Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program

CourtCenters For Medicare & Medicaid Services
Citation86 FR 25070
Record Number2021-08888
Publication Date10 May 2021
Federal Register, Volume 86 Issue 88 (Monday, May 10, 2021)
[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
                [Proposed Rules]
                [Pages 25070-25790]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-08888]
                [[Page 25069]]
                Vol. 86
                Monday,
                No. 88
                May 10, 2021
                Part II
                Book 2 of 2 Books
                Pages 25069-26798Department of Health and Human Services-----------------------------------------------------------------------
                Centers for Medicare & Medicaid Services
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                42 CFR Parts 412, 413, 425, et al.
                Medicare Program; Hospital Inpatient Prospective Payment Systems for
                Acute Care Hospitals and the Long-Term Care Hospital Prospective
                Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates;
                Quality Programs and Medicare Promoting Interoperability Program
                Requirements for Eligible Hospitals and Critical Access Hospitals;
                Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes
                to the Medicare Shared Savings Program; Proposed Rule
                Federal Register / Vol. 86 , No. 88 / Monday, May 10, 2021 / Proposed
                Rules
                [[Page 25070]]
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                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Centers for Medicare & Medicaid Services
                42 CFR Parts 412, 413, 425, 455, and 495
                [CMS-1752-P]
                RIN 0938-AU44
                Medicare Program; Hospital Inpatient Prospective Payment Systems
                for Acute Care Hospitals and the Long-Term Care Hospital Prospective
                Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates;
                Quality Programs and Medicare Promoting Interoperability Program
                Requirements for Eligible Hospitals and Critical Access Hospitals;
                Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes
                to the Medicare Shared Savings Program
                AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
                ACTION: Proposed rule.
                -----------------------------------------------------------------------
                SUMMARY: We are proposing to revise the Medicare hospital inpatient
                prospective payment systems (IPPS) for operating and capital-related
                costs of acute care hospitals to implement changes arising from our
                continuing experience with these systems for FY 2022 and to implement
                certain recent legislation. In addition, we are proposing to rebase and
                revise the hospital market baskets for acute care hospitals, update the
                labor-related share, and provide the market basket update that would
                apply to the rate-of-increase limits for certain hospitals excluded
                from the IPPS that are paid on a reasonable cost basis, subject to
                these limits for FY 2022. We are also proposing policies relating to
                Medicare graduate medical education (GME) for teaching hospitals to
                implement certain recent legislation. The proposed rule would also
                update the payment policies and the annual payment rates for the
                Medicare prospective payment system (PPS) for inpatient hospital
                services provided by long-term care hospitals (LTCHs) for FY 2022. In
                this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to extend
                New COVID-19 Treatments Add-on Payment (NCTAP) for certain eligible
                products through the end of the fiscal year in which the PHE ends and
                to discontinue the NCTAP for discharges on or after October 1, 2021 for
                a product that is approved for new technology add-on payments beginning
                FY 2022. We are also proposing to repeal the collection of market-based
                rate information on the Medicare cost report and the market-based MS-
                DRG relative weight methodology, as finalized in the FY 2021 IPPS/LTCH
                PPS final rule.
                 We are proposing to establish new requirements and revise existing
                requirements for eligible hospitals and critical access hospitals
                (CAHs) participating in the Medicare Promoting Interoperability
                Program. We are also providing estimated and newly established
                performance standards for the Hospital Value-Based Purchasing (VBP)
                Program, and proposing updated policies for the Hospital Readmissions
                Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program,
                Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction
                Program, and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program,
                and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP).
                Additionally, due to the impact of the COVID-19 PHE on measure data
                used in our value-based purchasing programs, we are proposing to
                suppress several measures in the Hospital VBP, HAC Reduction, and
                Hospital Readmissions Reduction Programs. In connection with our
                measure suppression proposals for the FY 2022 Hospital VBP Program, we
                are also proposing to revise the scoring and payment methodology for
                the FY 2022 program year such that hospitals will not be scored using
                quality measure data that are distorted by the effects of the COVID-19
                public health emergency (PHE) and will not receive Total Performance
                Scores or adjustments to their payments as a result. Similarly, we are
                proposing to suppress affected measures for the FY 2022 HAC Reduction
                Program such that hospitals will not be scored using distorted quality
                measure data and will not receive Total HAC Scores based on those data.
                For the Hospital Readmissions Reduction Program, we are proposing to
                suppress one affected measure under the proposed measure suppression
                policy for the FY 2023 applicable period such that hospitals will not
                be assessed using distorted quality measure data and will not receive
                payment reductions based on those data.
                 In addition, we are proposing to change, clarify, and codify
                Medicare organ acquisition payment policies relative to organ
                procurement organizations (OPOs), transplant hospitals, and donor
                community hospitals. Also, we are proposing to add regulation requiring
                that state Medicaid agencies accept valid enrollments from all
                Medicare-enrolled providers and suppliers for purposes of processing
                claims for Medicare cost-sharing liability for services furnished to
                Medicare-Medicaid dually eligible individuals in order to alleviate a
                long-standing problem related to claiming Medicare bad debt.
                 Additionally, we are proposing to amend the Medicare Shared Savings
                Program regulations to allow eligible accountable care organizations
                (ACOs) participating in the BASIC track's glide path the opportunity to
                maintain their current level of participation for performance year (PY)
                2022.
                DATES: To be assured consideration, comments must be received at one of
                the addresses provided in the ADDRESSES section, no later than 5 p.m.
                EDT on June 28, 2021.
                ADDRESSES: In commenting, please refer to file code CMS-1752-P. Because
                of staff and resource limitations, we cannot accept comments by
                facsimile (FAX) transmission.
                 Comments, including mass comment submissions, must be submitted in
                one of the following three ways (please choose only one of the ways
                listed):
                 1. Electronically. You may (and we encourage you to) submit
                electronic comments on this regulation to http://www.regulations.gov.
                Follow the instructions under the ``submit a comment'' tab.
                 2. By regular mail. You may mail written comments to the following
                address ONLY: Centers for Medicare & Medicaid Services, Department of
                Health and Human Services, Attention: CMS-1752-P, P.O. Box 8013,
                Baltimore, MD 21244-1850.
                 Please allow sufficient time for mailed comments to be received
                before the close of the comment period.
                 3. By express or overnight mail. You may send written comments via
                express or overnight mail to the following address ONLY: Centers for
                Medicare & Medicaid Services, Department of Health and Human Services,
                Attention: CMS-1752-P, Mail Stop C4-26-05, 7500 Security Boulevard,
                Baltimore, MD 21244-1850.
                 For information on viewing public comments, we refer readers to the
                beginning of the SUPPLEMENTARY INFORMATION section.
                FOR FURTHER INFORMATION CONTACT:
                 Donald Thompson, (410) 786-4487, and Michele Hudson, (410) 786-
                4487, Operating Prospective Payment, MS-DRG Relative Weights, Wage
                Index, Hospital Geographic Reclassifications, Graduate Medical
                Education, Capital Prospective Payment, Excluded Hospitals, Medicare
                Disproportionate Share Hospital (DSH) Payment
                [[Page 25071]]
                Adjustment, Sole Community Hospitals (SCHs), Medicare-Dependent Small
                Rural Hospital (MDH) Program, Low-Volume Hospital Payment Adjustment,
                and Critical Access Hospital (CAH) Issues.
                 Emily Lipkin, (410) 786-3633 and Jim Mildenberger, (410) 786-4551,
                Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG
                Relative Weights Issues.
                 Emily Forrest, (202) 205-1922, Market-Based Data Collection and
                Market-Based MS-DRG Relative Weight Methodology Issues.
                 Allison Pompey, (410) 786-2348, New Technology Add On Payments and
                New COVID-19 Treatments Add-on Payments Issues.
                 Mady Hue, (410) 786-4510, and Andrea Hazeley, (410) 786-3543, MS-
                DRG Classifications Issues.
                 Mollie Knight, (410) 786-7948, and Bridget Dickensheets, (410) 786-
                8670, Rebasing and Revising the Hospital Market Baskets Issues.
                 Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital
                Demonstration Program Issues.
                 Jeris Smith, (410) 786-0110, Frontier Community Health Integration
                Project Demonstration Issues.
                 Pamela Brown, [email protected], Hospital Readmissions
                Reduction Program--Administration Issues.
                 Jim Poyer, [email protected], Hospital Readmissions Reduction
                Program--Readmissions--Measures Issues.
                 Jennifer Tate, [email protected], Hospital-Acquired
                Condition Reduction Program--Administration Issues.
                 Yuling Li, (410) 786-8421, Hospital-Acquired Condition Reduction
                Program--Measures Issues.
                 Julia Venanzi, [email protected], Hospital Inpatient
                Quality Reporting and Hospital Value-Based Purchasing Programs--
                Administration Issues.
                 Katrina Hoadley, [email protected], Hospital Inpatient
                Quality Reporting and Hospital Value-Based Purchasing Programs--
                Measures Issues Except Hospital Consumer Assessment of Healthcare
                Providers and Systems Issues.
                 Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality
                Reporting and Hospital Value-Based Purchasing--Hospital Consumer
                Assessment of Healthcare Providers and Systems Measures Issues.
                 Annie Hollis, [email protected], PPS-Exempt Cancer Hospital
                Quality Reporting--Administration Issues.
                 Katrina Hoadley, [email protected], PPS-Exempt Cancer
                Hospital Quality Reporting Program-Measure Issues.
                 Christy Hughes, (410) 786-5662, Long-Term Care Hospital Quality
                Reporting Program--Data Reporting Issues.
                 Jessica Warren, [email protected], Dylan Podson,
                [email protected], and Elizabeth Holland,
                [email protected], Promoting Interoperability Programs.
                 Candace Anderson, (410) 786-1553, Medicaid Enrollment of Medicare
                Providers and Suppliers for Purposes of Processing Claims for Cost-
                Sharing for Services Furnished to Dually Eligible Beneficiaries.
                 Katie Lucas, (410) 786-7723, Amanda Michael, (410) 786-5834, and
                Kellie Shannon (410) 786-0416, Organ Acquisition Payment Issues.
                 Naseem Tarmohamed, (410) 786-0814, or
                [email protected], for issues related to the Shared
                Savings Program.
                SUPPLEMENTARY INFORMATION:
                 Inspection of Public Comments: All comments received before the
                close of the comment period are available for viewing by the public,
                including any personally identifiable or confidential business
                information that is included in a comment. We post all comments
                received before the close of the comment period on the following
                website as soon as possible after they have been received: http://www.regulations.gov/. Follow the search instructions on that website to
                view public comments.
                Tables Available Through the Internet on the CMS Website
                 The IPPS tables for this FY 2022 proposed rule are available
                through the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
                Click on the link on the left side of the screen titled, ``FY 2022 IPPS
                Proposed rule Home Page'' or ``Acute Inpatient--Files for Download.''
                The LTCH PPS tables for this FY 2022 proposed rule are available
                through the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation Number CMS-1752-P. For
                further details on the contents of the tables referenced in this
                proposed rule, we refer readers to section VI. of the Addendum to this
                FY 2022 IPPS/LTCH PPS proposed rule.
                 Readers who experience any problems accessing any of the tables
                that are posted on the CMS websites, as previously identified, should
                contact Michael Treitel at (410) 786-4552.
