of the information collection burden associated with this measure under the ASCQR Program control number. Aside from burden associated with information collection however, we anticipate that facilities will experience a general burden and cost reduction associated with this proposal stemming from no longer having to review and track program requirements associated with this measure.
In section XIV.B.3.c. of this final rule with comment period, we proposed to remove seven measures; we are finalizing the removal of only one measure from the ASCQR Program measure set beginning with the CY 2021 payment determination: ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. In section XIV.B.3.c. of this final rule with comment period we are not finalizing our proposal to remove ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients and ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. In addition, we are not finalizing our proposals to remove ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and ASC-4: All Cause Hospital Transfer/Admission, but are instead retaining the measures in the ASCQR Program and suspending their data collection beginning with the CY 2019 reporting period/CY 2021 payment determination until further action in rulemaking with the goal of updating the measures. Therefore, we are revising the estimated burden changes found in the CY 2019 OPPS/ASC proposed rule (83 FR 37222).
While we proposed to remove three chart-abstracted measures, in section XIV.B.3.c. of this final rule with comment period, we are finalizing the removal of only one chart-abstracted measure from the ASCQR Program measure set beginning with the CY 2021 payment determination: ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps—Avoidance of Inappropriate Use. We are not finalizing the removal of ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients and ASC-11: Cataracts—Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery. As discussed in section XIX.C.4.b. of this final rule with comment period, we believe the removal of ASC-10 will result in a burden reduction for ASCs. For ASC-10, we estimate the total annualized burden reduction to be 62,008 hours and $2,268,244 (3,937 ASCs × 15.75 hours × $36.58 per hour). Aside from burden associated with information collection however, we anticipate that facilities will experience a general burden and cost reduction associated with these removals stemming from no longer having to review and track program requirements associated with this measure.
Therefore, as noted in section XIX.C.4. of this final rule with comment period, we believe the removal of a total of one measure (ASC-10) from the ASCQR measure set for the CY 2021 payment determination will result in a total annual reduction in information collection burden of 62,008 hours and $2,268,244.
As discussed in section XVI. of this final rule with comment period, we are finalizing a modified version of our proposals regarding the Communication About Pain questions from the HCAHPS Survey in the Hospital IQR Program. Instead of removing the questions effective with January 2022 discharges, for the FY 2024 payment determination and subsequent years as proposed, we are finalizing to remove them effective with October 2019 discharges, for the FY 2021 payment determination and subsequent years. In addition, instead of publicly reporting the data in October 2022 and then subsequently discontinuing as proposed, we are finalizing that we will not publicly report the data collected from the Communication About Pain questions at all. We anticipate that the removal of these questions will result in only a nominal and temporary increase on the information collection burden on providers associated with adjusting the survey instrument and instructional materials, and a burden decrease for survey respondents. We note that the burden estimate for the Hospital IQR Program under the program's OMB control number 0938-1022 excludes the burden associated with the HCAHPS Survey measure, which is submitted under a separate information collection request and approved under OMB control number 0938-0981. We address the anticipated information collection burden reduction in section XVIII.D. of this final rule with comment period.
As described in section XVII.B. of this final rule with comment period, we are not finalizing our proposals made in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20503) to remove two chart-abstracted, NHSN measures, the Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (PCH-5/NQF #0138) and the Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure (PCH-4/NQF #0139) from the PCHQR Program beginning with the FY 2021 program year.
We estimate that not finalizing our proposals to remove the CAUTI and CLABSI measures will result in no changes to our previously finalized burden estimates under the PCHQR Program. We refer readers to section XIX.E. of this final rule with comment period for a discussion of the information collection estimates for the CAUTI and CLABSI measures. We refer readers to section XIV.B.4. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR 41694 through 41695) and Appendix A, section I.L. of that final rule (83 FR 41772) for more detail regarding our previously finalized information collection and burden estimates under the PCHQR Program.
If regulations impose administrative costs on private entities, such as the time needed to read and interpret a rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that will review a rule, we assumed that the number of commenters on the CY 2019 OPPS/ASC proposed rule (2,994) will be the number of reviewers of this final rule with comment period. We acknowledge that this assumption may understate or overstate the costs of reviewing this final rule with comment period. It is possible that not all commenters will review this final rule with comment period in detail, and it is also possible that some reviewers will choose not to comment on this final rule with comment period. Nonetheless, we believe that the number of commenters on the CY 2019 OPPS/ASC proposed rule will be a fair estimate of the number of reviewers of this final rule with comment period. In the CY 2019 OPPS/ASC proposed rule (83 FR 37237), we welcomed any comments on the approach in estimating the number of entities that will review the proposed rule. We also recognize that different types of entities are, in many cases, affected by mutually exclusive sections of the proposed rule and this final rule with comment period, and, therefore, for the purposes of our estimate, we assumed that each reviewer reads approximately 50 percent of the rule. In the proposed rule, we sought public comments. We did not receive any public comments specific to our solicitation.
Using the wage information from the BLS for medical and health service managers (Code 11-9111), we estimated that the cost of reviewing this rule is $107.38 per hour, including overhead and fringe benefits (
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that most hospitals, ASCs and CMHCs are small entities as that term is used in the RFA. For purposes of the RFA, most hospitals are considered small businesses according to the Small Business Administration's size standards with total revenues of $38.5 million or less in any single year or by the hospital's not-for-profit status. Most ASCs and most CMHCs are considered small businesses with total revenues of $15 million or less in any single year. For details, we refer readers to the Small Business Administration's “Table of Size Standards” at:
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has 100 or fewer beds. We estimate that this final rule with comment period will increase payments to small rural hospitals by less than 3 percent; therefore, it should not have a significant impact on approximately 616 small rural hospitals.
The analysis above, together with the remainder of this preamble, provides a regulatory flexibility analysis and a regulatory impact analysis.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $150 million. This final rule with comment period does not mandate any requirements for State, local, or tribal governments, or for the private sector.
Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on January 30, 2017. It has been determined that this final rule with comment period, will be a deregulatory action for the purposes of Executive Order 13771. We estimate that this final rule with comment period will generate $22.52 million in annualized cost savings at a 7-percent discount rate, discounted relative to 2016, over a perpetual time horizon.
The changes we are making in this final rule with comment period will affect all classes of hospitals paid under the OPPS and will affect both CMHCs and ASCs. We estimate that most classes of hospitals paid under the OPPS will experience a modest increase or a minimal decrease in payment for services furnished under the OPPS in CY 2019. Table 62 demonstrates the estimated distributional impact of the OPPS budget neutrality requirements that will result in a 0.6 percent increase in payments for all services paid under the OPPS in CY 2019, after considering all of the changes to APC reconfiguration and recalibration, as well as the OPD fee schedule increase factor, wage index changes, including the frontier State wage index adjustment, estimated payment for outliers, the finalized off-campus provider-based department clinic visits payment policy, and changes to the pass-through payment estimate. However, some classes of providers that are paid under the OPPS will experience more significant gains or losses in OPPS payments in CY 2019.
The updates to the ASC payment system for CY 2019 will affect each of the approximately 5,500 ASCs currently approved for participation in the Medicare program. The effect on an individual ASC will depend on its mix of patients, the proportion of the ASC's patients who are Medicare beneficiaries, the degree to which the payments for the procedures offered by the ASC are changed under the ASC payment system, and the extent to which the ASC provides a different set of procedures in the coming year. Table 63 demonstrates the estimated distributional impact among ASC surgical specialties of the MFP-adjusted hospital market basket update factor of 2.1 percent for CY 2019.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have examined the OPPS and ASC provisions included in this final rule with comment period in accordance with Executive Order 13132, Federalism, and have determined that they will not have a substantial direct effect on State, local or tribal governments, preempt State
This final rule with comment period will affect payments to a substantial number of small rural hospitals and a small number of rural ASCs, as well as other classes of hospitals, CMHCs, and ASCs, and some effects may be significant.
Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Hospitals, Medicare, Reporting and recordkeeping requirements.
For reasons stated in the preamble of this document, the Centers for Medicare & Medicaid Services is amending 42 CFR chapter IV as set forth below:
42 U.S.C. 273, 1302, 1320b-8, and 1395hh.
The revision and addition read as follows:
(a) * * *
(4) Drugs and biologicals for which separate payment is not allowed under the hospital outpatient prospective payment system (OPPS), with the exception of non-opioid pain management drugs that function as a supply when used in a surgical procedure;
(b) * * *
(6) Non-opioid pain management drugs that function as a supply when used in a surgical procedure.
(a) * * *
(2)
(i) For CY 2009, the update is equal to zero percent.
(ii) For CY 2010 through CY 2018, the update is the Consumer Price Index for All Urban Consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved.
(iii) For CY 2019 through CY 2023, the update is the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act.
(iv) For CY 2024 and subsequent years, the update is the Consumer Price Index for All Urban Consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved.
(v) For CY 2014 through CY 2018, the Consumer Price Index for All Urban Consumers update determined under paragraph (a)(2)(ii) of this section is reduced by 2.0 percentage points for an ASC that fails to meet the standards for reporting of ASC quality measures as established by the Secretary for the corresponding calendar year.
(vi) For CY 2019 through CY 2023, the hospital inpatient market basket update determined under paragraph (a)(2)(iii) of this section is reduced by 2.0 percentage points for an ASC that fails to meet the standards for reporting of ASC quality measures as established by the Secretary for the corresponding calendar year.
(vii) For CY 2024 and subsequent years, the Consumer Price Index for All Urban Consumers update determined under paragraph (a)(2)(iv) of this section is reduced by 2.0 percentage points for an ASC that fails to meet the standards for reporting of ASC quality measures as established by the Secretary for the corresponding calendar year.
(viii)(A) For CY 2011 through CY 2018, the Consumer Price Index for All Urban Consumers determined under paragraph (a)(2)(ii) of this section, after application of any reduction under paragraph (a)(2)(iv) of this section, is reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act.
(B) For CY 2019 through CY 2023, the hospital inpatient market basket update determined under paragraph (a)(2)(iii) of this section, after application of any reduction under paragraph (a)(2)(vi) of this section, is reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act.
(C) For CY 2024 and subsequent years, the Consumer Price Index for All Urban Consumers determined under paragraph (a)(2)(iv) of this section, after application of any reduction under paragraph (a)(2)(vii) of this section, is reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act.
(D) The application of the provisions of paragraph (a)(2)(viii)(A), (B), or (C) of this section may result in the update being less than zero percent for a year, and may result in payment rates for a year being less than the payment rates for the preceding year.
(b) * * *
(1) Covered ancillary services specified in § 416.164(b), with the exception of radiology services and certain diagnostic tests as provided in § 416.164(b)(5) and non-opioid pain management drugs that function as a supply when used in a surgical procedure as provided in § 416.164(b)(6).
(2) The device portion of device-intensive procedures, which are procedures that—
(i) Involve implantable devices assigned a CPT or HCPCS code;
(ii) Utilize devices (including single-use devices) that must be surgically inserted or implanted; and
(iii) Have a HCPCS code-level device offset of greater than 30 percent when calculated according to the standard OPPS ASC ratesetting methodology.
(c)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(3)
(i) Statistically indistinguishable performance at the 75th and 90th percentiles (defined as when the difference between the 75th and 90th percentiles for an ASC's measure is within two times the standard error of the full data set); and
(ii) A truncated coefficient of variation less than or equal to 0.10.
(4)
42 U.S.C. 1302, 1395l(t), and 1395hh.
(b) * * *
(1) * * *
(iv) * * *
(B) * * *
(
(a) * * *
(1) Register on the QualityNet website before beginning to report data;
(2) Identify and register a QualityNet security administrator as part of the registration process under paragraph (a)(1) of this section; and
(3) Submit at least one data element.
(h)
(2)
(3)
(i)
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(ii)
(A) Statistically indistinguishable performance at the 75th and 90th percentiles (defined as when the difference between the 75th and 90th percentiles for a hospital's measure is within two times the standard error of the full data set); and
(B) A truncated coefficient of variation less than or equal to 0.10.
(iii)
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Final rule.
This final rule amends FRA's passenger equipment safety standards using a performance-based approach to adopt new and modified requirements governing the construction of conventional- and high-speed passenger rail equipment. This final rule adds a new tier of passenger equipment safety standards (Tier III) to facilitate the safe implementation of nation-wide, interoperable high-speed passenger rail service at speeds up to 220 mph. While Tier III trainsets must operate in an exclusive right-of-way without grade crossings at speeds above 125 mph, these trainsets can share the right-of-way with freight trains and other tiers of passenger equipment at speeds not exceeding 125 mph. This final rule also establishes crashworthiness and occupant protection performance requirements in the alternative to those currently specified for Tier I passenger trainsets. Together, the Tier III requirements and Tier I alternative crashworthiness and occupant protection requirements remove regulatory barriers and enable use of new technological designs, allowing a more open U.S. rail market. Additionally, the final rule increases from 150 mph to 160 mph the maximum speed for passenger equipment that complies with FRA's Tier II requirements.
Devin Rouse, Staff Director, U.S. Department of Transportation, Federal Railroad Administration, Office of Railroad Safety, Passenger Rail Division, 1200 New Jersey Avenue SE, Washington, DC 20590 (telephone: 202-493-6185); or Michael Hunter, Attorney Adviser, U.S. Department of Transportation, Federal Railroad Administration, Office of Chief Counsel, 1200 New Jersey Avenue SE, Washington, DC 20590 (telephone: 202-493-0368).
Having considered the public comments in response to FRA's December 6, 2016, proposed rule on standards for alternative compliance and high-speed trainsets, see 81 FR 88006, FRA issues this final rule amending the Passenger Equipment Safety Standards, 49 CFR part 238. This final rule is the product of consensus reached by FRA's Railroad Safety Advisory Committee (RSAC), which accepted the task of reviewing passenger equipment safety needs and programs and recommending specific actions that could be useful to advance the safety of passenger service, including the development of regulatory requirements for the next generation of high-speed trainsets. The RSAC established the Passenger Safety Working Group (“PSWG” or “Working Group”) to handle this task and develop recommendations for the full RSAC to consider. In September 2009, the Working Group in turn established the Engineering Task Force (“ETF” or “Task Force”) for the purpose of producing a set of technical criteria and procedures to evaluate passenger rail equipment based on alternative designs. This work led to the development of the report entitled “Technical Criteria and Procedures for Evaluating the Crashworthiness and Occupant Protection Performance of Alternatively Designed Passenger Rail Equipment for Use in Tier I Service” (“Technical Criteria and Procedures Report” or “Report”).
This final rule establishes requirements in three main subject areas: (1) Tier III trainset safety standards; (2) alternative crashworthiness and occupant protection performance requirements for Tier I passenger equipment; and (3) the maximum authorized speed for Tier II passenger equipment. The following is a brief overview of the rule organized by subject area and a summary of its economic impact.
This final rule defines Tier III passenger train operations and outlines the minimum safety standards for the use of such trainsets in the United States, focusing on core structural and critical system design criteria. FRA intends for this final rule to facilitate the safe implementation of interoperable high-speed rail service, and enable the use of common infrastructure and promote other efficiencies. The Tier III operating environment is unique by design. Tier III passenger trains are permitted to operate in a shared right-of-way (one shared with freight trains and other tiers of passenger equipment) at speeds up to 125 mph, but must operate in an exclusive right-of-way without grade crossings at speeds exceeding 125 mph, up to 220 mph. The requirements provide for the sharing of rail infrastructure among various types of rail equipment, especially in more urban areas, while providing for dedicated passenger rail service at maximum speeds up to 220 mph.
This final rule also establishes requirements for Tier III trainset structure, window glazing, brake systems, interior fittings and surfaces, certain emergency systems (including window egress and rescue access requirements), and certain cab equipment. To support operational compatibility, the Tier III trainset crashworthiness and occupant protection requirements are predominantly based on the alternative crashworthiness and occupant protection requirements for Tier I passenger equipment and are intended to safely apply to operations at speeds up to 220 mph in a dedicated environment as approved by FRA. Specialized RSAC task groups developed the requirements for braking systems and cab glazing by focusing on the development of performance-based requirements that could be implemented in a technology-neutral manner, wherever possible.
To develop their recommendations, the ETF and full RSAC considered the latest trainset designs and technology available globally, and adapted their recommendations in a manner consistent with the North American operating environment. The intent of these requirements is to ensure that safety and reliability are paramount, while incorporating elements from the most advanced, service-proven technology available throughout the world.
As noted above, FRA is codifying a set of technical evaluation criteria the ETF developed as guidance for those seeking to demonstrate that alternative crashworthiness and occupant protection performance requirements for Tier I passenger trainsets provide a level of safety equivalent to the existing requirements in part 238. FRA intends for the alternative technical criteria to allow the industry greater flexibility to use more contemporary design techniques and more fully apply emerging technology, including crash energy management (CEM) technology, without requiring a waiver of compliance for operating the equipment. The technical criteria are based on established international standards and significant research and testing conducted by the industry and DOT's John A. Volpe National Transportation Systems Center (Volpe Center) over the past 25 years. Codifying the technical criteria dovetails with alternative crashworthiness performance requirements FRA earlier established in part 238 for the front-end structures of cab cars and multiple-unit (MU) locomotives (75 FR 1180), thereby broadening application of such requirements to other main structures.
On March 13, 2013, FRA issued a final rule (78 FR 16052) to amend the Federal Track Safety Standards to promote the safe interaction of rail vehicles and the tracks they operate on at speeds up to 220 mph. That final rule revised the track geometry and safety limits for various track classes, extended the limits for the highest track speeds from 200 to 220 mph (Class 9 track), and affirmed that the maximum authorized speed for Class 8 track is 160 mph. This final rule establishes the maximum authorized operating speed for Tier II passenger equipment consistent with the limits for Class 8 track. However, it is important to note that existing Tier II operations FRA has approved to operate at speeds up to 150 mph are still required to provide sufficient testing and vehicle/track interaction performance data required under 49 CFR 213.329 and 238.111, and obtain FRA approval before any operations occur at the new maximum authorized speed of 160 mph.
This final rule expands and makes more flexible FRA's Passenger Equipment Safety Standards. FRA believes this final rule will have a net cost savings effect on the passenger rail industry and society as a whole, along with safety benefits.
Specifically, the final rule will generate cost savings benefits by enabling high-speed rail operators to avoid new right-of-way acquisition and infrastructure construction for dedicated rail lines in dense urban areas. This is possible because the final rule allows such trains to travel on existing, non-dedicated rail lines, although at slower speeds than permissible for travel on dedicated rail lines.
For traditional passenger rail operations, there are both operational and safety benefits resulting from this final rule. Not issuing the rule would increase costs associated with the acquisition of new passenger trains and could delay new U.S. passenger rail infrastructure projects. The final rule ensures existing and future alternative trainset designs can operate in the U.S.
There will also be safety benefits associated with improvement of the existing rail infrastructure to accommodate the operation of new high-speed rail equipment in shared rights-of-way.
Over a 30-year period, FRA estimates quantifiable cost savings range from a present value of between $512.5 million to $1.1 billion (when discounted at a 7-percent rate) or between $790.1 million to $1.6 billion (when discounted at a 3-percent rate).
Over the same 30-year period, FRA estimates the industry will incur costs ranging between $227.7 to $523.3 million (when discounted at a 7-percent rate) or between $351.3 to $808.8 million (when discounted at a 3-percent rate). Annualized costs of this rule are expected to be between $18.4 million and $42.2 million when discounted at a 7-percent rate and between $17.9 million and $41.3 million when discounted at a 3-percent rate. All quantified costs would be for testing and analysis to demonstrate compliance with either the Tier I alternative or Tier III standards.
Over the 30-year period of the analysis, FRA estimates discounted net regulatory cost savings will be between $438.8 million (low range) and $837.8 million (high range) discounted at 3 percent; net regulatory cost savings will be between $284.8 million (low range) and $541.9 million (high range), discounted at 7 percent. Annualized net regulatory cost savings total between $22.4 million and $42.7 million when discounted at a 3-percent rate and between $22.9 million and $43.7 million when discounted at a 7-percent rate.
The rulemaking will provide an optional alternative, not a mandate, for railroads to use a different type or design of passenger equipment in Tier I service and will not impose any burden on existing rolling stock or new equipment qualifying under existing regulations. Similarly, the rulemaking will provide a framework for railroads to operate equipment in new Tier III service—it will not impose any burden on existing rolling stock or new equipment qualifying under existing regulations.
One of the main purposes of the final rule is to provide a set of minimum Federal safety requirements for safe operation in the U.S. rail environment of passenger equipment platforms designed to contemporary engineering standards outside of the U.S. Traditionally, U.S. railroad safety regulations evolved as a consequence of specific accidents scenarios, which have led to the identification of specific risks in the operating environment.
While FRA seeks to continue ensuring the safety risks are adequately addressed for the operating environment, the final rule places special emphasis on measures to avoid those risks rather than simply mitigating them. Importantly, this final rule allows the use of additional types of rolling stock design, which will enable innovation and provide railroads the flexibility to purchase equipment designed to more performance-based and modern requirements. The rule also permits carriers to move forward with a new tier of higher speed rail.
The alternatives FRA considered in establishing the safety requirements for Tier III trainsets are based on European and Japanese industry standards. These options provide a continuum of safety requirements for a range of aspects such as: Varying levels of regulation, market accessibility, benefits and costs, and operational efficiency and safety. FRA prepared a high-level cost comparison of those options based on the key attributes of the alternatives and the effect of those attributes on societal welfare and the regulatory purpose. FRA compared the technical requirements of other established high-speed rail standards to illustrate the primary differences, not make a direct comparison between comparable requirements or standards.
In Europe, passenger rail equipment crashworthiness and occupant protection design standards have been largely standardized by EuroNorms.
In Japan, railroad safety regulation is governed by the Railway Bureau, Ministry of Land, Infrastructure and Transport, and is codified in the Technical Regulatory Standards on Railways.
The RIA that accompanies this final rule contains an analysis of regulatory alternatives FRA considered. Specifically, the analysis compares at a general level the costs and benefits of the Tier III requirements to both European and Japanese standards for high-speed trains. The analysis concludes that a hypothetical $50 million European high-speed trainset could be modified to comply with the Tier III requirements with only minor structural modifications and, as indicated above, at little additional cost—about $310,000 per trainset. Modifications are expected to ensure such trainsets safely operate in a U.S. setting. Due to the lack of historical safety information for operations at Tier III speeds in the U.S., FRA was unable to estimate the incremental safety benefit that would be provided by the Tier III requirements as compared to the European technical standards. However, these new requirements are supported by the recommendation of the full RSAC and FRA is confident about the cost-beneficial nature of the final rule. Additionally, the analysis concludes that a hypothetical $50 million Tokaido Shinkansen Japanese high-speed trainset would need significant structural modifications, including those to the carbody, trucks, and suspension, to comply with the Tier III requirements, and, as indicated above, would incur significant additional costs—about $4.7 million per trainset.
FRA is unable to provide an estimate of the expected incremental benefit of the Tier III requirements over the alternatives, but FRA believes these additional costs are justified by the nature of the risks within the U.S. rail operating environment and RSAC's recommendations. Tier III trains in the U.S. will share track with other rail operations, including heavy and long
FRA conducted a qualitative analysis comparing the final rule's Tier I alternative requirements to two alternatives: Not taking any regulatory action or adopting existing international design standards. As discussed in the RIA, trainsets compliant with international design standards (such as European or Japanese) would require extensive modifications to meet Tier I requirements if FRA elected to take no regulatory action. However, under the new Tier I alternative requirements, FRA believes the costs associated with compliance will be similar to those discussed for Tier III equipment.
A second alternative would be to codify EuroNorms as Federal regulations, instead of the new Tier I alternative requirements. This option opens the possibility for manufacturers to accrue savings from fewer modifications; however, such an option would require manufacturers to expend resources that favor a particular technology or approach to equipment design. Additionally, codifying EuroNorms in lieu of the final rule would potentially have required equipment designed to a different standard to incur certain costs related to modifying the equipment to bring it into compliance.
Consequently, regardless of the requirements codified, manufacturers would likely have to modify trainsets to meet the regulatory requirements specified. Importantly, trainsets meeting only a European standard (or Japanese or other international standard) would not be interoperable with existing U.S. passenger or freight equipment. Therefore, this equipment could only operate on an exclusive right-of-way, unable to take advantage of existing infrastructure.
FRA requested and received no public comment on the alternatives presented and discussed. For further discussion, please also see the RIA's “Alternatives Considered” section, in which FRA presents more detailed discussion of the impact of the alternatives considered.
FRA did consider the alternative of standalone HSR systems (not physically connected to the general railroad system) operating on an exclusive right-of-way, which would use passenger equipment that complies with European or other international standards but not necessarily with FRA's new requirements. For the reasons discussed below, FRA declined to pursue this alternative. A major tenet of this final rule is to safely facilitate the implementation of nationwide, interoperable HSR service. Standalone systems operating equipment not compliant with FRA's passenger equipment safety standards would significantly limit the interoperability of HSR service. When developing these requirements, FRA did not envision a network of standalone, non-interoperable HSR systems comprising the nationwide network.
Additionally, it would be very costly for a standalone system to attempt to connect with major metropolitan areas because those standalone systems could not take advantage of a major regulatory savings—operating over existing infrastructure. FRA determined that two-thirds to four-fifths of the regulatory cost savings are due to infrastructure cost avoidance for operations electing to use Tier I alternative or Tier III equipment. In particular, interoperability will allow HSR operators to reach into major metropolitan areas where building new, exclusive rights-of-way may not be feasible due to land density, environmental, and other considerations.
An advantage of the standalone alternative is that an individual railroad system could optimize its operations to high levels of performance without necessarily having to adhere to requirements generally applicable to railroad systems in the U.S. However, for such a project to attain that level of performance, it would have to optimize the design of the entire system, not only the passenger equipment. Basically, a standalone system would have to bring together all the other aspects of railroad safety (such as operating practices, signal and train control, and track) that must be applied to the individual system. Given that such an approach covers more than passenger equipment, and would likely necessitate particular right-of-way intrusion protection and other safety requirements not adequately addressed in FRA's regulations, FRA continues to believe that addressing proposals for standalone HSR systems on a case-by-case basis and comprehensively (such as through a rule of particular applicability or other specific regulatory action(s)) is prudent because of the small number of potential operations and the potential for significant differences in their design. Entities considering such operations voluntarily assume the higher costs of building new infrastructure, knowing they cannot take advantage of the cost savings from sharing existing infrastructure.
In September 1994, the Secretary of Transportation (Secretary) convened a meeting of representatives from all sectors of the rail industry with the goal of enhancing rail safety. As one initiative of this Rail Safety Summit, the Secretary announced that DOT would begin developing safety standards for rail passenger equipment over a five-year period. In November 1994, Congress adopted the Secretary's schedule for implementing rail passenger equipment safety regulations and included it in the Federal Railroad Safety Authorization Act of 1994 (the Act), Public Law 103-440, 108 Stat. 4619, 4623-4624 (November 2, 1994). In the Act, Congress also authorized the Secretary to consult with various organizations involved in passenger train operations for purposes of prescribing and amending these regulations and to issue orders under it.
On May 4, 1998, under section 215 of the Act, FRA published the Passenger Train Emergency Preparedness final rule (PTEP).
On May 12, 1999, FRA published the PESS final rule.
Since then, FRA has engaged in a number of rulemakings to amend and enhance its passenger safety requirements. On October 19, 2006, FRA
On January 8, 2010, FRA published a final rule enhancing requirements for the structural strength of the front end of cab cars and MU locomotives.
This final rule is primarily based on consensus recommendations from the RSAC.
After the ETF developed the Report, the task of the ETF was expanded to: (1) Develop formal recommendations to the full RSAC to adopt the alternative crashworthiness criteria into FRA's regulations; and (2) establish minimum safety requirements for the next generation of high-speed trainsets able to operate at speeds up to 220 mph,
The comment period was initially scheduled to close on February 6, 2017. However, in a December 12, 2016 letter, APTA requested a 30-day extension of the NPRM's comment period. APTA stated it needed additional time to thoroughly review the NPRM, and review and consolidate comments on the NPRM from its members and affiliates. On February 13, 2017, FRA published a notice in the
To further benefit from the input of the ETF, FRA convened a meeting of the ETF on May 16-18, 2017, in Washington, DC.
Please note that the RSAC did not expressly consider FRA's removal of the requirement for a rule of particular applicability to conduct operations at speeds above 150 mph, as specified in subpart I of part 236 of this chapter. See the discussion of changes to § 236.1007 of this chapter in the section-by-section analysis, below. The RSAC also did not consider FRA's changes to §§ 229.3, 229.5, and 231.0 of this chapter. These changes, harmonizing references to the maximum authorized operating speed for Tier II equipment, were not expressly proposed in the NPRM as they were inadvertently omitted. See the discussion of changes to §§ 229.3, 229.5, and 231.0 of this chapter in the section-by-section analysis, below. FRA nonetheless believes the removal of language from part 236 and the harmonization of parts 229 and 231 are consistent with the RSAC recommended approach in this rulemaking.
As noted above, on February 13, 2017, FRA reopened the comment period for the NPRM that closed on February 6, 2017, in response to a request received from APTA.
As noted above, following the submission of these written comments, FRA convened the Engineering Task Force to consider and discuss the comments and to help achieve a fuller understanding of the comments received and recommendations for this final rule. As a result, certain of these comments have been superseded by changes made in the rule text from the NPRM to this final rule, and they should not necessarily be understood to reflect the positions of the commenters with respect to the requirements of the final rule. Nevertheless, FRA is setting out all the comments received and is responding to each of them, either here, or in the pertinent section-by-section analysis or Regulatory Impact Notice provision, so that FRA's positions are clearly understood. In addressing these comments and developing this final rule, FRA has relied on information contained in comments, RSAC meeting minutes, memoranda, and other materials in the docket for this rulemaking.
APTA, in its comment, stated that it is very supportive of the “Tier III approach.” APTA further stated that the Tier III crashworthiness and occupant protection requirements permit Tier III trainsets to operate in a shared right of way with conventional passenger and freight rail equipment at speeds below 125 mph (Tier I environment). This type of interoperability has the potential to have a safe and cost-effective approach to implementing high-speed rail as it permits the use of internationally service-proven high-speed rail equipment and also the use of existing infrastructure for lower speed operation. FRA appreciates APTA's support on FRA's approach to permit Tier III equipment to be interoperable at speeds not exceeding 125 mph. APTA further noted that FRA described very well an advantage of a standalone system to be the system's potential to optimize its operations to a high level of performance.
In both their comments, APTA and TCRR recommended that FRA adopt a definition for “Tier IV system.” For the reasons discussed in the section-by-section analysis for § 238.5, below, FRA is not including a definition for “Tier IV system” in this final rule. However, APTA's and TCRR's comments on this topic went beyond the definition of a Tier IV system and touched on FRA's discussion in the NPRM of Alternatives Considered under the Executive Summary. 81 FR 88006, 88009.
Additionally, APTA, as part of its comment, noted that the regulation references several APTA standards by a “date certain” for incorporation by reference. APTA further noted that many of those standards will be updated “in the near future” and recommended that the latest versions of the standards be referenced. APTA also recommended, more generally, that all existing references to APTA standards within part 238 be updated in the final rule. FRA must incorporate by reference updated technical standards according to 1 CFR part 51. To the extent possible, FRA has included for incorporation by reference the most up-to-date APTA standards that were under consideration in this rulemaking. Under the section-by-section analysis, FRA has indicated where it has revised references from the initial versions of APTA standards to refer to the most recent editions instead. With respect to updating references to APTA standards in part 238, generally, FRA will address this issue in another rulemaking effort in which FRA reviews and updates, as necessary, all references to relevant technical standards in part 238, because part 238 incorporates by reference technical standards from a number of different industry consensus organizations.
Alstom commented on § 238.15, Movement of passenger equipment with power brake defects, asking FRA if a reference for Tier III equipment will be added where there is currently a reference to Tier II. Alstom also commented more generally whether Tier II requirements will be analyzed on a case-by-case basis and extended to apply to Tier III equipment. Alstom comments on § 238.15 are outside the intended scope of this rulemaking. Due to the unique nature of Tier III equipment and operations, FRA believes that more consideration and analysis are necessary in developing appropriate regulatory requirements addressing the specific safety concerns implicated. Accordingly, FRA believes it appropriate to seek public comment on any proposal on this topic as part of a future rulemaking. In the interim, FRA will work with any proposed Tier III operation to ensure proper safeguards and procedures are in place to protect the movement of defective Tier III equipment.
Italcertifier, SPA submitted a presentation to the docket in which it outlined six comments. None of those six comments proposed any changes to regulatory text or to FRA's approach to Tier I alternative or Tier III requirements. Among its comments, Italcertifier stated that collision risk is mitigated “by the presence and efficiency of the train protection systems” and the crash-avoidance philosophy, and added that trains in Europe must be equipped with an onboard train control system that is integrated with the wayside signal
Italcertifier also commented that in Italy “level crossings” (highway-rail grade crossings) are not permitted at speeds exceeding 200 km/h (approximately 124 mph) but there is a movement to eliminate such crossings from track with speeds exceeding 160 km/h (approximately 100 mph). Although this has no impact on the regulatory text, FRA notes that such an approach appears consistent with FRA's treatment of grade crossings (permitted on Class 6 track, or at speeds up to 110 mph; permitted subject to FRA approval on Class 7 track, or at speeds up to 125 mph; and prohibited on Class 8 track and above, or at speeds exceeding 125 mph).
JR East's comment focused on the economic impacts of the proposed rule. In its comment, JR East articulated that when FRA calculates the costs of modifying Japanese equipment to meet Tier III requirements, FRA should consider not only the initial cost (which FRA estimated at $4.7 million per trainset), but also “the total cost including operation cost, maintenance cost and the expenses for the suspension of transportation due to accidents.” FRA has addressed this comment in section 2.1.1 of the regulatory impact analysis, which is included in the docket, and in the economic analysis discussion contained in this final rule. For purposes of the economic analysis, FRA chose to only consider the initial cost of modifying Japanese equipment to meet Tier III requirements. FRA considers that the operation, maintenance, and other related expenses would be unique to each railroad potentially operating the equipment, and therefore the differential cost would only be the expense to modify the equipment.
LTK was very supportive of the rule and the effort put forth by all involved in the ETF. LTK also expressed that the publication of the proposed rule was timely in that industry “requires clarity” with respect to applicable safety standards for Tier I alternative and Tier III high-speed trainsets, noting both of which must be capable of operating in mixed service with conventional passenger and freight operations at speeds below 125 mph as a result of a number of ongoing trainset procurements. LTK went on to say that the crashworthiness and occupant protection requirements contained in the proposed rule will facilitate the introduction of international passenger and high-speed trainset designs with minor modifications to enable operation in the North American rail environment. LTK also commented that it agrees with the comments APTA submitted to the docket, stating that the recommended edits in the APTA comments provide additional clarity and are consistent with the basis for consensus reached within the ETF. LTK further commented that APTA is currently in the process of reviewing and renewing its Passenger Rail Equipment Safety Standards and that, as FRA finalizes the rule, FRA should update the incorporation dates of APTA standards to the most recent dates if the standards are updated and approved through APTA prior to final rule publication. FRA makes clear it supports incorporating updated APTA standards and has incorporated by reference the most up-to-date APTA standards in this final rule consistent with the requirements of 1 CFR part 51.
Siemens' comment was very supportive of the rule and of the ETF's work on it. Siemens expressed the belief that the rule's defining of the new equipment tier, Tier III, was timely and is needed to clarify to the industry what types of trainset designs “can get approved by the FRA.” Siemens noted this significantly reduces risk for the industry and has its full support. Siemens also expressed its support for the comments submitted by APTA to the docket. Siemens stated it participated in the reviews leading to the submission of the APTA comments and believed they improve the NPRM.
TCRR also voiced support of the rulemaking and of the industry-developed comments submitted by APTA, noting they provide clarification on various requirements proposed in the NPRM and are consistent with the basis for consensus reached within the RSAC ETF. TCRR also submitted substantive comments on specific sections that are addressed in the section-by-section analysis, below.
In addition, FRA received comments on the rulemaking from individuals. One individual stated that he “strongly support[s] modifying the regulations that make American trains much more expensive and slower than train across much of the rest of the world.” The commenter urged, to the extent possible, that FRA align its regulations with other major standards (especially European standards) to enable railroads to buy “off-the-shelf” trainsets at much lower cost. The commenter stated that this was an easy way to start to reduce regulatory burdens and suggested that FRA's regulations be amended to grant a categorical safe harbor for any trainset that complies with the European safety requirements. FRA has long considered whether adopting European safety requirements would be practical in advancing passenger rail safety in the U.S., given the unique nature of the risks within the U.S. rail operating environment in which passenger trains share track with other rail operations, including heavy and long freight trains, and frequently operate on track with highway-rail grade crossings and the accompanying risks of colliding with trucks and other highway vehicles. 62 FR 49728, 49729-49731 (Sep. 23, 1997). In addressing the safety concerns that are present in the U.S., FRA has instead focused on developing regulations in this rulemaking that are performance-based and technology-neutral to further open the U.S. market to international experience and contemporary design techniques and to harmonize the crashworthiness and occupant protection requirements with those that are established internationally. Further, if a car builder can show that its equipment meets or exceeds the crashworthiness and occupant protection requirements as established by this rule without structural modification through proper modeling and documentation, FRA would not exclude that equipment from operating in the U.S. Specifically, FRA noted in the NPRM that it is important to recognize that differences between the FRA requirements and international technical standards do not mean that in all cases structural modifications are
FRA received a comment from another individual who expressed overall support for the proposed rule and wanted to accommodate NTSB recommendations to the extent possible without excluding the adoption of “EuroNorm-like trains.” FRA addresses NTSB's recommendations and comments, below.
FRA is not adopting the proposed ITM requirements under proposed subpart I in the NPRM. FRA worked with the ETF to develop a more comprehensive set of ITM requirements for Tier III equipment. Indeed, in their comments on the NPRM, both APTA and TCRR cited the likelihood that the requirements in the subpart as proposed would be subject to change based on the ETF's then-ongoing discussion of ITM requirements, and they recommended against including the requirements of proposed subpart I in this final rule.
FRA will work with any proposed Tier III operation so that ITM processes and procedures for an operation's equipment are sufficient to address all safety-critical features. FRA will be guided by the ITM program elements the ETF developed, which may be codified in a future rulemaking.
In the NPRM, FRA proposed to add and reserve a subpart J to contain the requirements for a Safe Operation Plan for Tier III Passenger Equipment (or Tier III Safe Operation Plan). As noted below, APTA commented that this subpart is unnecessary as the information requested by FRA for inclusion in a Tier III Safe Operation Plan would be available to FRA through other regulatory means. Specifically, APTA prepared a matrix recommending changes to various proposed requirements in the NPRM where it believed the desired information should be provided, including the addition of a § 238.110 (Pre-revenue qualification plan) to review specific design review elements. FRA has adopted APTA's recommendations, in whole or in part, in various sections of this final rule (see the specific section-by-section analysis, below), and has not adopted subpart J, as proposed. However, FRA intended the Tier III Safe Operation Plan to be a mechanism allowing flexibility for both the Tier III equipment manufacturer and operator to address, and FRA to review and approve, certain aspects of Tier III equipment or operations not prescriptively defined in the regulation so they can be appropriately tailored. To do so, the Tier III Safe Operation Plan would provide FRA a broad level of oversight during the equipment design period to ensure that safety issues are addressed. FRA therefore remains concerned that APTA's comments do not offer an alternative that provides FRA the same approval oversight for all Tier III equipment or operations matters initially identified for the Tier III Safe Operation Plan. For instance, FRA does not approve railroad operating rules, so referencing a railroad's operating rules to address various matters is not a suitable alternative. Without a Tier III Safe Operation Plan requirement in the rule, some other mechanism for FRA review and approval is necessary.
As noted below, APTA has suggested the addition of a new § 238.110 to handle this review and approval oversight function. However, FRA believes that further work is necessary to develop this alternate approach. The process for how FRA would provide approval is not fully addressed in APTA's proposal, including when that approval must be sought, and what, specifically, needs to be approved, including how certain Tier III operational aspects would be reviewed and approved by FRA. In the interim, FRA will work with any proposed Tier III operation on a case-by-case basis to address safety-critical matters that would otherwise have been identified for inclusion in the proposed Tier III Safe Operation Plan.
The NTSB submitted a letter to the docket asking FRA to include in the final rule provisions to address safety recommendations the NTSB has issued. Specifically, the NTSB asked FRA to add language addressing safety recommendations R-12-41, R-14-74, R-15-01, and R-15-02.
Recommendation R-12-41 arose from a grade crossing accident that occurred in Miriam, NV, in 2011, where a tractor-trailer truck struck the side of an Amtrak train that was passing through the crossing. The NTSB recommended FRA “[r]equire that passenger railcar doors be designed to prevent fire and smoke from traveling between railcars.” FRA notes that adding weight or tighter seals to the doors to prevent fire and smoke from traveling between railcars could cause unintended harm. Both sliding and swinging doors interact closely with the surrounding car body structure, at the hinge, track, jamb, pocket, and/or latch. Even minor distortion of that structure due to the forces of collision or derailment, or simply a change in the orientation of the door due to a car being significantly displaced from its upright position, could cause the door to fail to operate as intended. Thus, during an emergency, additional time and effort would be needed to operate the doors, delaying egress and access through those doors.
Recommendation R-14-74 arose from the overspeed derailment of a Metro-North commuter train in Spuyten Duyvil, NY, in 2013. The derailment occurred in a 6-degree left-hand curve where the maximum authorized speed was 30 mph. The train was traveling at 82 mph when it derailed. As a result of the derailment, four people died and at least 61 persons were injured. Metro-North estimated about 115 passengers were on the train at the time of the derailment. Contributing to the severity of the accident was the loss of the window glazing that resulted in the fatal ejection of four passengers from the train. The NTSB recommended FRA “[d]evelop a performance standard to ensure that windows (
Recommendations R-15-01 and R-15-02 arose from a train-to-train collision between two Metro-North commuter trains in Bridgeport, CT, in 2013. An eastbound train was struck by a westbound train after the eastbound had derailed. As a result of the collision, at least 65 persons were injured. Metro-North estimated about 250 passengers were on each train at the time of the accident. In R-15-01, the NTSB recommended FRA “[r]evise [49 CFR 238.213] to require the existing forward-end corner post strength requirements for the back-end corner posts of passenger railcars.” In R-15-02, the NTSB recommended FRA “[r]evise [49 CFR part 238] to incorporate a certificate of construction, similar to the one found at [49 CFR 179.5], and require that the certificate be furnished prior to the in-service date of the railcar.” FRA recognizes the importance of structurally sound passenger cars and believes it has achieved the intent of these recommendations. After fully analyzing FRA's current safety data, evaluating FRA's existing safety regulations, and reviewing the NTSB's findings, FRA determined that its current regulations do address the NTSB's underlying safety concerns.
FRA is revising § 229.3(c) to conform the reference to Tier II maximum authorized speed with this final rule's revision to the definition of “Tier II.” FRA is simply changing the reference to “150 mph” to “160 mph,” reflecting the changes to the maximum authorized speed of Tier II equipment under this rule. This was not expressly discussed in the proposed rule; however, this is merely a conforming technical revision and will not impose any additional regulatory requirements or burdens on the regulated industry.
FRA is revising the definition of “Tier II” to conform the maximum authorized operating speed of Tier II passenger equipment in this section (150 mph) with the maximum authorized operating speed of Tier II equipment as specified under § 238.5 of this chapter (160 mph). As a result, the definition of “Tier II” under part 229 is revised to mean operating at speeds exceeding 125 mph but not exceeding 160 mph. This was not expressly discussed in the proposed rule; however, this is merely a conforming technical revision and will not impose any additional regulatory requirements or burdens on the regulated industry.
FRA is revising § 231.0(c) to conform the reference to Tier II maximum authorized speed with the revisions in this final rule. FRA is simply changing the reference to “150 mph” to “160 mph,” reflecting the changes to the maximum authorized speed of Tier II equipment under this rule. This was not expressly discussed in the proposed rule; however, this is merely a conforming technical revision and will not impose any additional regulatory requirements or burdens on the regulated industry.
FRA is removing paragraph (d) of this section as it is no longer relevant, and redesignating paragraph (e) as paragraph (d) of this section. FRA described the reasons for removing paragraph (d) of this section in the NPRM, see 81 FR 88006, 88017, and did not receive any comments on or objections to the paragraph's removal. As this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, and FRA is adopting this change as proposed.
In this section, FRA is revising the definitions of “glazing, end-facing” and “glazing, side-facing,” and making technical revisions to the definitions of “Tier II” and “train, Tier II passenger” to reflect the change in the maximum authorized speed of Tier II passenger equipment from 150 mph to 160 mph. FRA is also adding new definitions for “Associate Administrator,” “Tier III,” “trainset, Tier I alternative passenger,” “trainset, Tier III,” and “trainset unit.” For the reasons discussed below, FRA is placing the definition of “cab” in new § 238.702, and not under this section as proposed in the NPRM.
FRA did not receive any comments on or objections to FRA's proposed revisions or additions to the definitions of “glazing, end-facing,” “glazing, side-facing,” “Tier II,” “train, Tier II passenger,” “Associate Administrator,” “Tier III,” “trainset, Tier I alternative passenger,” and “trainset, Tier III” and those definitions in this final rule are identical to the proposed versions. 81 FR 88006, 88018-88019. Accordingly, the analysis provided for these definitions in the NPRM is not being repeated here, and FRA is adopting these definitions as proposed.
FRA did receive comments, however, on the proposed new definitions of “cab” and “trainset unit.” APTA submitted comments suggesting revisions to the proposed definitions of “cab” and “trainset unit,” and to FRA's existing definition of “trainset, passenger.” Additionally, APTA, along
In its comment, APTA suggested that FRA amend its existing definition of “trainset, passenger” to provide a more robust definition to clarify when the term is used in other sections of the rule (
APTA also recommended clarifying the definition of “trainset unit,” which FRA proposed to mean a trainset segment located between connecting arrangements (articulations). In the NPRM, FRA explained this definition would clarify that the proposed requirements may apply to individual vehicles within a trainset consist, but not necessarily to the trainset as a whole. However, in its comment, APTA suggested restating the definition to mean “any car within a trainset that is semi-permanently coupled to an adjacent car within the trainset.” FRA is adopting its proposed definition of “trainset unit” in the final rule, not APTA's. APTA's suggested definition would be too narrow because, to be considered a trainset unit, a vehicle would require semi-permanent coupling to an adjacent unit. Yet, FRA intends the definition to apply to all tiers of passenger equipment, and therefore not require all configurations of trainsets to be semi-permanently coupled. FRA believes the definition addresses the essential elements constituting a trainset unit without being too specific.
In their comments, both APTA and Alstom requested FRA add a definition of “conventional locomotive.” APTA recommended the rule define “conventional locomotive” to mean “a piece of on-track rail equipment with one or more control stands designed to transport a Tier I alternative compliant passenger trainset and which meets the crashworthiness requirements defined in § 229.205 [of this chapter] and the design requirements contained in § 229.206 [of this chapter].” APTA stated that inclusion of such a definition would provide greater clarity with respect to application of the dynamic collision scenarios under § 238.705. As discussed below under § 238.705, APTA raised concern that because a conventional locomotive will not be used in Tier III service, requiring use of a conventional locomotive for a collision scenario under Tier III requirements would introduce confusion as to which is the correct collision scenario to apply. Alstom, in its comment, indicated that such a definition of “conventional locomotive” would clarify it is Tier I equipment governed by 49 CFR part 229 and that the front vehicle of a Tier III Trainset could therefore not be a conventional locomotive. However, FRA is not adding a definition of “conventional locomotive” to this § 238.5 of the final rule. APTA's proposed definition would be too narrowly limited to a locomotive used to move Tier I alternative equipment under appendix G to this part. Instead, FRA believes it is more appropriate to more fully explain under § 238.705, below, FRA's intent on how the two dynamic collision scenarios should be applied. As noted above, FRA is adding the term “integrated trainset” to § 238.705 to address any confusion about which initial velocity applies to a given trainset.
As mentioned above in the Discussion of Comments and Conclusions, section IV, APTA and TCRR recommended that FRA include in the final rule a definition of “Tier IV system.” According to both APTA and TCRR, a “Tier IV system would mean “any passenger rail or ground transportation system that operates on an exclusive right-of-way without grade crossings and is governed by a technology-specific rule of particular applicability, or other regulatory means.” Although amenable to undertaking the development of such a definition, FRA is not accepting APTA's and TCRR's recommendations to include a definition of a Tier IV system in this final rule. Adding such a broad-ranging definition is beyond the intended scope of this rulemaking at this final rule stage.
In commenting on this section in the NPRM, Alstom suggested that a reference to Tier III equipment be added in paragraph (a) where there is currently a reference to Tier II. Alstom noted that paragraph (a) includes a cross-reference to § 238.505, which governs approvals for Tier II ITM programs. While FRA agrees that a change to this paragraph will be warranted in the future, doing so
FRA is revising paragraphs (c)(2) and (d)(2) of this section, as proposed in the NPRM. FRA did not receive any comments on these technical changes. As these paragraphs are identical to those FRA proposed in the NPRM, please see the NPRM for an analysis of the changes, 81 FR 88006, 88050, as it is not being repeated here.
This section contains requirements for pre-revenue service testing of passenger equipment. As proposed in the NPRM, FRA is amending paragraphs (b)(2), (4), (5), (7), and (c) of this section to require railroads to obtain FRA approval before using Tier III passenger equipment that either has not been used in revenue service in the U.S., or has been used in revenue service in the U.S. and is scheduled for a major upgrade or introduction of new technology that affects a safety system on such equipment. The explicit inclusion of a Tier III notification and approval process is consistent with FRA's approach to the implementation of high-speed rail technology. It also provides a formal mechanism for FRA to ensure all required elements of this part are satisfactorily addressed and documented.
In commenting on the NPRM, APTA stated that FRA should separate out from this section issues related to FRA approval of the design of Tier III equipment. APTA therefore suggested that FRA add a new § 238.110, titled “Pre-revenue qualification plan,” to require a plan addressing all documents required by subpart H to be submitted for review and approval for Tier III equipment.” According to APTA, new § 238.110 would contain the requirements of Tier III equipment design that FRA would need to review and approve before Tier III equipment could operate in revenue service. As discussed above under proposed subpart J and the Safe Operation Plan for Tier III Passenger Equipment, the creation of this new section ties into APTA's comment recommending excluding from this final rule the proposed references to a Tier III Safe Operation Plan. (Please see the discussion above, under proposed subpart J, for FRA's response concerning removal of the Tier III Safe Operation Plan.)
FRA recognizes that § 238.111 will need some further revision as new Tier III equipment requirements are established. However, APTA's request to adopt a new § 238.110 exceeds the intended scope of this current rulemaking proceeding.
This section sets out the scope of subpart C, which contains specific requirements for Tier I passenger equipment, and also provides compliance alternatives for the use of Tier I passenger equipment. In its comments on the NPRM, APTA agreed with FRA's proposal to amend this section to allow Tier I equipment to comply with alternative crashworthiness and occupant protection requirements in appendix G to this part, instead of certain requirements under subpart C (§§ 238.203, 238.205, 238.207, 238.209(a), 238.211, 238.213, and 238.219). APTA also urged that efforts be undertaken to complete and reach consensus on a separate guidance document for demonstrating the crashworthiness of passenger rail equipment, to assist with the implementation of this rule. FRA is working on generating such a document, as FRA recognizes the importance of providing guidance on the proper application of the alternative crashworthiness and occupant protection requirements of appendix G to this part.
FRA did not receive any additional comments on the proposed revisions to this section as described in the NPRM, 81 FR 88006, 88019-88020, and FRA is adopting this section as proposed. Accordingly, as this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here.
These sections contain structural and equipment protection requirements for Tier I passenger equipment. FRA did not receive any comments on the proposed revisions to these sections as described in the NPRM, 81 FR 88006, 88020, to reflect the addition of alternative standards in appendix G to this part for Tier I trainsets. As these sections of the final rule are identical to the proposed versions, FRA is adopting them as proposed and the analysis provided in the NPRM for each section is not being repeated here.
As discussed in the NPRM, FRA is revising this section to increase the maximum allowable speed for Tier II passenger equipment from 150 mph to 160 mph. This change is consistent with FRA's March 13, 2013, final rule amending and clarifying the Track Safety Standards, which affirmed that the maximum allowable speed on Class 8 track is 160 mph.
In commenting on the NPRM, APTA expressed its support for this change and harmonizing the Track Safety Standards and Passenger Equipment Safety Standards. Separately, APTA stated that it might be appropriate to reexamine Tier II requirements in the future because they were developed prior to the congressional mandate to implement PTC. APTA added that such a reexamination should take into consideration the incident and accident data since the introduction of Amtrak's Acela Express trainsets, along with the corresponding risks associated with future operations and anticipated Northeast Corridor upgrades.
FRA agrees with APTA that if it becomes necessary to reexamine Tier II requirements, it would be appropriate, as always, to consider all relevant safety data available. However, FRA makes clear that the mandate to implement PTC should not be viewed as a replacement for crashworthiness and occupant protection requirements but as a complementary safety measure. Indeed, around the time part 238 was originally published, FRA issued an order of particular applicability for use of the Advanced Civil Speed Enforcement System, a type of PTC system, on Amtrak's Northeast Corridor to support safe train operations at higher speeds.
FRA did not receive any comments objecting to the revision to this section as described in the NPRM. 81 FR 88006, 88020. As this portion of the final rule is identical to the proposed version, the complete analysis provided in the NPRM is not being repeated here.
FRA is revising this section to increase the maximum allowable speed for Tier II passenger equipment from 150 mph to 160 mph. FRA did not receive any comments on the proposed revision to this section as described in the NPRM, 81 FR 88006, 88021, and FRA is adopting it as proposed. Please see the discussion of § 238.401 for further information on this speed change.
This subpart contains specific requirements for Tier III passenger equipment. Many of the requirements under this subpart consider Tier III passenger equipment in terms of an integrated trainset, as that term is now defined under § 238.702, particularly for purposes of crashworthiness and occupant protection requirements. This rule presumes that Tier III trainsets will consist of semi-permanently coupled, articulated, or otherwise “fixed” configurations, that are not intended to operate normally as individual vehicles, or in mixed consists (with equipment of another design or operational tier).
The requirements in this subpart are organized into subject areas based on their general applicability: Trainset structure, window glazing, brake systems, interior fittings and surfaces, emergency systems, and cab equipment. FRA intends that the requirements be applied in a manner that is performance-based and technology-neutral, where possible. FRA notes that it intends for certain sections of this subpart to be applied as an integrated set of alternative crashworthiness and occupant protection performance requirements for Tier I passenger equipment as delineated in appendix G to this part. FRA considers this set of requirements to provide an equivalent level of safety to its counterpart set of Tier I requirements in subpart C of this part. As explained in greater detail in the discussion of appendix G below, the rule clarifies which specific Tier III crashworthiness and occupant protection performance requirement should be applied as an alternative set of Tier I counterpart requirements. Specifically, FRA makes clear that if alternative Tier I compliance is sought under appendix G, then all the requirements in appendix G must be met so the integrity of the alternative requirements is maintained.
This section sets out the scope of new subpart H. Subpart H contains specific requirements for railroad passenger equipment operating in a shared right-of-way at speeds not exceeding 125 mph, and in an exclusive right-of-way without grade crossings at speeds exceeding 125 mph but not exceeding 220 mph. FRA did not receive any comments on the exclusion of grade crossings or the 125-mph speed limit when grade crossings are present within the right-of-way, or on whether FRA should explicitly apply the 125-mph speed limit only to track located at or near each grade crossing within an exclusive right-of-way. As stated in the NPRM, FRA believes that in most cases new, exclusive rights-of-way designed for Tier III operations will be constructed without highway grade crossings, see 81 FR 88006, 88021. However, in the situation where exclusive rights-of-way include highway grade crossings, but may have long stretches of track without a grade crossing, FRA would expect appropriate operational safeguards to be in place to prevent trainsets from traversing highway grade crossings at speeds exceeding 125 mph. In fact, FRA would expect those operations that include grade crossings in their exclusive rights-of-way to also comply with the requirements of § 213.347 of this chapter.
Section 213.347(a) of this chapter prohibits any grade crossings on Class 8 or 9 track. Whereas Class 8 track is track with an operational speed range from above 125 mph not exceeding 160 mph, Class 9 track is track with an operational speed range from above 160 mph not exceeding 220 mph. Further, § 213.347(b) of this chapter requires a track owner of Class 7 track (track with an operational speed range from above 110 mph not exceeding 125 mph) to submit for FRA's approval a complete description of the proposed warning/barrier system to address the protection of highway traffic and high-speed trains if the track will include highway grade crossings. Section 213.347(b) of this chapter prohibits operations on Class 7 track unless such an FRA-approved warning barrier system is in place and functioning as intended.
Separately, FRA received comments on its proposal to allow passenger seating in the leading unit of a Tier III trainset provided safety issues associated with passengers occupying the leading unit are addressed and mitigated through a comprehensive Tier III Safe Operation Plan. (See the discussion of proposed subpart J and the Safe Operation Plan for Tier III Passenger Equipment, under Discussion of Comments and Conclusions, section IV, above.) APTA stated that addressing safety concerns in a Tier III Safe Operation Plan is unnecessary because those safety concerns are already addressed through other regulatory means. APTA maintained that when Tier III equipment is operating at speeds not exceeding 125 mph, the crashworthiness and occupant protection requirements provide an equivalent level of safety to that of Tier I equipment and sufficient protection is already afforded passengers occupying leading units of Tier III trainsets. Additionally, APTA suggested that when operating above 125 mph, the right-of-way barrier plan required under § 213.361 of this chapter and the HSR-125 plan required under § 236.1007 of this chapter address any additional safety concerns for passengers occupying the leading units of Tier III trainsets, as these two sections guard against unauthorized intrusions into the right-of-way. Accordingly, APTA believed that conducting an additional, comprehensive analysis for the Tier III Safe Operation Plan would be redundant.
Alstom's comment on this section mirrored APTA's comment in substance. Alstom also suggested that the safety considerations that FRA initially sought to address in the Tier III Safe Operation Plan are adequately addressed just as APTA outlined in its comment.
As explained under Discussion of Comments and Conclusions, section IV, above, this section does not refer to a Tier III Safe Operation Plan. This final rule does not require railroads to complete a comprehensive safety analysis specifically addressing and mitigating all safety conditions
Finally, as noted earlier, APTA suggested that FRA create a new section, § 238.110, to address compliance review and approval with the requirements of this subpart H. See FRA's discussion of this suggestion under Discussion of Comments and Conclusions, section IV, above.