                Table of Contents
                I. Executive Summary and Background
                 A. Executive Summary
                 B. Background Summary
                 C. Summary of Provisions of Recent Legislation That Would Be
                Implemented in This Proposed Rule
                 D. Summary of the Provisions of This Proposed Rule
                 E. Advancing Health Information Exchange
                 F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH
                PPS Ratesetting
                II. Proposed Changes to Medicare Severity Diagnosis-Related Group
                (MS-DRG) Classifications and Relative Weights
                 A. Background
                 B. Adoption of the MS-DRGs and MS-DRG Reclassifications
                 C. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment
                 D. Proposed Changes to Specific MS-DRG Classifications
                 E. Recalibration of the FY 2022 MS-DRG Relative Weights
                 F. Proposed Add-On Payments for New Services and Technologies
                for FY 2022
                III. Proposed Changes to the Hospital Wage Index for Acute Care
                Hospitals
                 A. Background
                 B. Worksheet S-3 Wage Data for the Proposed FY 2022 Wage Index
                 C. Verification of Worksheet S-3 Wage Data
                 D. Method for Computing the Proposed FY 2022 Unadjusted Wage
                Index
                 E. Proposed Occupational Mix Adjustment to the FY 2022 Wage
                Index
                 F. Analysis and Implementation of the Proposed Occupational Mix
                Adjustment and the Proposed FY 2022 Occupational Mix Adjusted Wage
                Index
                 G. Application of the Rural Floor, Application of the State
                Frontier Floor, and Continuation of the Low Wage Index Hospital
                Policy, and Proposed Budget Neutrality Adjustment
                 H. Proposed FY 2022 Wage Index Tables
                 I. Proposed Revisions to the Wage Index Based on Hospital
                Redesignations and Reclassifications
                 J. Proposed Out-Migration Adjustment Based on Commuting Patterns
                of Hospital Employees
                 K. Reclassification From Urban to Rural Under Section
                1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
                 L. Process for Requests for Wage Index Data Corrections
                 M. Proposed Labor-Related Share for the FY 2022 Wage Index
                IV. Proposed Rebasing and Revising of the Hospital Market Baskets
                for Acute Care Hospitals
                 A. Background
                 B. Rebasing and Revising the IPPS Market Basket
                 C. Market Basket for Certain Hospitals Presently Excluded From
                the IPPS
                 D. Rebasing and Revising the Capital Input Price Index (CIPI)
                V. Other Decisions and Changes to the IPPS for Operating System
                [[Page 25072]]
                 A. Proposed Changes in the Inpatient Hospital Updates for FY
                2021 (Sec. 412.64(d))
                 B. Rural Referral Centers (RRCs)--Proposed Annual Updates to
                Case-Mix Index and Discharge Criteria (Sec. 412.96)
                 C. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
                412.101)
                 D. Proposed Indirect Medical Education (IME) Payment Adjustment
                Factor (Sec. 412.105)
                 E. Proposed Payment Adjustment for Medicare Disproportionate
                Share Hospitals (DSHs) for FY 2022 (Sec. 412.106)
                 F. Counting Days Associated With Section 1115 Demonstration
                Projects in the Medicaid Fraction
                 G. Hospital Readmissions Reduction Program: Proposed Updates and
                Changes (Sec. Sec. 412.150 Through 412.154)
                 H. Hospital Value-Based Purchasing (VBP) Program: Proposed
                Updates and Changes (Sec. Sec. 412.160 Through 412.167)
                 I. Hospital-Acquired Conditions (HAC) Reduction Program:
                Proposed Updates and Changes (Sec. 412.170)
                 J. Proposed Payments for Indirect and Direct Graduate Medical
                Education Costs (Sec. Sec. 412.105 and 413.75 through 413.83)
                 K. Rural Community Hospital Demonstration Program
                 L. Market-Based MS-DRG Relative Weight--Proposed Policy Changes
                (Sec. 413.20)
                 M. Payment Adjustment for CAR T-cell Clinical Trial and Expanded
                Use for Immunotherapy Cases (Sec. Sec. 412.85 and 412.312)
                VI. Proposed Changes to the IPPS for Capital-Related Costs
                 A. Overview
                 B. Additional Provisions
                 C. Proposed Annual Update for FY 2022
                VII. Proposed Changes for Hospitals Excluded From the IPPS
                 A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
                for FY 2022
                 B. Critical Access Hospitals (CAHs)
                VIII. Proposed Changes to the Long-Term Care Hospital Prospective
                Payment System (LTCH PPS) for FY 2022
                 A. Background of the LTCH PPS
                 B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
                LTC-DRG) Classifications and Relative Weights for FY 2021
                 C. Proposed Changes to the LTCH PPS Payment Rates and Other
                Proposed Changes to the LTCH PPS for FY 2022
                IX. Proposed Quality Data Reporting Requirements for Specific
                Providers and Suppliers
                 A. Advancing to Digital Quality Measurement and the Use of Fast
                Healthcare Interoperability Resources (FHIR) in Hospital Quality
                Programs--Request for Information
                 B. Closing the Health Equity Gap in CMS Hospital Quality
                Programs--Request For Information
                 C. Hospital Inpatient Quality Reporting (IQR) Program
                 D. Changes to the PPS-Exempt Cancer Hospital Quality Reporting
                (PCHQR) Program
                 E. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
                 F. Proposed Changes to the Medicare Promoting Interoperability
                Programs
                X. Proposed Changes for Hospitals and Other Providers and Suppliers
                 A. Medicaid Enrollment of Medicare Providers and Suppliers for
                Purposes of Processing Claims for Cost-Sharing for Services
                Furnished to Dually Eligible Beneficiaries--Proposed Policy Changes
                (Sec. 455.410)
                 B. Organ Acquisition Payment--Proposed Policy Changes (Part 413,
                Subpart L)
                 C. Medicare Shared Savings Program--Proposed Policy Changes
                (Sec. 425.600)
                XI. MedPAC Recommendations
                XII. Other Required Information
                 A. Publicly Available Files
                 B. Collection of Information Requirements
                 C. Response to Public Comments
                Regulation Text
                Addendum--Schedule of Standardized Amounts, Update Factors, and
                Rate-of-Increase Percentages Effective With Cost Reporting Periods
                Beginning on or After October 1, 2021 and Payment Rates for LTCHs
                Effective for Discharges Occurring on or After October 1, 2021
                I. Summary and Background
                II. Proposed Changes to Prospective Payment Rates for Hospital
                Inpatient Operating Costs for Acute Care Hospitals for FY 2022
                 A. Calculation of the Proposed Adjusted Standardized Amount
                 B. Proposed Adjustments for Area Wage Levels and Cost-of-Living
                 C. Calculation of the Proposed Prospective Payment Rates
                III. Proposed Changes to Payment Rates for Acute Care Hospital
                Inpatient Capital-Related Costs for FY 2022
                 A. Determination of the Proposed Federal Hospital Inpatient
                Capital-Related Prospective Payment Rate Update for FY 2022
                 B. Calculation of the Proposed Inpatient Capital-Related
                Prospective Payments for FY 2022
                 C. Capital Input Price Index
                IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
                of-Increase Percentages for FY 2022
                V. Proposed Changes to the Payment Rates for the LTCH PPS for FY
                2022
                 A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2022
                 B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS
                for FY 2022
                 C. Proposed Cost-of-Living Adjustment (COLA) for LTCHs Located
                in Alaska and Hawaii
                 D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO)
                Cases
                 E. Proposed Update to the IPPS Comparable/Equivalent Amounts to
                Reflect the Statutory Changes to the IPPS DSH Payment Adjustment
                Methodology
                 F. Computing the Proposed Adjusted LTCH PPS Federal Prospective
                Payments for FY 2022
                VI. Tables Referenced in This Proposed Rule Generally Available
                Through the Internet on the CMS Website
                Appendix A--Economic Analyses
                I. Regulatory Impact Analysis
                 A. Statement of Need
                 B. Overall Impact
                 C. Objectives of the IPPS and the LTCH PPS
                 D. Limitations of Our Analysis
                 E. Hospitals Included in and Excluded From the IPPS
                 F. Effects on Hospitals and Hospital Units Excluded From the
                IPPS
                 G. Quantitative Effects of the Policy Changes Under the IPPS for
                Operating Costs
                 H. Effects of Other Proposed Policy Changes
                 I. Effects of Proposed Changes in the Capital IPPS
                 J. Effects of Proposed Payment Rate Changes and Policy Changes
                Under the LTCH PPS
                 K. Effects of Proposed Requirements for Hospital Inpatient
                Quality Reporting (IQR) Program
                 L. Effects of Proposed Requirements for the PPS-Exempt Cancer
                Hospital Quality Reporting (PCHQR) Program
                 M. Effects of Proposed Requirements for the Long-Term Care
                Hospital Quality Reporting Program (LTCH QRP)
                 N. Effects of Proposed Requirements Regarding the Promoting
                Interoperability Program
                 O. Alternatives Considered
                 P. Overall Conclusion
                 Q. Regulatory Review Costs
                II. Accounting Statements and Tables
                 A. Acute Care Hospitals
                 B. LTCHs
                III. Regulatory Flexibility Act (RFA) Analysis
                IV. Impact on Small Rural Hospitals
                V. Unfunded Mandate Reform Act (UMRA) Analysis
                VI. Executive Order 13175
                VII. Executive Order 12866
                Appendix B: Recommendation of Update Factors for Operating Cost
                Rates of Payment for Inpatient Hospital Services
                I. Background
                II. Inpatient Hospital Update for FY 2022
                 A. Proposed FY 2022 Inpatient Hospital Update
                 B. Proposed Update for SCHs and MDHs for FY 2022
                 C. Proposed FY 2022 Puerto Rico Hospital Update
                 D. Proposed Update for Hospitals Excluded From the IPPS for FY
                2022
                 E. Proposed Update for LTCHs for FY 2022
                III. Secretary's Recommendation
                IV. MedPAC Recommendation for Assessing Payment Adequacy and
                Updating Payments in Traditional Medicare
                I. Executive Summary and Background
                A. Executive Summary
                1. Purpose and Legal Authority
                 This FY 2022 IPPS/LTCH PPS proposed rule would make payment and
                policy changes under the Medicare inpatient prospective payment systems
                (IPPS) for operating and capital-related costs of acute care hospitals
                as well as for certain hospitals and hospital units excluded from the
                IPPS. In addition, it would make payment and policy changes for
                inpatient hospital services
                [[Page 25073]]
                provided by long-term care hospitals (LTCHs) under the long-term care
                hospital prospective payment system (LTCH PPS). This proposed rule also
                would make policy changes to programs associated with Medicare IPPS
                hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2022 proposed
                rule, we are continuing policies to address wage index disparities
                impacting low wage index hospitals; including a proposal to implement
                the imputed floor wage index provision of the American Rescue Plan Act
                of 2021; including proposals related to new technology add-on payments;
                and proposing to repeal the collection of market-based rate information
                on the Medicare cost report and the market-based MS-DRG relative weight
                methodology, as finalized in the FY 2021 IPPS/LTCH PPS final rule. This
                proposed rule also includes proposals to implement provisions of the
                Consolidated Appropriations Act of 2021 relating to payments to
                hospitals for direct graduate medical education (GME) and indirect
                medical education (IME) costs.
                 We are proposing to establish new requirements and revise existing
                requirements for eligible hospitals and CAHs participating in the
                Medicare Promoting Interoperability Program.
                 We are providing estimated and newly established performance
                standards for the Hospital Value-Based Purchasing (VBP) Program, and
                proposing updated policies for the Hospital Readmissions Reduction
                Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital
                VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, Long
                Term Care Hospital Quality Reporting Program (LTCH QRP), and the PPS-
                Exempt Cancer Hospital Reporting (PCHQR) Program. Additionally, due to
                the impact of the COVID-19 PHE on measure data used in our value-based
                purchasing programs, we are proposing to suppress several measures in
                the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction
                Programs. As a result of these measure suppressions for the Hospital
                VBP Program we are also proposing a special scoring methodology for FY
                2022 that results in a value-based incentive payment amount that
                matches the 2 percent reduction to the base operating DRG payment
                amount.
                 Under various statutory authorities, we either discuss continued
                program implementation or are proposing to make changes to the Medicare
                IPPS, to the LTCH PPS, other related payment methodologies and programs
                for FY 2022 and subsequent fiscal years, and other policies and
                provisions included in this rule. These statutory authorities include,
                but are not limited to, the following:
                 Section 1886(d) of the Social Security Act (the Act),
                which sets forth a system of payment for the operating costs of acute
                care hospital inpatient stays under Medicare Part A (Hospital
                Insurance) based on prospectively set rates. Section 1886(g) of the Act
                requires that, instead of paying for capital-related costs of inpatient
                hospital services on a reasonable cost basis, the Secretary use a
                prospective payment system (PPS).
                 Section 1886(d)(1)(B) of the Act, which specifies that
                certain hospitals and hospital units are excluded from the IPPS. These
                hospitals and units are: Rehabilitation hospitals and units; LTCHs;
                psychiatric hospitals and units; children's hospitals; cancer
                hospitals; extended neoplastic disease care hospitals, and hospitals
                located outside the 50 States, the District of Columbia, and Puerto
                Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
                Northern Mariana Islands, and American Samoa). Religious nonmedical
                health care institutions (RNHCIs) are also excluded from the IPPS.
                 Sections 123(a) and (c) of the BBRA (Public Law (Pub. L.)
                106-113) and section 307(b)(1) of the BIPA (Pub. L. 106-554) (as
                codified under section 1886(m)(1) of the Act), which provide for the
                development and implementation of a prospective payment system for
                payment for inpatient hospital services of LTCHs described in section
                1886(d)(1)(B)(iv) of the Act.
                 Sections 1814(l), 1820, and 1834(g) of the Act, which
                specify that payments are made to critical access hospitals (CAHs)
                (that is, rural hospitals or facilities that meet certain statutory
                requirements) for inpatient and outpatient services and that these
                payments are generally based on 101 percent of reasonable cost.
                 Section 1886(a)(4) of the Act, which specifies that costs
                of approved educational activities are excluded from the operating
                costs of inpatient hospital services. Hospitals with approved graduate
                medical education (GME) programs are paid for the direct costs of GME
                in accordance with section 1886(h) of the Act.
                 Section 1886(b)(3)(B)(viii) of the Act, which requires the
                Secretary to reduce the applicable percentage increase that would
                otherwise apply to the standardized amount applicable to a subsection
                (d) hospital for discharges occurring in a fiscal year if the hospital
                does not submit data on measures in a form and manner, and at a time,
                specified by the Secretary.
                 Section 1866(k) of the Act, which provides for the
                establishment of a quality reporting program for hospitals described in
                section 1886(d)(1)(B)(v) of the Act, referred to as ``PPS-exempt cancer
                hospitals.''
                 Section 1886(o) of the Act, which requires the Secretary
                to establish a Hospital Value-Based Purchasing (VBP) Program, under
                which value-based incentive payments are made in a fiscal year to
                hospitals meeting performance standards established for a performance
                period for such fiscal year.
                 Section 1886(p) of the Act, which establishes a Hospital-
                Acquired Condition (HAC) Reduction Program, under which payments to
                applicable hospitals are adjusted to provide an incentive to reduce
                hospital-acquired conditions.
                 Section 1886(q) of the Act, as amended by section 15002 of
                the 21st Century Cures Act, which establishes the Hospital Readmissions
                Reduction Program. Under the program, payments for discharges from an
                applicable hospital as defined under section 1886(d) of the Act will be
                reduced to account for certain excess readmissions. Section 15002 of
                the 21st Century Cures Act directs the Secretary to compare hospitals
                with respect to the number of their Medicare-Medicaid dual-eligible
                beneficiaries (dual-eligibles) in determining the extent of excess
                readmissions.
                 Section 1886(r) of the Act, as added by section 3133 of
                the Affordable Care Act, which provides for a reduction to
                disproportionate share hospital (DSH) payments under section
                1886(d)(5)(F) of the Act and for a new uncompensated care payment to
                eligible hospitals. Specifically, section 1886(r) of the Act requires
                that, for fiscal year 2014 and each subsequent fiscal year, subsection
                (d) hospitals that would otherwise receive a DSH payment made under
                section 1886(d)(5)(F) of the Act will receive two separate payments:
                (1) 25 percent of the amount they previously would have received under
                section 1886(d)(5)(F) of the Act for DSH (``the empirically justified
                amount''), and (2) an additional payment for the DSH hospital's
                proportion of uncompensated care, determined as the product of three
                factors. These three factors are: (1) 75 percent of the payments that
                would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1
                minus the percent change in the percent of individuals who are
                uninsured; and (3) a hospital's uncompensated care amount relative to
                the uncompensated
                [[Page 25074]]
                care amount of all DSH hospitals expressed as a percentage.
                 Section 1886(m)(5) of the Act, which requires the
                Secretary to reduce by two percentage points the annual update to the
                standard Federal rate for discharges for a long-term care hospital
                (LTCH) during the rate year for LTCHs that do not submit data in the
                form, manner, and at a time, specified by the Secretary.
                 Section 1886(m)(6) of the Act, as added by section
                1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act
                of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the
                Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the
                establishment of site neutral payment rate criteria under the LTCH PPS,
                with implementation beginning in FY 2016. Section 51005(b) of the
                Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B) by adding
                new clause (iv), which specifies that the IPPS comparable amount
                defined in clause (ii)(I) shall be reduced by 4.6 percent for FYs 2018
                through 2026.
                 Section 1899B of the Act, as added by section 2(a) of the
                Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT
                Act) (Pub. L. 113-185), which provides for the establishment of
                standardized data reporting for certain post-acute care providers,
                including LTCHs.
                 Section 1899 of the Act which established the Medicare
                Shared Savings Program (Shared Savings Program) to facilitate
                coordination and cooperation among providers and suppliers to improve
                the quality of care for Medicare fee-for-service (FFS) beneficiaries
                and reduce the rate of growth in expenditures under Medicare Parts A
                and B.