FRA has added this new section to contain definitions applying specifically to subpart H of this part. This section defines the terms “cab,” which was proposed in the NPRM under § 238.5, and “integrated trainset,” which is a new term not expressly proposed in the NPRM. FRA determined it will be clearer and more useful to place definitions that are tailored to the application of subpart H in this section, rather than in this part's general definitions section, § 238.5.
In its comments on the proposed definition of “cab,” APTA recommended FRA remove the proposed statement that the term “cab” includes a locomotive cab for the purposes of subpart H. According to APTA, the Tier III trainsets subpart H addresses do not have locomotive cabs. APTA also commented that any analysis for a Tier I alternatively compliant trainset as governed by appendix G cannot include an analysis of the cab of a conventional locomotive because the collision model used for that analysis is insufficient. APTA suggested instead to revise the proposed definition of “cab” to mean “for the purposes of subpart H of this part, a compartment or space in a trainset designed to be occupied by the engineer and contain an operating console from which the engineer exercises control over the trainset.” When discussed at the May 2017 ETF meeting, APTA expanded on its comment saying that if the definition were to remain as proposed, there would need to be a way to differentiate between when the term “cab” applies to a Tier III trainset versus a conventional locomotive cab. APTA stated this is crucial when applying the dynamic collision scenario under § 238.705 because (as discussed more comprehensively below) a Tier III trainset cannot be led by a conventional North American locomotive in its intended service.
FRA recognizes APTA's underlying concern with the proposed definition of “cab.” FRA has therefore defined the term in this section of the final rule to better clarify how the term is applied to Tier III equipment, and by extension of appendix G to this part, Tier I alternative equipment. Accordingly, the term “cab” means a compartment or space within a trainset that is designed to be occupied by an engineer and contain an operating console for exercising control over the trainset. As the definition is contained in this new section, which applies specifically to subpart H, there is no need to add language to the definition expressly limiting its application.
In addition, as fully discussed below, FRA has included the term “integrated trainset” in § 238.705 and is defining that term in this § 238.702. FRA believes that any confusion over which initial velocity applies to a given trainset undergoing evaluation in the dynamic collision scenario in § 238.705 is reconciled with the new term “integrated trainset.” The term “integrated trainset” is defined as a passenger trainset in which all units of the trainset are designed to operate as an integrated consist to achieve its structural crashworthiness performance. FRA intends the term “integrated trainset” to mean that each individual vehicle comprising the trainset is interdependent structurally with each other, specifically with respect to the collision load path and how the collision loads are designed to be resolved.
This section contains the quasi-static compression load requirements for Tier III equipment. This section also requires compliance with § 238.705 to demonstrate sufficient occupied volume integrity (OVI). The purpose of applying both requirements is to ensure the integrity of the occupied volume during a collision or other accident. Integrity of the occupied volume is a fundamental requirement of crashworthiness—the primary goal of which is preservation of space to protect occupants during an accident. Additionally, a strong occupied volume serves as the foundation for other crashworthiness features such as CEM components. And although the language of this section references only Tier III trainsets, the requirements of this section may also be applied to Tier I trainsets through the application of appendix G, in the alternative to the requirements of 49 CFR 238.203, Static end strength. Tier I passenger equipment designed to alternative crashworthiness standards may demonstrate an appropriate level of crashworthiness by complying with the quasi-static compression load requirements proposed in § 238.703(b).
FRA received one comment on this section. The commenter, Alstom, stated that the methodology necessary to properly apply the collision load along the collision load path was not included in the proposal, and suggested FRA supply that methodology in some form of compliance manual or document. FRA does agree with Alstom that providing guidance on how to properly apply the requirements of this section would be beneficial to the regulated community. However, to remain technology neutral, FRA did not propose a specific methodology in the rule text. FRA understands there may be different methodologies that are equivalent, and thus putting one in the regulation over another could unintentionally limit the technology employed. FRA intends to address this issue in developing a guidance document, as discussed above.
FRA did not receive any other comments on the requirements in this section as described in the NPRM, 81 FR 88006, 88021-88023, and FRA is adopting this section as proposed. Because this portion of the final rule is identical to the proposed version, the complete analysis provided in the NPRM is not being repeated here.
As discussed in the NPRM, this section contains the dynamic collision scenario analysis requirements as the second part of the OVI evaluation of a Tier III passenger trainset, in conjunction with § 238.703. Because PTC technology does not protect against all possible collision scenarios, such as collisions with trespassing highway equipment at grade crossings or with other rolling stock (freight or passenger equipment) during manual operations at 20 mph or below, compliance with this requirement is necessary to preserve the occupied volume, to protect all occupants on the trainset.
As mentioned in the discussion of § 238.703, each vehicle in the trainset needs to demonstrate it meets both the OVI requirements in paragraph (b) of that section and the dynamic collision scenario requirements in paragraph (b) of this section. Further, as provided in § 238.703, and as outlined in appendix G, a Tier I passenger trainset designed to alternative crashworthiness standards may comply with this section instead of the requirements applicable to Tier I passenger trainsets in § 238.203.
In combination with the quasi-static compression load requirements in § 238.703, the purpose of this dynamic collision scenario requirement is to ensure that survivable space for the passengers and crew is preserved in up to moderately severe accident conditions (
Paragraph (a) outlines the required conditions under which a dynamic collision scenario is performed. Generally, the collision scenario requires a dynamic impact to be simulated between an initially-moving trainset and an initially-standing train. The initially-moving trainset is the trainset undergoing evaluation, either Tier III equipment or, as provided in appendix G, Tier I equipment designed to alternative crashworthiness standards. The initially-standing train is a locomotive-led consist of five conventionally-designed passenger cars. The conventionally-designed passenger cars have a prescribed weight and force-versus-displacement characteristic.
FRA expects the collision scenario simulation to be executed for an impact duration sufficient to capture the most severe portion of the collision event. The actual amount of impact time required to simulate the collision sufficiently will vary based upon the characteristics of the trainset undergoing evaluation. Typically, the collision scenario will be executed until all the equipment, including the initially-standing train and initially-moving trainset, is moving in the same direction at approximately the same velocity. If all the equipment is moving together at approximately the same speed, no further vehicle-to-vehicle impacts will occur, and the simulation will then have been executed for a sufficient duration to capture the most severe decelerations.
There are various types of analyses that may be used to evaluate the collision scenario requirements. These analyses include fully-detailed FE models, lumped-parameter analyses, or a hybrid approach where a combination of detailed FE modeling and lumped-parameter techniques are used within the same simulation. An FEA of the scenario is generally a highly-detailed simulation of the actual trainset geometry. The parts making up the trainset are meshed into a large number of elements, with each element having its own mass, stiffness, and connection properties to the adjacent elements. A lumped parameter analysis represents each car or section of a car within a trainset using a small number of masses and a small number of non-linear springs. At its extreme, each vehicle consists of a single mass and a single spring characteristic. A hybrid approach may utilize an FE mesh to represent some structures (
FRA received comments from APTA recommending revisions to several paragraphs of this section in the NPRM. In its comments on the NPRM, APTA recommended that FRA replace the references made to “train” in paragraphs (a)(1)-(3), (6), and (8), and replace them with the term “trainset,” to clarify the application of the collision scenario under paragraph (a) of this section. APTA proposed that the term trainset be defined to mean a passenger train where all units within the trainset are semi-permanently coupled to operate as a single consist. As stated under the discussion of § 238.5, FRA has not adopted APTA's proposal definition of “trainset.” However, FRA does agree that reference to a trainset is more appropriate than to a “train” in this section. Accordingly, the above-referenced paragraphs of paragraph (a) use the term “trainset,” instead of “train,” and FRA intends the term “trainset” to mean either a Tier I alternative or Tier III trainset, as those terms are defined in § 238.5. However, with reference to the initially-standing train, as FRA envisions it being reflective of a conventional Tier I passenger train, FRA is using the term “train” for clarity. Although not specifically requested by APTA, paragraphs (a)(4) and (9) use the term “trainset” in conformance with these changes.
In commenting on the NPRM, APTA recommended that paragraph (a)(3) be placed in appendix G to part 238, consistent with its other comments that requirements for conventional locomotive led equipment are not appropriate in subpart H because Tier III equipment will not utilize conventional locomotive power. APTA also suggested that the text adopt APTA's proposed definition of “trainset” instead of “train,” as proposed. Paragraph (a)(3) of this section, as proposed in the NPRM, stated that if the trainset is intended for use in push-pull service, then both the locomotive-led and cab-car-led configurations would require separate evaluation. This proposal was intended to ensure sufficient OVI for all occupied spaces in the trainset regardless of whether led by a cab car or a conventional locomotive.
FRA's discussion of the use of the term “conventional locomotive” in paragraph (a)(6) of this section applies
In its comments on this section, Alstom also raised concern about how to implement the force-versus-crush requirements in proposed paragraph (a)(4)(ii) and Table 1 to this section. Proposed paragraph (a)(4)(ii) stated that the rigid locomotive and each passenger coach in the initially-standing train crush in response to applied force as specified in Table 1, which in turn provided the non-linear, force-versus-crush relationships for the passenger cars and locomotive comprising the initially-standing train. In particular, Alstom found it unclear whether the paragraph made it necessary to combine characteristics at “inter-trailers,” and, if so, how to do so. Alstom therefore suggested that the force-crush characteristics to be used at each interface between vehicles be included in this paragraph instead of Table 1.
FRA makes clear that the force-crush characteristics described in Table 1 are intended for use as inputs to a lumped-parameter simulation model of a train-to-train collision. The data in Table 1 describe the resulting force when the equipment moves into a rigid fixed barrier. In the initial position, when the crush is 0 inches, the passenger coach is just touching the barrier and the force is also 0 lbf. The length of the coach is reduced as the coach moves towards the barrier and crushes. When the coach has crushed by 3 inches, the force has increased linearly to 80,000 lbf. When the coach has crushed by 6 inches, the force again increases linearly to 250,000 lbf, from 80,000 lbf. For the rigid locomotive, the force is 0 lbf when the crush is 0 inches and the rigid locomotive is just touching the barrier. After 2.5 inches of crush, the force increases linearly to 100,000 lbf. When the rigid locomotive has crushed by 5 inches, the force again increases linearly to 2,500,000 lbf, from 100,000 lbf.
Depending on the details of the software used to implement the lumped-parameter model, the data in Table 1 may need to be re-formatted. Some software may allow the data to be input simply as it is presented in Table 1. Other software may require coach-to-coach force crush characteristics for input. For coach-to-coach crush, the crush distances simply double for the corresponding force. Accordingly, 6 inches of crush between coaches are required to reach 80,000 lbf, and 12 inches of crush are required to reach 2,500,000 lbf. For rigid locomotive-to-coach crush, some calculations are required. At 80,000 lbf between the rigid locomotive and coach, the rigid locomotive has crushed by 2 inches, while the coach has crushed by 3 inches. The rigid locomotive-to-coach crush is then 5 inches when there is 80,000 lbf between the rigid locomotive and coach. At 100,000 lbf between the rigid locomotive and coach, the rigid locomotive has crushed by 2.5 inches and the coach has crushed by 3.35 inches. The rigid locomotive-to-coach crush is 5.85 inches at 100,000 lbf. At 2,500,000 lbf between the rigid locomotive and coach, the rigid locomotive has crushed by 5 inches and the coach has crushed by 6 inches. The rigid locomotive-to-coach crush is 11 inches at 2,500,000 lbf.
Calculations may be necessary to determine the force-crush characteristic between the rigid locomotive described in Table 1 and the new equipment under evaluation. The details of such calculations will likely depend on the software modeling choices. One possibility, of many, is to calculate the force-crush response of the new equipment with a rigid fixed barrier, and use those results in combination with the rigid locomotive data in Table 1. The force-crush characteristic for the rigid locomotive to the new equipment may then be calculated in a manner similar to the force crush characteristic for the rigid locomotive to the coaches.
Most notably, APTA recommended revising paragraph (a)(6), which specifically describes the initial velocities to be assigned to the initially-moving trainset in the dynamic collision scenario. FRA makes clear that, although the collision scenario in paragraph (a)(6) references “initial velocities” for the scenario, FRA expects that the actual velocity at the colliding interface be the same as the initial velocity, as generally models do not account for loss of velocity. However, if a model includes loss of velocity due to friction, or other velocity-reducing forces, FRA would expect the initial velocity to be increased so that the collision velocity remains either 20 mph or 25 mph, depending on the equipment undergoing evaluation. As proposed in the NPRM, if the initially-moving trainset were led by a cab car or an MU locomotive, its initial velocity would be 20 mph; if the initially-moving trainset were led by a conventional locomotive, its initial velocity would be 25 mph. These speeds were chosen based upon estimates of the upper limit of the ability of conventionally-designed Tier I equipment to maintain its occupied volume in a similar collision scenario.
APTA commented that, although it is probable for a Tier I alternative trainset, it is not possible for a Tier III trainset to be led by a conventional North American locomotive. APTA stated that a Tier III trainset could never meet its performance capabilities with a conventional locomotive on the leading and trailing ends, because the end units must be low-profile, aerodynamic designs that are an integral part of the trainset design. APTA therefore suggested that the portion of the rule text involving an initially-moving consist led by a conventional locomotive be placed in appendix G to this part and not contained in this section.
Alstom also provided comments on paragraph (a)(6) of this section. Specifically, Alstom sought clarification of the application of the 20-mph and 25-mph initial velocities. Alstom did not believe having two initial velocities makes sense and suggested there should instead be only one initial velocity applicable to all equipment—an initial velocity for all Tier III trainsets.
FRA carefully considered both APTA's and Alstom's comments on this paragraph. FRA recognizes the importance of ensuring that the intent of the section's application is clearly understood so that equipment designed to the Tier III crashworthiness and occupant protection requirements, or the Tier I alternative requirements, properly preserves the occupied volume in the event of a collision. As discussed above, the collision scenario speeds were chosen based upon estimates of the upper limit of the ability of conventionally-designed Tier I equipment to maintain its occupied volume in a similar collision scenario. FRA did not intend inclusion of two
FRA notes that it also considered drafting the regulatory text so that the 20-mph initial velocity would apply to a trainset led by a vehicle designed to be occupied by passengers, and the 25-mph initial velocity would apply to a trainset led by equipment not designed to be occupied by passengers. When this issue was discussed at the May 2017 ETF meeting, the ETF members rejected this approach. Simply referencing a locomotive not designed to be occupied by passengers instead of a conventional locomotive did not fully resolve the issue, because of concern that a Tier III trainset may not be powered by a stand-alone power unit but rather through an integrated system in which powered axles are distributed throughout the trainset. Additionally, a question arose whether a control cab in the lead unit of such an integrated and powered trainset design made that lead unit an MU, further clouding which initial velocity would apply. Moreover, to the extent passengers do not occupy the lead unit in such a trainset, there would be a large mass in front of passenger-occupied units that allows for more absorption of energy not being transferred to the passenger-occupied units, and the ETF raised concern that the lead unit in such a trainset not be subjected to more stringent requirements.
In discussing how best to clarify the application of the requirements of this paragraph, ETF industry representatives mentioned that the requirements, when developed for the Technical Criteria and Procedures Report, were intended to apply to integrated trainsets, not trainsets led by conventional North American locomotives. Consistent with the comments APTA and Alstom submitted, ETF industry representatives suggested applying the 20-mph initial velocity to Tier III trainsets in this section, and applying the 25-mph initial velocity to Tier I alternative trainsets in appendix G to this part. ETF labor representatives noted the original consensus product of the ETF and cautioned against re-drafting consensus language. After a healthy discussion and to remain technology neutral, FRA proposed to the ETF the concept of using the term “integrated trainset” for determining which initial velocity applies. If the design of the trainset was integrated from a structural and crashworthiness perspective, with all vehicles inclusive of the leading unit designed to work together in a collision scenario, then the 20-mph initial velocity would apply. For all other configurations not considered “integrated,” regardless of the equipment's tier and what type of unit leads the trainset, the 25-mph initial velocity would apply. Such an approach would take into account instances when the lead unit of a Tier III trainset and its passenger coaches would be manufactured by different companies. Further, because properly testing the crashworthiness and occupant protection capabilities of the passenger coaches must involve some known characteristics of the vehicle leading the trainset, this section would consider such a trainset a non-integrated trainset led by a surrogate for the lead unit, and reflect that the collision load paths of the lead unit and the coach cars are not structurally interdependent.
Accordingly, in the final rule, FRA has not adopted the proposed references to cab cars, or MU or conventional locomotives. Rather, paragraph (a)(6) of this section requires the initially-moving trainset to have an initial velocity of 20 mph if it is an integrated trainset, as that term is now defined under § 238.702, or an initial velocity of 25 mph when the lead vehicle is not part of the integrated design. By using the term “integrated trainset,” FRA intends to remain technology-neutral and not restrict the type of equipment that could potentially lead a Tier III trainset. As long as the entire trainset is designed and built as an integrated trainset, the 20-mph initial velocity applies.
FRA also received comments from APTA concerning paragraph (b) of this section, which contains the crashworthiness and occupant protection performance requirements the individual vehicles in the initially-moving trainset involved in the dynamic collision scenario must meet as described in paragraph (a). Specifically, FRA proposed in paragraph (b)(2) that if the option to use GM/RT2100 is exercised to demonstrate compliance with any of the requirements in §§ 238.733, 238.735, 238.737, or 238.743, then the average longitudinal deceleration of the center of gravity (CG) of each vehicle during the dynamic collision scenario shall not exceed 5g in any 100-millisecond (ms) time period. FRA explained that a plot of the 100-ms average longitudinal deceleration versus time, in which the curve never exceeds 5g, would suffice to demonstrate compliance with paragraph (b)(2). APTA, in its comment, noted that proposed paragraph differed slightly from the consensus agreement. However, APTA expressed its agreement with the proposal if FRA intends the rule to allow the use of a moving window of a 5g average deceleration within 100 ms.
FRA makes clear that the differences between the consensus rule text and the proposed rule text were merely editorial in nature and in no way changed the substantive intent that the average longitudinal deceleration of the CG of each vehicle of the initially-moving trainset during the dynamic collision scenario not exceed 5g in any 100-ms time period. Additionally, FRA disagrees with APTA's characterization of the intent of this section. The average deceleration in any 100-ms period was never intended to be comprised of the most favorable data points during the time period,
FRA has otherwise adopted this section as proposed in the NPRM, and the complete analysis provided in the NPRM is not being repeated here.
This section contains the requirements for analyzing the ability of a Tier III passenger trainset to resist vertical climbing or override at its collision interface locations during a dynamic collision scenario. This section examines the vertical displacement behavior of colliding equipment under an ideal impact scenario where an initially-moving Tier III trainset and an initially-standing train are aligned. This section also prescribes an impact scenario where the interface of the colliding equipment is translated both laterally and vertically by 3 inches to ensure that override is resisted during an impact when the two trains are not perfectly aligned. Evaluating the colliding equipment's ability to resist override in an offset impact condition helps to demonstrate that the override features are robust. As proposed, Tier III passenger trainsets must comply with both paragraphs (a) and (b) of this section.
FRA received comments from Alstom on this section on proposed paragraphs (a)(1)(ii) and (b)(1)(ii). Alstom stated that the direction of the vertical perturbation required in each paragraph was not defined (
FRA agrees with Alstom's comment, and for the reasons discussed below, paragraph (a)(1) in the final rule contains three sets of initial conditions for analyzing the ability of the evaluated trainset to resist vertical climbing or override during a dynamic collision scenario. Paragraph (a)(1) also states these conditions must be applied using the dynamic collision scenario in § 238.705(a). The criteria for evaluating the dynamic collision scenario for each set of initial conditions are provided in paragraph (a)(2), and remain unchanged from the NPRM. Because the same model may be used both to demonstrate compliance with the requirements of § 238.705 and the requirements of paragraphs (a) and (b) of this section, the model must be validated with test data in such a way as to provide confidence in the validity of the results of the collision analyses. In this regard, if the components that experience large deflection or permanent deformation in the analysis described in § 238.705 also experience large deflection or permanent deformation in the analysis described in paragraph (a)(2) of this section, then the same test results may be used to validate the model. If the performance of the components that undergo large deformation in the analysis described in paragraph (a)(2) of this section is not validated with test data as part of the validation of the model used in § 238.705, then additional validation testing must be performed to validate the model being used to demonstrate performance under paragraph (a)(2).
Paragraph (a)(1)(i) describes the first condition to be used in the collision simulation to demonstrate anti-climbing performance, and remains unchanged from the NPRM. This paragraph still provides that all vehicles in both the initially-moving trainset and the initially-standing train consists must be positioned at their nominal running heights with the centerlines of the initially-moving trainset and initially-standing train aligned. Because the centerlines of the colliding vehicles are aligned with one another, a longitudinally half-symmetric model may be used to simulate this collision scenario, as appropriate. FRA intends for this initial condition to represent an ideal collision situation where the colliding vehicles are initially aligned with one another.
As proposed, paragraph (a)(1)(ii) described the second condition to be used in the collision simulation as a 3-inch lateral and 3-inch vertical offset of the interface of the colliding equipment, without defining the direction of the perturbance. It is here where Alstom's comment was focused. FRA notes that implicit in the proposed regulatory text for this paragraph was an assumption that, to demonstrate compliance with this section, a railroad or manufacturer would choose the more unfavorable arrangement (upwards or downwards perturbance) with respect to override (the arrangement most likely to lead to override) to be evaluated. However, FRA recognizes that this assumption was not made clear. Therefore, in the final rule, FRA has provided more detail in paragraph (a)(1)(ii) and included new paragraph (a)(1)(iii). Although FRA is being more prescriptive with respect to the requirements of this section to remove ambiguity on its application, FRA still expects that when a scenario arises where there are multiple arrangements that can be evaluated, the most severe scenario (the scenario most likely to lead to override) will be evaluated and the results used to determine whether compliance with the requirements of this section has been achieved.
Accordingly, paragraph (a)(1)(ii) specifies that the initially-moving trainset must be perturbed 3-inches laterally and 3-inches vertically upwards relative to the initially-standing train. Further, paragraph (a)(1)(iii) requires that the initially-moving trainset must be perturbed 3-inches laterally and 3-inches vertically downwards relative to the initially-standing train. The lateral and vertical offsets still must be applied simultaneously in the same simulation. Evaluating the equipment offset in this manner will demonstrate that the anti-climb features are of a robust design, capable of preventing climbing when the colliding vehicles are not perfectly aligned. Because these simulations require a lateral offset between the initially-standing train and initially-moving trainset, a symmetric boundary condition may not be employed (
Paragraph (a)(2) remains unchanged from the NPRM, except for use of the term “trainset,” instead of “train,” to remain consistent with use of the term in other sections of this final rule. This paragraph explains the pass/fail criteria that must be successfully met to demonstrate a trainset possesses adequate anti-climb features for its colliding interface. The criteria must be met for each set of initial conditions in paragraphs (a)(1)(i)-(iii) for demonstrating appropriate resistance to override between colliding equipment.
Paragraph (b) contains the evaluation methodology for demonstrating the appropriate level of override protection for connected equipment in a Tier III trainset. This paragraph requires examination of the vertical displacement behavior of coupled equipment under an ideal impact scenario where the vehicles within the initially-moving trainset are aligned. It also prescribes an impact scenario where the first coupled interface of the initially-moving trainset is translated both laterally and vertically by 2 inches. Evaluating the connected equipment's ability to resist override in an offset impact condition is necessary to demonstrate the override features are robust and can resist override during an impact where the coupled vehicles are not perfectly aligned.
Paragraph (b)(1) explains the conditions for analyzing the ability of connected equipment to resist vertical climbing or override at the coupled interfaces during a dynamic collision
Paragraph (b)(1)(i) describes the first condition to be used for collision simulation to demonstrate override protection for connected equipment, and remains unchanged from the NPRM. This paragraph provides that all vehicles in both the initially-moving trainset and the initially-standing train consists must be positioned at their nominal running heights, with the centerlines of the initially-moving trainset and initially-standing train aligned. Because the centerlines of the colliding vehicles will be aligned with one another, a longitudinally half-symmetric model may be used to simulate this collision scenario, as appropriate. This initial condition is meant to represent an ideal collision situation where the colliding vehicles are initially aligned with one another.
As proposed, paragraph (b)(1)(ii) described the second condition to be used in the collision simulation as a 2-inch lateral and 2-inch vertical offset of the first connected interface between vehicles in the initially-moving train. As discussed above, Alstom raised concern that the proposed paragraph did not define the direction of the vertical offset. Accordingly, FRA is employing the same approach here as under paragraph (a)(1)(ii) to clarify the direction of the vertical offset and is also including a new paragraph (b)(1)(iii).
In the final rule, paragraph (b)(1)(ii) specifies that the first connected vehicle behind the lead unit of the initially-moving trainset must be perturbed 2-inches laterally and 2-inches vertically upwards, relative to the adjacent vehicle, at the first connected interface. Further, paragraph (b)(1)(iii) requires that the first connected vehicle behind the lead unit of the initially-moving trainset must be perturbed 2-inches laterally and 2-inches vertically downwards, relative to the adjacent vehicle, at the first connected interface. The lateral and vertical offsets must still be applied simultaneously in the same simulation. Evaluating the equipment offset in this manner will demonstrate that the anti-climb features are of a robust design, capable of preventing climbing when the vehicles in the initially-moving trainset are not perfectly aligned. Because these simulations require a lateral offset between the vehicles of the initially-moving consist, a symmetric boundary condition may not be used (
Paragraph (b)(2) remains unchanged from the NPRM, except for use of the term “trainset,” instead of “train,” to remain consistent with use of the term in other sections of this final rule. This paragraph sets out the pass/fail criteria that must be successfully met to demonstrate a Tier III trainset possesses adequate anti-climb features to protect the vehicles connected in the trainset from overriding each other. The criteria must be met for each set of initial conditions provided in paragraphs (b)(1)(i)-(iii) to demonstrate appropriate resistance to override between connected equipment.
Under appendix G to this part, a Tier I alternative passenger trainset may demonstrate an appropriate level of override protection by complying with the requirements of this section instead of the requirements applicable to Tier I passenger train in § 238.205, Anti-climbing mechanism, and § 238.207, Link between coupling mechanism and car body, as proposed. In general, the requirements in this section were developed as an alternative to demonstrating anti-climbing capabilities in § 238.205 and the capability of the link between the coupling mechanism and carbody to resist the loads in current § 238.207. While compliance with both §§ 238.205 and 238.207 requires meeting a set of quasi-static, vertical load cases, the requirements in this section were developed as a dynamic performance standard.
This section contains the requirements for fluid entry inhibition for the skin covering the forward-facing end of a Tier III trainset. FRA received one comment on this section from APTA which agreed with the language of this section, noting that compliance with this section can be demonstrated during a design review of the equipment. As this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, see 81 FR 88006, 88026, and FRA is adopting this section as proposed.
This section contains requirements to ensure the structure of cab ends of Tier III trainsets (and Tier I trainsets designed to alternative crashworthiness standards under appendix G) provides a minimum level of protection for the engineer and other cab occupants, equivalent to the collision post and corner post requirements for Tier I equipment in subpart C. FRA did not receive any comments on these requirements and FRA is adopting this section as proposed. Accordingly, as this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, see 81 FR 88006, 88027.
This section contains requirements to ensure the structure of the non-cab ends of Tier III trainsets (and Tier I trainsets designed to alternative crashworthiness standards under appendix G) provides a minimum level of protection for occupants equivalent to that required for Tier I equipment in subpart C. These requirements help ensure the integrity of the components that make up any non-cab end of a passenger trainset unit. FRA did not receive any comments on these requirements and FRA is adopting this section as proposed. Accordingly, as this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, see 81 FR 88006, 88027.
To demonstrate sufficient roof and side structure integrity, Tier III trainsets (and Tier I trainsets designed to alternative crashworthiness standards under appendix G) must comply with the requirements in § 238.215, “Rollover strength,” and § 238.217, “Side structure.” These Tier I requirements in §§ 238.215 and 238.217 are thereby broadly applicable to both new trainset classifications in this final rule. FRA did not receive any comments on this section and FRA is adopting it as proposed. Accordingly, as this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, see 81 FR 88006, 88029.
This section contains requirements to demonstrate the integrity of truck-to-carbody attachments on a Tier III trainset (or a Tier I trainset designed to
As a separate comment, Alstom requested that FRA make clear this section “supersedes” the requirements contained in § 229.141(a)(5) of this chapter, which applies to MU locomotives built new after April 1, 1956, that are operated in trains having a total empty weight of 600,000 pounds or more. Section 229.141(a)(5) of this chapter provides that the strength of the means of locking the truck to the body shall be at least the equivalent of an ultimate shear value of 250,000 pounds. However, FRA notes that the required truck attachment strength in § 238.717 is intended to be equivalent to an ultimate shear value of 250,000 pounds. Consequently, the requirements of § 238.717 are harmonious with the requirements of § 229.141(a)(5) of this chapter. Nonetheless, in response to Alstom's comment, FRA makes clear that the requirements of § 229.141(a)(5) of this chapter are inapplicable to Tier III and Tier I alternative trainsets subject to § 238.717.
FRA did not receive any other comments on this section and FRA is adopting it as proposed. As this portion of the final rule is identical to the proposed version, the analysis provided in the NPRM is not being repeated here, see 81 FR 88006, 88029-88030.