                 Section 1902(a)(23) of the Act, which specifies Medicaid
                provider enrollment requirements. States may set reasonable standards
                relating to the qualifications of providers but may not restrict the
                right of beneficiaries to obtain services from any person or entity
                that is both qualified and willing to furnish such services.
                2. Summary of the Major Provisions
                 The following is a summary of the major provisions in this proposed
                rule. In general, these major provisions are being proposed as part of
                the annual update to the payment policies and payment rates, consistent
                with the applicable statutory provisions. A general summary of the
                proposed changes in this proposed rule is presented in section I.D. of
                the preamble of this proposed rule.
                a. Proposed MS-DRG Documentation and Coding Adjustment
                 Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
                L. 112- 240) amended section 7(b)(1)(B) of Public Law 110-90 to require
                the Secretary to make a recoupment adjustment to the standardized
                amount of Medicare payments to acute care hospitals to account for
                changes in MS-DRG documentation and coding that do not reflect real
                changes in case-mix, totaling $11 billion over a 4-year period of FYs
                2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
                represented the amount of the increase in aggregate payments as a
                result of not completing the prospective adjustment authorized under
                section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the
                ATRA, this amount could not have been recovered under Public Law 110
                90. Section 414 of the Medicare Access and CHIP Reauthorization Act of
                2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment
                we intended to make in FY 2018 with a 0.5 percent positive adjustment
                to the standardized amount of Medicare payments to acute care hospitals
                for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently
                adjusted to 0.4588 percent by section 15005 of the 21st Century Cures
                Act.) Therefore, for FY 2022, we are proposing to make an adjustment of
                +0.5 percent to the standardized amount.
                b. Proposed Changes to the New COVID-19 Treatments Add-On Payment
                (NCTAP)
                 In response to the COVID-19 PHE, we established the New COVID-19
                Treatments Add-on Payment (NCTAP) under the IPPS for COVID-19 cases
                that meet certain criteria (85 FR 71157 and 71158). We believe that as
                drugs and biological products become available and are authorized for
                emergency use or approved by Food and Drug Administration (FDA) for the
                treatment of COVID-19 in the inpatient setting, it is appropriate to
                increase the current IPPS payment amounts to mitigate any potential
                financial disincentives for hospitals to provide new COVID-19
                treatments during the PHE. Therefore, effective for discharges
                occurring on or after November 2, 2020 and until the end of the PHE for
                COVID-19, CMS established the NCTAP.
                 We anticipate that there might be inpatient cases of COVID-19,
                beyond the end of the PHE, for which payment based on the assigned MS-
                DRG may not adequately reflect the additional cost of new COVID-19
                treatments. In order to continue to mitigate potential financial
                disincentives for hospitals to provide these new treatments, and to
                minimize any potential payment disruption immediately following the end
                of the PHE, we believe that the NCTAP should remain available for cases
                involving eligible treatments for the remainder of the fiscal year in
                which the PHE ends (for example, until September 30, 2022). At the same
                time, we also believe that any new technology add-on payments that may
                be approved for a COVID-19 treatment would also serve to mitigate any
                potential financial disincentives for hospitals to provide that new
                COVID-19 treatment, such that the NCTAP would no longer be needed for
                that same product.
                 Therefore, we are proposing to extend NCTAP for eligible products
                that are not approved for new technology add-on payments through the
                end of the fiscal year in which the PHE ends (for example, September
                30, 2022). We also are proposing to discontinue the NCTAP for
                discharges on or after October 1, 2021 for a product that is approved
                for new technology add-on payments beginning FY 2022.
                c. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS
                Ratesetting
                 For the IPPS and LTCH PPS ratesetting, our longstanding goal is
                always to use the best available data overall. In section I.F. of the
                preamble of this proposed rule we discuss our analysis of the best
                available data for use in the development of this FY 2022 IPPS/LTCH PPS
                proposed rule given the potential impact of the public health emergency
                (PHE) for the Coronavirus Disease (COVID-19). As discussed in section
                I.F of the preamble of this proposed rule, we are proposing to use the
                FY 2019 data, such as the FY 2019 MedPAR file, for the FY 2022
                ratesetting for circumstances where the FY 2020 data is significantly
                impacted by the COVID-19 PHE, primarily in that the utilization of
                inpatient services reflect generally markedly different utilization for
                certain types of services in FY 2020 than would have been expected in
                the absence of the PHE. In section I.O. of Appendix A of this proposed
                rule, we are also considering, as an alternative to this proposal, the
                use of the same FY 2020 data that we would ordinarily use for purposes
                of FY 2022 ratesetting, and which we may consider finalizing based on
                consideration of comments received.
                d. Proposed Continuation of the Low Wage Index Hospital Policy
                 To help mitigate wage index disparities between high wage and low
                hospitals, in the FY 2020 IPPS/LTCH
                [[Page 25075]]
                PPS rule (84 FR 42326 through 42332), we adopted a policy to increase
                the wage index values for certain hospitals with low wage index values
                (the low wage index hospital policy). This policy was adopted in a
                budget neutral manner through an adjustment applied to the standardized
                amounts for all hospitals. We also indicated that this policy would be
                effective for at least 4 years, beginning in FY 2020, in order to allow
                employee compensation increases implemented by these hospitals
                sufficient time to be reflected in the wage index calculation.
                Therefore, for FY 2022, we are continuing the low wage index hospital
                policy, and are also proposing to apply this policy in a budget neutral
                manner by applying an adjustment to the standardized amounts.
                e. Proposed Implementation of Section 9831 of the American Rescue Plan
                Act of 2021 (Pub. L. 117-2) Imputed Floor Wage Index Policy for All-
                Urban States
                 Section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-
                2) amended section 1886(d)(3)(E) of the Act (42 U.S.C. 1395ww(d)(3)(E))
                to establish a minimum area wage index for hospitals in all-urban
                States. Specifically, section 1886(d)(3)(E)(iv) of the Act (as added by
                section 9831(a)(2) of Pub. L. 117-2) reinstates the imputed floor wage
                index policy for all-urban states effective for discharges on or after
                October 1, 2021 (FY 2022) with no expiration date using the methodology
                described in 42 CFR 412.64(h)(4)(vi) as in effect for FY 2018.
                Furthermore, section 1886(d)(3)(E)(iv)(III) of the Act provides that
                the imputed floor wage index shall not be applied in a budget neutral
                manner. We refer readers to section III.G.2. of this proposed rule for
                a summary of the provisions of section 9831 of Public Law 117-2 that we
                are proposing to implement in this proposed rule.
                f. Proposed DSH Payment Adjustment and Additional Payment for
                Uncompensated Care
                 Section 3133 of the Affordable Care Act modified the Medicare
                disproportionate share hospital (DSH) payment methodology beginning in
                FY 2014. Under section 1886(r) of the Act, which was added by section
                3133 of the Affordable Care Act, starting in FY 2014, FY 2014, Medicare
                DSHs receive 25 percent of the amount they previously would have
                received under the statutory formula for Medicare DSH payments in
                section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75
                percent of the amount that otherwise would have been paid as Medicare
                DSH payments, is paid as additional payments after the amount is
                reduced for changes in the percentage of individuals that are
                uninsured. Each Medicare DSH will receive an additional payment based
                on its share of the total amount of uncompensated care for all Medicare
                DSHs for a given time period.
                 In this proposed rule, we are proposing to update our estimates of
                the three factors used to determine uncompensated care payments for FY
                2022. We are also proposing to continue to use uninsured estimates
                produced by CMS' Office of the Actuary (OACT) as part of the
                development of the National Health Expenditure Accounts (NHEA) in the
                calculation of Factor 2. Consistent with the policy adopted in the FY
                2021 IPPS/LTCH PPS final rule for FY 2022 and subsequent fiscal years,
                we are using a single year of data on uncompensated care costs from
                Worksheet S-10 of the FY 2018 cost reports to calculate Factor 3 in the
                FY 2022 methodology for all eligible hospitals with the exception of
                Indian Health Service (IHS) and Tribal hospitals and Puerto Rico
                hospitals. For IHS and Tribal hospitals and Puerto Rico hospitals we
                are proposing to continue to use the low-income insured days proxy to
                calculate Factor 3 for these hospitals for FY 2022. We are proposing
                certain methodological changes for calculating Factor 3 for FY 2022.
                 Additionally, we are proposing to revise our regulation governing
                the calculation of the Medicaid fraction of the DSH calculation. Under
                this proposal, patient days of individuals receiving benefits under a
                section 1115 waiver program would be counted in the numerator of the
                Medicaid fraction only if the patient directly receives inpatient
                hospital insurance coverage on that day under a waiver authorized under
                section 1115(a)(2) of the Act.
                g. Reduction of Hospital Payments for Excess Readmissions
                 We are proposing to make changes to policies for the Hospital
                Readmissions Reduction Program, which was established under section
                1886(q) of the Act, as amended by section 15002 of the 21st Century
                Cures Act. The Hospital Readmissions Reduction Program requires a
                reduction to a hospital's base operating DRG payment to account for
                excess readmissions of selected applicable conditions. For FY 2017 and
                subsequent years, the reduction is based on a hospital's risk-adjusted
                readmission rate during a 3-year period for acute myocardial infarction
                (AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary
                disease (COPD), elective primary total hip arthroplasty/total knee
                arthroplasty (THA/TKA), and coronary artery bypass graft (CABG)
                surgery. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing
                the following policies: (1) To adopt a cross-program measure
                suppression policy; (2) to suppress the Hospital 30-Day, All-Cause,
                Risk-Standardized Readmission Rate (RSRR) following Pneumonia
                Hospitalization measure (NQF #0506) for the FY 2023 program year; (3)
                to modify the remaining five condition-specific readmission measures to
                exclude COVID-19 diagnosed patients from the measure denominators,
                beginning with the FY 2023 program year; (4) to use the MedPAR data
                that aligns with the applicable period for FY 2022; (5) to
                automatically adopt the use of MedPAR data corresponding to the
                applicable period beginning with the FY 2023 program year and all
                subsequent program years, unless otherwise specified by the Secretary;
                and (6) to update the regulatory text to reflect that our Hospital
                Compare website has been renamed and is now referred to as Care
                Compare. We are clarifying our Extraordinary Circumstances Exceptions
                (ECE) policy, and we are also requesting public comment on
                opportunities to advance health equity through possible future
                stratification of results by race and ethnicity for condition/
                procedure-specific readmission measures and by expansion of
                standardized data collection to additional social factors, such as
                language preference and disability status. We are also seeking comment
                on mechanisms of incorporating other demographic characteristics into
                analyses that address and advance health equity, such as the potential
                to include administrative and self-reported data to measure co-
                occurring disability status.
                h. Hospital Value-Based Purchasing (VBP) Program
                 Section 1886(o) of the Act requires the Secretary to establish a
                Hospital VBP Program under which value-based incentive payments are
                made in a fiscal year to hospitals based on their performance on
                measures established for a performance period for such fiscal year. In
                this proposed rule, we are proposing to: (1) Establish a measure
                suppression policy for the duration of the public health emergency for
                COVID-19; (2) suppress the Hospital Consumer Assessment of Healthcare
                Providers and Systems (HCAHPS), Medicare Spending Per Beneficiary
                (MSPB), and five Healthcare-Associated Infection (HAI) measures, for
                the FY 2022 Program year; and (3) suppress the Hospital 30-Day,
                [[Page 25076]]
                All-Cause, Risk-Standardized Mortality Rate Following Pneumonia (PN)
                Hospitalization (MORT-30-PN) measure for the FY 2023 program year. We
                are also proposing to revise the scoring and payment methodology for
                the FY 2022 program year such that hospitals' Total Performance Scores
                will not include calculations based on these measures. We believe that
                awarding a TPS to any hospital based off the remaining measures that
                are not suppressed would not result in a fair national comparison and,
                as a result, are proposing not to award a TPS to any hospital for the
                FY 2022 program year. Instead, we are proposing to award each hospital
                a payment incentive multiplier that results in a value-based incentive
                payment that is equal to the amount withheld for the fiscal year (2
                percent). We are proposing to remove the CMS Patient Safety and Adverse
                Events Composite (PSI 90) measure beginning with FY 2023 because the
                costs associated with the measure outweigh the benefit of its use in
                the program. We are also proposing to update the baseline periods for
                certain measures affected by the ECE granted in response to the COVID-
                19 PHE and to make a technical update to our terminology used in the
                Hospital VBP Program regulations.
                i. Hospital-Acquired Condition (HAC) Reduction Program
                 Section 1886(p) of the Act establishes an incentive to hospitals to
                reduce the incidence of hospital-acquired conditions by requiring the
                Secretary to make an adjustment to payments to applicable hospitals,
                effective for discharges beginning on October 1, 2014. This 1-percent
                payment reduction applies to hospitals that rank in the worst-
                performing quartile (25 percent) of all applicable hospitals, relative
                to the national average, of conditions acquired during the applicable
                period and on all of the hospital's discharges for the specified fiscal
                year. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to:
                (1) Clarify our ECE policy; (2) adopt a cross-program measure
                suppression policy; (3) apply that measure suppression policy to
                suppress certain program data; and (4) update the regulatory text to
                reflect that our Hospital Compare website has been renamed and is now
                referred to as Care Compare.
                j. Hospital Inpatient Quality Reporting (IQR) Program
                 Under section 1886(b)(3)(B)(viii) of the Act, subsection (d)
                hospitals are required to report data on measures selected by the
                Secretary for a fiscal year in order to receive the full annual
                percentage increase that would otherwise apply to the standardized
                amount applicable to discharges occurring in that fiscal year.
                 In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to
                make several changes. We are proposing to adopt five new measures: (1)
                A new structural measure--Maternal Morbidity Structural Measure--
                beginning with a shortened reporting period from October 1, 2021
                through December 31, 2021 affecting the CY 2021 reporting period/FY
                2023 payment determination; (2) the Hybrid Hospital-Wide All-Cause Risk
                Standardized Mortality (Hybrid HWM) measure in a stepwise fashion,
                beginning with a voluntary reporting period from July 1, 2022 through
                June 30, 2023, and followed by mandatory reporting from July 1, 2023
                through June 30, 2024, affecting the FY 2026 payment determination and
                for subsequent years; (3) the COVID-19 Vaccination Coverage Among
                Health Care Personnel (HCP) measure beginning with a shortened
                reporting period from October 1, 2021 through December 31, 2021,
                affecting the CY 2021 reporting period/FY 2023 payment determination
                and with quarterly reporting beginning with the FY 2024 payment
                determination and for subsequent years; and two medication-related
                adverse event eCQMs beginning with the CY 2023 reporting period/FY 2025
                payment determination; (4) Hospital Harm-Severe Hypoglycemia eCQM (NQF
                #3503e); and (5) Hospital Harm-Severe Hyperglycemia eCQM (NQF #3533e).