This section contains the requirements for exterior glazing (
Both APTA and TCRR recommended deleting as unnecessary the requirement in proposed paragraph (a) of this section to conduct a comprehensive analysis identifying and addressing glazing safety issues associated with operating in a Tier III environment as part of the railroad's Safe Operation Plan for Tier III Passenger Equipment. APTA stated that specific requirements for Tier III glazing were adequately defined in the other paragraphs of this section, and were based on the operating environment for Tier I passenger equipment and the protected ROW required by FRA regulations under 49 CFR parts 213 and 236 for the dedicated high-speed portions. APTA also commented that compliance with the other paragraphs of this section will permit Tier III trainsets to be interoperable on the national rail network. Similarly, TCRR believed that compliance with the performance requirements contained in the other paragraphs proposed in this section should be the only regulatory requirements necessary to demonstrate suitability for Tier III trainset glazing and will assure interoperability throughout the national rail network. TCRR added that even if proposed paragraph (a) was intended to ensure that the ROW is adequately protected against potential hazards to the glazing there is no need to specify such a requirement here as other provisions of FRA's regulations adequately cover the topic, citing FRA's requirement for a ROW barrier plan, under 49 CFR 213.361, and the HSR-125 plan, under 49 CFR 236.1007.
In the final rule, FRA has not adopted the requirement proposed in paragraph (a) for railroads to conduct a comprehensive analysis of their systems to identify and address glazing safety issues their systems present for Tier III operations. Moreover, as explained further in the discussion under Discussion of Comments and Conclusions, section IV, neither this section nor any section in the final rule text refers to analyses required under a Tier III Safe Operation Plan. However, this section does require railroads to properly support and document glazing safety determinations, notably for the ballistic-resistance properties of the glazing material and for use of alternative requirements in a non-cab, side-facing window intended to be a breakable emergency window exit, for which specific FRA approval is required. FRA, based on input provided by the ETF, is working towards developing procedures and processes to provide such FRA approval, as discussed under Discussion of Comments and Conclusions, section IV, above. FRA will of course also work with any proposed Tier III operation to ensure that the requirements of this section are properly implemented.
Separately, because FRA has not adopted proposed paragraph (a), the paragraph ordering in this final rule begins with proposed paragraph (b), which is designated paragraph (a). Subsequent paragraphs proposed in the NPRM are designated accordingly in conformance, with the exception of the certification requirements in paragraph (e) in this final rule, discussed below.
In its comments on this section, APTA disagreed with FRA's proposal under paragraph (b)(5) of the NPRM that ballistic penetration resistance be sufficient to protect cab occupants from the risks and hazards identified by the railroad as part of its Tier III Safe Operation Plan, at a minimum meeting the protection requirements in appendix A to part 223 of this chapter. Instead, APTA suggested the regulation should require compliance with the ballistic impact protection requirement in appendix A to part 223, specifically in paragraphs (b)(10)(i) or (11)(i) of that
In its comments, TCRR agreed with APTA and stated it did not see the merits of requiring each railroad to perform a risk assessment to form the basis for any performance requirements for glazing as suggested in proposed § 238.721(b)(5). Instead, TCRR recommended that the regulation include specific ballistic impact requirements that are applicable to glazing on all Tier III trainsets, to assure compatibility and interoperability of Tier III trainsets over the general railroad network. Additionally, TCRR stated that the current 22 caliber bullet requirement should apply to both end-facing and side-face exterior glazing in the cab, as well as in non-cab areas, to assure that both the passengers and crew in a Tier III trainset are afforded the same protection.
FRA notes that ballistic protection for cab glazing was discussed in detail during the RSAC glazing task group meetings, as stated in the NPRM. In particular, during those meetings, labor representatives asserted that ballistic protection from a larger diameter projectile, differing from the size required for Type I glazing by part 223, would enhance the overall safety of the cab occupants. Much discussion was focused on this point, but a review of the available information on the impact characteristics of reasonable ballistic scenarios (projectile size and terminal velocity), and a review of the statistics related to glazing failure due to ballistic impact, proved inconclusive. This is one area where the task group could not agree on a consensus approach. Therefore, the decision on ballistic requirements for cab glazing was referred to FRA.
At this time, FRA does not have sufficient evidence to suggest a particular risk or hazard exists facing all potential Tier III systems to warrant a change from current ballistic requirements in part 223. However, even without such a risk or hazard facing all Tier III systems in common, the circumstances of a specific Tier III operation may warrant additional consideration and protection for that operation. To be consistent with the approach to Tier III safety in this rule, railroad safety elements subject to elements present within a specific Tier III operation need to be addressed in a manner appropriate to that operation, reflecting the level of service, operating environment, operational conditions, etc. Accordingly, while the ballistic penetration resistance requirement in paragraphs (b)(10)(i) and (11)(i) of appendix A to part 223 remains the minimum requirement in this final rule—namely, protection from a 22 caliber long rifle lead bullet of 40 grains in weight impacting at a minimum velocity of 960 feet per second, this final rule allows for the use of a ballistic penetration resistance standard that provides greater protection. Nor would use of a more stringent standard necessarily affect equipment interoperability any more than in any situation where a particular operation uses a standard more stringent than the minimum standard specified in the regulation. Consequently, even though FRA has not adopted the reference to a Tier III Safe Operation Plan in proposed paragraph (b)(5), a Tier III operation is in no way restricted from protecting against only a 22 caliber long-rifle bullet if circumstances known to the railroad warrant additional protection—whether for end-facing glazing in paragraph (a)(5) of this final rule or for side-face glazing in paragraph (b)(2) of this final rule (proposed paragraph (c)(2)).
FRA has continued to examine the appropriateness of the ballistic impact requirement with the ETF, but no consensus within the ETF was reached on this topic. FRA has also engaged in additional research. At the behest of ETF industry members, FRA has subjected representative samples of forward- and side-facing glazing to 22 caliber long rifle and 9 mm ballistic impact tests. The use of a 9 mm bullet for ballistic impact testing reflects the alternative ballistic penetration resistance requirement in 49 CFR 238.421(c)(3)(i) for Tier II equipment ordered prior to May 12, 1999, which FRA believes provides an equivalent level of ballistic protection. However, the results of the testing were not sufficient to confirm whether use of the different caliber bullets results in a different level of test severity or whether the tests are indeed equivalent.
Commenters APTA and TCRR also raised concern over the NPRM's approach to the certification of glazing material in proposed § 238.721(b)(6). As a threshold matter, APTA requested that the rule make clear the glazing manufacturer is responsible for certification of each type of glazing material supplied. APTA then stated that the rule, in turn, require testing to be done either by an independent laboratory or the manufacturer with allowance for FRA to witness the testing. Similarly, TCRR believed that the proposal would create unnecessary confusion regarding glazing certification and instead recommended FRA continue with the current approach to glazing certification in part 223. TCRR stated that the current requirements under appendix A to part 223 have worked very well and provide the railroads and carbuilders assurance that all glazing materials they receive are produced from a lot that has been properly tested. TCRR cautioned that before taking a new approach to glazing certification, discussions are needed involving the glazing manufacturers and possible testing agencies to better understand both how any proposed changes would be addressed and the practical realities and consequences of the proposed changes.
FRA recognizes that the proposed regulatory language created confusion regarding who is ultimately responsible for certifying that the glazing material is compliant with FRA's requirements. As such, the final rule text makes clear that the glazing manufacturer is ultimately responsible for this certification. In the NPRM, FRA had intended to convey that the glazing manufacturer can certify the glazing material based on tests performed by an independent third party (
Finally, consistent with APTA's comments concerning the NPRM's proposal for a Tier III Safe Operation Plan, APTA commented that proposed paragraph (d)(2)'s alternative requirements for non-cab, side-facing exterior window glazing should not reference a Tier III Safe Operation Plan. APTA stated that during the design review process information would be available that is necessary to demonstrate an equivalent level of glazing safety for a side-facing exterior window intended to be breakable and serve as an emergency window exit, and that its proposal for a new § 238.110 would specifically reference this design review requirement to be included in the pre-revenue qualification plan.
As discussed above, this § 238.721 does require railroads to properly support and document glazing safety determinations. Specifically, paragraph (c)(2) of this section requires such support and documentation for use of alternative glazing requirements in a non-cab, side-facing exterior window intended to be a breakable emergency window exit. FRA approval is also required. Nonetheless, as noted above and discussed under proposed subpart J in the Discussion of Comments and Conclusions, section IV, FRA, based on input provided by the ETF, is working towards developing procedures and processes to provide such FRA approval. As always, FRA will work with any proposed Tier III operation to ensure that the requirements of this section are properly implemented.
This section introduces brake system requirements for Tier III passenger trainsets. As articulated in the NPRM, development of these requirements was identified as one of the goals for this first Tier III rulemaking to facilitate planned equipment acquisitions. These requirements represent a balance between maintaining compatibility with existing Tier I equipment and the adoption of service-proven techniques to protect against potential risks encountered with high-speed operations. A concerted effort was made to develop technology-neutral requirements, and the NPRM identified various requirements to be determined by a railroad and included in the railroad's Tier III Safe Operation Plan or ITM Plan.
In response to the comments received, FRA is making changes to this section from the NPRM's proposal, as explained below. Additionally, FRA is making a minor editorial change to reference an ITM “program” rather than ITM “plan.” Otherwise, FRA has adopted the requirements as proposed in the NPRM, and FRA is not repeating the analysis in the NPRM supporting and explaining those provisions remaining the same, see 81 FR 88006, 88032-88034.
In its comment on this section, APTA recommended that the determinations identified in the NPRM to be included in a Tier III Safe Operation Plan be left to the railroad to address at various stages of equipment design reviews. APTA offered in support of this position that certain determinations to be included in a Tier III Safe Operation Plan are already required under other FRA regulations. As discussed earlier, the requirements of this final rule do not reference a Tier III Safe Operation Plan, and this section contains no such references as proposed in the NPRM. However, this section does provide for FRA approval of various determinations made by the railroad, consistent with FRA's closer oversight of high-speed train operations.
Accordingly, paragraph (b) requires the railroad to define the worst-case adhesion conditions under which each Tier III trainset's brake system must stop the passenger trainset from its maximum operating speed within the prevailing signal spacing, as approved by FRA. The paragraph is intended to ensure that the railroad formally establish the worst case-adhesion conditions for use in procuring individual trainsets. Similarly, paragraph (c)(2) requires the railroad to specify the locations onboard its Tier III trainsets where a crewmember can initiate an irretrievable emergency brake application, as approved by FRA.
FRA approval of railroad determinations is required in several provisions under paragraph (d). Paragraph (d)(1) requires the railroad to identify the locations onboard its Tier III trainsets where a mechanism to initiate the passenger brake alarm is installed. Paragraph (d)(4) requires the railroad to define the timeframe in which engineers must acknowledge a passenger brake alarm after the trainsets have safely cleared the boarding platform, for the engineer to retain full control of the trainset, and to define the method used to confirm that the trainsets did in fact safely clear the boarding platform. In addition, paragraph (d)(6) requires the railroad to specify the procedures for engineers to retrieve full service brake application if the timeframe to acknowledge a passenger brake alarm has passed and a brake application has been automatically initiated.
FRA approval of railroad determinations is also required under paragraph (e), which addresses how trainsets without fully functional electric braking are to be safely operated, particularly to ensure thermal-related brake system damage does not occur. Paragraph (e)(1) requires that the railroad specify the allowable stopping distance not to be exceeded in the event of a power loss or failure of the dynamic or regenerative brake. FRA expects the railroad to provide a means for automatically reducing the maximum allowable train speed, based on feedback from the on-board monitoring and diagnostic system specified in § 238.731(n), so the trainset can safely stop using friction braking alone within the allowable stopping distance. Additionally, paragraph (e)(2) requires the railroad to define the operating conditions under which the available friction braking effort alone can safely stop the trainset. For discussion of paragraph (e)(4), please see below.
FRA approval of railroad determinations is required under paragraph (f)'s main reservoir system requirements. Paragraph (f)(1) requires that main reservoirs be designed and tested using a recognized industry standard specified by the railroad and approved by FRA. This paragraph also provides that the railroad shall define the working pressure and rated temperature for main reservoirs in accordance with the designated standard, if different from the pressure and temperature otherwise specified in this paragraph. Further, paragraph (f)(2) requires the railroad to identify a recognized industry standard governing the drilling of steel main reservoirs.
FRA approval is required under paragraph (j)'s brake application/release requirements. Specifically, paragraph (j)(2) requires that the railroad establish the minimum brake cylinder pressure necessary to adjust from minimum service to full service brake application for proper train operation.
FRA approval is required under paragraph (m)'s slide protection and alarm requirements. Paragraph (m)(3) requires the railroad to specify the operational restrictions that apply when the wheel slide protection system fails to function as intended within pre-established, allowable parameters.
As noted above, the railroad determinations specified under paragraphs (b), (c)(2), (d)(1), (d)(4), (d)(6), (e)(1)-(2), (f)(1)-(2), (j)(2), and (m)(3) do not reference a Tier III Safe Operation Plan but do require FRA approval. However, as discussed under Discussion of Comments and Conclusions, section IV, above, FRA
FRA notes that proposed paragraph (l), Leakage, did refer to the Tier III Safe Operation Plan. Paragraph (l) of the final rule contains no such reference. Specifically, the Air Consumption Analysis required under this paragraph shall be developed as part of the railroad's ITM program.
Based on APTA's comments, FRA is taking a somewhat different approach regarding the proposed reference in paragraph (n) to a Tier III Safe Operation Plan. Paragraph (n) requires each Tier III trainset to be equipped with a brake system health monitoring and diagnostic system to automatically assesses the functionality of the brake system for the entire trainset, both before the trainset departs and while it is en route. As proposed, the railroad must document the details of the monitoring system and diagnostic system, and the means for communicating trainset brake system functionality to the engineer. In its comment, APTA recommended that rather than include this information in a Tier III Safe Operation Plan, a railroad should include this information in its ITM program. FRA agrees with and is adopting APTA's recommendation. It accomplishes the goals of this paragraph, and trainset monitoring and diagnostics relate to inspection, testing, and maintenance. It will also provide FRA approval oversight through the ITM program approval process.
In other comments on this section, APTA recommended that FRA include in paragraph (e)(4) a requirement that railroads conduct additional analysis and testing to determine the maximum safe operating speed for various percentages of operative friction brakes.
As proposed, paragraph (e)(4) requires railroads to determine through analysis and testing the maximum speed for safely operating and stopping their Tier III trainsets using the friction brake system alone without causing thermal-related damage to the equipment or infrastructure. APTA recommended the additional analysis and testing to adequately quantify the braking performance for movement of defective equipment. TCRR's comments on the NPRM were in agreement with APTA's on this paragraph. TCRR cautioned that the movement of defective equipment requirements must refer to paragraph (e) of this section and require railroads to conduct appropriate analysis and testing to determine the maximum safe operating speed for various percentages of operative friction brakes. FRA agrees with APTA's and TCRR's comments.
Accordingly, FRA is adopting the recommendation in paragraph (e) to make clear further testing and analysis is required to determine the safe maximum operating speed for various percentages of friction brakes less than 100-percent operative. FRA expects the railroad to include these determination in its ITM program.
FRA also received comments on paragraph (o) of this section from APTA and Alstom. As proposed, this paragraph requires Tier III equipment to be equipped with a means to secure unattended equipment against unintentional movement. Because the securement technique may be technology-specific to a particular trainset, FRA proposed that the procedures and means necessary for securing unattended equipment based on the grade conditions be included in the Tier III Safe Operation Plan, which in turn could be used to help demonstrate the effectiveness of the securement method(s). FRA further proposed to define the term “unattended equipment” to have the same meaning as in § 238.231(h)(4), which provides that unattended equipment is equipment left standing and unmanned in such a manner that a qualified person cannot readily control the brake system of the equipment. FRA intended the cross reference to § 238.231(h)(4) to be limited specifically to the definition of “unattended equipment,” for consistency and to remove any ambiguity as to the meaning of the term, because FRA has already defined the term in this part 238.
In APTA's comment on paragraph (o), APTA objected to the cross reference to § 238.231(h)(4). APTA raised concern that its inclusion in the regulatory text could sweep in the Tier I requirement that Tier III trainsets be equipped with a parking or handbrake. APTA stated that was not part of the consensus agreement on the proposed rule text presented to FRA in which wheel chocks could be used to secure unattended equipment under certain circumstances. Nonetheless, APTA did agree to FRA's use of the modifier “unattended” in this paragraph to describe the type of equipment to be secured, noting that technical specifications normally state that the equipment can be left for an indefinite time period, which corresponds to unattended. Further, consistent with its other comments, APTA stated that this paragraph's reference to a Tier III Safe Operation Plan was unnecessary because the physical means for securing the trainset will be addressed during the design review and the procedures for securing the trainset will be defined in the railroad's operating rules. In its comments on this paragraph, Alstom similarly objected to the addition of the cross reference to § 238.231(h)(4), stating it was not consistent with the consensus agreement on the proposed regulatory text to permit the use of wheel chocks to secure unattended equipment under certain conditions.
FRA makes clear that the reference to § 238.231(h)(4) was not intended to mean that § 238.231(h)(4)'s requirements for parking or hand brakes apply to this § 238.731(o). As explained above, the reference was intended to capture only the definition of “unattended” and not sweep into this paragraph requirements concerning parking or hand brakes. However, to guard against ambiguity and for consistent application of the term, in this paragraph of the final rule FRA has incorporated § 238.231(h)(4)'s definition of “unattended.” Further, FRA agrees with APTA's recommendation not to include the reference to the Tier III Safe Operation Plan, and it is not included in this paragraph. Yet, FRA believes it necessary to approve the procedures and means necessary for securing unattended equipment on the grade conditions identified, and this paragraph requires such approval. Inclusion in the railroad's operating rules alone is not sufficient as FRA does not approve railroad operating rules under part 217 of this chapter. Further, issues surrounding how equipment will be properly secured while unattended are operational in nature and thus capturing those issues in a design review is not sufficient. In the interim, FRA will of course work with any proposed Tier III operation to ensure that the specific procedures and means of securing unattended equipment as required under this paragraph are properly addressed and documented. In this regard, and as FRA made clear in the NPRM, certain brake system requirements are imposed by Federal statute, 49 U.S.C. ch. 203. Specifically, 49 U.S.C. 20302(a)(1)(B) requires “efficient handbrakes.” Railroads must
This section contains requirements for interior fixture attachment strength for Tier III trainsets. This section relates to strength requirements for seats and luggage racks in §§ 238.735 and 238.737, respectively, to help prevent and mitigate hazards associated with occupants impacting interior objects and surfaces during a collision.
In its comments on this section and §§ 238.735 and 238.737, APTA recommended that FRA not reference the attachment strength requirements in § 238.233, Interior fittings and surface, for Tier I equipment. The NPRM proposed to allow compliance with those strength requirements, specifically, 8g longitudinal, 4g vertical, and 4g lateral, as an option instead of using Railway Group Standard GM/RT2100 and 5g longitudinal, 3g vertical, and 3g lateral attachment strength requirements. As discussed in the ETF's May 2017 meeting, APTA believes the 5g, 3g, and 3g attachment strength requirements are sufficient to serve as the minimum safety requirements and are consistent with the dynamic collision requirements in § 238.705(b)(2), which provides that, if GM/RT2100 is used, the average deceleration experienced by each vehicle in a Tier III trainset may not exceed 5g during any 100-ms period. APTA added that, in developing the NPRM, the ETF consensus for use of the strength requirements in § 238.233 was for Tier I alternative trainsets, as reflected in proposed paragraphs (i) though (k) of appendix G to this part. According to APTA, the ETF's consensus was for Tier III trainsets to comply with the relevant strength requirements in Railway Group Standard GM/RT2100, Issue Four, with the additional requirement to apply a 3g vertical load rather than a 1g vertical load. As noted above, APTA contends that the 5g, 3g, and 3g attachment strength requirements are more harmonious with the Tier III requirements because they are tied to a maximum crash pulse requirement, unlike the 8g, 4g, and 4g requirements in § 238.223.
FRA is not adopting APTA's recommendation. FRA always intended to provide the two options for compliance, as discussed in the NPRM. The first option, in paragraph (a)(1) of this section, allows compliance with the requirements of § 238.233 and APTA PR-CS-S-006-98, Rev. 1, “Standard for Attachment Strength of Interior Fittings for Passenger Railroad Equipment,” Authorized September 2005. The second option, in paragraph (a)(2) of this section, allows compliance with section 6.1.4, “Security of furniture, equipment and features,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, provided: The test conditions of § 238.705(b)(2) are met; interior fixture attachment strength is based on a minimum of 5g longitudinal, 3g vertical, and 3g lateral acceleration resistance; and use of the GM/RT standard is carried out in accordance with any conditions identified by the railroad, as approved by FRA. (This last condition has been modified from the NPRM consistent with FRA's discussion regarding proposed subpart J, under Discussion of Comments and Conclusions, section IV, above.)
The acceleration-based performance standards in § 238.233 and APTA standard PR-CS-S-006-98, Rev. 1, were established after years of industry practice designing interior fittings to withstand the forces due to accelerations of 6g longitudinally, 3g vertically, and 3g laterally, which FRA specifically found to be inadequate to protect against occupant injury (see 64 FR 25540, 25614).
As noted above, paragraph (a)(2)(iii) provides for use of the GM/RT standard in accordance with any conditions identified by the railroad and approved by FRA. According to APTA, in its comments on this NPRM, the proposed reference to a Tier III Safe Operation plan in this paragraph was unnecessary because the criteria for the acceleration pulse in the Tier III collision scenario must be met as provided in § 238.705(b)(2). Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the conditions involving the option to comply with paragraph (a)(2) rather than paragraph (a)(1) is necessary. FRA seeks to ensure that compliance with paragraph (a)(2) provides an equivalent level of safety to the existing requirements in § 238.233 and the APTA standard, and that no acceleration-based load higher than 5g is experienced. Nonetheless, as noted above and discussed under proposed subpart J in the Discussion of Comments and Conclusions, section IV, FRA, based on input provided by the ETF, is working towards developing procedures and processes to provide such FRA approval. As always, FRA will work with any proposed Tier III operation to ensure that the requirements of this section are properly implemented. Because FRA has otherwise adopted the substantive requirements of this section as proposed in the NPRM, FRA is not repeating the full analysis in the NPRM supporting and explaining the requirements of this section, see 81 FR 88006, 88034-88036.
FRA does note it is incorporating by reference APTA PR-CS-S-006-98, Rev. 1 (previously designated as SS-C&S-006), “Standard for Attachment Strength of Interior Fittings for Passenger Railroad Equipment,” Authorized September 2005, in paragraph (a)(1) of this section and in paragraph (i) of appendix G to this part; and section 6.1.4, “Security of furniture, equipment and features,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards
APTA PR-CS-S-006-98 addresses fittings used in commuter and intercity railcar and locomotive cab interiors. It specifies the minimum strength and attachment strength for interior sub-systems, including overhead luggage racks, stanchions and handholds, windscreen and partitions, food service equipment, and miscellaneous interior fittings. This standard also contains recommendations for design requirements and design practices for such interior sub-systems. APTA PR-CS-S-006-98 is available to all interested parties online at
Section 6.1.4 of GM/RT2100 contains requirements for securement of furniture, on-board equipment, and other trainset features to help mitigate against injuries to passengers and crew from secondary impacts within the occupied volume. GM/RT2100 is available to all interested parties online at
This section contains the seat strength requirements for Tier III trainsets and relates to the strength requirements for interior fixtures and luggage racks in §§ 238.733 and 238.737, respectively, as noted above. APTA and Alstom both commented on this section. Specifically, APTA commented on the proposed passenger seating requirements in paragraph (a) based on the same premise as its comment on § 238.733(a), as discussed above. APTA recommended that the option in proposed paragraph (a)(1) to comply with § 238.233 and APTA standard PR-CS-S-006-98 not be included. Instead, APTA suggested that the sole option to demonstrate compliance would be based on section 6.2, “Seats for passengers, personnel, or train crew,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, under the same acceleration resistance conditions APTA recommended for § 238.733(a)(2)(ii). As the underlying issue APTA raises applies equally for both sections, FRA is not repeating the full discussion here. For the reasons discussed under § 238.733(a), above, FRA is not adopting APTA's recommendation and is therefore retaining both compliance options under paragraph (a).
Similarly, APTA also commented that the proposed reference to a Tier III Safe Operation Plan under paragraph (a)(2)(iii) was unnecessary because the criteria for the acceleration pulse in the Tier III collision scenario must be met as provided in § 238.705(b)(2). Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the conditions involving the option to comply with paragraph (a)(2) rather than paragraph (a)(1) is necessary for safety. Accordingly, paragraph (a)(2)(iii) provides for such FRA approval rather than refer to a Tier III Safe Operation Plan. Please see § 238.733(a)(2)(iii), above, and proposed subpart J, under Discussion of Comments and Conclusions, section IV, above, for a fuller discussion of the comment and this requirement. FRA notes that Alstom, in commenting on this section in the NPRM, stated that paragraphs (a)(1) and (2) are not fully equivalent in terms of scope of application. Although the requirements of the paragraph are different, FRA has always intended these requirements to provide an equivalent level of safety, given the different circumstances surrounding their application. FRA will work with any proposed Tier III operation to ensure that the requirements of paragraph (a) are properly implemented.
FRA notes it is incorporating by reference APTA PR-CS-S-016-99, Rev. 2, “Standard for Passenger Seats in Passenger Rail Cars,” Authorized October 2010, in paragraph (a)(1) of this section and in paragraph (j) of appendix G to this part; and section 6.2, “Seats for passengers, personnel, or train crew,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, in paragraph (a)(2) of this section.
APTA PR-CS-S-016-99 addresses row-to-row passenger seating in commuter and intercity railcars. APTA PR-CS-S-016-99 is available to all interested parties online at
Section 6.2 of GM/RT2100 contains design specifications and tolerances for passenger and crew seating. GM/RT2100 is available to all interested parties online at
Paragraph (b) contains requirements for the crashworthiness of seats provided for an employee in the cab of a Tier III trainset. Unlike passenger seating, FRA proposed in paragraph (b)(1) that cab seats must comply with the requirements in § 238.233(e), (f), and (g), and the performance, design, and test criteria of AAR-RP-5104, “Locomotive Cab Seats,” April 2008, which FRA proposed to incorporate by reference in paragraph (b)(2) and paragraph (k)(2) of appendix G to this part. Although not submitted as a comment, AAR made FRA aware that it is archiving AAR-RP-5104. FRA therefore requested assistance from the ETF during the May 2017 meeting, and a small work group was convened to address the problem. The group recommended back to the ETF to excerpt language from section 3 of AAR-RP-5104 that prescribes minimum loading requirements for the seat itself, and place that language into the final rule. When the recommendation was presented to the ETF, industry members were adamantly opposed, stating that the requirements in section 3 of AAR-RP-5104 were durability standards and not safety-related. In fact, APTA, in a comment submitted after the close of the comment period, recommended deleting the reference to AAR-RP-5104 and its proposed paragraph (b)(2) entirely, stating that proposed paragraph (b)(1) adequately defines the requirements for Tier III cab seating.
Resultantly, FRA has not adopted proposed paragraph (b)(2) and FRA is not including a requirement to comply with any portion of AAR-RP-5104. In turn, proposed paragraph (b)(1) is designated as (b) of this section. As proposed, paragraph (b) requires compliance with § 238.233(e), (f), and (g). However, with respect to the acceleration-based loading requirements specified in § 238.233(f), FRA makes clear in paragraph (b) that it expects for Tier III (and Tier I alternative) trainsets the cab seat to remain attached to the trainset structure when subjected to an 8g longitudinal acceleration-based load applied to the combined mass of the seat and a 95th-percentile male. FRA recognizes that this constitutes the more severe scenario to be tested. It is more severe than an 8g acceleration-based load applied solely to the mass of the cab seat. It is also more severe than testing under AAR-RP-5104, which provides for testing the seat with 250 pounds impacting the seatback at 3g. FRA concludes that if the cab seat can remain attached when subjected to an 8g acceleration-based load applied to the combined mass of the cab seat and
This section contains requirements to constrain the longitudinal and lateral motion of articles stowed in luggage racks, and relates to the strength requirements for interior fixtures and seats in §§ 238.733 and 238.735, respectively, as noted above.
FRA received no comments on paragraph (a) and has adopted it as proposed. Please see the discussion of paragraph (a) in the NPRM (81 FR 88006, 88036). Nonetheless, APTA commented on the proposed luggage rack strength requirements in paragraph (b) based on the same premise as its comments on §§ 238.733(a) and 238.735(a), as discussed above. APTA recommended that the option in proposed paragraph (b)(1) to comply with § 238.233 not be included. Instead, APTA suggested that the sole option to demonstrate compliance would be based on section 6.8, “Luggage stowage,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, specifically under the same acceleration resistance conditions APTA recommended for §§ 238.733(a)(2)(ii) and 238.735(a)(2)(ii). As the underlying issue APTA raises applies equally here, FRA is not repeating the full discussion. For the reasons discussed under §§ 238.733(a) and 238.735(a), above, FRA is not adopting APTA's recommendation and is therefore retaining both compliance options under paragraph (b).