                 We are also proposing to remove five measures: (1) Death Among
                Surgical Inpatients with Serious Treatable Complications (CMS PSI-04)
                beginning with the FY 2023 payment determination; (2) Exclusive Breast
                Milk Feeding (PC-05) (NQF #0480) beginning with the FY 2026 payment
                determination; (3) Admit Decision Time to ED Departure Time for
                Admitted Patients (ED-2) (NQF #0497) beginning with the FY 2026 payment
                determination; and two stroke-related eCQMs beginning with the FY 2026
                payment determination; (4) Anticoagulation Therapy for Atrial
                Fibrillation/Flutter eCQM (STK-03) (NQF #0436); and (5) Discharged on
                Statin Medication eCQM (STK-06) (NQF #0439).
                 We are requesting comment from stakeholders on the potential future
                development and inclusion of two measures: (1) A mortality measure for
                patients admitted with COVID-19; and (2) a patient-reported outcomes
                measure following elective total hip and/or total knee arthroplasty
                (THA/TKA). We are also requesting comment from stakeholders on ways we
                can leverage measures to address gaps in existing health equity
                generally as well as comment on: (1) Potential future confidential
                stratified reporting for the Hospital-Wide All-Cause Unplanned
                Readmission (HWR) measure using both dual eligibility and race/
                ethnicity; and (2) potential future reporting of a structural measure
                to assess the degree of hospital leadership engagement in health equity
                performance data. In this proposed rule, we are also requesting
                feedback across programs on potential actions and priority areas that
                would enable the continued transformation of our quality measurement
                toward greater digital capture of data and use of the FHIR standard.
                 In addition, beginning with the CY 2023 reporting period/FY 2025
                payment determination, we are proposing to require hospitals to use
                certified technology that has been updated consistent with the 2015
                Edition Cures Update and clarifying that certified technology must
                support the reporting requirements for all available eCQMs. We also are
                proposing that hybrid measures comply with the same certification
                requirements as eCQMs, specifically that EHR technology must be
                certified to the 2015 Edition Cures Update. We are proposing an update
                to revise 42 CFR 412.140(a)(2) and 42 CFR 412.140(e)(2)(iii) replacing
                the terms ``Security Administrator'' and ``System Administrator'' with
                the term ``security official'' in alignment with other CMS quality
                programs. Due to an updated URL for the QualityNet website from
                QualityNet.org to QualityNet.cms.gov, we are also proposing to revise
                Hospital IQR Program regulations at 42 CFR 412.140(a)(1) and 42 CFR
                412.140(c)(2)(i) to reflect updates to the QualityNet website. Lastly,
                we are proposing to extend the effects of the educational review
                process for chart-abstracted measures beginning with validations
                affecting the FY 2024 payment determination.
                k. PPS-Exempt Cancer Hospital Quality Reporting Program
                 Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and
                each subsequent fiscal year, that a hospital described in section
                1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH)
                submit data in accordance with section 1866(k)(2) of the Act with
                respect to such fiscal year. There is no financial impact to PCH
                Medicare payment if a PCH does not participate.
                 In this proposed rule, we are proposing to remove the Oncology:
                Plan of Care for Pain--Medical Oncology and
                [[Page 25077]]
                Radiation Oncology (NQF #0383) (PCH-15) measure beginning with the FY
                2024 program year, adopt the COVID-19 Vaccination Coverage Among
                Healthcare Personnel measure beginning with the FY 2023 program year,
                make a technical update to the terminology we use in the program, and
                codify existing PCHQR Program policies in our regulations.
                l. Medicare Promoting Interoperability Program
                 For purposes of reducing the burden on eligible hospitals and CAHs,
                we are proposing several changes to the Medicare Promoting
                Interoperability Program. Specifically, we are proposing: (1) To
                continue the EHR reporting period of a minimum of any continuous 90-day
                period for new and returning eligible hospitals and CAHs for CY 2023
                and to increase the EHR reporting period to a minimum of any continuous
                180-day period for new and returning eligible hospitals and CAHs for CY
                2024; (2) to maintain the Electronic Prescribing Objective's Query of
                PDMP measure as optional while increasing its available bonus from five
                points to 10 points for the EHR reporting period in CY 2022; (3) to
                modify the Provide Patient's Electronic Access to Their Health
                Information measure to establish a data availability requirement
                beginning with encounters with a date of service on or after January 1,
                2016, beginning with the EHR reporting period in CY 2022; (4) to add a
                new Health Information Exchange (HIE) Bi-Directional Exchange measure
                as a yes/no attestation, to the HIE objective as an optional
                alternative to the two existing measures beginning with the EHR
                reporting period in CY 2022; (5) to require reporting a ``yes'' on four
                of the existing Public Health and Clinical Data Exchange Objective
                measures (Syndromic Surveillance Reporting, Immunization Registry
                Reporting, Electronic Case Reporting, and Electronic Reportable
                Laboratory Result Reporting) or requesting the applicable exclusion(s);
                (6) adding a new measure to the Protect Patient Health Information
                objective that requires eligible hospitals and CAHs to attest to having
                completed an annual assessment of SAFER Guides beginning with the EHR
                reporting period in CY 2022; (7) to remove attestation statements 2 and
                3 from the Promoting Interoperability Program's prevention of
                information blocking requirement; (8) to increase the minimum required
                score for the objectives and measures from 50 points to 60 points (out
                of 100 points) in order to be considered a meaningful EHR user; and (9)
                to adopt two new eCQMs to the Medicare Promoting Interoperability
                Program's eCQM measure set beginning with the reporting period in CY
                2023, in addition to removing four eCQMs from the measure set beginning
                with the reporting period in CY 2024 which is in alignment with the
                proposals for the Hospital IQR Program. We are amending our regulation
                texts as necessary to incorporate several of these proposed changes.
                m. Proposed Repeal of Market-Based Data Collection and Market-Based MS-
                DRG Relative Weight Methodology
                 As discussed in section V.L. of the preamble of this proposed rule,
                we are proposing to repeal the requirement that a hospital report on
                the Medicare cost report the median payer-specific negotiated charge
                that the hospital has negotiated with all of its MA organization
                payers, by MS-DRG, for cost reporting periods ending on or after
                January 1, 2021. We are also proposing to repeal the market-based MS-
                DRG relative weight methodology adopted for calculating the MS-DRG
                relative weights effective in FY 2024, and to continue using the
                existing cost-based methodology for calculating the MS-DRG relative
                weights for FY 2024 and subsequent fiscal years. Lastly, we are
                soliciting comment on alternative approaches or data sources that could
                be used in Medicare fee-for-service (FFS) ratesetting. The proposed
                repeal of these policies would result in a reduction of 63,780 annual
                burden hours for all hospitals.
                n. Proposed Implementation of Sections 126, 127 and 131 of the
                Consolidated Appropriations Act (CAA) of 2021
                 In this proposed rule, we are including proposals to implement
                sections 126, 127 and 131 of the Consolidated Appropriations Act (CAA)
                of 2021. Section 126(a) of the CAA amended section 1886(h) of the Act
                by adding a new section 1886(h)(9) of the Act requiring the
                distribution of additional residency positions to qualifying hospitals.
                Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act to
                specify that in the case of a hospital not located in a rural area that
                established or establishes a medical residency training program (or
                rural track) in a rural area, the hospital, and each such hospital
                located in a rural area that participates in such a training, is
                allowed to receive an adjustment to its full-time equivalent (FTE)
                resident limit. Section 131 of the CAA amended section 1886(h)(2)(F) of
                the Act to provide an opportunity to hospitals with such extremely low
                or $0 per resident amounts (PRAs) that meet certain criteria to reset
                and establish new PRAs if the hospital trains resident(s) in a cost
                reporting period beginning on or after enactment [December 27, 2020]
                and before the date that is 5 years after enactment [December 26,
                2025]. Section 131 also amended section 1886(h)(4)(H)(i) of the Act to
                provide an opportunity for hospitals that meet certain criteria and
                that have very small FTE resident caps to replace those caps if the
                Secretary determines the hospital begins training residents in a new
                program beginning on or after enactment (December 27, 2020) and before
                5 years after enactment (December 26, 2025). We refer readers to
                section V.J.2. of this proposed rule for rule for a summary of the
                provisions of sections 126, 127, and 131 of the CAA that we are
                proposing to implement in this proposed rule.
                o. Proposed Changes to Organ Acquisition Payment Policy
                 In section X.B.2.h. of the preamble of this proposed rule, we are
                proposing to revise and codify the Medicare usable organ counting
                policy to count only organs transplanted into Medicare beneficiaries so
                that Medicare more accurately records and pays its share of organ
                acquisition costs.
                p. Medicare Shared Savings Program
                 We are proposing to make changes to policies for the Shared Savings
                Program, which was established under section 1899 of the Act, to allow
                eligible ACOs participating in the BASIC track's glide path the option
                to elect to forgo automatic advancement along the glide path's
                increasing levels of risk and potential reward for performance year
                (PY) 2022. Under this proposal, prior to the automatic advancement for
                PY 2022, an eligible ACO may elect to remain in the same level of the
                BASIC track's glide path in which it participated during PY 2021. For
                PY 2023, an ACO that elects this advancement deferral option would be
                automatically advanced to the level of the BASIC track's glide path in
                which it would have participated during PY 2023 if it had advanced
                automatically to the required level for PY 2022 (unless the ACO elects
                to advance more quickly before the start of PY 2023).
                3. Summary of Costs and Benefits
                 The following table provides a summary of the costs, savings,
                benefits associated with the major provisions described in section
                I.A.3. of the preamble of this proposed rule.
                BILLING CODE 4120-01-P
                [[Page 25078]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.000
                [[Page 25079]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.001
                [[Page 25080]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.002
                [[Page 25081]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.003
                [[Page 25082]]
                BILLING CODE 4120-01-C
                B. Background Summary
                1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
                 Section 1886(d) of the Act sets forth a system of payment for the
                operating costs of acute care hospital inpatient stays under Medicare
                Part A (Hospital Insurance) based on prospectively set rates. Section
                1886(g) of the Act requires the Secretary to use a prospective payment
                system (PPS) to pay for the capital-related costs of inpatient hospital
                services for these ``subsection (d) hospitals.'' Under these PPSs,
                Medicare payment for hospital inpatient operating and capital-related
                costs is made at predetermined, specific rates for each hospital
                discharge. Discharges are classified according to a list of diagnosis-
                related groups (DRGs).
                 The base payment rate is comprised of a standardized amount that is
                divided into a labor-related share and a nonlabor-related share. The
                labor-related share is adjusted by the wage index applicable to the
                area where the hospital is located. If the hospital is located in
                Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
                living adjustment factor. This base payment rate is multiplied by the
                DRG relative weight.
                 If the hospital treats a high percentage of certain low-income
                patients, it receives a percentage add-on payment applied to the DRG-
                adjusted base payment rate. This add-on payment, known as the
                disproportionate share hospital (DSH) adjustment, provides for a
                percentage increase in Medicare payments to hospitals that qualify
                under either of two statutory formulas designed to identify hospitals
                that serve a disproportionate share of low-income patients. For
                qualifying hospitals, the amount of this adjustment varies based on the
                outcome of the statutory calculations. The Affordable Care Act revised
                the Medicare DSH payment methodology and provides for a new additional
                Medicare payment beginning on October 1, 2013, that considers the
                amount of uncompensated care furnished by the hospital relative to all
                other qualifying hospitals.
                 If the hospital is training residents in an approved residency
                program(s), it receives a percentage add-on payment for each case paid
                under the IPPS, known as the indirect medical education (IME)
                adjustment. This percentage varies, depending on the ratio of residents
                to beds.
                 Additional payments may be made for cases that involve new
                technologies or medical services that have been approved for special
                add-on payments. In general, to qualify, a new technology or medical
                service must demonstrate that it is a substantial clinical improvement
                over technologies or services otherwise available, and that, absent an
                add-on payment, it would be inadequately paid under the regular DRG
                payment. In addition, certain transformative new devices and certain
                antimicrobial products may qualify under an alternative inpatient new
                technology add-on payment pathway by demonstrating that, absent an add-
                on payment, they would be inadequately paid under the regular DRG
                payment.
                 The costs incurred by the hospital for a case are evaluated to
                determine whether the hospital is eligible for an additional payment as
                an outlier case. This additional payment is designed to protect the
                hospital from large financial losses due to unusually expensive cases.
                Any eligible outlier payment is added to the DRG-adjusted base payment
                rate, plus any DSH, IME, and new technology or medical service add-on
                adjustments.
                 Although payments to most hospitals under the IPPS are made on the
                basis of the standardized amounts, some categories of hospitals are
                paid in whole or in part based on their hospital-specific rate, which
                is determined from their costs in a base year. For example, sole
                community hospitals (SCHs) receive the higher of a hospital-specific
                rate based on their costs in a base year (the highest of FY 1982, FY
                1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the
                standardized amount. SCHs are the sole source of care in their areas.
                Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a
                hospital that is located more than 35 road miles from another hospital
                or that, by reason of factors such as an isolated location, weather
                conditions, travel conditions, or absence of other like hospitals (as
                determined by the Secretary), is the sole source of hospital inpatient
                services reasonably available to Medicare beneficiaries. In addition,
                certain rural hospitals previously designated by the Secretary as
                essential access community hospitals are considered SCHs.
                 Under current law, the Medicare-dependent, small rural hospital
                (MDH) program is effective through FY 2022. For discharges occurring on
                or after October 1, 2007, but before October 1, 2022, an MDH receives
                the higher of the Federal rate or the Federal rate plus 75 percent of
                the amount by which the Federal rate is exceeded by the highest of its
                FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major
                source of care for Medicare beneficiaries in their areas. Section
                1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is
                located in a rural area (or, as amended by the Bipartisan Budget Act of
                2018, a hospital located in a State with no rural area that meets
                certain statutory criteria), has not more than 100 beds, is not an SCH,
                and has a high percentage of Medicare discharges (not less than 60
                percent of its inpatient days or discharges in its cost reporting year
                beginning in FY 1987 or in two of its three most recently settled
                Medicare cost reporting years).
                 Section 1886(g) of the Act requires the Secretary to pay for the
                capital-related costs of inpatient hospital services in accordance with
                a prospective payment system established by the Secretary. The basic
                methodology for determining capital prospective payments is set forth
                in our regulations at 42 CFR 412.308 and 412.312. Under the capital
                IPPS, payments are adjusted by the same DRG for the case as they are
                under the operating IPPS. Capital IPPS payments are also adjusted for
                IME and DSH, similar to the adjustments made under the operating IPPS.
                In addition, hospitals may receive outlier payments for those cases
                that have unusually high costs.
                 The existing regulations governing payments to hospitals under the
                IPPS are located in 42 CFR part 412, subparts A through M.
                2. Hospitals and Hospital Units Excluded From the IPPS
                 Under section 1886(d)(1)(B) of the Act, as amended, certain
                hospitals and hospital units are excluded from the IPPS. These
                hospitals and units are: Inpatient rehabilitation facility (IRF)
                hospitals and units; long-term care hospitals (LTCHs); psychiatric
                hospitals and units; children's hospitals; cancer hospitals; extended
                neoplastic disease care hospitals, and hospitals located outside the 50
                States, the District of Columbia, and Puerto Rico (that is, hospitals
                located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands,
                and American Samoa). Religious nonmedical health care institutions
                (RNHCIs) are also excluded from the IPPS. Various sections of the
                Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the Medicare,
                Medicaid and SCHIP [State Children's Health Insurance Program] Balanced
                Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the
                Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
                of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs
                for IRF hospitals and units, LTCHs, and psychiatric hospitals and units
                (referred to as inpatient psychiatric facilities (IPFs)). (We note that
                the annual
                [[Page 25083]]
                updates to the LTCH PPS are included along with the IPPS annual update
                in this document. Updates to the IRF PPS and IPF PPS are issued as
                separate documents.) Children's hospitals, cancer hospitals, hospitals
                located outside the 50 States, the District of Columbia, and Puerto
                Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
                Northern Mariana Islands, and American Samoa), and RNHCIs continue to
                be paid solely under a reasonable cost-based system, subject to a rate-
                of-increase ceiling on inpatient operating costs. Similarly, extended
                neoplastic disease care hospitals are paid on a reasonable cost basis,
                subject to a rate-of-increase ceiling on inpatient operating costs.
                 The existing regulations governing payments to excluded hospitals
                and hospital units are located in 42 CFR parts 412 and 413.
                3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
                 The Medicare prospective payment system (PPS) for LTCHs applies to
                hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
                for cost reporting periods beginning on or after October 1, 2002. The
                LTCH PPS was established under the authority of sections 123 of the
                BBRA and section 307(b) of the BIPA (as codified under section
                1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform
                Act of 2013 (Pub. L. 113-67) established the site neutral payment rate
                under the LTCH PPS, which made the LTCH PPS a dual rate payment system
                beginning in FY 2016. Under this statute, effective for LTCH's cost
                reporting periods beginning in FY 2016 cost reporting period, LTCHs are
                generally paid for discharges at the site neutral payment rate unless
                the discharge meets the patient criteria for payment at the LTCH PPS
                standard Federal payment rate. The existing regulations governing
                payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
                Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
                in the same documents that update the IPPS.
                4. Critical Access Hospitals (CAHs)
                 Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
                to critical access hospitals (CAHs) (that is, rural hospitals or
                facilities that meet certain statutory requirements) for inpatient and
                outpatient services are generally based on 101 percent of reasonable
                cost. Reasonable cost is determined under the provisions of section
                1861(v) of the Act and existing regulations under 42 CFR part 413.
                5. Payments for Graduate Medical Education (GME)
                 Under section 1886(a)(4) of the Act, costs of approved educational
                activities are excluded from the operating costs of inpatient hospital
                services. Hospitals with approved graduate medical education (GME)
                programs are paid for the direct costs of GME in accordance with
                section 1886(h) of the Act. The amount of payment for direct GME costs
                for a cost reporting period is based on the hospital's number of
                residents in that period and the hospital's costs per resident in a
                base year. The existing regulations governing payments to the various
                types of hospitals are located in 42 CFR part 413.
                C. Summary of Provisions of Recent Legislation That Would Be
                Implemented in This Proposed Rule
                1. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
                114-10)
                 Section 414 of the Medicare Access and CHIP Reauthorization Act of
                2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
                adjustment to the standardized amount of Medicare payments to acute
                care hospitals for FYs 2018 through 2023. These adjustments follow the
                recoupment adjustment to the standardized amounts under section 1886(d)
                of the Act based upon the Secretary's estimates for discharges
                occurring from FYs 2014 through 2017 to fully offset $11 billion, in
                accordance with section 631 of the ATRA. The FY 2018 adjustment was
                subsequently adjusted to 0.4588 percent by section 15005 of the 21st
                Century Cures Act.
                2. Consolidated Appropriations Act, 2021 (Pub. L. 116-260)
                 Sections 126, 127 and 131 of the Consolidated Appropriations Act,
                2021 made a number of changes to various sections of the Act relating
                to payment for direct GME and IME costs to hospitals.
                a. Section 126 of the Consolidated Appropriations Act, 2021
                 Section 126 amended section 1886(h) of the Act by adding a new
                section 1886(h)(9) requiring the distribution of additional residency
                positions to qualifying hospitals. Section 1886(h)(9)(A) requires that
                for FY 2023, and for each succeeding fiscal year until the aggregate
                number of full-time equivalent residency positions distributed is equal
                to 1,000, the Secretary shall initiate separate rounds of applications
                from hospitals for these additional residency positions. The Secretary
                is required, subject to certain provisions in the law, to increase the
                otherwise applicable resident limit for each qualifying hospital that
                submits a timely application by the number of positions that may be
                approved by the Secretary for that hospital. The Secretary is required
                to notify hospitals of the number of positions distributed to them by
                January 31 of the fiscal year of the increase, and the increase is
                effective beginning July 1 of that fiscal year. Section 1886(h)(9)(A)
                also limits the aggregate number of such positions made available in a
                single fiscal year across all hospitals to no more than 200.
                 In determining the qualifying hospitals for which an increase is
                provided, section 1886(h)(9)(B) requires the Secretary to take into
                account the demonstrated likelihood of the hospital filling the
                positions made available within the first 5 training years beginning
                after the date the increase would be effective, as determined by the
                Secretary.
                 Section 1886(h)(9)(B) of the Act also requires a minimum
                distribution for certain categories of hospitals. Specifically, the
                Secretary is required to distribute at least 10 percent of the
                aggregate number of total residency positions available to each of four
                categories of hospitals. Stated briefly, and discussed in greater
                detail in later in this proposed rule, the categories are as follows:
                (1) Hospitals located in rural areas or that are treated as being
                located in a rural area; (2) hospitals in which the reference resident
                level of the hospital is greater than the otherwise applicable resident
                limit; (3) hospitals in states with new medical schools or additional
                locations and branches of existing medical schools; and (4) hospitals
                that serve areas designated as Health Professional Shortage Areas
                (HPSAs). Additionally, section 1886(h)(9)(F)(ii) of the Act defines a
                qualifying hospital as a hospital in one of these four categories.
                 Section 1886(h)(9)(C) of the Act places certain limitations on the
                distribution of the residency positions. First, a hospital may not
                receive more than 25 additional full-time equivalent residency
                positions. Second, no increase in the otherwise applicable resident
                limit of a hospital may be made unless the hospital agrees to increase
                the total number of full-time equivalent residency positions under the
                approved medical residency training program of the hospital by the
                number of positions made available to that hospital.
                b. Section 127 of the Consolidated Appropriations Act, 2021
                 Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act
                to
                [[Page 25084]]
                specify that in the case of a hospital not located in a rural area that
                established or establishes a medical residency training program (or
                rural tracks) in a rural area, the hospital, and each such hospital
                located in a rural areas that participates in such a training, is
                allowed to receive an adjustment to its full-time equivalent (FTE)
                resident limit.
                c. Sections 131 of the Consolidated Appropriations Act, 2021
                 Section 131 of the CAA amended section 1886(h)(2)(F) of the Act to
                provide an opportunity to hospitals with such extremely low or $0 per
                resident amounts (PRAs) that meet certain criteria to reset and
                establish new PRAs if the hospital trains resident(s) in a cost
                reporting period beginning on or after enactment [December 27, 2020]
                and before the date that is 5 years after enactment [December 26,
                2025]. Section 131 of the CAA also amended section 1886(h)(4)(H)(i) of
                the Act to provide an opportunity for hospitals that meet certain
                criteria and that have very small FTE resident caps to replace those
                caps if the Secretary determines the hospital begins training residents
                in a program year beginning on or after enactment (December 27, 2020)
                and before 5 years after enactment (December 26, 2025).
                D. Summary of the Provisions of This Proposed Rule
                 In this proposed rule, we set forth proposed payment and policy
                changes to the Medicare IPPS for FY 2022 operating costs and capital-
                related costs of acute care hospitals and certain hospitals and
                hospital units that are excluded from IPPS. In addition, we set forth
                proposed changes to the payment rates, factors, and other payment and
                policy-related changes to programs associated with payment rate
                policies under the LTCH PPS for FY 2022.
                 The following is a general summary of the changes that we are
                proposing to make in this proposed rule.
                1. Proposed Changes to MS-DRG Classifications and Recalibrations of
                Relative Weights
                 In section II. of the preamble of this proposed rule, we include--
                 Proposed changes to MS-DRG classifications based on our
                yearly review for FY 2022.
                 Proposed adjustment to the standardized amounts under
                section 1886(d) of the Act for FY 2022 in accordance with the
                amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
                414 of the MACRA.
                 Proposed recalibration of the MS-DRG relative weights.
                 A discussion of the proposed FY 2022 status of new
                technologies approved for add-on payments for FY 2022, a presentation
                of our evaluation and analysis of the FY 2022 applicants for add-on
                payments for high-cost new medical services and technologies (including
                public input, as directed by Public Law 108-173, obtained in a town
                hall meeting) for applications not submitted under an alternative
                pathway, and a discussion of the proposed status of FY 2022 new
                technology applicants under the alternative pathways for certain
                medical devices and certain antimicrobial products.
                 A proposal to extend the New COVID-19 Treatments Add-on
                Payment (NCTAP) through the end of the fiscal year in which the PHE
                ends for certain products and discontinue NCTAP for products approved
                for new technology add-on payments in FY 2022.
                2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
                 In section III. of the preamble of this proposed rule we are
                proposing to make revisions to the wage index for acute care hospitals
                and the annual update of the wage data. Specific issues addressed
                include, but were not limited to, the following:
                 The proposed FY 2022 wage index update using wage data
                from cost reporting periods beginning in FY 2018.
                 Calculation, analysis, and implementation of the proposed
                occupational mix adjustment to the wage index for acute care hospitals
                for FY 2022 based on the 2019 Occupational Mix Survey.
                 Proposed application of the rural floor and the frontier
                State floor, and continuation of the low wage index hospital policy.
                 Proposed implementation of the imputed floor wage index
                policy for all-urban states under section 9831 of the American Rescue
                Plan Act of 2021 (Pub. L. 117-2).
                 Proposed revisions to the wage index for acute care
                hospitals, based on hospital redesignations and reclassifications under
                sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
                 Proposed revisions to the regulations at Sec. 412.278
                regarding the Administrator's Review of MGCRB decisions.
                 Proposed changes to rural reclassification cancellation
                requirements at Sec. 412.103(g).
                 Proposed adjustment to the wage index for acute care
                hospitals for FY 2022 based on commuting patterns of hospital employees
                who reside in a county and work in a different area with a higher wage
                index.
                 Proposed labor-related share for the proposed FY 2022 wage
                index.
                3. Proposed Rebasing and Revising of the Hospital Market Baskets
                 In section IV. of the preamble of this proposed rule, we are
                proposing to rebase and revise the hospital market baskets for acute
                care hospitals and update the labor-related share.
                4. Other Decisions and Proposed Changes to the IPPS for Operating Costs
                 In section V. of the preamble of this proposed rule, we discuss
                proposed changes or clarifications of a number of the provisions of the
                regulations in 42 CFR parts 412 and 413, including the following:
                 Proposed inpatient hospital update for FY 2022.
                 Proposed updated national and regional case-mix values and
                discharges for purposes of determining RRC status.
                 The statutorily required IME adjustment factor for FY
                2022.
                 Proposed changes to the methodologies for determining
                Medicare DSH payments and the additional payments for uncompensated
                care.
                 Proposed requirements for payment adjustments under the
                Hospital Readmissions Reduction Program for FY 2022.
                 The provision of estimated and newly established
                performance standards for the calculation of value-based incentive
                payments, as well as a proposal to suppress multiple measures and
                provide net-neutral payment adjustments under the Hospital Value-Based
                Purchasing Program.
                 Proposed requirements for payment adjustments to hospitals
                under the HAC Reduction Program for FY 2022.
                 Discussion of and proposed changes relating to the
                implementation of the Rural Community Hospital Demonstration Program in
                FY 2022.
                 Proposed revisions to the regulations regarding the
                counting of days associated with section 1115 demonstration projects in
                the Medicaid fraction.
                 Proposals to implement provisions of the Consolidated
                Appropriations Act relating to payments to hospitals for direct
                graduate medical education (GME) and indirect medical education (IME)
                costs.
                 Proposed repeal of the market-based data collection
                requirement and market-based MS-DRG relative weight methodology.
                [[Page 25085]]
                5. Proposed FY 2022 Policy Governing the IPPS for Capital-Related Costs
                 In section VI. of the preamble to this proposed rule, we discuss
                the proposed payment policy requirements for capital-related costs and
                capital payments to hospitals for FY 2022.
                6. Proposed Changes to the Payment Rates for Certain Excluded
                Hospitals: Rate-of-Increase Percentages
                 In section VII. of the preamble of this proposed rule, we discuss--
                 Proposed changes to payments to certain excluded hospitals
                for FY 2022.
                 Proposed continued implementation of the Frontier
                Community Health Integration Project (FCHIP) Demonstration.
                7. Proposed Changes to the LTCH PPS
                 In section VIII. of the preamble of this proposed rule, we set
                forth proposed changes to the LTCH PPS Federal payment rates, factors,
                and other payment rate policies under the LTCH PPS for FY 2022.
                8. Proposed Changes Relating to Quality Data Reporting for Specific
                Providers and Suppliers
                 In section IX. of the preamble of this proposed rule, we address
                the following:
                 Proposed requirements for the Hospital Inpatient Quality
                Reporting (IQR) Program.
                 Proposed changes to the requirements for the quality
                reporting program for PPS-exempt cancer hospitals (PCHQR Program).
                 Proposed changes to the requirements under the LTCH
                Quality Reporting Program (QRP). We are also seeking information on
                CMS's future plans to define digital quality measures (dQMs) for the
                LTCH QRP and on CMS' continued efforts to close the health equity gap.
                 Proposed changes to requirements pertaining to eligible
                hospitals and CAHs participating in the Medicare Promoting
                Interoperability Program.