Similarly, APTA also commented that the proposed reference to a Tier III Safe Operation plan under paragraph (b)(2)(iii) was unnecessary because the criteria for the acceleration pulse in the Tier III collision scenario must be met as provided in § 238.705(b)(2). Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the conditions involving the option to comply with paragraph (b)(2) is necessary for safety. Accordingly, paragraph (b)(2)(iii) provides for such FRA approval rather than refer to a Tier III Safe Operation Plan. Please see §§ 238.733(a)(2)(iii) and 238.735(a)(2)(iii), above, and proposed subpart J, under Discussion of Comments and Conclusions, section IV, above, for a fuller discussion of the comment and this requirement. Further, FRA expects that in demonstrating compliance with this requirement, the railroad must address how the mass of the luggage was considered when applied to the loading conditions defined in paragraph (b)(2)(ii).
FRA notes it is incorporating by reference section 6.8, “Luggage stowage,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, in paragraph (b)(2) of this section. Section 6.8 contains requirements for luggage stowage, either on the floor or in overhead racks. As noted above, GM/RT2100 is available to all interested parties online at
This section establishes requirements for emergency egress and rescue access through windows or alternative openings in passenger cars as part of an emergency window egress and rescue access plan for Tier III trainsets. The ETF recognized that any regulation would need to allow multiple approaches to facilitate the adoption of service-proven, high-speed trainset technology. Specifically, the methods used to manufacture high-speed trainsets are often governed by consideration of the effects of aerodynamics and noise; together with the potential need to pressurize occupied compartments, these can affect the way window glazing is installed and mounted in some trainset designs. Therefore, the ETF recommended performance-oriented requirements to allow necessary flexibility where an appropriate safety case can be made.
FRA did not receive any comments on the requirements of this section as described in the NPRM. However, FRA is clarifying in paragraph (b) the reference to a Tier III ITM program, rather than to a Tier III ITM plan, as proposed in the NPRM. Otherwise, FRA is adopting this section as proposed. Accordingly, as this section of the final rule is virtually identical to the proposed version, the full analysis and discussion of this section provided in the NPRM is not repeated here (see 81 FR 88006, 88019-88020).
This section contains the emergency lighting requirements for Tier III trainsets. As proposed, paragraph (a) provides that the requirements are the same as the emergency lighting requirements in § 238.115, except for those specific to emergency lighting back-up power systems in paragraph (b). Paragraph (b), in turn, permits compliance with alternative, crash loading resistance requirements, to demonstrate the capability of back-up power systems to function after the initial shock caused by a collision or derailment.
APTA commented on the proposed back-up power requirements in paragraph (b) based on the same premise as its comments on §§ 238.733, 238. 735, and 238.737, above. APTA recommended that the option in proposed paragraph (b)(1) of this section to comply with the acceleration resistance requirements in § 238.115 not be included. Instead, APTA suggested that the sole option to demonstrate compliance be based on section 6.1.4, “Security of furniture, equipment and features,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, under the same conditions APTA recommended for §§ 238.733(a)(2)(ii), 238.735(a)(2)(ii), and 238.737(b)(2)(ii). As the underlying issue APTA raises generally applies equally for all sections, FRA is not repeating the full discussion here, and generally for the reasons discussed under these sections, above, FRA is not adopting APTA's recommendation. This paragraph retains both compliance options. Further, FRA makes clear that § 238.115 is contained in subpart B of part 238, and the scope of subpart B applies to all passenger equipment, regardless of operating speed. Consequently, FRA could have included specific back-up power requirements for Tier III trainsets in subpart B's § 238.115 but chose instead to place them here in subpart H for ease of reference.
FRA notes § 238.743(b)(1) in the final rule references the acceleration-based loads in § 238.115(a)(4)(ii), which are 8g, longitudinally, and 4g, laterally and vertically. In the NPRM, FRA inadvertently referenced § 238.115(b)(4)(ii), which was clear error because there is no such paragraph in § 238.115. FRA has corrected the reference.
Paragraph (b)(2) provides the second option for demonstrating the crashworthiness of emergency lighting back-up power systems. A railroad may use the loading requirements defined in section 6.1.4, “Security of furniture, equipment and features,” of GM/RT2100, under specified conditions. In the NPRM, FRA proposed that back-up power systems have an attachment strength sufficient to resist minimum loads of 5g longitudinally, 3g laterally, and 3g vertically. However, FRA's
Consistent with its comments on similar proposed provisions, APTA also commented that the proposed reference to a Tier III Safe Operation plan under paragraph (b)(2)(iii) was unnecessary because the criteria for the acceleration pulse in the Tier III collision scenario must be met as provided in § 238.705(b)(2). Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the conditions involving the option to comply with paragraph (b)(2) is necessary for safety. Accordingly, paragraph (b)(2)(iii) provides for such FRA approval rather than refer to a Tier III Safe Operation Plan. Please see §§ 238.733(a)(2)(iii), 238.735(a)(2)(iii), and 238.737(b)(2)(iii), above, and proposed subpart J, under Discussion of Comments and Conclusions, section IV, above, for a fuller discussion of the comment and this requirement.
FRA notes it is incorporating by reference section 6.1.4, “Security of furniture, equipment and features,” of Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, into paragraph (b)(2) of this section. Section 6.1.4 contains requirements for the securement of furniture, equipment, and other features. As noted above, GM/RT2100 is available to all interested parties online at
This section contains requirements for alerters on Tier III passenger trainsets. In commenting on this section in the NPRM, APTA recommended removal of the proposed references to a Tier III Safe Operation Plan, consistent with its comments on proposed subpart J. As discussed below, this section does not include references to a Tier III Safe Operation Plan but does ensure FRA oversight. Otherwise, FRA has adopted this section as proposed and has therefore not repeated the full analysis of this section in the NPRM (see 81 FR 88006, 88037-88038).
As proposed in the NPRM, paragraph (b) would have required the railroad to determine the appropriate time period within which the engineer must acknowledge the alerter and include that determination in the railroad's Tier III Safe Operation Plan for review and approval by FRA. In its comment, APTA stated that inclusion in the Safe Operation Plan was unnecessary because the basis for setting the alerter control timing would be addressed during the design review process and FRA could review the railroad's alerter timing determination then. Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the periodicity of the alerter alarm, as well as the time period within which the engineer must react to that alarm, is necessary for safety. Nonetheless, as noted above and discussed under proposed subpart J in the Discussion of Comments and Conclusions, section IV, FRA, based on input provided by the ETF, is working towards developing procedures and processes to provide such FRA approval. As always, FRA will work with any proposed Tier III operation to ensure that the requirements of this paragraph and this section are properly implemented. In this regard, FRA makes clear it intends alerter control timing to be set by the railroad taking into consideration maximum train speed and capabilities of the signal system.
As proposed in the NPRM, paragraph (d) would have required specifying in the railroad's Tier III Safe Operation Plan the necessary actions of the engineer responding to a full-service brake application initiated after the engineer failed to properly acknowledge the alerter. APTA, in its comment, stated that this was also unnecessary as these required actions would be contained in the railroad's operating rules and the “engineer's training program.” Again, although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval is necessary, namely, of the actions specified for the engineer to recover the full-service brake application. Inclusion in the railroad's operating rules is not sufficient as FRA does not approve railroad operating rules under part 217 of this chapter. Additionally, these procedures are not intended to be specified in the locomotive engineer certification program required under part 240 of this chapter. Thus, simple inclusion in a training program does not provide the necessary review and approval mechanism FRA desires. Nonetheless, as FRA, based on input provided by the ETF, is working towards developing specific procedures and processes for obtaining such approval, FRA will work with any proposed Tier III operation to ensure the requirements of this paragraph are properly implemented.
Finally, as proposed in the NPRM, paragraph (e) would have required a railroad electing to use alternate technology to an alerter, to provide the function(s) of an alerter, to conduct a hazard analysis as part of its Tier III Safe Operation Plan. The intent behind the analysis was to demonstrate that the alternate alerter technology provided an equivalent level of safety. APTA, in its comment, stated that inclusion in a Tier III Safe Operation Plan was unnecessary because the demonstration of an equivalent level of safety would be performed during the design review process, with the results of the safety analysis being used to support the determination. Although FRA agrees not to include a reference to a Tier III Safe Operation Plan, FRA continues to believe that FRA approval of the equivalency determination is necessary for safety, and FRA will work with any proposed Tier III operation to ensure that the requirements of this paragraph are properly implemented, as discussed above. In this regard, FRA has clarified that the required analysis is not limited to a “hazard analysis,” as proposed in the NPRM, but provides for a broader evaluation.
This section introduces requirements for sanders on Tier III trainsets. In their comments on the NPRM, APTA and TCRR objected to inclusion of this section in the final rule. According to APTA and TCRR, in the international market, sanders are not considered a safety critical component but rather only performance enhancing and not critical to the safe operation of the trainset. Both APTA and TCRR further stated that if a railroad were to determine that sanders were critical to the safe operation of the trainset, then the sanders would be defined and addressed in the railroad's ITM program; under these circumstances, a trainset with defective sanders could move only under the regulatory provisions dealing with movement of defective equipment. Thus, APTA and TCRR believed that providing specific requirements for sanders in this section is unnecessary.
FRA disagrees with this recommendation. As explained in the NPRM, this section does not require Tier III trainsets to be equipped with sanders; this section applies only if the railroad determines sanders are a required trainset component. Some railroads may determine that sanders
The final rule includes an amended schedule of civil penalties under appendix A to this part. Specifically, the schedule includes civil penalty amounts for violations of the requirements of subpart H of this part. Because the penalty schedule is a statement of policy, notice and comment was not required prior to its revision.
FRA is revising this appendix to clarify the application of the floor fire test in the table of “Test Procedures and Performance Criteria for the Flammability and Smoke Emission Characteristics of Materials Used in Passenger Cars and Locomotive Cabs” in paragraph (c) to Tier III passenger equipment. FRA received no comments on this clarification and has adopted it as proposed. As this portion of the final rule is identical to the proposed version, FRA is not repeating the analysis provided in the NPRM (see 81 FR 88006, 88039).
FRA is revising this appendix so that it applies to Tier III passenger equipment. FRA received no comments on this change and has adopted it as proposed. As this portion of the final rule is identical to the proposed version, FRA is not repeating the analysis of this change provided in the NPRM (see 81 FR 88006, 88039).
As proposed, FRA is adding appendix G to this part to provide alternative crashworthiness and occupant protection performance requirements for Tier I passenger trainsets instead of the conventional requirements of §§ 238.203, 238.205, 238.207, 238.209(a), 238.211, 238.213, and 238.219 in subpart C of this part. The technical contents of appendix G remain materially unchanged from those developed for the original Technical Criteria and Procedures Report.
FRA intends for these alternative requirements to be applied to a Tier I trainset as a whole. Accordingly, compliance must be demonstrated either through application of the conventional requirements in subpart C, or through application of the requirements in this appendix G, not a combination of both. They also apply in addition to the requirements of §§ 238.209(b), 238.215, 238.217, and 238.233, and APTA standards for occupant protection, as specified in this appendix. Although the appendix may refer to specific units of rail equipment in a trainset, the alternative requirements in this appendix apply only to a Tier I trainset as a whole, as noted above. Further, use of this appendix to demonstrate alternative crashworthiness and occupant protection performance for Tier I passenger trainsets is subject to FRA review and approval under § 238.201.
In general, where alternatives to the conventional Tier I requirements are given in this appendix G, those requirements are also identified in the Tier III requirements in subpart H—Specific Requirements for Tier III Passenger Equipment. See the discussion in the section-by-section analysis for subpart H, which applies to Tier I trainsets seeking qualification under this appendix. As FRA did not receive any comments on this appendix, FRA is not repeating the full analysis of this appendix provided in the NPRM, see 81 FR 88006, 88039-88040.
However, FRA does highlight that in paragraph (i) of this appendix, FRA is incorporating by reference APTA standard PR-CS-S-034-99, Rev. 2, “Standard for the Design and Construction of Passenger Railroad Rolling Stock,” Authorized June 2006, for interior fixtures. The standard is intended to address forces applied to the carbody and truck structures during collisions, derailments, and other accident conditions. APTA PR-CS-S-034-99 is available to all interested parties online at
Further, in paragraph (j) of this appendix, FRA is incorporating by reference APTA standard PR-CS-S-016-99, Rev. 2, “Standard for Passenger Seats in Passenger Rail Cars,” Authorized October 2010, with the exception of Section 6 of the standard, which relates to the durability testing of seats. FRA considers the durability testing of seats to be beyond the scope of this final rule for the same reasons discussed under § 238.735, above.
FRA is adding this appendix to part 238 to formally provide input data and a geometrical depiction necessary to create a computer model of the rigid locomotive design in § 238.705(a)(4) for use in evaluating the occupied volume integrity of a Tier III trainset (and a Tier I alternative passenger trainset under appendix G) in a dynamic collision scenario. Section 238.705(a) outlines the required conditions for performing a dynamic collision scenario involving an initially-moving trainset impacting an initially-standing train having the rigid locomotive leading its consist. As explained in § 238.705(a)(4), the initially-standing train is made up of a rigid locomotive and five identical passenger coaches having the following characteristics: The locomotive weighs 260,000 pounds and each coach weighs 95,000 pounds; the locomotive and each coach crush in response to applied force as specified in Table 1 to § 238.705; and the locomotive has a geometric design as depicted in Figure 1 to this appendix H.
This appendix is intended to establish a consistent definition for locomotive geometry for use in conducting dynamic computer simulations. The input data, in the form of an input file, contains the geometry for approximately the first 12 feet of the rigid locomotive design. Because this input file is for a half-symmetric model, a locomotive mass corresponding to 130,000 pounds of weight is provided for modeling purposes—half the 260,000 pounds of weight specified for the locomotive in § 238.705(a)(4). Figure 1 to this appendix provides two views of the locomotive's geometric depiction. The input data is contained in Appendix C to FRA's Technical Criteria and Procedures Report, available at
This final rule is an economically significant regulatory action within the meaning of Executive Order 12866 and DOT policies and procedures.
FRA has prepared and placed in the docket a Regulatory Impact Analysis (RIA) addressing the economic impacts of this final rule. The RIA estimates the costs of this final rule that are likely to be incurred over a 30-year period. FRA estimated the costs of this final rule using discount rates of 3 and 7 percent, respectively. For the 30-year period analyzed, the present value of the estimated high-range quantified net cost savings for this final rule is $837.8 million when discounted at 3 percent and $541.9 million when discounted at 7 percent. Annualized net cost savings total approximately $42.7 million when discounted at 3 percent and $43.7 million when discounted at 7 percent.
This final rule addresses several limitations in the Code of Federal Regulations pertaining to passenger equipment. Prior to publication of this final rule, the PESS in 49 CFR part 238 did not comprehensively address safety requirements for passenger rail equipment at speeds above 150 mph. Further, the regulatory framework established Tier I safety compliance through equipment requirements that were more design-based, and therefore limited the application of contemporary design techniques and innovative technology.
This final rule amends FRA's PESS and adds a new equipment tier (Tier III) to facilitate the safe implementation of high-speed rail at speeds up to 220 mph. The final rule also establishes alternative crashworthiness performance standards to qualify passenger rail equipment for Tier I operations (Tier I alternative). In addition, FRA is increasing the maximum allowable speed for Tier II operations from 150 mph to 160 mph, making it consistent with prior changes in 49 CFR parts 213 and 238 for Vehicle/Track Interaction (VTI) Safety Standards.
There are several HSR projects in development, such as Amtrak's next-generation Acela, Texas High-Speed Rail, and California's high-speed rail project, which are all expected to benefit from implementation of the rule. Additionally, FRA believes that other HSR operations may be initiated due to the publication of this final rule. The costs, cost savings, and benefits associated with the Tier III requirements of this rule were developed looking at all possible operations in the United States. FRA researched HSR projects that were most viable, focusing on all publicly available business models for HSR projects. FRA developed an economic analysis that could be applied to any individual Tier III operation in the United States, including Amtrak's next-generation Acela. The main costs savings result from minimizing the costs of right-of-way acquisition, especially in high population urban areas, such as New York, Washington, Miami, and other large metropolitan areas. The provisions of the final rule's Tier III passenger equipment safety standards allow the service to use existing rights-of-way, permitting the use of track shared with other rail service (
FRA estimates that between $227.7 million and $523.3 million (when discounted at a 7-percent rate) or between $351.3 million and $808.8 million (when discounted at a 3-percent rate) in quantifiable costs will be borne by the industry over a future 30-year period in availing itself of the rule's new regulatory framework. Note that industry will only incur these costs if it chooses to test to demonstrate compliance with either the Tier I alternative, or decides to implement Tier III operations. The added alternative Tier I standards provide an option for railroads to use different types or designs of passenger equipment in Tier I service and will not impose any cost on existing rolling stock or new equipment qualifying under existing regulations. The new Tier III requirements will not impose any cost on existing rolling stock or new equipment qualifying under existing regulations (existing passenger rolling stock is Tier I and II; there is no Tier III rolling stock in operation in the U.S.).
This final rule
The U.S. passenger rail industry will experience cost savings from this regulatory action because it permits manufacturers to adapt existing designs of rolling stock to meet the new standards and will allow operators to take advantage of a wider variety of trainset designs. Further, the rule will allow Tier I and Tier III operations to use service-proven platforms with the latest technology available. These cost savings will be achieved by adapting technology that exists on the international market to meet FRA's safety requirements and ensuring that all equipment suppliers comply with the same safety standards.
Table 2 provides the estimated industry equipment and infrastructure cost savings and their discounted values at the 3- and 7-percent levels, respectively. High-range cost savings represent cost savings at a high funding level with a 25-percent multiplier to adjust for the confidence level of an HSR system becoming operational. Low-range cost savings represent cost savings at a low funding level with a 10-percent multiplier to adjust for the confidence level of an HSR system becoming operational. For a more detailed description of the low- and high-range cost savings, please refer to the RIA.
Table 3 below displays the net cost savings of this final rule, categorized by either Tier I alternative or Tier III costs and cost savings. Discounted net regulatory cost savings will be between $438.8 million (low range) and $837.8 million (high range) at the 3-percent level, and between $284.8 million (low range) and $541.9 million (high range) at the 7-percent level. Annualized net regulatory cost savings are between $22.4 million and $42.7 million when discounted at 3 percent and between $22.9 million and $43.7 million when discounted at 7 percent.
This final rule is considered an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in the RIA.
The Regulatory Flexibility Act (5 U.S.C. 601
Prior to this final rule, the Passenger Equipment Safety Standards in part 238 did not comprehensively address safety requirements for passenger rail equipment at speeds above 150 mph. Further, the former regulatory framework generally set Tier I safety compliance through equipment design requirements, which limited the application of new technology. This final rule changes the passenger rail equipment safety regulatory framework by introducing a new tier of equipment safety standards (Tier III) and also establishes more performance-based crashworthiness and occupant protection requirements in the alternative to those specified for Tier I equipment. Additionally, the final rule increases the maximum allowable speed for Tier II equipment to make it consistent the corresponding speed range in FRA's Track Safety Standards for the track over which the equipment operates. This Final Regulatory Flexibility Analysis is presented to comply with Executive Order 13272 and with the Regulatory Flexibility Act as part of the rulemaking process required by law.
FRA initiated the rulemaking using recommendations made by FRA's RSAC. In general, the rulemaking amends 49 CFR part 238, to reflect new or modified safety requirements for Tier I and Tier III equipment, and to increase the authorized speed limit for Tier II equipment.
The “universe” of the entities under consideration includes only those small entities that can reasonably be expected to be directly affected by the provisions of this final rule. For the rule, there is only one type of small entity that will be affected: Small passenger railroads. “Small entity” is defined in 5 U.S.C. 601(3) as having the same meaning as “small business concern” under section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated, and is not dominant in its field of operation. Under 5 U.S.C. 601(5) “small entities” is defined as governments of cities, counties, towns, townships, villages, school districts, or special districts with populations less than 50,000.
The U.S. Small Business Administration (SBA) stipulates “size standards” for small entities. It provides that industry sectors relevant for the rulemaking must not exceed the limits listed below (and still classify as a “small entity”):
• 1,500 employees for railroad rolling stock manufacturing.
• 1,500 employees for line haul operating railroads.
• 1,250 employees for motor and generator manufacturing.
• 1,250 employees for switchgear and switchboard apparatus manufacturing.
Federal agencies may adopt their own size standards for small entities in consultation with SBA, and in conjunction with public comment. Under the authority provided to it by SBA, FRA published a final policy, which formally establishes small entities as railroads that meet the line haulage revenue requirements of a Class III railroad.
For purposes of this analysis, there are only two intercity passenger railroads, Amtrak and the Alaska Railroad. Neither is considered a small entity. Amtrak is a Class I railroad and the Alaska Railroad is a Class II railroad. The Alaska Railroad is owned by the State of Alaska, which has a population well in excess of 50,000. There are currently 30 commuter or other short-haul passenger railroad operations in the U.S., most of which are part of larger transportation organizations that receive Federal funds and serve major metropolitan areas with populations greater than 50,000. However, one of these railroads does not fall in this category and is considered a small entity: The Hawkeye Express. The Hawkeye Express provides service to Iowa City, Iowa, and is owned by a Class III railroad, a small entity. FRA notes that it has not analyzed the Saratoga & North Creek Railway as a small entity under this final rule. Because of operational changes subsequent to the NPRM's publication, FRA considers the Saratoga & North Creek Railway a tourist railroad, not subject to this rule.
It is important to note that the small railroad being considered in this analysis uses passenger rolling stock that is different from the equipment covered by the rulemaking. Further, the Hawkeye Express would be able to find their current type of train equipment in the market if they decide to acquire new rolling stock over the next 30 years. This final rule does not increase costs for this small passenger railroad. FRA expects the cost to acquire passenger rail equipment will drop as a result of the rulemaking. There will be more variety in trainset models available for passenger operations and options in companies supplying equipment in the U.S. market. Additionally, the railroad may enjoy lower prices as the U.S. passenger rail market is enlarged as a result of the rulemaking, enhancing economies of scale and increasing predictability for equipment orders.
The passenger rail and urban rapid transit equipment manufacturing sector in the United States has a fairly small number of firms with no more than 15 Original Equipment Manufacturers (OEM) and a few hundred component and subcomponent suppliers.
• NAICS code 336510, Railroad rolling stock manufacturing, 159 firms in the industry, and 137 firms with less than 500 employees.
• NAICS code 335312, Motor and generator manufacturing, 428 firms in the industry, and 384 firms with less than 500 employees.
The main impact of the rule affecting these industries is the qualification costs for Tier I alternative and Tier III trainsets. FRA worked with the industry to develop new safety criteria to evaluate passenger equipment designed to standards differing from those historically used for procurements in the U.S. As noted in the RIA, companies supplying new trainsets covered by the rulemaking will be required to submit test and analysis results to demonstrate compliance with these new safety standards. However, in the case of rolling stock manufacturing, this cost will only be incurred by the OEM when submitting a qualification package, which would include details regarding the performance of the trainset model under the required tests and analyses. Therefore, small and very small firms supplying OEMs are not expected to be required to submit that information. Small firms could be expected to benefit from existing requirements for minimum domestic content as more trainsets are purchased by U.S. railroad operators. Small businesses have the opportunity to supply OEMs with domestic inputs and to partner with larger firms to allow small domestic producers to meet the needs of the market being created by this final rule. Consequently, FRA expects the rulemaking to have only a positive impact on these small entities as more of them are provided with the opportunity to enter the passenger railroad equipment manufacturing industry.
Previously, FRA sampled small railroads and found that revenue averaged approximately $4.7 million (not discounted) in 2006. One percent of average annual revenue per small railroad is $47,000. FRA realizes that some railroads will have revenue lower than $4.7 million. However, FRA estimates that small railroads will not have any additional expenses over the next ten years to comply with the requirements in this rule. Based on this, FRA concludes that the expected burden of this rule will not have a significant impact on the competitive position of small entities, or on the small entity segment of the railroad industry as a whole.
This final rule will likely affect any small railroad that is not exempt from its scope or application (see 49 CFR 238.3). Thus, as noted above, this final rule will impact a substantial number of small railroads.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Administrator of the Federal Railroad Administration certifies that this rule will not have a significant economic impact on a substantial number of small entities. In the NPRM, FRA requested comments on its certification made as a result of its Regulatory Flexibility Act analysis, see 81 FR 88006, 88044. FRA received no comments. FRA therefore stands with its previous Regulatory Flexibility Act certification.
The information collection requirements in this final rule are being submitted to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
All estimates include the time for reviewing instructions; searching existing data sources; gathering or maintaining the needed data; and reviewing the information. For information or a copy of the information collection submission sent to OMB, please contact FRA Information Collection Clearance Officers Mr. Robert Brogan at (202) 493-6292 or Ms. Kimberly Toone at (202) 493-6132, or via email at the following addresses:
Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, Office of Information and Regulatory Affairs, 725 17th St. NW, Washington, DC 20503, attn: FRA Desk Officer. Comments may also be sent via email to the Office of Management and Budget at the following address:
OMB is required to make a decision concerning the collection of information requirements contained in this final rule between 30 and 60 days after publication of this document in the
FRA cannot impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action prior to the effective date of this final rule. The OMB control number, when assigned, will be announced by separate notice in the
Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999), requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.
This final rule has been analyzed under the principles and criteria contained in Executive Order 13132. This final rule will not have a substantial effect on the States or their political subdivisions, and it will not affect the relationships between the Federal government and the States or their political subdivisions, or the distribution of power and responsibilities among the various levels of government. In addition, FRA has determined that this regulatory action will not impose substantial direct compliance costs on the States or their political subdivisions. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.
However, this final rule could have preemptive effect by operation of law under certain provisions of the Federal railroad safety statutes, specifically the former Federal Railroad Safety Act of 1970, repealed and recodified at 49 U.S.C. 20106, and the former Locomotive Boiler Inspection Act (LIA) at 45 U.S.C. 22-34, repealed and re-codified at 49 U.S.C. 20701-20703. Section 20106 provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or order issued by the Secretary of Transportation (with respect to railroad safety matters) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the “essentially local safety or security hazard” exception to section 20106. Moreover, the former LIA has been interpreted by the Supreme Court as preempting the field concerning locomotive safety.
The Trade Agreements Act of 1979 (Pub. L. 96-39, 19 U.S.C. 2501
FRA has assessed the potential effect of this rulemaking on foreign commerce and believes that its requirements are consistent with the Trade Agreements Act. The requirements are safety standards, which, as noted, are not considered unnecessary obstacles to trade. Moreover, FRA has sought, to the extent practicable, to state the requirements in terms of the performance desired, rather than in more narrow terms restricted to a particular design or system.
FRA has evaluated this final rule in accordance with the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In analyzing the applicability of a CE, the agency must also consider whether extraordinary circumstances are present that would warrant a more detailed environmental review through the preparation of an EA or EIS. Id. In accordance with section 4(c) and (e) of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. The purpose of this rulemaking is to amend FRA's Passenger Equipment Safety Standards. This rulemaking adds safety standards to facilitate the safe implementation of high-speed rail at
Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations,” and DOT Order 5610.2(a) (91 FR 27534, May 10, 2012) require DOT agencies to achieve environmental justice as part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects, including interrelated social and economic effects, of their programs, policies, and activities on minority populations and low-income populations. The DOT Order instructs DOT agencies to address compliance with Executive Order 12898 and requirements within the DOT Order in rulemaking activities, as appropriate. FRA has evaluated this rule under Executive Order 12898 and the DOT Order and has determined that it will not cause disproportionately high and adverse human health and environmental effects on minority populations or low-income populations.
FRA has evaluated this rule in accordance with the principles and criteria contained in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” dated November 6, 2000. This rule will not have a substantial direct effect on one or more Indian tribes, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal laws. Therefore, the funding and consultation requirements of Executive Order 13175 do not apply, and a tribal summary impact statement is not required.
Under section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. This final rule will not result in the expenditure, in the aggregate, of $100,000,000 or more (as adjusted annually for inflation) in any one year, and thus preparation of such a statement is not required.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.”
Executive Order 13783, “Promoting Energy Independence and Economic Growth,” requires Federal agencies to review regulations to determine whether they potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.
As required by 1 CFR 51.5, FRA has summarized the standards it is incorporating by reference and shown the reasonable availability of those standards in the section-by-section analysis of §§ 238.733, 238.735, 238.737, 238.743, and Appendix G, paragraphs (i) and (j) of this rulemaking document.
Railroad safety.
Incorporation by reference, Passenger equipment, Railroad safety, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, FRA amends parts 229, 231, 236, and 238 of chapter II, subtitle B of title 49, Code of Federal Regulations as follows:
49 U.S.C. 103, 322(a), 20103, 20107, 20901-02, 21301, 21302, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89.
(c) Paragraphs (a) and (b) of § 229.125 do not apply to Tier II passenger equipment as defined in § 238.5 of this chapter (
49 U.S.C. 20102-20103, 20107, 20131, 20301-20303, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49 CFR 1.89.
(c) Except for the provisions governing uncoupling devices, this part does not apply to Tier II passenger equipment as defined in § 238.5 of this chapter (
49 U.S.C. 20102-20103, 20107, 20133, 20141, 20157, 20301-20303, 20306, 20701-20703, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49 CFR 1.89.
49 U.S.C. 20103, 20107, 20133, 20141, 20302-20303, 20306, 20701-20702, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49 CFR 1.89.
The additions and revisions read as follows:
(c) * * *
(2) The elements prescribed in §§ 238.201(b)(1), 238.229(j)(2), and 238.230(d); and
(d) * * *
(2) Each petition for special approval of the pre-revenue service acceptance testing plan shall be submitted to the Associate Administrator, Federal Railroad Administration, 1200 New Jersey Avenue SE, Washington, DC 20590.
(b) * * *
(2) Submit a copy of the plan to FRA at least 30 days before testing the equipment and include with that submission notification of the times and places of the pre-revenue service tests to permit FRA observation of such tests. For Tier II and Tier III passenger equipment, the railroad shall obtain FRA approval of the plan under the procedures specified in § 238.21.
(4) Document in writing the results of the tests. For Tier II and Tier III passenger equipment, the railroad shall report the results of the tests to the Associate Administrator at least 90 days prior to its intended operation of the equipment in revenue service.
(5) Correct any safety deficiencies identified in the design of the equipment or in the ITM procedures uncovered during testing. If safety deficiencies cannot be corrected by design changes, the railroad shall impose operational limitations on the revenue service operation of the equipment designed to ensure the equipment can operate safely. For Tier II and Tier III passenger equipment, the railroad shall comply with any operational limitations the Associate Administrator imposes on the revenue service operation of the equipment for cause stated following FRA review of the results of the test program. This section does not restrict a railroad from petitioning FRA for a waiver of a safety regulation under the procedures specified in part 211 of this chapter.
(7) For Tier II or Tier III passenger equipment, obtain approval from the Associate Administrator before placing the equipment in revenue service. The Associate Administrator will grant such approval if the railroad demonstrates compliance with the applicable requirements of this part.
(c) If a railroad plans a major upgrade or introduction of new technology to Tier II or Tier III passenger equipment that has been used in revenue service in
(b) * * * (1) Passenger equipment of special design shall be deemed to comply with this subpart, other than § 238.203, for the service environment the petitioner proposes to operate the equipment in if the Associate Administrator determines under paragraph (c) of this section that the equipment provides at least an equivalent level of safety in such environment for the protection of its occupants from serious injury in the case of a derailment or collision. * * *
(2)(i) Tier I passenger trainsets may comply with the alternative crashworthiness and occupant protection requirements in appendix G to this part instead of the requirements in §§ 238.203, 238.205, 238.207, 238.209(a), 238.211, 238.213, and 238.219.
(ii) To assess compliance with the alternative requirements, the railroad shall submit the following documents to the Associate Administrator, for review:
(A) Test plans, and supporting documentation for all tests intended to demonstrate compliance with the alternative requirements and to validate any computer modeling and analysis used, including notice of such tests, 30 days before commencing the tests; and
(B) A carbody crashworthiness and occupant protection compliance report based on the analysis, calculations, and test data necessary to demonstrate compliance.
(iii) The carbody crashworthiness and occupant protection compliance report shall be deemed acceptable unless the Associate Administrator stays action by written notice to the railroad within 60 days after receipt of the report.
(A) If the Associate Administrator stays action, the railroad shall correct any deficiencies FRA identified and notify FRA it has corrected the deficiencies before placing the subject equipment into service.
(B) FRA may also impose written conditions necessary for safely operating the equipment, for cause stated.
(a)(1) Except as further specified in this paragraph (a), paragraph (d) of this section, and § 238.201(b)(2), on or after November 8, 1999, all passenger equipment shall resist a minimum static end load of 800,000 pounds applied on the line of draft without permanent deformation of the body structure.
(a) Except as provided in paragraph (b) of this section, and § 238.201(b), all passenger equipment placed in service for the first time on or after September 8, 2000, and prior to March 9, 2010, shall have at both the forward and rear ends an anti-climbing mechanism capable of resisting an upward or downward vertical force of 100,000 pounds without failure. * * *
Except as specified in § 238.201(b), all passenger equipment placed in service for the first time on or after September 8, 2000, shall have a coupler carrier at each end designed to resist a vertical downward thrust from the coupler shank of 100,000 pounds for any normal horizontal position of the coupler, without permanent deformation. Passenger equipment connected by articulated joints that complies with the requirements of § 238.205(a) also complies with the requirements of this section.
(a) Except as specified in § 238.201(b)—
(a) Except as further specified in this paragraph (a), paragraphs (b) through (d) of this section, § 238.201(b), and § 238.209(b)—
(a)(1) Except as further specified in paragraphs (b) and (c) of this section, § 238.201(b), and § 238.209(b), each passenger car shall have at each end of the car, placed ahead of the occupied volume, two full-height corner posts, each capable of resisting together with its supporting car body structure:
Except as provided in § 238.201(b), passenger equipment shall have a truck-to-carbody attachment with an ultimate strength sufficient to resist without failure the following individually applied loads: 2g vertically on the mass of the truck; and 250,000 pounds in any horizontal direction on the truck, along with the resulting vertical reaction to this load. * * *
This subpart contains specific requirements for railroad passenger equipment operating at speeds exceeding 125 mph but not exceeding 160 mph. * * *
This subpart contains inspection, testing, and maintenance requirements for railroad passenger equipment that operates at speeds exceeding 125 mph but not exceeding 160 mph.
This subpart contains specific requirements for railroad passenger equipment operating in a shared right-of-way at speeds not exceeding 125 mph and in an exclusive right-of-way without grade crossings at speeds exceeding 125 mph but not exceeding 220 mph. Passenger seating is permitted in the leading unit of a Tier III trainset if the trainset complies with the crashworthiness and occupant protection requirements of this subpart, and the railroad has an approved right-of-way plan under § 213.361 of this chapter and an approved HSR-125 plan under § 236.1007(c) of this chapter. Demonstration of compliance with the requirements of this subpart is subject to FRA review and approval under § 238.111.
As used in this subpart—
(a)
(b)
(i) 800,000 pounds without permanent deformation of the occupied volume; or
(ii) 1,000,000 pounds without exceeding either of the following two conditions:
(A) Local plastic strains no greater than 5 percent; and
(B) Vehicle shortening no greater than 1 percent over any 15-foot length of the occupied volume; or
(iii) 1,200,000 pounds without crippling the body structure. Crippling of the body structure is defined as reaching the maximum point on the load-versus-displacement characteristic.
(2) To demonstrate compliance with this section, each type of vehicle shall be subjected to an end compression load (buff) test with an end load magnitude no less than 337,000 lbf (1500 kN).
(3) Compliance with the requirements of paragraph (b) of this section shall be documented and submitted to FRA for review and approval.
(a)
(1) The initially-moving trainset is made up of the equipment undergoing evaluation at its AW0 ready-to-run weight;
(2) If trainsets of varying consist lengths are intended for use in service, then the shortest and longest consist lengths shall be evaluated;
(3) If the initially-moving trainset is intended for use in push-pull service, then, as applicable, each configuration of leading vehicle shall be evaluated separately;
(4) The initially-standing train is led by a rigid locomotive and also made up of five identical passenger coaches having the following characteristics:
(i) The rigid locomotive weighs 260,000 pounds and each coach weighs 95,000 pounds;
(ii) The rigid locomotive and each passenger coach crush in response to applied force as specified in Table 1 to this section; and
(iii) The rigid locomotive shall be modeled using the data inputs listed in appendix H to this part so that it has a geometric design as depicted in Figure 1 to appendix H to this part;
(5) The scenario shall be evaluated on tangent, level track;
(6) The initially-moving trainset shall have an initial velocity of 20 mph if it is an integrated trainset, or an initial velocity of 25 mph if the lead vehicle of the trainset is not part of the integrated design;
(7) The coupler knuckles on the colliding equipment shall be closed and centered;
(8) The initially-moving trainset and initially-standing train consists are not braked;
(9) The initially-standing train has only one degree-of-freedom (longitudinal displacement); and
(10) The model used to demonstrate compliance with the dynamic collision requirements must be validated. Model validation shall be documented and submitted to FRA for review and approval.
(b)
(1) One of the following two conditions must be met for the occupied volume of the initially-moving trainset:
(i) There shall be no more than 10 inches of longitudinal permanent deformation; or
(ii) Global vehicle shortening shall not exceed 1 percent over any 15-foot length of occupied volume.
(2) If Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” Rail Safety and Standards Board Ltd., December 2010, is used to demonstrate compliance with any of the requirements in §§ 238.733, 238.735, 238.737, or 238.743, then the average longitudinal deceleration of the center of gravity (CG) of each vehicle in the initially-moving trainset during the dynamic collision scenario shall not exceed 5g during any 100-millisecond (ms) time period. The maximum interval between data points so averaged in the 100-ms time period shall be no greater than 1-ms.
(3) Compliance with each of the following conditions shall also be demonstrated for the cab of the initially-moving trainset after the impact:
(i) For each seat provided for an employee in the cab, and any floor-
(ii) There shall be a clear exit path for the occupants of the cab;
(iii) The vertical height of the cab (floor to ceiling) shall not be reduced by more than 20 percent; and
(iv) The operating console shall not have moved more than 2 inches closer to the engineer's seat; if the engineer's seat is part of a set of adjacent seats, the requirements of this paragraph (b)(3) apply to both seats.
(a)
(i) All vehicles in the initially-moving trainset and initially-standing train consists are positioned at their nominal running heights;
(ii) The lead vehicle of the initially-moving trainset shall be perturbed laterally and vertically upwards by 3 inches at the colliding interface; and
(iii) The lead vehicle of the initially-moving trainset shall be perturbed laterally and vertically downwards by 3 inches at the colliding interface.
(2) For each set of initial conditions specified in paragraph (a)(1) of this section, compliance with the following conditions shall be demonstrated after a dynamic impact:
(i) The relative difference in elevation between the underframes of the colliding equipment in the initially-moving trainset and initially-standing train consists shall not change by more than 4 inches; and
(ii) The tread of any wheel of the first vehicle of the initially-moving trainset shall not rise above the top of the rail by more than 4 inches
(b)
(i) All vehicles in the initially-moving trainset and initially-standing train consists are positioned at their nominal running heights;
(ii) One vehicle is perturbed laterally and vertically upwards by 2 inches, relative to the adjacent vehicle, at the first vehicle-to-vehicle interface in the initially-moving trainset; and,
(iii) One vehicle is perturbed laterally and vertically downwards by 2 inches, relative to the adjacent vehicle, at the first vehicle-to-vehicle interface in the initially-moving trainset.
(2) For each set of initial conditions specified in paragraph (b)(1) of this section, compliance with the following conditions shall be demonstrated after a dynamic impact:
(i) The relative difference in elevation between the underframes of the connected equipment in the initially-moving trainset shall not change by more than 4 inches; and
(ii) The tread of any wheel of the initially-moving trainset shall not rise above the top of rail by more than 4 inches.
(a) The skin covering the forward-facing end of a Tier III trainset shall be—
(1) Equivalent to a
(2) Designed to inhibit the entry of fluids into the cab; and
(3) Affixed to the collision posts or other main structural members of the forward end structure so as to add to the strength of the end structure.
(b) Information used to demonstrate compliance with the requirements of this section shall at a minimum include a list and drawings of the structural elements considered in satisfying the thickness-strength requirement of this section, and calculations showing that the thickness-strength requirement is satisfied.
The cab ends of Tier III trainsets shall comply with the requirements of appendix F to this part to demonstrate the integrity of the end structure. For those units of Tier III trainsets without identifiable corner or collision posts, the requirements of appendix F to this part apply to the end structure at each location specified, regardless of whether the structure is a post.
(a)
(b)
(i) Two full-height collision posts, located at approximately the one-third points laterally. Each collision post shall have an ultimate longitudinal shear strength of not less than 300,000 pounds at a point even with the top of the underframe member to which it is attached. If reinforcement is used to provide the shear value, the reinforcement shall have full value for a distance of 18 inches up from the underframe connection and then taper to a point approximately 30 inches above the underframe connection; or
(ii) An equivalent end structure that can withstand the sum of forces that each collision post in paragraph (b)(1)(i) of this section is required to withstand. For analysis purposes, the required forces may be assumed to be evenly distributed at the locations where the equivalent structure attaches to the underframe.
(2) Collision posts are not required for the non-cab ends of any unit with push-back couplers and interlocking anti-climbing mechanisms in a Tier III trainset, or the non-cab ends of a semi-permanently coupled consist of trainset units, if the inter-car connection is capable of preventing disengagement and telescoping to the same extent as equipment satisfying the anti-climbing and collision post requirements in subpart C of this part. For demonstrating that the inter-car connection is capable of preventing such disengagement (and telescoping), the criteria in § 238.707(b) apply.
(c)
(i) 150,000-pound horizontal force applied at floor height without failure;
(ii) 20,000-pound horizontal force applied at roof height without failure; and
(iii) 30,000-pound horizontal force applied at a point 18 inches above the top of the floor without permanent deformation.
(2) For purposes of this paragraph (c), the orientation of the applied horizontal forces shall range from longitudinal inward to transverse inward.
(3) For each evaluation load, the load shall be applied to an area of the structure sufficient to not locally cripple or punch through the material.
(4) The load area shall be chosen to be appropriate for the particular car design and shall not exceed 10 inches by 10 inches.
To demonstrate roof and side structure integrity, Tier III trainsets shall comply with the requirements in §§ 238.215 and 238.217.
To demonstrate the integrity of truck-to-carbody attachments, each unit in a Tier III trainset shall:
(a) Comply with the requirements in § 238.219; or
(b) Have a truck-to-carbody attachment with strength sufficient to resist, without yielding, the following individually applied, quasi-static loads on the mass of the truck at its CG:
(1) 3g vertically downward;
(2) 1g laterally, along with the resulting vertical reaction to this load; and
(3) Except as provided in paragraph (c) of this section, 5g longitudinally, along with the resulting vertical reaction to this load, provided that for the conditions in the dynamic collision scenario described in § 238.705(a):
(i) The average longitudinal deceleration at the CG of the equipment during the impact does not exceed 5g; and
(ii) The peak longitudinal deceleration of the truck during the impact does not exceed 10g.
(c) As an alternative to demonstrating compliance with paragraph (b)(3) of this section, the truck shall be shown to remain attached after a dynamic impact under the conditions in the collision scenario described in § 238.705(a).
(d) For purposes of paragraph (b) of this section, the mass of the truck includes axles, wheels, bearings, truck-mounted brake system, suspension system components, and any other component attached to the truck by design.
(e) Truck attachment shall be demonstrated using a validated model.
(a)
(2) Instead of the large object impact test specified in appendix A to part 223, each end-facing exterior window in a cab shall demonstrate compliance with the following requirements of this paragraph (a):
(i) The glazing article shall be impacted with a cylindrical projectile that complies with the following design specifications as depicted in Figure 1 to this subpart:
(A) The projectile shall be constructed of aluminum alloy such as ISO 6362-2:1990, grade 2017A, or its demonstrated equivalent;
(B) The projectile end cap shall be made of steel;
(C) The projectile assembly shall weigh 2.2 pounds (−0, +0.044 pounds) or 1 kilogram (kg) (−0, +0.020 kg) and shall have a hemispherical tip. Material may be removed from the interior of the aluminum portion to adjust the projectile mass according to the prescribed tolerance. The hemispherical tip shall have a milled surface with 0.04 inch (1 mm) grooves; and
(D) The projectile shall have an overall diameter of 3.7 inches (94 mm) with a nominal internal diameter of 2.76 inches (70 mm).
(ii) The test of the glazing article shall be deemed satisfactory if the test projectile does not penetrate the windscreen, the windscreen remains in its frame, and the witness plate is not marked by spall.
(iii) A new projectile shall be used for each test.
(iv) The glazing article to be tested shall be that which has the smallest area for each design type. For the test, the glazing article shall be fixed in a frame of the same construction as that mounted on the vehicle.
(v) A minimum of four tests shall be conducted and all must be deemed satisfactory. Two tests shall be conducted with the complete glazing article at 32 °F ± 9 °F (0 °C ± 5 °C) and two tests shall be conducted with the complete glazing article at 68 °F ± 9 °F (20 °C ± 5 °C). For the tests to be valid they shall demonstrate that the core temperature of the complete glazing article during each test is within the required temperature range.
(vi) The test glazing article shall be mounted at the same angle relative to the projectile path as it will be to the direction of travel when mounted on the vehicle.
(vii) The projectile's impact velocity shall equal the maximum operating speed of the Tier III trainset plus 100 mph (160 km/h). The projectile velocity shall be measured within 13 feet (4 m) of the point of impact.
(viii) The point of impact shall be at the geometrical center of the glazing article.
(3) Representative samples for large object impact testing of large Tier III end-facing cab glazing articles may be used instead of the actual design size, provided that the following conditions are met:
(i) Testing of glazing articles having dimensions greater than 39.4 by 27.6 inches (1,000 mm by 700 mm), excluding framing, may be performed using a flat sample having the same composition as the glazing article for which compliance is to be demonstrated. The glazing manufacturer shall provide documentation containing its technical justification that testing a flat sample is sufficient to verify compliance of the glazing article with the requirements of this paragraph (a).
(ii) Flat sample testing is permitted only when no surface of the full-size glazing article contains curvature with a radius less than 98 inches (2,500 mm), and when a complete, finished glazing article is laid (convex side uppermost) on a flat horizontal surface, the distance (measured perpendicularly to the flat surface) between the flat surface and the inside face of the glazing article is not greater than 8 inches (200 mm).
(4) End-facing glazing shall demonstrate sufficient resistance to spalling, as verified by the large impact projectile test under the following conditions:
(i) An annealed aluminum witness plate of maximum thickness 0.006 inch (0.15 mm) and of dimension 19.7 by 19.7 inches (500 mm by 500 mm) is placed vertically behind the sample under test, at a horizontal distance of 500 mm from the point of impact in the direction of travel of the projectile or the distance between the point of impact of the projectile and the location of the engineer's eyes in the engineer's normal operating position, whichever is less. The center of the witness plate is aligned with the point of impact.
(ii) Spalling performance shall be deemed satisfactory if the aluminum witness plate is not marked.
(iii) For the purposes of this subpart, materials used specifically to protect the cab occupants from spall (
(5) Each end-facing exterior window in a cab shall, at a minimum, provide ballistic penetration resistance that meets the requirements of appendix A to part 223.
(6) Each end-facing exterior window in a cab shall be permanently marked, before installation, in such a manner that the marking is clearly visible after the material has been installed. The marking shall include:
(i) The words “FRA TYPE IHS” to indicate that the material has successfully passed the testing requirements specified in this paragraph (a);
(ii) The name of the manufacturer; and
(iii) The type or brand identification of the material.
(b)
(1) Comply with the requirements for Type II glazing contained in appendix A to part 223 of this chapter, for large-object impact; and
(2) Maintain the minimum ballistics penetration resistance as required for end-facing glazing in paragraph (a)(5) of this section.
(c)
(2) Instead of the requirements specified in paragraph (c)(1) of this section, a side-facing exterior window intended to be breakable and serve as an emergency window exit may comply with an alternative standard that provides an equivalent level of safety and is approved for use by FRA.
(d)
(1) The forces due to air pressure differences caused when two trains pass at the minimum separation for two adjacent tracks, while traveling in opposite directions, each train traveling at the maximum authorized speed; and
(2) The impact forces that the exterior window is required to resist as specified in this section.
(e)
(i) An independent third-party (laboratory, facility, underwriter); or
(ii) The glazing manufacturer, by providing FRA the opportunity to witness all tests by written notice at least 30 days prior to testing.
(2) Any glazing material certified to meet the requirements of this section shall be re-certified by the same means (as originally certified) if any changes are made to the glazing that may affect its mechanical properties or its mounting arrangement on the vehicle.
(3) All certification/re-certification documentation shall be made available to FRA upon request.
(a)
(b)
(c)
(1) An unintentional parting of the trainset; or
(2) The train crew at locations within the trainset specified by the railroad, as approved by FRA.
(d)
(2) All passenger brake alarms shall be installed so as to prevent accidental activation.
(3) During departure from the boarding platform, activation of the passenger brake alarm shall result in an emergency brake application.
(4) A passenger brake alarm activation that occurs after the trainset has safely cleared the boarding platform shall be acknowledged by the engineer within the time period specified by the railroad, as approved by FRA, for train operation to remain under the full control of the engineer. The method used to confirm that the trainset has safely cleared the boarding platform shall be defined by the railroad as approved by FRA.
(5) If the engineer does not acknowledge the passenger brake alarm as specified in paragraph (d)(4) of this section, at a minimum, a retrievable full service brake application shall be automatically initiated until the trainset has stopped unless the engineer intervenes as described in paragraph (d)(6) of this section.
(6) To retrieve the full service brake application described in paragraph (d)(5) of this section, the engineer must acknowledge the passenger brake alarm and activate appropriate controls to issue a command for brake application as specified by the railroad, as approved by FRA.
(e)
(1) Loss of power or failure of the dynamic or regenerative brake shall not result in exceeding the allowable stopping distance defined by the railroad as approved by FRA;
(2) The available friction braking shall be adequate to stop the trainset safely under the operating conditions defined by the railroad, as approved by FRA;
(3) The operational status of the trainset brake system shall be displayed for the engineer in the operating cab; and
(4) The railroad shall demonstrate through analysis and testing the maximum speed for safely operating its Tier III trainsets using only the friction brake portion of the blended brake with no thermal damage to equipment or infrastructure. The analysis and testing shall also be used to determine the maximum safe operating speed for various percentages of operative friction brakes and shall be included in the railroad's ITM program.
(f)
(2) Each welded steel main reservoir shall be drilled in accordance with the requirements of a recognized standard specified by the railroad as approved by FRA, such as paragraph UG-25(e) of Section VIII of the ASME Boiler and Pressure Vessel Code. With the drain opening located at the low point of the reservoir, one row of holes shall be drilled lengthwise on the reservoir on a line intersecting the drain opening and sloped to the drain opening.
(3) A breach of a welded steel main reservoir at any of the drilled holes described in paragraph (f)(2) of this section shall be cause for the reservoir to be condemned and withdrawn from service. Any type of welded repair to a steel main reservoir is prohibited.
(g)
(2) Any type of welded repair to an aluminum main reservoir is prohibited.
(h)
(i)
(j)
(2) The minimum brake cylinder pressure shall be established by the railroad, as approved by FRA, to provide adequate adjustment from minimum service to full service for proper train operation.
(k)
(l)
(2) Brake pipe leakage may not exceed 5 p.s.i. per minute; and with a full service application at maximum brake pipe pressure and with communication to the brake cylinders closed, the brakes shall remain applied for at least 5 minutes.
(m)
(2) A wheel-slide alarm that is visual or audible, or both, shall alert the engineer in the operating cab to wheel-slide conditions on any axle of the trainset.
(3) The railroad shall specify operating restrictions for trainsets with slide protection devices for when they fail to prevent wheel slide within safety parameters preset by the railroad. Both the operating restrictions and safety parameters shall be approved by FRA.
(n)
(o)
(p)
(a) Tier III trainsets shall comply with the interior fixture attachment strength requirements referenced in either of the following paragraphs:
(1) Section 238.233 and APTA PR-CS-S-006-98; or
(2) Section 6.1.4, “Security of furniture, equipment and features,” of GM/RT2100, provided that—
(i) The conditions of § 238.705(b)(2) are met;
(ii) Interior fixture attachment strength is sufficient to resist without failure individually applied loads of 5g longitudinal, 3g lateral, and 3g vertical when applied to the mass of the fixture; and
(iii) Use of the standard is carried out under any conditions identified by the railroad, as approved by FRA.
(b) The standards required in this section are incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and is available from the sources indicated below. It is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030 or go to
(1) American Public Transportation Association, 1666 K Street NW, Washington, DC 20006,
(i) APTA PR-CS-S-006-98, Rev. 1, “Standard for Attachment Strength of Interior Fittings for Passenger Railroad Equipment,” Authorized September 28, 2005.
(ii) [Reserved]
(2) Rail Safety and Standards Board Ltd., Communications, RSSB, Block 2 Angel Square, 1 Torrens Street, London, England EC1V 1NY,
(i) Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” December 2010.
(ii) [Reserved]
(a) Passenger seating in Tier III trainsets shall comply with the requirements referenced in either of the following paragraphs:
(1) Section 238.233 and APTA PR-CS-S-016-99 excluding Section 6, “Seat durability testing;” or
(2) Section 6.2, “Seats for passengers, personnel, or train crew,” of GM/RT2100, provided that—
(i) The conditions of § 238.705(b)(2) are met;
(ii) Seat attachment strength is sufficient to resist without failure individually applied loads of 5g longitudinal, 3g lateral, and 3g applied to the mass of the seat; and
(iii) Use of the standard is carried out under any conditions identified by the railroad, as approved by FRA.
(b) Each seat provided for an employee in the cab of a Tier III trainset, and any floor-mounted seat in the cab, shall comply with § 238.233(e), (f), and (g).
(c) The standards required in this section are incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and are available from the sources indicated below. They are also available for inspection at NARA. For information on the availability of this material at NARA, call 202-741-6030 or go to
(1) American Public Transportation Association, 1666 K Street NW, Washington, DC 20006,
(i) APTA PR-CS-S-016-99, Rev. 2, “Standard for Passenger Seats in Passenger Rail Cars,” Authorized October 3, 2010.
(ii) [Reserved]
(2) Rail Safety and Standards Board Ltd., Communications, RSSB, Block 2 Angel Square, 1 Torrens Street, London, England EC1V 1NY,
(i) Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” December 2010.
(ii) [Reserved]
(a) Overhead storage racks shall provide longitudinal and lateral restraint for stowed articles. These racks shall incorporate transverse dividers at a maximum spacing of 10 ft. (3 m) to restrain the longitudinal movement of luggage. To restrain the lateral movement of luggage, these racks shall also slope downward in the outboard direction at a minimum ratio of 1:8 with respect to a horizontal plane.
(b) Luggage racks shall comply with the requirements in either of the following paragraphs:
(1) Section 238.233; or
(2) Section 6.8, “Luggage stowage,” of GM/RT2100, provided that—
(i) The conditions of § 238.705(b)(2) are met;
(ii) Attachment strength is sufficient to resist without failure individually applied loads of 5g longitudinal, 3g lateral, and 3g vertical; and
(iii) Use of the standard is carried out under any conditions identified by the railroad, as approved by FRA. In particular, the railroad shall determine the maximum allowable weight of the luggage stowed for purposes of evaluating luggage rack attachment strength.
(c) Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” December 2010 is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and is available from Rail Safety and Standards Board Ltd., Communications, RSSB, Block 2 Angel Square, 1 Torrens Street, London, England EC1V 1NY,
(a)
(b)
(c)
(d)
(a) Except as provided in paragraph (b) of this section, Tier III trainsets shall comply with the emergency lighting requirements specified in § 238.115.
(b) Emergency lighting back-up power systems shall, at a minimum, be capable of operating after experiencing the individually applied accelerations defined in either of the following paragraphs:
(1) Section 238.115(a)(4)(ii); or
(2) Section 6.1.4, “Security of furniture, equipment and features,” of GM/RT2100, provided that—
(i) The conditions of § 238.705(b)(2) are met;
(ii) The initial shock of a collision or derailment is based on a minimum load of 5g longitudinal, 3g lateral, and 3g vertical; and
(iii) Use of the standard is carried out under any conditions identified by the railroad, as approved by FRA.
(c) Railway Group Standard GM/RT2100, Issue Four, “Requirements for Rail Vehicle Structures,” December 2010, is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and is available from Rail Safety and Standards Board Ltd., Communications,
(a) An alerter shall be provided in the operating cab of each Tier III trainset, unless in accordance with paragraph (e) of this section the trainset operates in a territory where an alternate technology providing equivalent safety is installed, such as redundant automatic train control or redundant automatic train stop system.
(b) Upon initiation of the alerter, the engineer must acknowledge the alerter within the time period and according to the parameters specified by the railroad, as approved by FRA, in order for train operations to remain under the full control of the engineer.
(c) If the engineer does not acknowledge the alerter as specified in paragraph (b) of this section, at a minimum a retrievable full service brake application shall occur until the train has stopped, unless the crew intervenes as described in paragraph (d) of this section.
(d) To retrieve the full service brake application described in paragraph (c) of this section, the engineer must acknowledge the alerter and activate appropriate controls to issue a command for brake application as specified by the railroad and approved by FRA.
(e) If an alternate technology to the alerter is used, the railroad shall conduct an analysis that confirms the ability of the technology to provide an equivalent level of safety. This analysis shall be approved by FRA.
(a) A Tier III trainset shall be equipped with operative sanders, if required by the railroad and as approved by FRA.
(b) Sanders required under this section shall comply with § 229.131(a), (b), and (d) of this chapter, except that instead of the requirements of §§ 229.9 and 229.23 of this chapter:
(1) The requirements of § 238.17 shall apply to the tagging and movement of a Tier III trainset with defective sanders; and
(2) The requirements of the railroad's ITM program shall apply to the next periodic inspection of such a trainset.
(c) In addition to the requirements in paragraph (b) of this section, the railroad's ITM program shall specify the inspection, testing, and maintenance requirements for Tier III trainsets equipped with sanders.
(c) * * *
Although the requirements of this appendix are stated in terms applicable to Tier I passenger equipment, they are also applicable to Tier III passenger trainsets under § 238.711. Specifically, the cab ends of Tier III trainsets shall comply with the requirements of this appendix to demonstrate the integrity of the end structure.
This appendix applies to Tier I alternative passenger trainsets, as described below. While the appendix may refer to specific units of rail equipment in a trainset, the alternative requirements in this appendix apply only to a trainset as a whole.