                9. Other Proposals Included in This Proposed Rule
                 Section X. of the preamble to this proposed rule includes the
                following proposals:
                 Proposed changes pertaining to Medicaid enrollment of
                Medicare-enrolled providers and suppliers to 42 CFR part 455.410 and
                request for comment on provider experiences where state Medicaid
                agencies apply the Medicaid payment and coverage rules to a claim for a
                Medicare service rather than adjudicating the claim for Medicare cost-
                sharing liability.
                 Proposed changes pertaining to Medicare's share of organ
                acquisition costs transplanted into Medicare beneficiaries and the
                charges for services provided to cadaveric organ donors by donor
                community hospitals and transplants hospitals.
                 Proposed changes pertaining to the Shared Savings Program
                that would allow eligible ACOs participating in the BASIC track's glide
                path to maintain their current level of participation for PY 2022.
                10. Other Provisions of This Proposed Rule
                 Section XI. of the preamble to this proposed rule includes our
                discussion of the MedPAC Recommendations.
                 Section XII. of the preamble to this proposed rule includes the
                following:
                 A descriptive listing of the public use files associated
                with the proposed rule.
                 The collection of information requirements for entities
                based on our proposals.
                 Information regarding our responses to public comments.
                11. Determining Prospective Payment Operating and Capital Rates and
                Rate-of-Increase Limits for Acute Care Hospitals
                 In sections II. and III. of the Addendum to this proposed rule, we
                set forth proposed changes to the amounts and factors for determining
                the proposed FY 2022 prospective payment rates for operating costs and
                capital-related costs for acute care hospitals. We proposed to
                establish the threshold amounts for outlier cases. In addition, in
                section IV. of the Addendum to this proposed rule, we address the
                proposed update factors for determining the rate-of-increase limits for
                cost reporting periods beginning in FY 2022 for certain hospitals
                excluded from the IPPS.
                12. Determining Prospective Payment Rates for LTCHs
                 In section V. of the Addendum to the proposed rule, we set forth
                proposed changes to the amounts and factors for determining the
                proposed FY 2022 LTCH PPS standard Federal payment rate and other
                factors used to determine LTCH PPS payments under both the LTCH PPS
                standard Federal payment rate and the site neutral payment rate in FY
                2022. We are proposing to establish the adjustments for the wage index,
                labor-related share, the cost-of-living adjustment, and high-cost
                outliers, including the applicable fixed-loss amounts and the LTCH
                cost-to-charge ratios (CCRs) for both payment rates.
                13. Impact Analysis
                 In Appendix A of the proposed rule, we set forth an analysis of the
                impact the proposed changes would have on affected acute care
                hospitals, CAHs, LTCHs, PCHs and other entities.
                14. Recommendation of Update Factors for Operating Cost Rates of
                Payment for Hospital Inpatient Services
                 In Appendix B of the proposed rule, as required by sections
                1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the
                appropriate percentage changes for FY 2022 for the following:
                 A single average standardized amount for all areas for
                hospital inpatient services paid under the IPPS for operating costs of
                acute care hospitals (and hospital-specific rates applicable to SCHs
                and MDHs).
                 Target rate-of-increase limits to the allowable operating
                costs of hospital inpatient services furnished by certain hospitals
                excluded from the IPPS.
                 The LTCH PPS standard Federal payment rate and the site
                neutral payment rate for hospital inpatient services provided for LTCH
                PPS discharges.
                15. Discussion of Medicare Payment Advisory Commission Recommendations
                 Under section 1805(b) of the Act, MedPAC is required to submit a
                report to Congress, no later than March 15 of each year, in which
                MedPAC reviews and makes recommendations on Medicare payment policies.
                MedPAC's March 2021 recommendations concerning hospital inpatient
                payment policies address the update factor for hospital inpatient
                operating costs and capital-related costs for hospitals under the IPPS.
                We address these recommendations in Appendix B of this proposed rule.
                For further information relating specifically to the MedPAC March 2021
                report or to obtain a copy of the report, contact MedPAC at (202) 220-
                3700 or visit MedPAC's website at: http://www.medpac.gov.
                E. Advancing Health Information Exchange
                 The Department of Health and Human Services (HHS) has a number of
                initiatives designed to encourage and support the adoption of
                interoperable health information technology and to promote nationwide
                health information exchange to improve health care and patient access
                to their health information.
                 To further interoperability in post-acute care settings, CMS and
                the Office of the National Coordinator for Health
                [[Page 25086]]
                Information Technology (ONC) participate inin the Post-Acute Care
                Interoperability Workgroup (PACIO http://pacioproject.org/) to
                facilitate collaboration with industry stakeholders to develop FHIR
                standards. These standards could support the exchange and reuse of
                patient assessment data derived from the Minimum Data Set (MDS),
                Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-
                PAI), LTCH Continuity Assessment Record and Evaluation (CARE Data Set
                (LCDS), Outcome and Assessment Information Set (OASIS), and other
                sources. The PACIO Project has focused on FHIR implementation guides
                for functional status, cognitive status and new use cases on advance
                directives and speech language pathology. We encourage post-acute care
                (PAC) provider and health information technology (IT) vendor
                participation as the efforts advance.
                 The CMS Data Element Library (DEL) continues to be updated and
                serves as the authoritative resource for PAC assessment data elements
                and their associated mappings to health IT standards, such as Logical
                Observation Identifiers Names and Codes (LOINC) and Systematized
                Nomenclature of Medicine Clinical Terms (SNOMED). The DEL furthers CMS'
                goal of data standardization and interoperability. These interoperable
                data elements can reduce provider burden by allowing the use and
                exchange of healthcare data; supporting provider exchange of electronic
                health information for care coordination, person-centered care; and
                supporting real-time, data driven, clinical decision-making. Standards
                in the Data Element Library (https://del.cms.gov/DELWeb/pubHome)can be
                referenced on the CMS website and in the ONC Interoperability Standards
                Advisory (ISA). The 2021 ISA is available at https://www.healthit.gov/isa.
                 The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted
                December 13, 2016) requires HHS to take new steps to enable the
                electronic sharing of health information ensuring interoperability for
                providers and settings across the care continuum. The Cures Act
                includes a trusted exchange framework and common agreement (TEFCA)
                provision \1\ that will enable the nationwide exchange of electronic
                health information across health information networks and provide an
                important way to enable bi-directional health information exchange in
                the future. For more information on current developments related to
                TEFCA, we refer readers to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement and
                https://rce.sequoiaproject.org/.
                ---------------------------------------------------------------------------
                 \1\ ONC, Draft 2 Trusted Exchange Framework and Common
                Agreement, https://www.healthit.gov/sites/default/files/page/2019-04/FINALTEFCAQTF41719508version.pdf.
                ---------------------------------------------------------------------------
                 The ONC final rule entitled ``21st Century Cures Act:
                Interoperability, Information Blocking, and the ONC Health IT
                Certification Program'' (85 FR 25642) published in the May 1, 2020
                Federal Register, (hereinafter referred to as ``ONC Cures Act Final
                Rule'') implemented policies related to information blocking as
                authorized under section 4004 of the 21st Century Cures Act.
                Information blocking is generally defined as a practice by a health IT
                developer of certified health IT, health information network, health
                information exchange, or health care provider that, except as required
                by law or specified by the HHS Secretary as a reasonable and necessary
                activity, is likely to interfere with access, exchange, or use of
                electronic health information. For a health care provider (as defined
                in 45 CFR 171.102), the definition of information blocking (see 45 CFR
                171.103) specifies that the provider knows that the practice is
                unreasonable, as well as likely to interfere with access, exchange, or
                use of electronic health information.\2\ To deter information blocking,
                health IT developers of certified health IT, health information
                networks and health information exchanges whom the HHS Inspector
                General determines, following an investigation, have committed
                information blocking, are subject to civil monetary penalties of up to
                $1 million per violation. Appropriate disincentives for health care
                providers need to be established by the Secretary through rulemaking.
                Stakeholders can learn more about information blocking at https://www.healthit.gov/curesrule/final-rule-policy/information-blocking. ONC
                has posted information resources including fact sheets (https://www.healthit.gov/curesrule/resources/fact-sheets), frequently asked
                questions (https://www.healthit.gov/curesrule/resources/information-blocking-faqs), and recorded webinars (https://www.healthit.gov/curesrule/resources/webinars).
                ---------------------------------------------------------------------------
                 \2\ For other types of actors (health IT developers of certified
                health IT and health information network or health information
                exchange, as defined in 45 CFR 171.102), the definition of
                ``information blocking'' (see 45 CFR 171.103) specifies that the
                actor ``knows, or should know, that such practice is likely to
                interfere with access, exchange, or use of electronic health
                information.''
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                 We invite providers to learn more about these important
                developments and how they are likely to affect LTCHs.
                F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS
                Ratesetting
                 We primarily use two data sources in the IPPS and LTCH PPS
                ratesetting: Claims data and cost report data. The claims data source
                is the MedPAR file, which includes fully coded diagnostic and procedure
                data for all Medicare inpatient hospital bills for discharges in a
                fiscal year. Our goal is always to use the best available data overall
                for ratesetting. Ordinarily, the best available MedPAR data would be
                the most recent MedPAR file that contains claims from discharges for
                the fiscal year that is 2 years prior to the fiscal year that is the
                subject of the rulemaking. For FY 2022 ratesetting, under ordinary
                circumstances, the best available data would be the FY 2020 MedPAR
                file. The cost report data source is the Medicare hospital cost report
                data files from the most recent quarterly HCRIS release. For example,
                ordinarily, the best available cost report data used in relative weight
                calculations would be based on the cost reports beginning 3 fiscal
                years prior to the fiscal year that is the subject of the rulemaking.
                For the FY 2022 ratesetting, under ordinary circumstances, that would
                be the FY 2019 cost report data from HCRIS, which would contain many
                cost reports ending in FY 2020 based on each hospital's cost reporting
                period.
                 The FY 2020 MedPAR claims file and the FY 2019 HCRIS dataset both
                contain data significantly impacted by the COVID-19 PHE, primarily in
                that the utilization of inpatient services was generally markedly
                different for certain types of services in FY 2020 than would have been
                expected in the absence of the PHE, as we discuss in this section.
                Accordingly, we question whether these data sources are the best
                available data to use for the FY 2022 ratesetting. One factor in
                assessing whether these data sources represent the best available data
                is to what extent the FY 2019 data from before the COVID-19 PHE is a
                better overall approximation of FY 2022 inpatient experience (for
                example, whether the share of total inpatient utilization for elective
                surgeries will be more similar to FY 2019 than to FY 2020), or
                alternatively, to what extent the FY 2020 data which include the COVID-
                19 PHE time period is a better overall approximation of FY 2022
                inpatient experience (for example, whether the share of total inpatient
                utilization for respiratory infections will be more similar to FY 2020
                than to FY
                [[Page 25087]]
                2019). Another factor is to what extent the decision to use the FY 2019
                or FY 2020 data differentially impacts the FY 2022 IPPS ratesetting.
                 In order to help assess likely inpatient utilization in FY 2022, we
                examined the trend in the number of COVID-19 vaccinations in the United
                States as reported to the Centers for Disease Control (CDC) (see
                https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html, accessed April 16, 2021).
                 The U.S. COVID-19 Vaccination Program began December 14, 2020. As
                of April 15, 2021, 198.3 million vaccine doses have been administered.
                Overall, about 125.8 million people, or 37.9 percent of the U.S.
                population, have received at least one dose of vaccine as of this date.
                About 78.5 million people, or 23.6 percent of the U.S. population have
                been fully vaccinated.\3\ As of April 15, the 7-day average number of
                administered vaccine doses reported to CDC per day was 3.3 million, a
                10.3 percent increase from the previous week. As of April 15, 80
                percent of people 65 or older have received at least one dose of
                vaccine; 63.7 percent are fully vaccinated. Nearly one-half (48.3
                percent) of people 18 or older have received at least one dose of
                vaccine; 30.3 percent are fully vaccinated. Nationally, COVID-19-
                related emergency department visits as well as both hospital admissions
                and current hospitalizations have risen among patients ages 18 to 64
                years in recent weeks, but emergency department visits and
                hospitalizations among people ages 65 years and older have decreased,
                likely demonstrating the important role vaccination plays in protecting
                against COVID-19.
                ---------------------------------------------------------------------------
                 \3\ People who are fully vaccinated (formerly receiving 2 doses)
                represents the number of people who have received the second dose in
                a two-dose COVID-19 vaccine series or one dose of the single-dose
                J&J/Janssen COVID-19 vaccine.
                ---------------------------------------------------------------------------
                 As indicated by the CDC, COVID-19 vaccines are effective at
                preventing COVID-19.\4\ For example, a recent CDC report on the
                effectiveness of the Pfizer-BioNTech and Moderna COVID-19 vaccines when
                administered in real-world conditions found that after being fully
                vaccinated with either of these vaccines a person's risk of infection
                is reduced by up to 90 percent. With respect to inpatient utilization
                in FY 2020, we believe that COVID-19 and the risk of disease were
                drivers of the different utilization patterns observed. Therefore, the
                continuing rapid increase in vaccinations coupled with the overall
                effectiveness of the vaccines leads us to conclude based on the
                information available to us at this time that there will be
                significantly lower risk of COVID-19 in FY 2022 and fewer
                hospitalizations for COVID-19 for Medicare beneficiaries in FY 2022
                than there were in FY 2020. This calls into question the applicability
                of inpatient data from FY 2020 to the FY 2022 time period for hospitals
                paid under the IPPS and LTCH PPS.
                ---------------------------------------------------------------------------
                 \4\ Interim Estimates of Vaccine Effectiveness of BNT162b2 and
                mRNA-1273 COVID-19 Vaccines in Preventing SARS-CoV-2 Infection Among
                Health Care Personnel, First Responders, and Other Essential and
                Frontline Workers--Eight U.S. Locations, December 2020-March 2021,
                available at https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e3.htm?s_cid=mm7013e3_e&ACSTrackingID=USCDC_921-DM53321&ACSTrackingLabel=MMWR%20Early%20Release%20-%20Vol.%2070%2C%20March%2029%2C%202021&deliveryName=USCDC_921-DM53321, accessed April 2, 2021).
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                 We also reviewed CDC guidance to healthcare facilities during the
                COVID-19 PHE (see https://www.cdc.gov/coronavirus/2019-ncov/hcp/guidance-hcf.html). In its most recent guidance, the CDC described how
                the COVID-19 pandemic has changed how health care is delivered in the
                United States and has affected the operations of healthcare facilities.
                Effects cited by the CDC include increases in patients seeking care for
                respiratory illnesses, patients deferring and delaying non-COVID-19
                care, disruptions in supply chains, fluctuations in facilities'
                occupancy, absenteeism among staff because of illness or caregiving
                responsibilities, and increases in mental health concerns.