This appendix specifies alternatives to the crashworthiness and occupant protection performance requirements for Tier I passenger equipment in §§ 238.203, Static end strength; 238.205, Anti-climbing mechanism; 238.207, Link between coupling mechanism and car body; 238.209(a), Forward end structure of locomotives, including cab cars and MU locomotives; 238.211, Collision posts; 238.213, Corner posts; and 238.219, Truck-to-carbody attachment. To maintain their integrity, these requirements apply as a whole. They also apply in addition to the requirements of §§ 238.209(b); 238.215, Rollover strength; 238.217, Side structure; and 238.233, Interior fittings and surfaces; and they apply with APTA standards for occupant protection, as specified in this appendix.
For ease of comparison with the Tier I requirements in subpart C of this part, this appendix is arranged in order by the Tier I section referenced.
Use of this appendix to demonstrate alternative crashworthiness and occupant protection performance for Tier I passenger equipment is subject to FRA review and approval under § 238.201.
(a) Instead of the requirements of § 238.203, the units of a Tier I alternative passenger trainset may demonstrate their occupied volume integrity by complying with both the quasi-static compression load and dynamic collision requirements in §§ 238.703(b) and 238.705, respectively.
(b)
(c)
(d) Instead of the requirements of § 238.209(a), each cab end of a Tier I alternative passenger trainset may demonstrate its ability to inhibit fluid entry and provide other penetration resistance by complying with the requirements in § 238.709.
(e) Each cab end of a Tier I alternative passenger trainset is subject to the requirements of appendix F to this part to demonstrate cab end structure integrity. For those cab ends without identifiable corner or collision posts, the requirements of appendix F to this part apply to the end structure at the specified locations, regardless of whether the structure at the specified locations is a post.
(f) Instead of the applicable requirements of §§ 238.211 and 238.213, the units of a Tier I alternative trainset may demonstrate end structure integrity for other than a cab end by complying with the requirements in § 238.713(b) and (c).
(g) A Tier I alternative passenger trainset is subject to the requirements of §§ 238.215 and 238.217 to demonstrate roof and side structure integrity.
(h) Instead of the requirements of § 238.219, the units of a Tier I alternative passenger trainset may demonstrate their truck-to-carbody attachment integrity by complying with the requirements in § 238.717 (b) through (e).
(i)(1) A Tier I alternative passenger trainset is subject to the interior fixture requirements in § 238.233. Interior fixtures must also comply with APTA PR-CS-S-006-98, Rev. 1, “Standard for Attachment Strength of Interior Fittings for Passenger Railroad Equipment,” Authorized September 28, 2005, and those portions of APTA PR-CS-S-034-99, Rev. 2, “Standard for the Design and Construction of Passenger Railroad Rolling Stock,” Authorized June 11, 2006, relating to interior fixtures.
(2) The standards required in this paragraph (i) are incorporated by reference into this paragraph with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and available from the American Public Transportation Association, 1666 K Street NW, Washington, DC 20006,
(i) APTA PR-CS-S-006-98, Rev. 1, “Standard for Attachment Strength of Interior Fittings for Passenger Railroad Equipment,” Authorized September 28, 2005.
(ii) APTA PR-CS-S-034-99, Rev. 2, “Standard for the Design and Construction of Passenger Railroad Rolling Stock,” Authorized June 11, 2006.
(j)
(2) APTA PR-CS-S-016-99, Rev. 2, “Standard for Passenger Seats in Passenger Rail Cars,” Authorized October 3, 2010, is incorporated by reference into this paragraph (j) with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection at Federal Railroad Administration, Docket Clerk, 1200 New Jersey Avenue SE, Washington, DC and is available from the American Public Transportation Association, 1666 K Street NW, Washington, DC 20006,
(k)
(a) As specified in § 238.705(a)(4), this appendix provides input data and a geometrical depiction necessary to create a computer model of the rigid locomotive design for use in evaluating the occupied volume integrity of a Tier III trainset in a dynamic collision scenario. (This appendix may also be applied to a Tier I alternative passenger trainset to evaluate its occupied volume integrity, in accordance with appendix G to this part).
(b) The input data, in the form of an input file, contains the geometry for approximately the first 12 feet of the rigid locomotive design. Because this input file is for a half-symmetric model, a locomotive mass corresponding to 130,000 pounds of weight is provided for modeling purposes—half the 260,000 pounds of weight specified for the locomotive in § 238.705(a)(4). Figure 1 to this appendix provides two views of the locomotive's geometric depiction. The input data is contained in Appendix C to FRA's Technical Criteria and Procedures Report, available at
Issued in Washington, DC.
Fish and Wildlife Service, Interior.
Proposed rule.
We, the U.S. Fish and Wildlife Service (Service), propose to designate critical habitat for the candy darter (
We will accept comments on the proposed rule or DEA that are received or postmarked on or before January 22, 2019. Comments submitted electronically using the Federal eRulemaking Portal (see
You may submit comments on the proposed rule or DEA by one of the following methods:
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
The coordinates or plot points or both from which the maps are generated are included in the administrative record for this critical habitat designation and are available at
John Schmidt, Field Supervisor, U.S. Fish and Wildlife Service, West Virginia Ecological Services Field Office, 694 Beverly Pike, Elkins, WV 26241-9475; telephone 304-636-6586. If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service at 800-877-8339.
We intend that any final action resulting from this proposed rule will be based on the best scientific data available and be as accurate and as effective as possible. Therefore, we request comments or information from other concerned government agencies, the scientific community, industry, or any other interested party concerning this proposed rule. We particularly seek comments concerning:
(1) The reasons why we should or should not designate habitat as “critical habitat” under section 4 of the Act (16 U.S.C. 1531
(2) Specific information on:
(a) The amount and distribution of candy darter habitat;
(b) What areas, that were occupied at the time of listing and that contain the physical or biological features essential to the conservation of the species, should be included in the designation and why;
(c) Special management considerations or protection that may be needed in critical habitat areas we are proposing, including managing for the potential effects of climate change; and
(d) What areas not occupied at the time of listing are essential for the conservation of the species and why.
(3) Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat.
(4) Information on the projected and reasonably likely impacts of climate change on the candy darter and proposed critical habitat.
(5) Any probable economic, national security, or other relevant impacts of designating any area that may be included in the final designation, and the benefits of including or excluding areas that may be impacted.
(6) Information on the extent to which the description of probable economic impacts in the draft economic analysis (DEA) is a reasonable estimate of the likely economic impacts.
(7) Whether any specific areas we are proposing for critical habitat designation should be considered for exclusion under section 4(b)(2) of the Act, and whether the benefits of potentially excluding any specific area outweigh the benefits of including that area under section 4(b)(2) of the Act.
(8) Whether we could improve or modify our approach to designating critical habitat in any way to provide for greater public participation and understanding, or to better accommodate public concerns and comments.
(9) Information about currently unoccupied areas within the historical range of the species that contain the essential physical or biological features that would aid in the reestablishment of populations under section 10(j) of the Act.
(10) Information regarding the need for other recovery tools such as safe harbor agreements, in addition to, or instead of, the designation of critical habitat, and why.
You may submit your comments and materials concerning this proposed rule by one of the methods listed in
All comments submitted electronically via
Comments and materials we receive and supporting documentation we used in preparing this proposed rule will be available for public inspection on
See the candy darter proposed listing rule (82 FR 46197; October 4, 2017) for a history of previous Federal actions prior to today's publication of this proposed rule.
Elsewhere in today's
Critical habitat is defined in section 3 of the Act as:
(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features
(a) Essential to the conservation of the species, and
(b) Which may require special management considerations or protection; and
(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.
Our regulations at 50 CFR 424.02 define the geographical area occupied by the species as an area that may generally be delineated around species' occurrences, as determined by the Secretary (
Conservation, as defined under section 3 of the Act, means to use and the use of all methods and procedures that are necessary to bring an endangered or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary. Such methods and procedures include, but are not limited to, all activities associated with scientific resources management such as research, census, law enforcement, habitat acquisition and maintenance, propagation, live trapping, and transplantation, and, in the extraordinary case where population pressures within a given ecosystem cannot be otherwise relieved, may include regulated taking.
Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the consultation requirements of section 7(a)(2) of the Act would apply, but even in the event of a destruction or adverse modification finding, the obligation of the Federal action agency and the landowner is not to restore or recover the species, but to implement reasonable and prudent alternatives to avoid destruction or adverse modification of critical habitat.
Under the first prong of the Act's definition of critical habitat, areas within the geographical area occupied by the species at the time it was listed are included in a critical habitat designation if they contain physical or biological features (1) which are essential to the conservation of the species and (2) which may require special management considerations or protection. For these areas, critical habitat designations identify, to the extent known using the best scientific and commercial data available, those physical or biological features that are
Under the second prong of the Act's definition of critical habitat, we can designate critical habitat in areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. We will determine whether unoccupied areas are essential for the conservation of the species by considering the life-history, status, and conservation needs of the species. This will be further informed by any generalized conservation strategy, criteria, or outline that may have been developed for the species to provide a substantive foundation for identifying which features and specific areas are essential to the conservation of the species and, as a result, the development of the critical habitat designation. For example, an area currently occupied by the species but that was not occupied at the time of listing may be essential to the conservation of the species and may be included in the critical habitat designation.
Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific data available. Further, our Policy on Information Standards Under the Endangered Species Act (published in the
When we are determining which areas should be designated as critical habitat, our primary source of information is generally the information from the species status assessment (SSA) report and information developed during the listing process for the species. Additional information sources may include any generalized conservation strategy, criteria, or outline that may have been developed for the species; articles in peer-reviewed journals; conservation plans developed by States and counties; scientific status surveys and studies; biological assessments; other unpublished materials; or experts' opinions or personal knowledge.
Habitat is dynamic, and species may move from one area to another over time. We recognize that critical habitat designated at a particular point in time may not include all of the habitat areas that we may later determine are necessary for the recovery of the species. For these reasons, a critical habitat designation does not signal that habitat outside the designated area is unimportant or may not be needed for recovery of the species. Areas that are important to the conservation of the species, both inside and outside the critical habitat designation, will continue to be subject to: (1) Conservation actions implemented under section 7(a)(1) of the Act, (2) regulatory protections afforded by the requirement in section 7(a)(2) of the Act for Federal agencies to ensure their actions are not likely to jeopardize the continued existence of any endangered or threatened species, and (3) section 9 of the Act's prohibitions on taking any individual of the species, including taking caused by actions that affect habitat. Federally funded or permitted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. These protections and conservation tools will continue to contribute to recovery of this species. Similarly, critical habitat designations made on the basis of the best available data at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans (HCPs), or other species' conservation planning efforts if new information available at the time of these planning efforts calls for a different outcome.
Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12), require that, to the maximum extent prudent and determinable, the Secretary shall designate critical habitat at the time the species is determined to be an endangered or threatened species. Our regulations (50 CFR 424.12(a)(1)) state that the designation of critical habitat is not prudent when one or both of the following situations exist:
(1) The species is threatened by taking or other human activity, and identification of critical habitat can be expected to increase the degree of threat to the species, or
(2) Such designation of critical habitat would not be beneficial to the species. In determining whether a designation would not be beneficial, the factors the Service may consider include but are not limited to: Whether the present or threatened destruction, modification, or curtailment of a species' habitat or range is not a threat to the species, or whether any areas meet the definition of “critical habitat.”
There is no imminent threat of take attributed to collection or vandalism identified under Factor B for this species (82 FR 46197; October 4, 2017), and identification and mapping of critical habitat is not expected to initiate any such threat. In the absence of finding that the designation of critical habitat would increase threats to a species, we next determine whether such designation of critical habitat would not be beneficial to the species. In our proposed listing rule (82 FR 46197; October 4, 2017), that was informed by the SSA (Service 2017, entire), we determined that there are habitat-based threats to the candy darter species identified under Factor A (82 FR 46197, pp. 46200-46201). Therefore, we find that the designation of critical habitat would be beneficial to the candy darter through the provisions of section 7 of the Act. Because we have determined that the designation of critical habitat will not likely increase the degree of threat to the species and would be beneficial, we find that designation of critical habitat is prudent for the candy darter.
Having determined that designation is prudent, under section 4(a)(3) of the Act we must find whether critical habitat for the candy darter is determinable. Our regulations at 50 CFR 424.12(a)(2) state that critical habitat is not determinable when one or both of the following situations exist:
(i) Data sufficient to perform required analyses are lacking, or
(ii) The biological needs of the species are not sufficiently well known to identify any area that meets the definition of “critical habitat.”
When critical habitat is not determinable, the Act allows the Service an additional year to publish a critical habitat designation (16 U.S.C. 1533(b)(6)(C)(ii)).
We reviewed the available information pertaining to the biological needs of the species and habitat characteristics where these species are located (Service 2018, entire). This and other information (Industrial Economics, Inc. (IEc) 2018, entire) represent the best scientific data available and led us to conclude that the designation of critical habitat is determinable for the candy darter (see below).
In accordance with section 3(5)(A)(i) of the Act and regulations at 50 CFR 424.12(b), in determining which areas within the geographical area occupied by the species at the time of listing to designate as critical habitat, we consider the physical or biological features that are essential to the conservation of the species and which may require special management considerations or protection. For example, physical features might include gravel of a particular size required for spawning, alkali soil for seed germination, protective cover for migration, or susceptibility to flooding or fire that maintains necessary early-successional habitat characteristics. Biological features might include prey species, forage grasses, specific kinds or ages of trees for roosting or nesting, symbiotic fungi, or a particular level of nonnative species consistent with conservation needs of the listed species. The features may also be combinations of habitat characteristics and may encompass the relationship between characteristics or the necessary amount of a characteristic needed to support the life history of the species. In considering whether features are essential to the conservation of the species, the Service may consider an appropriate quality, quantity, and spatial and temporal arrangement of habitat characteristics in the context of the life-history needs, condition, and status of the species. These characteristics include, but are not limited to, space for individual and population growth and for normal behavior; food, water, air, light, minerals, or other nutritional or physiological requirements; cover or shelter; sites for breeding, reproduction, or rearing (or development) of offspring; and habitats that are protected from disturbance.
We derive the specific physical or biological features (PBFs) essential to the conservation of the candy darter from studies of this species' habitat, ecology, and life history as described below. Additional information can be found in the final listing rule published elsewhere in today's
(1) Ratios or densities of nonnative species that allow for maintaining populations of candy darters.
(2) A blend of unembedded gravel and cobble that allows for normal breeding, feeding, and sheltering behavior.
(3) Adequate water quality characterized by seasonally moderated temperatures and physical and chemical parameters (
(4) An abundant, diverse benthic macroinvertebrate community (
(5) Sufficient water quantity and velocities that support normal behavior, growth, and viability of all life stages of the candy darter.
When designating critical habitat, we assess whether the specific areas within the geographical area occupied by the species at the time of listing contain features which are essential to the conservation of the species and which may require special management considerations or protection. The overall habitat characteristics that are important for the candy darter include sufficiently stabilized forest stream banks throughout the watersheds such that water quality allows for normal feeding, breeding, and sheltering in an area with sufficiently low numbers of nonnative species (Service 2018, pp. 15-17, 22-25, 32-34). The features essential to the conservation of the candy darter may require special management considerations or protections to reduce the following threats: (1) Hybridization with the nonnative variegate darter (
Management activities that could ameliorate these threats include, but are not limited to: Use of best management practices (BMPs) designed to reduce sedimentation, erosion, and bankside destruction; protection of riparian corridors and retention of sufficient canopy cover along banks; reduction of other watershed disturbances that release sediments, pollutants, or nutrients into the water; public outreach requesting the public's assistance with stopping the movement of nonnative aquatic species; increased enforcement and/or outreach regarding existing regulations prohibiting the movement of bait fish; survey and monitoring to further characterize the extent and spread of hybridization with variegate darters; research to determine whether some environmental factors or set of factors might allow candy darters to persist in particular areas despite variegate darter introductions; research characterizing habitat conditions in historically extirpated candy darter sites to facilitate successful reintroduction efforts; research and development of tools and techniques that can be used to address the competitive behavior that allows for variegate darters to dominate candy darters, which leads to hybridization; and re-introductions of candy darters to historically extirpated areas and/or population augmentation of candy darters in sufficient numbers to outcompete variegate darters.
As required by section 4(b)(2) of the Act, we use the best scientific data available to designate critical habitat. In accordance with the Act and our implementing regulations at 50 CFR 424.12(b), we review available information pertaining to the habitat requirements of the species and identify specific areas within the geographical area occupied by the species at the time of listing and any specific areas outside the geographical area occupied by the species to be considered for designation as critical habitat. We are not currently proposing to designate any areas outside the geographical area occupied by the species because we did not find any areas that were essential for the conservation of the species.
The current distribution of the candy darter is much reduced from its historical distribution. We anticipate that recovery will require continued protection of existing populations and habitat, in addition to establishing populations in additional streams that more closely approximate its historical distribution to ensure there are adequate numbers of fish in stable populations and that these populations occur over a wide geographic area. These actions will help to ensure that catastrophic events, such as flooding or a contamination spill event, cannot simultaneously affect all known populations.
Sources of data for this species include the West Virginia Department of Natural Resources, Virginia Department of Game and Inland Fisheries, U.S. Geological Survey, published scientific literature and government reports, and unpublished data from researchers at the Virginia Polytechnic Institute, West Virginia University, and the University of Missouri. A complete list of specific sources is provided in the SSA report (Service 2018, pp. 68-74) and available online at
The proposed critical habitat designation does not include all streams known to have been historically occupied by the species; instead, it focuses on occupied streams within the historical range that retain the necessary PBFs that allow for the maintenance and expansion of existing populations. The following streams have sections that meet the definition of areas occupied by the species (Service 2018, pp. 13, 56) at the time of listing:
• In the Greenbrier River watershed of West Virginia (WV)—the East and West Forks of the Greenbrier River, Little River of the West Fork, Little River of the East Fork, the “Upper” Greenbrier River (between Knapps Creek and the confluences of East and West Forks), Deer Creek, North Fork Deer Creek, Sitlington Creek, and Knapp Creek;
• In the Middle New River watershed of Virginia (VA)—Dismal Creek, Stony Creek, and Laurel Creek;
• In the Lower Gauley River watershed of WV—the “Lower” Gauley River;
• In the Upper New River watershed of VA—Cripple Creek; and
• In the Upper Gauley River watershed of WV—the headwaters of the Gauley River, Straight Creek, “Upper” Gauley River, Panther Creek, Williams River, Tea Creek, Cranberry River, Cherry River, North and South Forks of the Cherry River, and Laurel Creek.
There are no developed areas within the wetted portion of these streams.
We are not proposing to designate any areas outside of the geographic range at the time of listing. However, in line with our conservation strategy, we intend to reestablish populations within the candy darter's historical range under section 10(j) of the Act or through other applicable voluntary conservation tools (
In summary, for areas within the geographic area occupied by the species at the time of listing, we propose critical habitat unit boundaries using the following approach:
(1) We delineated areas within the historical range that had positive survey data between the year 2000 and the time of listing (see Service 2018).
(2) We terminated stream segments at barriers, confluences, areas where genetically pure candy darters have been extirpated, other obvious unsuitable habitat, or a location selected based on expert knowledge of a lack of presence.
(3) We included connecting stream segments between occupied stream segments as long as the inclusion does not disagree with criterion (2) and there are no data to suggest that the candy darter is not present.
(4) If there are no data points (positive or negative occurrence), we did not include the segment.
(5) In the absence of other biologically meaningful termini, we established a buffer approximately 1-mile long from the last known positive survey point.
When determining proposed critical habitat boundaries, we made every effort to avoid including developed areas such as lands covered by buildings, pavement, and other structures because such lands lack physical or biological features necessary for the candy darter. The scale of the maps we prepared under the parameters for publication within the Code of Federal Regulations may not reflect the exclusion of such developed lands. Any such lands inadvertently left inside critical habitat boundaries shown on the maps of this proposed rule have been excluded by text in the proposed rule and are not proposed for designation as critical habitat. Therefore, if the critical habitat is finalized as proposed, a Federal action involving these lands would not trigger section 7 consultation with respect to critical habitat and the requirement of no adverse modification unless the specific action would affect the physical or biological features in the adjacent critical habitat.
We are proposing for designation as critical habitat lands that we have determined are occupied at the time of listing and contain one or more of the PBFs to support life-history processes essential to the conservation of the candy darter. Some units contain all of the identified PBFs and support multiple life-history processes. Some units contain only some of the PBFs necessary to support the candy darter's particular use of that habitat.
The critical habitat designation is defined by the maps, as modified by any accompanying regulatory text, presented at the end of this document under Proposed Regulation Promulgation. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. We will make the coordinates or plot points or both on which each map is based available to the public on
We are proposing to designate approximately 596 stream kilometers (skm) (370 stream miles (smi)) in five units as critical habitat for the candy
We present brief descriptions of all units, and reasons why they meet the definition of critical habitat for candy darter, below. In all instances, the units are occupied (see Areas Occupied at the Time of Listing, above); the State of VA or WV, as applicable, owns the stream water and stream bottoms; and the lands described below are those adjacent to the designated critical habitat stream areas.
The Greenbrier Unit consists of six subunits in Pocahontas County, WV. The occupied streams are adjacent to primarily Federal land, with some private land and one State owned parcel. Candy darter have been surveyed in the Greenbrier Unit as recently as 2014 (Service 2018, p. 48). See details below.
Unit 1a includes approximately 31.2 skm (19.4 smi) of the East Fork of the Greenbrier River from a point approximately 3.2 skm (2.0 smi) upstream of the Bennett Run confluence, downstream to the confluence of the East Fork and West Fork of the Greenbrier River at Durbin, WV; and approximately 12.2 skm (7.6 smi) of the Little River from a point 3.2 skm (2.0 smi) upstream of the power line right-of-way, downstream to the confluence of the Little River and the East Fork of the Greenbrier River. The land adjacent to this unit is mostly forested interspersed with small communities, low density residences, and agricultural fields along the lower portion of the East Fork of the Greenbrier River. Approximately 26.2 skm (16.3 smi) of Unit 1a is within the Monongahela National Forest with the remainder located almost entirely adjacent to private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Candy darters occur at multiple sites in this unit (Service 2018, p. 28) . Unit 1a contributes to the redundancy of the Greenbrier metapopulation.
Unit 1b includes approximately 29.9 skm (18.6 smi) of the West Fork of the Greenbrier River from the Public Road 44 crossing, downstream to the confluence of the East Fork and West Fork of the Greenbrier River at Durbin, WV; and approximately 14.2 skm (8.8 smi) of the Little River from a point approximately 1.6 skm (1.0 smi) upstream of the Lukins Run confluence, downstream to the confluence of the Little River and the West Fork of the Greenbrier River. The land adjacent to this unit is almost entirely forested interspersed with a few residences and agricultural fields along the lower portion of the West Fork of the Greenbrier River near the town of Durbin, WV. Approximately 43.2 skm (26.8 smi) of Unit 1b is within the
Unit 1c includes approximately 69.3 skm (43.1 smi) of the Greenbrier River from the confluence of the East Fork and West Fork of the Greenbrier River at Durbin, WV, downstream to the confluence of Knapp Creek at Marlinton, WV. The land adjacent to this unit is mostly forested; however, several small communities with residences and light commercial development, along with scattered rural residences and agricultural fields, occur at various locations. Approximately 47.5 skm (29.5 smi) of Unit 1c is within the Monongahela National Forest and the Seneca State Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Survey data indicate candy darters are present in the upper and lower portions of this unit (Service 2018, p. 28). While survey data for the intervening section are lacking, candy darters may occur where suitable habitat is present. Unit 1c contributes to the redundancy of the Greenbrier metapopulation and provides connectivity between the other Greenbrier watershed populations.
Unit 1d includes approximately 21.2 skm (13.2 smi) of Deer Creek from the confluence of Deer Creek and Saulsbury Run, downstream to the confluence with the Greenbrier River; and approximately 16.3 skm (10.1 smi) of North Fork from a point approximately 1.6 skm (1.0 smi) upstream of the Elleber Run confluence, downstream to the confluence of North Fork and Deer Creek. The lower half of the land adjacent to this unit is mostly forested, while the upper portion contains low density residences and agricultural fields. Approximately 10.0 skm (6.2 smi) of Unit 1d is within the Monongahela National Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys collected candy darters at two locations in this unit (Service 2018, p. 28). Unit 1d contributes to the redundancy of the Greenbrier metapopulation.
Unit 1e includes approximately 10.1 skm (6.3 smi) of Sitlington Creek from the confluence of Galford Run and Thorny Branch, downstream to the confluence with the Greenbrier River. Some of the riparian area of Unit 1e is forested; however, the majority of the land adjacent to this unit is agricultural fields and widely scattered residences. Approximately 1.2 skm (0.7 smi) of Unit 1e is within the Monongahela National Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Candy darters at several locations in this unit (Service 2018, p. 28). Unit 1e contributes to the redundancy of the Greenbrier metapopulation.
Unit 1f includes approximately 43.9 skm (27.3 smi) of Knapp Creek from a point approximately (0.1 smi) west of the WV Route 84 and Public Road (PR) 55 intersection, downstream to the confluence with the Greenbrier River at Marlinton, WV. The land adjacent to this unit is largely forested; however, low density residential and agricultural fields occur in much of the upstream portions. The land surrounding the lowest section of Unit 1f is dominated by residential and commercial development. Approximately 7.2 skm (4.5 smi) of Unit 1f is within the Monongahela National Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys indicate candy darters at several locations in this unit (Service 2018, p. 28). Unit 1f contributes to the redundancy of the Greenbrier metapopulation.
The Middle New Unit comprises three stream subunits in Bland and Giles Counties, VA. The occupied streams are adjacent to a mix of Federal and private land. Candy darter have been surveyed in the Middle New Unit as recently as 2016 (Service 2018, p. 48). See details below.
Unit 2a includes approximately 4.2 skm (2.6 smi) of Dismal Creek from the confluence with Standrock Branch, downstream to the confluence of Dismal Creek and Walker Creek. The land adjacent to this unit is almost entirely forested, with some scattered residences and small agricultural fields. Approximately 3.2 skm (2.0 smi) of Unit 2a is within the George Washington and Jefferson National Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys indicate a small candy darter population that contributes to the representation and redundancy of the species (Service 2018, p. 28).
Unit 2b includes approximately 34.1 skm (21.2 smi) of Stony Creek from a point approximately 2.4 skm (1.5 smi) upstream of North Fork Mountain Road, downstream to the confluence with the New River. The land adjacent to this unit is almost entirely forested, with some scattered residences, a large underground lime mine, a processing plant, and a railroad spur line along the downstream portion. Approximately 19.2 skm (11.9 smi) of Unit 2b is within the George Washington and Jefferson National Forest, with the remainder adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys indicate candy darters at multiple locations within this unit. Unit 2b is the most robust population in Virginia and contributes to the representation and redundancy of the species (Service 2018, p. 28).
Unit 2c includes approximately 5.1 skm (3.2 smi) of Laurel Creek from a point approximately 0.8 skm (0.5 smi) upstream of the unnamed pond, downstream to the confluence of Laurel Creek and Wolf Creek. The unit passes through a forested gap in a ridgeline; however, the riparian zone is dominated by Interstate Highway 77, U.S. Highway 52, and residential and commercial development. Unit 2c is adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys found candy darters at several locations within this unit (Service 2018, p. 28). Unit 2c contributes to the representation and redundancy of the species.
Unit 3 includes approximately 2.9 skm (1.8 smi) of the Gauley River from
Unit 4 includes approximately 7.9 skm (4.9 smi) of Cripple Creek from a point approximately (2.0 smi) upstream of the State Road 94 bridge, downstream to the confluence of Cripple Creek and the New River. The land adjacent to this unit is primarily low density residences and agricultural fields, although some small segments pass through wooded parcels. The stream in Unit 4 is adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys found candy darters at several locations within this unit as recently as 2016 (Service 2018, pp. 28 & 48). This is the only known candy darter population in the Upper New River watershed, and this unit contributes to the representation and redundancy of the species.
The Upper Gauley Unit consists of six stream subunits in Nicholas, Greenbrier, Pocahontas, and Webster Counties, WV. The occupied streams are adjacent to a mix of Federal and private land. Candy darter have been surveyed in the Upper Gauley Unit as recently as 2014 (Service 2018, p. 48). See details below.
Unit 5a includes approximately 23.2 skm (37.3 smi) of the Gauley River from the North and South Forks of the Gauley River, downstream to the confluence of the Gauley River and the Williams River at Donaldson, WV; and 2.9 skm (1.8 smi) of Straight Creek from its confluence with the Gauley River to a point approximately 2.9 skm (1.8 smi) upstream of the confluence. The land adjacent to this unit is mostly forested; however, aerial imagery (Environmental Systems Research Institute (ESRI) 2015; ESRI 2016; ESRI 2017) shows forest clearings with varying degrees of regrowth, indicating ongoing timber harvests in some tributary stream systems. Other human development in the watershed consists primarily of scattered residences and roads, mostly in the valley adjacent to the Gauley River. Approximately 9.0 skm (5.6 smi) of Unit 5a is within the Monongahela National Forest. The remainder of the unit is adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys of Unit 5a captured candy darters at multiple locations (Service 2018, p. 28). The unit contributes to the redundancy of the Upper Gauley metapopulation.