                 In order to investigate the effects cited by the CDC, we examined
                the claims data from the FY 2020 MedPAR compared to the FY 2019 MedPAR.
                Overall, in FY 2020, inpatient admissions under the IPPS dropped by
                approximately 14 percent compared to FY 2019. Elective surgeries
                declined significantly, and the share of admissions for MS-DRGs
                associated with the treatment of COVID-19 increased. For example, the
                number of inpatient admissions for MS-DRG 470 (Major Hip and Knee Joint
                Replacement or Reattachment of Lower Extremity without MCC) dropped by
                40 percent in FY 2020. Its share of inpatient admissions dropped from
                4.0 percent in FY 2019 to 2.8 percent in FY 2020. The number of
                inpatient admissions for MS-DRG 177 (Respiratory Infections and
                Inflammations with MCC) increased by +133 percent. Its share of
                inpatient admissions increased from 0.8 percent in FY 2019 to 2.2
                percent in FY 2020. This data analysis is consistent with the
                observations in the CDC's guidance that COVID-19 increased the number
                of patients seeking care for respiratory illnesses, and caused patients
                to defer and delay non-COVID-19 care. We note that these observed
                changes in the claims data also extend to the cost reports submitted by
                hospitals that include the COVID-19 PHE time period, since those cost
                reports that extend into the COVID-19 PHE are based in part on the
                discharges that occurred during that time.
                 The effects noted by the CDC are specific to the pandemic and to
                the extent that the effects on healthcare facilities noted by the CDC
                are not expected to continue into FY 2022, it would suggest that the
                inpatient data from FY 2020 impacted by the COVID-19 PHE may be less
                suitable for use in the FY 2022 ratesetting.
                 We also considered the analysis of 2020 IPPS real case-mix included
                in the notice titled ``CY 2021 Inpatient Hospital Deductible and
                Hospital and Extended Care Services Coinsurance Amounts'' that appeared
                in the Federal Register on November 12, 2020 (85 FR 71916). Section
                1813(b) of the Act prescribes the method for computing the amount of
                the inpatient hospital deductible. The inpatient hospital deductible is
                an amount equal to the inpatient hospital deductible for the preceding
                CY, adjusted by the best estimate of the payment-weighted average of
                the applicable percentage increases used for updating the payment rates
                to hospitals, and adjusted to reflect changes in real case-mix.
                 To develop the adjustment to reflect changes in real case-mix, we
                first calculated an average case-mix for each hospital that reflected
                the relative costliness of that hospital's mix of cases compared to
                those of other hospitals. We then computed the change in average case-
                mix for hospitals paid under the IPPS in FY 2020 compared to FY 2019,
                using Medicare bills from IPPS hospitals received as of July 2020.
                Those bills represented a total of about 6.1 million Medicare
                discharges for FY 2020 and provided the most recent case-mix data
                available at the time of that analysis. Based on these bills, the
                change in average case-mix in FY 2020 was 2.8 percent. Based on these
                bills and past experience, we expected the overall case-mix change to
                be 3.8 percent as the year progressed and more FY 2020 data became
                available.
                 Real case-mix is that portion of case-mix that is due to changes in
                the mix of cases in the hospital and not due to coding optimization. As
                stated in the November 2020 notice, COVID-19 has complicated the
                determination of real case-mix increase. COVID-19 cases typically group
                to higher-weighted MS-DRGs, and hospitals have experienced a concurrent
                reduction in cases that group
                [[Page 25088]]
                to lower weighted MS-DRGs. Both of these factors cause a real increase
                in case-mix. We compared the average case-mix for February 2020 through
                July 2020 (COVID-19 period) with average case-mix for October 2019
                through January 2020 (pre-COVID-19 period). Since this increase applies
                for only a portion of CY 2020, we allocated this increase by the
                estimated discharges over the 2 periods--a 2.5 percent increase for FY
                2020. The 1.3-percent residual case-mix increase is a mixture of real
                case-mix and coding optimization. Over the past several years, we have
                observed total case-mix increases of about 0.5 percent per year and
                have assumed that they are real. Thus, based on the information
                available, we expect that 0.5 percent of the residual 1.3 percent
                change in average case-mix for FY 2020 will be real. The combination of
                the 2.5 percent COVID-19 effect and the remaining residual 0.5-percent
                real case-mix increase results in an estimated 3.0 percent increase in
                real case-mix for FY 2020.
                 Because this analysis was based on Medicare bills from IPPS
                hospitals received as of July 2020, for this proposed rule, we
                calculated case-mix values for FY 2019 and FY 2020 based on the full
                year FY 2019 and FY 2020 MedPAR files to help assess the change in
                case-mix based on more complete data. For FY 2019 we calculated a case-
                mix value of 1.813 and for FY 2020 we calculated a case-mix value of
                1.883, an increase in total case-mix of 3.9 percent. These were
                calculated using the MS-DRG relative weights in effect for those time
                periods.\5\ This is consistent with the estimate in the Notice of the
                CY 2021 Inpatient Hospital Deductible and Hospital and Extended Care
                Services Coinsurance Amounts that the change in total case-mix for FY
                2020 would be 3.8 percent when more complete data was available.
                ---------------------------------------------------------------------------
                 \5\ Section 3710 of the Coronavirus Aid, Relief, and Economic
                Security (CARES) Act directs the Secretary of HHS to increase the
                weighting factor of the assigned DRG by 20 percent for an individual
                diagnosed with COVID-19 discharged during the COVID-19 PHE period.
                In order to make the case-mix values more comparable, the 20 percent
                increase is not included.
                ---------------------------------------------------------------------------
                 The increases in patients seeking care for respiratory illnesses
                and patients deferring and delaying non-COVID-19 care during FY 2020,
                the increasing number of vaccinations for COVID-19, and the high
                estimate of FY 2020 real case-mix growth all lead us to believe that FY
                2020 is not the best overall approximation of inpatient experience in
                FY 2022. We believe that FY 2019 as the most recent complete FY prior
                to the COVID-19 PHE is a better approximation of FY 2022 inpatient
                experience.
                 As we indicated earlier, whether the data is a better overall
                approximation of FY 2022 inpatient experience is one factor in
                assessing which data source represents the best available data for the
                FY 2022 rulemaking. Another factor is to what extent the decision to
                use the FY 2019 or FY 2020 data differentially impacts the FY 2022
                ratesetting. One way to assess this factor is to model the change in
                the total case-mix, which is a driver of spending, if our assumption
                regarding the FY 2022 inpatient experience used in calculating the MS-
                DRG relative weights turns out to be less accurate based on actual FY
                2022 experience. We estimated the difference in the total case-mix if
                we calculated the MS-DRG relative weights based on the FY 2019 claims
                data and the actual utilization is ultimately more similar to the FY
                2020 data, as compared to if we calculated the MS-DRG relative weights
                based on the FY 2020 data and the actual utilization is ultimately more
                similar to the FY 2019 data.
                 We first calculated a set of MS-DRG relative weights using an
                assumption that the FY 2022 inpatient experience would be similar to
                the FY 2019 data. Specifically, we used the proposed version 39 GROUPER
                (which would be applicable to discharges occurring in FY 2022) and the
                FY 2019 MedPAR data to calculate MS-DRG relative weights. We refer to
                these MS-DRG relative weights as the FY 2019-based weights.
                 We next calculated a set of MS-DRG relative weights using an
                assumption that the FY 2022 inpatient experience would be more similar
                to the FY 2020 data. Specifically, we used the proposed version 39
                GROUPER and the FY 2020 MedPAR data to calculate MS-DRG relative
                weights. This is how we would ordinarily calculate the proposed FY 2022
                MS-DRG relative weights. We refer to these MS-DRG relative weights as
                the FY 2020-based weights.
                 We then estimated the difference in case-mix under the FY 2019-
                based weights and the FY 2020-based weights if the FY 2022 inpatient
                experience ended up being the reverse of the assumption made when
                calculating that set of relative weights. In other words, we compared
                estimated case-mix calculated under four different scenarios. For the
                FY 2019-based weights, we calculated the case-mix using claims from the
                FY 2019 MedPAR as an approximation of the actual FY 2022 experience
                (Scenario A), and using claims from the FY 2020 MedPAR as an
                approximation of the actual FY 2022 experience (Scenario B). For the FY
                2020-based weights, we calculated the case-mix using claims from the FY
                2020 MedPAR as an approximation of the actual FY 2022 experience
                (Scenario C), and using claims from the FY 2019 MedPAR as an
                approximation of the actual FY 2022 experience (Scenario D).
                 The results are shown in the following table.
                 [GRAPHIC] [TIFF OMITTED] TP10MY21.004
                
                [[Page 25089]]
                 In Scenario A and Scenario C, there is by definition no
                differential impact on total case-mix due to a less accurate assumption
                made when the MS-DRG relative weights were calculated: The FY 2022
                inpatient experience matches the assumption used when the MS-DRG
                relative weights were calculated. In Scenario B and Scenario D, it is
                the reverse of the assumption used when the MS-DRG relative weights
                were calculated.
                 In Scenario B, when the FY 2019-based weights were used, but the FY
                2022 inpatient experience turns out to be more similar to FY 2020 data,
                the less accurate assumption does not differentially impact the
                modelled case-mix. This can be seen by comparing the modelled case-mix
                under Scenario B (1.885) with the modelled case-mix under Scenario C
                (also 1.885). In other words, if the FY 2019-based weights and
                inpatient experience turn out to be more similar to the FY 2020 data,
                then the modelled case-mix is approximately the same as if we had used
                the FY 2020-based weights. The results show that use of the FY 2019-
                based weights did not impact the modelled case-mix compared to using
                the FY 2020-based weights.
                 The same conclusion is not true of Scenario D where the FY 2020-
                based weights were used, but the FY 2022 inpatient experience turns out
                to be more similar to FY 2019 data. Here the less accurate assumption
                does differentially impact the modelled case-mix, by -0.2 percent. This
                can be seen by comparing the modelled case-mix under Scenario D (1.816)
                with the modelled case-mix under Scenario A (1.820). In other words, if
                we use the FY 2020-based weights, and FY 2022 inpatient experience
                turns out to be more similar to FY 2019 data, the modelled case-mix is
                -0.2 percent lower than if we had used the FY 2019-based weights. This
                shows that use of the FY 2020-based weights does impact the modelled
                case-mix compared to a result from using the FY 2019-based weights.
                 Putting aside that we believe FY 2019 is a more likely
                approximation of the FY 2022 inpatient experience for the reasons
                discussed earlier, the previous analysis indicates that the
                differential effect of the FY 2022 MS-DRG relative weights is more
                limited if the FY 2019-based weights are used than it is if the FY
                2020-based weights are used, should the FY 2022 inpatient experience
                not match the assumption used to calculate the MS-DRG relative weights.
                 Another payment factor that is impacted by the use of the FY 2019
                or FY 2020 data in the FY 2022 ratesetting is the outlier fixed-loss
                threshold. As discussed in section II.A.4.j. of this proposed rule,
                section 1886(d)(5)(A) of the Act provides for payments in addition to
                the basic prospective payments for ``outlier'' cases involving
                extraordinarily high costs. To qualify for outlier payments, a case
                must have costs greater than the sum of certain payments and the
                ``outlier threshold'' or ``fixed-loss'' amount (a dollar amount by
                which the costs of a case must exceed payments in order to qualify for
                an outlier payment). In accordance with section 1886(d)(5)(A)(iv) of
                the Act, outlier payments for any year are projected to be not less
                than 5 percent nor more than 6 percent of total operating DRG payments
                plus outlier payments. We target 5.1 percent within this range. Section
                1886(d)(3)(B) of the Act requires the Secretary to reduce the average
                standardized amount by a factor to account for the estimated proportion
                of total DRG payments made to outlier cases. In other words, outlier
                payments are prospectively estimated to be budget neutral overall under
                the IPPS.\6\
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                 \6\ More information on outlier payments may be found on the CMS
                website at: http://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/AcuteInpatientPPS/outlier.html.
                ---------------------------------------------------------------------------
                 Under an assumption that the FY 2022 inpatient experience will be
                more similar to FY 2019 data, we estimate an outlier fixed-loss amount
                of $30,967. Under an assumption that FY 2022 inpatient experience will
                be more similar to FY 2020 data, we estimate an outlier fixed-loss
                amount of $36,843, a difference of $5,876 or approximately 20 percent
                higher. Again, putting aside that we believe FY 2019 is a better
                approximation of the FY 2022 inpatient experience for the reasons
                discussed earlier, the difference between the two estimated outlier
                fixed-loss amounts means there is a consequence to making a decision as
                to the best available data for estimating the FY 2022 outlier fixed-
                loss amount in the form of potentially exceeding or falling short of
                the targeted 5.1 percent of total operating DRG payments plus outlier
                payments.
                 In summary, we have highlighted two factors in the decision
                regarding the best available data to use in the FY 2022 ratesetting.
                The first factor is to what extent the FY 2019 data from before the
                COVID-19 PHE is a better overall approximation of FY 2022 inpatient
                experience, or alternatively, to what extent the FY 2020 data including
                the COVID-19 PHE time period is a better overall approximation of FY
                2022 inpatient experience. After analyzing this issue and for the
                reasons discussed, we believe for purposes of this proposed rule that
                FY 2019 is generally a better overall approximation of FY 2022. The
                second factor is to what extent the decision to use the FY 2019 or FY
                2020 data differentially impacts the FY 2022 IPPS ratesetting. After
                analyzing this issue, and as discussed previously, we have determined
                that the decision does differentially impact the overall FY 2022 IPPS
                ratesetting in two primary ways. First, a decision to base the MS-DRG
                relative weights on the FY 2020 data has an impact of -0.2 percent if
                the FY 2022 inpatient experience is more like FY 2019 data. Second, the
                decision to use the FY 2019 or FY 2020 data results in an approximately
                20 percent difference in the estimate of the outlier fixed-loss amount.
                 Taking these factors into account, we are proposing to use the FY
                2019 data for the FY 2022 ratesetting for circumstances where the FY
                2020 data is significantly impacted by the COVID-19 PHE, primarily in
                that the data reflect generally markedly different utilization for
                certain types of services in FY 2020 than would have been expected in
                the absence of the PHE, as discussed previously. For example, we are
                proposing to use the FY 2019 MedPAR claims data for purposes where we
                ordinarily would have used the FY 2020 MedPAR claims data, such as in
                our analysis of changes to MS-DRG classifications (as discussed in
                greater detail section II.D. of the preamble of this proposed rule).