Unit 5b includes approximately 43.8 skm (27.2 smi) of the Gauley River from the confluence of the Gauley and Williams Rivers at Donaldson, WV, downstream to a point approximately 1.6 skm (1.0 smi) upstream of the Big Beaver Creek confluence. The land adjacent to this unit is mostly forested; however, aerial imagery (ESRI 2015; ESRI 2016; ESRI 2017) show forest clearings with varying degrees of regrowth, indicating ongoing timber harvests in some areas. Other human development consists primarily of low-density residential areas and small communities with some commercial facilities. Small agricultural fields are associated with some of the scattered residences. Approximately 14.6 skm (9.2 smi) of Unit 5b is within the Monongahela National Forest and/or adjacent to land owned by the Corps. The streams in the remainder of the unit are adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Surveys of Unit 5b captured candy darters at several locations (Service 2018, p. 28). The unit provides connectivity between other candy darter streams in the Upper Gauley watershed and contributes to the redundancy of the Upper Gauley metapopulation.
Unit 5c includes approximately 16.3 skm (10.1 smi) of Panther Creek from a point approximately 1.1 skm (0.7 smi) upstream of the Grassy Creek Road crossing, downstream to the confluence with the Gauley River. The unit is mostly forested; however, aerial imagery (ESRI 2015; ESRI 2016; ESRI 2017) show forest clearings with varying degrees of regrowth, indicating ongoing timber harvests in much of the upland areas. Other human development consists of the occasional residence and small agricultural field in the creek valley, and the Richwood Municipal Airport located on an adjacent ridge. The streams in Unit 5c are adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. While survey data are sparse for this unit, candy darters occur within Panther Creek, and the stream maintains suitable habitat for the species; thus, this unit contributes to the redundancy of the Upper Gauley metapopulation (Service 2018, p. 28).
Unit 5d includes approximately 52.4 skm (32.6 smi) of the Williams River from the confluence with Beaverdam Run, downstream to the confluence of the Williams River and the Gauley River at Donaldson, WV; and 5.1 skm (3.2 smi) of Tea Creek from a point on Lick Creek approximately 2.7 skm (1.7 smi) upstream of the Lick Creek confluence, downstream to the Tea Creek confluence with the Williams River. The land adjacent to this unit is almost entirely forested with just a few residences and small agricultural fields at the lower portion of the river. The streams in Unit 5d are entirely within the Monongahela National Forest. Survey data indicate candy darters are present at the upper and lower portions of this unit. While data are sparse for the majority of the intervening stretch, we assume, based on the available evidence, that the habitat is suitable for the species (Service 2018, p. 28). Unit 5d contributes to the redundancy of the Upper Gauley metapopulation.
Unit 5e includes approximately 39.3 skm (24.4 smi) of the Cranberry River from the confluence of the North and South Forks of the Cranberry River, downstream to the confluence of the Cranberry River and the Gauley River. The land adjacent to this unit is almost entirely forested, and the stream is entirely within the Monongahela National Forest. Survey data indicate candy darters are present at the upper and lower portions of this unit. While survey are sparse for the intervening stretch, we assume, based on the available evidence, that the habitat is suitable for the species (Service 2018, p. 28). Unit 5e contributes to the
Unit 5f includes approximately 16.7 skm (10.4 smi) of Cherry River from the confluence of the North and South Forks of the Cherry River, downstream to the confluence of the Cherry River and the Gauley River; approximately 28.0 skm (17.4 smi) of the North Fork Cherry River from the Pocahontas Trail crossing, downstream to the confluence of the North and South Forks of the Cherry River; approximately 26.2 skm (16.3 smi) of the South Fork Cherry River from a point approximately 0.5 skm (0.3 smi) south of County Road 29/4 in VA, downstream to the confluence of the North and South Forks of the Cherry River; and approximately 24.9 skm (15.5 smi) of Laurel Creek from a point approximately 0.3 skm (0.2 smi) west of Cold Knob Road, downstream to the confluence of Laurel Creek the Cherry River. The land adjacent to this unit is mostly forested with scattered residences along the lower portion of the Cherry River. The town of Richwood, WV, with residential and commercial development and an industrial sawmill, is at the confluence of the North and South Forks of the Cherry River. The North and South Forks of the Cherry River are almost entirely forested; however, aerial imagery (ESRI 2015; ESRI 2016; ESRI 2017) show forest clearings with varying degrees of regrowth, indicating ongoing timber harvests in several locations. There are scattered residences on Laurel Creek and some evidence of recent timber harvests; otherwise, the land adjacent to this section of Unit 1f is mostly forested. Approximately 29.1 skm (18.1 smi) of Unit 5f is within the Monongahela National Forest. The remainder is adjacent to almost entirely private land, except for a small amount that is publicly owned in the form of bridge crossings, road easements, and the like. Survey data indicate candy darters are well distributed throughout most of this unit (Service 2018, p. 28). Unit 5f contributes to the redundancy of the Upper Gauley metapopulation.
Section 7(a)(2) of the Act requires Federal agencies, including the Service, to ensure that any action they fund, authorize, or carry out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of designated critical habitat of such species. In addition, section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any agency action which is likely to jeopardize the continued existence of any species proposed to be listed under the Act or result in the destruction or adverse modification of proposed critical habitat.
We published a final rule adopting a new definition of “destruction or adverse modification” on February 11, 2016 (81 FR 7214). Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the value of critical habitat for the conservation of a listed species. Such alterations may include, but are not limited to, those that alter the physical or biological features essential to the conservation of a species or that preclude or significantly delay development of such features.
If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Examples of actions that are subject to the section 7 consultation process are actions on State, tribal, local, or private lands that require a Federal permit (such as a permit from the Corps under section 404 of the Clean Water Act (33 U.S.C. 1251
As a result of section 7 consultation, we document compliance with the requirements of section 7(a)(2) through our issuance of:
(1) A concurrence letter for Federal actions that may affect, but are not likely to adversely affect, listed species or critical habitat; or
(2) A biological opinion for Federal actions that may affect and are likely to adversely affect, listed species or critical habitat.
When we issue a biological opinion concluding that a project is likely to jeopardize the continued existence of a listed species and/or destroy or adversely modify critical habitat, we provide reasonable and prudent alternatives to the project, if any are identifiable, that would avoid the likelihood of jeopardy and/or destruction or adverse modification of critical habitat. We define “reasonable and prudent alternatives” (at 50 CFR 402.02) as alternative actions identified during consultation that:
(1) Can be implemented in a manner consistent with the intended purpose of the action,
(2) Can be implemented consistent with the scope of the Federal agency's legal authority and jurisdiction,
(3) Are economically and technologically feasible, and
(4) Would, in the Service Director's opinion, avoid the likelihood of jeopardizing the continued existence of the listed species and/or avoid the likelihood of destroying or adversely modifying critical habitat.
Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.
Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where we have listed a new species or subsequently designated critical habitat that may be affected and the Federal agency has retained discretionary involvement or control over the action (or the agency's discretionary involvement or control is authorized by law). Consequently, Federal agencies sometimes may need to request reinitiation of consultation with us on actions for which formal consultation has been completed, if those actions with discretionary involvement or control may affect subsequently listed species or designated critical habitat.
The key factor related to the adverse modification determination is whether, with implementation of the proposed Federal action, the affected critical habitat would continue to serve its intended conservation role for the species. Activities that may destroy or adversely modify critical habitat are those that result in a direct or indirect alteration that appreciably diminishes the value of critical habitat for the conservation of the candy darter. Such alterations may include, but are not limited to, those that alter the PBFs essential to the conservation of these species or that preclude or significantly delay development of such features. As discussed above, the role of critical habitat is to support PBFs essential to the conservation of a listed species and provide for the conservation of the species.
Section 4(b)(8) of the Act requires us to briefly evaluate and describe, in any proposed or final regulation that designates critical habitat, activities involving a Federal action that may destroy or adversely modify such habitat, or that may be affected by such designation.
Activities that may affect critical habitat, when carried out, funded, or authorized by a Federal agency, should result in consultation for the candy darter. These activities include, but are not limited to:
(1) Actions that would promote or facilitate the movement of variegate darters (or other nonnative aquatic species). Such activities could include, but are not limited to, the transfer of surface water across watershed boundaries and the modification or removal of dams that are currently limiting the spread of variegate darters where they have been introduced. These activities could further decrease the abundance of the candy darter through hybridization with the nonnative variegate darter.
(2) Actions that would significantly increase water temperature or sedimentation and stream bottom embeddedness. Such activities could include, but are not limited to, land use changes that result in an increase in sedimentation, erosion, and bankside destruction or the loss of the protection of riparian corridors and leaving insufficient canopy cover along banks.
(3) Actions that would significantly alter water chemistry. Such activities could include, but are not limited to, release of chemicals, biological pollutants, or heated effluents into the surface water or connected groundwater at a point source or by dispersed release (nonpoint source). These activities could alter water conditions to levels that are beyond the tolerances of the candy darter and result in direct or cumulative adverse effects to these individuals and their life cycles.
(4) Actions that would contribute to further habitat fragmentation. Such activities include, but are not limited to, construction of barriers that impede the instream movement of the candy darter (
(5) Actions that would contribute to nonnative competition for habitat and other instream resources and to predation. Possible actions could include, but are not limited to, stocking of nonnative fishes or other related actions. These activities can introduce predators or affect the growth, reproduction, and survival of the candy darter through competition for resources.
Section 4(b)(2) of the Act states that the Secretary shall designate and make revisions to critical habitat on the basis of the best available scientific data after taking into consideration the economic impact, national security impact, and any other relevant impact of specifying any particular area as critical habitat. The Secretary may exclude an area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific data available, that the failure to designate such area as critical habitat will result in the extinction of the species. In making that determination, the statute on its face and the legislative history are clear that the Secretary has broad discretion regarding which factor(s) to use and how much weight to give to any factor.
We have not considered any areas for exclusion from critical habitat. However, the final decision on whether to exclude any areas will be based on the best scientific data available at the time of the final designation, including information we obtain during the comment period and information about the economic impact of designation. Accordingly, we have prepared a draft economic analysis (DEA) concerning the proposed critical habitat designation, which is available for review and comment (see
Section 4(b)(2) of the Act and its implementing regulations require that we consider the economic impact that may result from a designation of critical habitat. To assess the probable economic impacts of a designation, we must first evaluate specific land uses or activities and projects that may occur in the area of the critical habitat. We then must evaluate the impacts that a specific critical habitat designation may have on restricting or modifying specific land uses or activities for the benefit of the species and its habitat within the areas proposed. We then identify which conservation efforts may be the result of the species being listed under the Act versus those attributed solely to the designation of critical habitat for this particular species. The probable economic impact of a proposed critical habitat designation is analyzed by comparing scenarios both “with critical habitat” and “without critical habitat.” The “without critical habitat” scenario represents the baseline for the analysis, which includes the existing regulatory and socio-economic burden imposed on landowners, managers, or other resource users potentially affected by the designation of critical habitat (
For this particular designation, we developed an incremental effects memorandum (IEM) considering the probable incremental economic impacts that may result from this proposed designation of critical habitat (Service 2018b). The information contained in our IEM was then used to develop a screening analysis of the probable effects of the designation of critical habitat for the candy darter (Industrial Economics, Incorporated (IEc) 2018). We began by conducting a screening analysis of the proposed designation of critical habitat in order to focus our analysis on the key factors that are likely to result in incremental economic impacts. The purpose of the screening analysis is to filter out the geographic areas in which the critical habitat designation is unlikely to result in probable incremental economic impacts. In particular, the screening analysis considers baseline costs (
Executive Orders (E.O.s) 12866 and 13563 direct Federal agencies to assess the costs and benefits of available regulatory alternatives in quantitative (to the extent feasible) and qualitative terms. Consistent with the E.O.s' regulatory analysis requirements, our effects analysis under the Act may take into consideration impacts to both directly and indirectly affected entities, where practicable and reasonable. If sufficient data are available, we assess to the extent practicable the probable impacts to both directly and indirectly affected entities. As part of our screening analysis, we considered the types of economic activities that are likely to occur within the areas likely affected by the critical habitat designation. In our evaluation of the probable incremental economic impacts that may result from the proposed designation of critical habitat for the candy darter, first we identified, in the IEM dated April 18, 2018, probable incremental economic impacts associated with the following categories of activities: (1) Watershed and stream restoration activities (Natural Resources Conservation Service (NRCS), U.S. Forest Service (USFS), Service, Corps, Environmental Protection Agency (EPA), Federal Emergency Management Agency (FEMA)); (2) timber harvest and vegetation management (USFS); (3) prescribed fire (USFS); (4) construction and management of recreation improvement activities (USFS, NPS); (5) coal mining (Office of Surface Mining (OSM)); (6) pipeline and utility crossings (Corps, Federal Energy Regulatory Commission (FERC)); (7) road and bridge construction and maintenance (Corps, Federal Highway Administration (FHWA)); (8) pesticide use (USFS, FERC, FHWA); (9) abandoned mine reclamation (OSM); (10) emergency response activities (FEMA); and (11) oil and gas exploration (Corps). We considered each industry or category individually. Additionally, we considered whether their activities have any Federal involvement. Critical habitat designation generally will not affect activities that do not have any Federal involvement; under the Act, designation of critical habitat affects only activities conducted, funded, permitted, or authorized by Federal agencies. In areas where the candy darter is present, Federal agencies already are required to consult with the Service under section 7 of the Act on activities they fund, permit, or implement that may affect the species. If we finalize this proposed critical habitat designation, consultations to avoid the destruction or adverse modification of critical habitat would be incorporated into the existing consultation process.
In our IEM, we attempted to clarify the distinction between the effects that will result from the species being listed and those attributable to the critical habitat designation (
We have identified and delineated five proposed critical habitat units, totaling approximately 596 skm (370 smi), that are currently (
The entities most likely to incur incremental costs are parties to section 7 consultations, in this case, only Federal action agencies. We do not anticipate any costs to State or local agencies, or impacts on property values related to the public's perception of additional regulation, because we do not expect the designation of critical habitat for the candy darter to result in changes to Virginia or West Virginia fishing regulations, or other local regulations (IEc 2018, pp. 14-15).
The probable incremental economic impacts of the candy darter critical habitat designation are expected to be limited to additional administrative effort resulting from a small number of future section 7 consultations. This is due to the fact that (1) All proposed critical habitat stream reaches are considered to be occupied by the species; (2) within occupied habitat, regardless of whether critical habitat is designated, all projects with a Federal nexus will already be subject to the section 7 requirement; and (3) during section 7 consultation, project modifications that would be recommended to avoid adverse modification would already be requested to avoid jeopardizing the continued existence of the species. There are no forecasted incremental costs associated with project modifications (IEc 2018, p. 8).
At approximately $10,000 or less per consultation, to reach the threshold of $100 million of incremental administrative impacts in a single year, critical habitat designation would have to result in more than 11,000 consultations in a single year (IEc 2018, p. 11). No more than 91 candy darter consultations (31 technical assistance, 55 informal, 1 formal, 2 reinitiated formal, and 1 programmatic) are anticipated in any given year (IEc 2018, pp. 12-13). Units 1 (Greenbrier Watershed) and 5 (Upper Gauley Watershed) have the highest potential costs, due in part to the higher densities of occupied candy darter streams relative to the other units and the anticipated consultation workload
As we stated earlier, we are soliciting data and comments from the public on the DEA and all aspects of the proposed rule and our required determinations. We may revise the proposed rule or supporting documents to incorporate or address information we receive during the public comment period. In particular, we may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area, provided the exclusion will not result in the extinction of this species.
Under section 4(b)(2) of the Act, we consider the economic impacts of specifying any particular area as critical habitat. To consider economic impacts, we prepared an analysis of the probable economic impacts of the proposed critical habitat designation and related factors.
During the development of a final designation, we will consider any additional economic impact information we receive through the public comment period, and as such areas may be excluded from the final critical habitat designation under section 4(b)(2) of the Act and our implementing regulations at 50 CFR 424.19.
Under section 4(b)(2) of the Act, we consider whether there are lands owned or managed by the Department of Defense where a national security impact might exist. In preparing this proposal, we have determined that the lands adjacent to the proposed designation of critical habitat for candy darter are not owned or managed by the Department of Defense or Department of Homeland Security, and, therefore, we anticipate no impact on national security. Consequently, the Secretary is not intending to exercise his discretion to exclude any areas from the final designation based on impacts on national security.
Under section 4(b)(2) of the Act, we consider any other relevant impacts, in addition to economic impacts and impacts on national security. We consider a number of factors including whether there are permitted conservation plans covering the species in the area such as HCPs, safe harbor agreements, or candidate conservation agreements with assurances, or whether there are nonpermitted conservation agreements and partnerships that would be encouraged by designation of, or exclusion from, critical habitat. In addition, we look at the existence of tribal conservation plans and partnerships and consider the government-to-government relationship of the United States with tribal entities. We also consider any social impacts that might occur because of the designation.
Although we have determined that there are currently no HCPs or other management plans for the candy darter and the proposed designation does not include any tribal lands or trust resources, we are aware of management plans within the candy darter's range such as the Monongahela National Forest Land and Resource Management Plan and forest plans for the George Washington and Thomas Jefferson National Forests. At this time, we anticipate no impact on tribal lands, partnerships, or HCPs from this proposed critical habitat designation. Accordingly, the Secretary does not intend to exercise his discretion to exclude any areas from the designation based on other relevant impacts.
We believe that the best way to facilitate reintroductions of candy darter within the historical range where the essential PBFs can be found will be to use the authorities under section 10(j) of the Act. We have developed a conservation strategy for the candy darter, part of which identified the need to reestablish candy darter populations within areas of its historical range. These areas could include Reed Creek, Pine Run, and Sinking Creek in VA; and sections of Indian Creek, Bluestone River, and Camp Creek in WV. Because the candy darter is extirpated from these areas and natural repopulation is not possible without human assistance, use of a 10(j) rule may be one appropriate tool to achieve this recovery objective. An overview of the process to establish an experimental population under section 10(j) of the Act is described below.
Section 10(j) of the Act enables us to designate certain populations of federally listed species that are released into the wild as “experimental.” The circumstances under which this designation can be applied are: (1) The population is geographically separate from nonexperimental populations of the same species (
When we designate a population as experimental, section 10(j) of the Act requires that we determine whether that population is either essential or nonessential to the continued existence of the species, based on the best available information. Nonessential experimental populations located outside National Wildlife Refuge System or National Park System lands are treated, for the purposes of section 7 of the Act, as if they are proposed for listing. Thus, for nonessential experimental populations, only two provisions of section 7 would apply outside National Wildlife Refuge System and National Park System lands: Section 7(a)(1), which requires all Federal agencies to use their authorities to conserve listed species, and section 7(a)(4), which requires Federal agencies to informally confer with the Service on actions that are likely to jeopardize the continued existence of a proposed species. Section 7(a)(2) of the Act, which requires Federal agencies to ensure that their activities are not likely to jeopardize the continued existence of a listed species, would not apply except
To establish an experimental population, we must issue a proposed rule and consider public comments on the proposed rule prior to publishing a final rule. In addition, we must comply with the National Environmental Policy Act (42 U.S.C. 4321
The flexibility gained by establishment of a nonessential experimental population through section 10(j) would be reduced if there is a designation of critical habitat that overlaps it. This is because Federal agencies would still be required to consult with us on any actions that may adversely modify critical habitat. In fact, section 10(j)(2)(C)(ii) of the Act states that critical habitat shall not be designated under the Act for any experimental population determined to be not essential to the continued existence of a species.
We wish to reestablish the candy darter in areas of its historical range. We strongly believe that to achieve recovery for the candy darter we would need the flexibility provided for in section 10(j) of the Act to help ensure the success of reestablishing the candy darter in suitable unoccupied areas within the historical range. Use of section 10(j) is meant to encourage local cooperation through management flexibility. Critical habitat is often viewed negatively by the public because it is not well understood and there are many misconceptions about how it affects private landowners. It is important for recovery of this species that we have the support of the public when we move towards meeting the recovery goals. Therefore, we conclude that the best way to facilitate reintroduction into unoccupied portions of the candy darter range is to garner support of private landowners adjacent to potential reintroduction areas through the management flexibility provided by 10(j) of the Act.
In summary, we believe that establishing nonessential experimental populations under Section 10(j) of the Act within the historical range will be the most effective means of achieving recovery for the candy darter. Establishing nonessential experimental populations will greatly benefit the overall recovery of the candy darter by allowing us to move forward using the flexibility and greater public acceptance of section 10(j) of the Act to reestablish the candy darter in other portions of its historical range where it no longer occurs. This is likely one of the most important steps in reaching recovery of this species, and we believe that section 10(j) is the best tool to achieve this objective. Thus, we believe that establishing a nonessential experimental population in unoccupied areas will be beneficial in conserving the species within historical range. We intend to initiate rulemaking regarding a section 10(j) rule for the candy darter in the near future.
In accordance with our joint policy on peer review published in the
Section 4(b)(5) of the Act provides for one or more public hearings on this proposal, if requested. Requests must be received by the date specified in
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.
Executive Order (E.O.) 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
This rule is not an E.O. 13771 (“Reducing Regulation and Controlling Regulatory Costs”) (82 FR 9339, February 3, 2017) regulatory action because this rule is not significant under E.O. 12866.
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
The Service's current understanding of the requirements under the RFA, as amended, and following recent court decisions, is that Federal agencies are only required to evaluate the potential incremental impacts of rulemaking on those entities directly regulated by the rulemaking itself, and, therefore, are not required to evaluate the potential impacts to indirectly regulated entities. The regulatory mechanism through which critical habitat protections are realized is section 7 of the Act, which requires Federal agencies, in consultation with the Service, to ensure that any action authorized, funded, or carried out by the agency is not likely to destroy or adversely modify critical habitat. Therefore, under section 7, only Federal action agencies are directly subject to the specific regulatory requirement (avoiding destruction and adverse modification) imposed by critical habitat designation. Consequently, it is our position that only Federal action agencies will be directly regulated by this designation. There is no requirement under RFA to evaluate the potential impacts to entities not directly regulated. Moreover, Federal agencies are not small entities. Therefore, because no small entities would be directly regulated if we adopt this rule as proposed, the Service certifies that, if made final, the proposed critical habitat designation will not have a significant economic impact on a substantial number of small entities.
In summary, we have considered whether the proposed designation would result in a significant economic impact on a substantial number of small entities. For the above reasons and based on currently available information, we certify that, if made final, the proposed critical habitat designation would not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required.
Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use) requires agencies to prepare Statements of Energy Effects when undertaking certain actions. In our economic analysis, we did not find that the designation of this proposed critical habitat would significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action, and no Statement of Energy Effects is required.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
(1) This proposed rule would not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments” with two exceptions. It excludes “a condition of Federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding,” and the State, local, or tribal governments “lack authority” to adjust accordingly. At the time of enactment, these entitlement programs were: Medicaid; Aid to Families with Dependent Children work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement. “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except (i) a condition of Federal assistance or (ii) a duty arising from participation in a voluntary Federal program.”
The designation of critical habitat does not impose a legally binding duty on non-Federal Government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply, nor would critical habitat shift the costs of the large entitlement programs listed above onto State governments.
(2) We do not believe that this proposed rule would significantly or uniquely affect small governments because the waters being proposed for critical habitat designation are owned by the States of Virginia and West Virginia. These government entities do not fit the definition of “small government jurisdiction.” Therefore, a Small Government Agency Plan is not required.
In accordance with E.O. 12630 (Government Actions and Interference with Constitutionally Protected Private Property Rights), we have analyzed the potential takings implications of designating critical habitat for the candy darter in a takings implications assessment. The Act does not authorize the Service to regulate private actions on private lands or confiscate private property as a result of critical habitat designation. Designation of critical habitat does not affect land ownership, or establish any closures or restrictions
In accordance with E.O. 13132 (Federalism), this proposed rule does not have significant Federalism effects. A federalism summary impact statement is not required. In keeping with Department of the Interior and Department of Commerce policy, we request information from, and coordinated development of this proposed critical habitat designation with, appropriate State resource agencies in Virginia and West Virginia. From a federalism perspective, the designation of critical habitat directly affects only the responsibilities of Federal agencies. The Act imposes no other duties with respect to critical habitat, either for States and local governments, or for anyone else. As a result, the proposed rule would not have substantial direct effects either on the States, or on the relationship between the national government and the States, or on the distribution of powers and responsibilities among the various levels of government. The designation may have some benefit to these governments because the areas that contain the features essential to the conservation of the species are more clearly defined, and the physical or biological features of the habitat necessary to the conservation of the species are specifically identified. This information does not alter where and what federally sponsored activities may occur. However, it may assist these local governments in long-range planning (because these local governments would no longer have to wait for case-by-case section 7 consultations to occur).
Where State and local governments require approval or authorization from a Federal agency for actions that may affect critical habitat, consultation under section 7(a)(2) would be required. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency.
In accordance with E.O. 12988 (Civil Justice Reform), the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order. We have proposed designating critical habitat in accordance with the provisions of the Act. To assist the public in understanding the habitat needs of the species, this proposed rule identifies the elements of physical or biological features essential to the conservation of the species. The designated areas of critical habitat are presented on maps, and the proposed rule provides several options for the interested public to obtain more detailed location information, if desired.
This rule does not contain information collection requirements, and a submission to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
It is our position that, outside the jurisdiction of the U.S. Court of Appeals for the Tenth Circuit, we do not need to prepare environmental analyses pursuant to the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes. We determined that there are no tribal lands that were occupied by the candy darter at the time of listing that contain the features essential for conservation of the species, and no tribal lands unoccupied by the candy darter that are essential for the conservation of the species. Therefore, we are not proposing to designate critical habitat for the candy darter on any tribal lands.
We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(1) Be logically organized;
(2) Use the active voice to address readers directly;
(3) Use clear language rather than jargon;
(4) Be divided into short sections and sentences; and
(5) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in
A complete list of references cited in this rulemaking is available on the
The primary authors of this proposed rule are the staff members of the Service's Species Assessment Team, the West Virginia Ecological Services Field Office, and the Southwest Virginia Ecological Services Field Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(e)
(1) Critical habitat units are depicted for Bland, Giles, and Wythe Counties, Virginia, and Nicholas, Pocahontas, Greenbrier, and Webster Counties, West Virginia, on the maps in this entry.
(2) Within these areas, the physical or biological features essential to the conservation of the candy darter consist of the following components:
(i) Ratios or densities of nonnative species that allow for maintaining populations of candy darters.
(ii) Blend of unembedded gravel and cobble that allows for normal breeding, feeding, and sheltering behavior.
(iii) Adequate water quality characterized by seasonally moderated temperatures and physical and chemical parameters (
(iv) Abundant, diverse benthic macroinvertebrate community (
(v) Sufficient water quantity and velocities that support normal behavior, growth, and viability of all life stages of the candy darter.
(3) Critical habitat does not include manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located existing within the legal boundaries on the effective date of this rule.
(4)
(5)
(6) Index map of Unit 1—Greenbrier follows:
(7) Unit 1a: East Fork of Greenbrier River, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1a, East Fork of Greenbrier River, follows:
(8) Unit 1b: West Fork of Greenbrier River, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1b, West Fork of Greenbrier River, follows:
(9) Unit 1c: Upper Greenbrier River, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1c, Upper Greenbrier River, follows:
(10) Unit 1d: Deer Creek, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1d, Deer Creek, follows:
(11) Unit 1e: Sitlington Creek, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1e, Sitlington Creek, follows:
(12) Unit 1f: Knapp Creek, Pocahontas County, West Virginia.
(i)
(ii) Map of Unit 1f, Knapp Creek, follows:
(13) Index map of Unit 2—Middle New follows:
(14) Unit 2a: Dismal Creek, Bland and Giles Counties, Virginia.
(i)
(ii) Map of Unit 2a, Dismal Creek, follows:
(15) Unit 2b: Stony Creek, Giles County, Virginia.
(i)
(ii) Map of Unit 2b, Stony Creek, follows:
(16) Unit 2c: Laurel Creek, Bland County, Virginia.
(i)
(ii) Map of Unit 2c, Laurel Creek, follows:
(17) Unit 3: Lower Gauley, “Lower” Gauley River, Nicholas County, West Virginia.
(i)
(ii) Map of Unit 3, Lower Gauley, follows:
(18) Unit 4: Upper New, Cripple Creek, Wythe County, Virginia.
(i)
(ii) Map of Unit 4, Upper New, follows:
(19) Index map of Unit 5—Upper Gauley follows:
(20) Unit 5a: Gauley Headwaters, Webster County, West Virginia.
(i)
(ii) Map of Unit 5a, Gauley Headwaters, follows:
(21) Unit 5b: Upper Gauley River, Nicholas and Webster Counties, West Virginia.
(i)
(ii) Map of Unit 5b, Upper Gauley River, follows:
(22) Unit 5c: Panther Creek, Nicholas County, West Virginia.
(i)
(ii) Map of Unit 5c, Panther Creek, follows:
(23) Unit 5d: Williams River, Pocahontas and Webster Counties, West Virginia.
(i)
(ii) Map of Unit 5d, Williams River, follows:
(24) Unit 5e: Cranberry River, Nicholas and Webster Counties, West Virginia.
(i)
(ii) Map of Unit 5e, Cranberry River, follows:
(25) Unit 5f: Cherry River, Greenbrier and Nicholas Counties, West Virginia.
(i)
(ii) Map of Unit 5f, Cherry River, follows:
This document was received for publication by the Office of Federal Register on November 15, 2018.
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