                Similarly, we are proposing to use cost report data from the FY 2018
                HCRIS file for purposes where we ordinarily would have used the FY 2019
                HCRIS file, such as in determining the proposed FY 2022 IPPS MS-DRG
                relative weights (as discussed in greater detail section II.E. of the
                preamble of this proposed rule). (As noted previously, the FY 2019
                HCRIS data would contain many cost reports ending in FY 2020 based on
                each hospital's cost reporting period.) We note that MedPAR claims data
                and cost report data from the HCRIS file are examples of the data
                sources for which we discuss the proposed use of the FY 2019 data for
                the FY 2022 ratesetting in this proposed rule. We have clearly
                identified throughout this proposed rule where and how we are proposing
                to use alternative data than what ordinarily would be used for the
                proposed FY 2022 IPPS and LTCH PPS ratesetting, including certain
                provider specific information.
                 As discussed in section I.O. of Appendix A of this proposed rule,
                we are also considering, as an alternative to this proposal, the use of
                the same FY 2020 data that we would ordinarily use for purposes of FY
                2022 ratesetting, and
                [[Page 25090]]
                which we may consider finalizing based on consideration of comments
                received. To facilitate comment on this alternative for FY 2022, we are
                making available the FY 2020 MedPAR file and the FY 2019 HCRIS file
                that we would ordinarily have provided in conjunction with this
                proposed rule. We are also making available the MS-DRG and MS-LTC-DRG
                relative weighting factors and length of stay information calculated
                using the FY 2020 data we would have ordinarily used. We are providing
                a file comparing the budget neutrality and other ratesetting
                adjustments calculated under our proposal with those adjustments
                calculated under this alternative approach. Finally, we are making
                available other proposed rule supporting data files based on the use of
                the FY 2020 data that we ordinarily would have provided, including: The
                IPPS and LTCH PPS Impact Files; the AOR/BOR File; the Case Mix Index
                File; and, the Standardizing File. We refer the reader to section I.O.
                of Appendix A of this proposed rule for more information on where these
                supplemental files may be found.
                II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
                DRG) Classifications and Relative Weights
                A. Background
                 Section 1886(d) of the Act specifies that the Secretary shall
                establish a classification system (referred to as diagnosis-related
                groups (DRGs) for inpatient discharges and adjust payments under the
                IPPS based on appropriate weighting factors assigned to each DRG.
                Therefore, under the IPPS, Medicare pays for inpatient hospital
                services on a rate per discharge basis that varies according to the DRG
                to which a beneficiary's stay is assigned. The formula used to
                calculate payment for a specific case multiplies an individual
                hospital's payment rate per case by the weight of the DRG to which the
                case is assigned. Each DRG weight represents the average resources
                required to care for cases in that particular DRG, relative to the
                average resources used to treat cases in all DRGs.
                 Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
                the DRG classifications and relative weights at least annually to
                account for changes in resource consumption. These adjustments are made
                to reflect changes in treatment patterns, technology, and any other
                factors that may change the relative use of hospital resources.
                B. Adoption of the MS-DRGs and MS-DRG Reclassifications
                 For information on the adoption of the MS-DRGs in FY 2008, we refer
                readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
                through 47189).
                 For general information about the MS-DRG system, including yearly
                reviews and changes to the MS-DRGs, we refer readers to the previous
                discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
                43764 through 43766) and the FYs 2011 through 2021 IPPS/LTCH PPS final
                rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR
                53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through
                56872; 82 FR 38010 through 38085, 83 FR 41158 through 41258, 84 FR
                42058 through 42165, and 85 FR 58445 through 58596 respectively).
                C. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment
                1. Background on the Prospective MS-DRG Documentation and Coding
                Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and
                the Recoupment or Repayment Adjustment Authorized by Section 631 of the
                American Taxpayer Relief Act of 2012 (ATRA)
                 In the FY 2008 IPPS final rule with comment period (72 FR 47140
                through 47189), we adopted the MS-DRG patient classification system for
                the IPPS, effective October 1, 2007, to better recognize severity of
                illness in Medicare payment rates for acute care hospitals. The
                adoption of the MS-DRG system resulted in the expansion of the number
                of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number
                of MS-DRGs and more fully taking into account patient severity of
                illness in Medicare payment rates for acute care hospitals, MS-DRGs
                encourage hospitals to improve their documentation and coding of
                patient diagnoses.
                 In the FY 2008 IPPS final rule with comment period (72 FR 47175
                through 47186), we indicated that the adoption of the MS-DRGs had the
                potential to lead to increases in aggregate payments without a
                corresponding increase in actual patient severity of illness due to the
                incentives for additional documentation and coding. In that final rule
                with comment period, we exercised our authority under section
                1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget
                neutrality by adjusting the national standardized amount, to eliminate
                the estimated effect of changes in coding or classification that do not
                reflect real changes in case-mix. Our actuaries estimated that
                maintaining budget neutrality required an adjustment of -4.8 percentage
                points to the national standardized amount. We provided for phasing in
                this -4.8 percentage point adjustment over 3 years. Specifically, we
                established prospective documentation and coding adjustments of -1.2
                percentage points for FY 2008, -1.8 percentage points for FY 2009, and
                -1.8 percentage points for FY 2010.
                 On September 29, 2007, Congress enacted the TMA [Transitional
                Medical Assistance], Abstinence Education, and QI [Qualifying
                Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section
                7(a) of Public Law 110-90 reduced the documentation and coding
                adjustment made as a result of the MS-DRG system that we adopted in the
                FY 2008 IPPS final rule with comment period to -0.6 percentage point
                for FY 2008 and -0.9 percentage point for FY 2009.
                 As discussed in prior year rulemakings, and most recently in the FY
                2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we
                implemented a series of adjustments required under sections 7(b)(1)(A)
                and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of
                FY 2008 and FY 2009 claims data. We completed these adjustments in FY
                2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274
                through 53275) that delaying full implementation of the adjustment
                required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013
                resulted in payments in FY 2010 through FY 2012 being overstated, and
                that these overpayments could not be recovered under Public Law 110-90.
                 In addition, as discussed in prior rulemakings and most recently in
                the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009),
                section 631 of the American Taxpayer Relief Act of 2012 (ATRA) amended
                section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to
                make a recoupment adjustment or adjustments totaling $11 billion by FY
                2017. This adjustment represented the amount of the increase in
                aggregate payments as a result of not completing the prospective
                adjustment authorized under section 7(b)(1)(A) of Public Law 110-90
                until FY 2013.
                [[Page 25091]]
                2. Adjustments Made for FYs 2018, 2019, 2020 and 2021 as Required Under
                Section 414 of Public Law 114-10 (MACRA) and Section 15005 of Public
                Law 114-255
                 As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785),
                once the recoupment required under section 631 of the ATRA was
                complete, we had anticipated making a single positive adjustment in FY
                2018 to offset the reductions required to recoup the $11 billion under
                section 631 of the ATRA. However, section 414 of the MACRA (which was
                enacted on April 16, 2015) replaced the single positive adjustment we
                intended to make in FY 2018 with a 0.5 percentage point positive
                adjustment for each of FYs 2018 through 2023. In the FY 2017
                rulemaking, we indicated that we would address the adjustments for FY
                2018 and later fiscal years in future rulemaking. Section 15005 of the
                21st Century Cures Act (Pub. L. 114-255), which was enacted on December
                13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section
                631 of the ATRA and section 414 of the MACRA, to reduce the adjustment
                for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588
                percentage point positive adjustment. As we discussed in the FY 2018
                rulemaking, we believe the directive under section 15005 of Public Law
                114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule
                (82 FR 38009) for FY 2018, we implemented the required +0.4588
                percentage point adjustment to the standardized amount. In the FY 2019
                IPPS/LTCH PPS final rule (83 FR 41157), the FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42057), and the FY 2021 IPPS/LTCH PPS final rule (85 FR
                58444-58445), consistent with the requirements of section 414 of the
                MACRA, we implemented 0.5 percentage point positive adjustments to the
                standardized amount for FY 2019, FY 2020, and FY 2021, respectively. We
                indicated the FY 2018, FY 2019, FY 2020, and FY 2021 adjustments were
                permanent adjustments to payment rates. We also stated that we plan to
                propose future adjustments required under section 414 of the MACRA for
                FYs 2022 and 2023 in future rulemaking.
                3. Proposed Adjustment for FY 2022
                 Consistent with the requirements of section 414 of the MACRA, we
                are proposing to implement a 0.5 percentage point positive adjustment
                to the standardized amount for FY 2022. This would constitute a
                permanent adjustment to payment rates. We plan to propose the final
                adjustment required under section 414 of the MACRA for FY 2023 in
                future rulemaking.
                D. Proposed Changes to Specific MS-DRG Classifications
                1. Discussion of Changes to Coding System and Basis for Proposed FY
                2022 MS-DRG Updates
                a. Conversion of MS-DRGs to the International Classification of
                Diseases, 10th Revision (ICD-10)
                 As of October 1, 2015, providers use the International
                Classification of Diseases, 10th Revision (ICD-10) coding system to
                report diagnoses and procedures for Medicare hospital inpatient
                services under the MS-DRG system instead of the ICD-9-CM coding system,
                which was used through September 30, 2015. The ICD-10 coding system
                includes the International Classification of Diseases, 10th Revision,
                Clinical Modification (ICD-10-CM) for diagnosis coding and the
                International Classification of Diseases, 10th Revision, Procedure
                Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as
                well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and
                Reporting. For a detailed discussion of the conversion of the MS-DRGs
                to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81
                FR 56787 through 56789).
                b. Basis for Proposed FY 2022 MS-DRG Updates
                 Given the need for more time to carefully evaluate requests and
                propose updates, as discussed in the FY 2018 IPPS/LTCH PPS final rule
                (82 FR 38010), we changed the deadline to request updates to the MS-
                DRGs to November 1 of each year, which provided an additional five
                weeks for the data analysis and review process. In the FY 2021 IPPS/
                LTCH PPS proposed rule (85 FR 32472), we stated that with the continued
                increase in the number and complexity of the requested changes to the
                MS-DRG classifications since the adoption of ICD-10 MS-DRGs, and in
                order to consider as many requests as possible, more time is needed to
                carefully evaluate the requested changes, analyze claims data, and
                consider any proposed updates. We further stated we were changing the
                deadline to request changes to the MS-DRGs to October 20 of each year
                to allow for additional time for the review and consideration of any
                proposed updates. However, in the FY 2021 IPPS/LTCH PPS final rule (85
                FR 58445), due to the unique circumstances for the FY 2021 IPPS/LTCH
                PPS final rule for which we waived the delayed effective date, we
                maintained the deadline of November 1, 2020 for FY 2022 MS-DRG
                classification change requests. We also noted that we expected to
                reconsider a change in the deadline beginning with comments and
                suggestions submitted for FY 2023. While we continue to believe that a
                change in the deadline from November 1 to October 20 will provide
                hospitals sufficient time to assess potential impacts and inform future
                MS-DRG recommendations, we are maintaining the deadline of November 1
                for FY 2023 MS-DRG classification change requests.
                 As noted, interested parties had to submit MS-DRG classification
                change requests for FY 2022 by November 1, 2020, and the comments that
                were submitted in a timely manner for FY 2022 are discussed in this
                section of the preamble of this proposed rule. As we discuss in the
                sections that follow, we may not be able to fully consider all of the
                requests that we receive for the upcoming fiscal year. We have found
                that, with the implementation of ICD-10, some types of requested
                changes to the MS-DRG classifications require more extensive research
                to identify and analyze all of the data that are relevant to evaluating
                the potential change. We note in the discussion that follows those
                topics for which further research and analysis are required, and which
                we will continue to consider in connection with future rulemaking.
                Interested parties should continue to submit any comments and
                suggestions for FY 2023 by November 1, 2021 via the CMS MS-DRG
                Classification Change Request Mailbox located at:
                [email protected].
                 As we did for the FY 2021 IPPS/LTCH PPS proposed rule, for this FY
                2022 IPPS/LTCH PPS proposed rule we are providing a test version of the
                ICD-10 MS-DRG GROUPER Software, Version 39, so that the public can
                better analyze and understand the impact of the proposals included in
                this proposed rule. We note that this test software reflects the
                proposed GROUPER logic for FY 2022. Therefore, it includes the new
                diagnosis and procedure codes that are effective for FY 2022 as
                reflected in Table 6A.--New Diagnosis Codes--FY 2022 and Table 6B.--New
                Procedure Codes--FY 2022 associated with this proposed rule and does
                not include the diagnosis codes that are invalid beginning in FY 2022
                as reflected in Table 6C.--Invalid Diagnosis Codes--FY 2022 and Table
                6D.--Invalid Procedure Codes--FY 2022 associated with this proposed
                rule. These tables are not published in the Addendum to this proposed
                rule, but are available via the
                [[Page 25092]]
                internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in
                section VI. of the Addendum to this proposed rule. Because the
                diagnosis and procedure codes no longer valid for FY 2022 are not
                reflected in the test software, we are making available a supplemental
                file in Table 6P.1a that includes the mapped Version 39 FY 2022 ICD-10-
                CM codes and the deleted Version 38 FY 2021 ICD-10-CM codes that should
                be used for testing purposes with users' available claims data. In
                addition, we are making available a supplemental file in Table 6P.1b
                that includes the mapped Version 39 FY 2022 ICD-10-PCS codes and the
                deleted Version 38 FY 2021 ICD-10-PCS codes that should be used for
                testing purposes with users' available claims data. Therefore, users
                will have access to the test software allowing them to build case
                examples that reflect the proposals included in this proposed rule. In
                addition, users will be able to view the draft version of the ICD-10
                MS-DRG Definitions Manual, Version 39.
                 The test version of the ICD-10 MS-DRG GROUPER Software, Version 39,
                the draft version of the ICD-10 MS-DRG Definitions Manual, Version 39,
                and the supplemental mapping files in Table 6P.1a and Table 6P.1b of
                the FY 2021 and FY 2022 ICD-10-CM diagnosis and ICD-10-PCS procedure
                codes are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
                 Following are the changes that we are proposing to the MS-DRGs for
                FY 2022. We are inviting public comments on each of the MS-DRG
                classification proposed changes, as well as our proposals to maintain
                certain existing MS-DRG classifications discussed in this proposed
                rule. In some cases, we are proposing changes to the MS-DRG
                classifications based on our analysis of claims data and consultation
                with our clinical advisors. In other cases, we are proposing to
                maintain the existing MS-DRG classifications based on our analysis of
                claims data and consultation with our clinical advisors. As discussed
                in section I.F of the preamble of this proposed rule, we are proposing
                to use claims data from the March 2020 update of the FY 2019 MedPAR
                file in our analysis of proposed MS-DRG classification changes for FY
                2022, consistent with our goal of using the best available data overall
                for ratesetting. Alternatively, we are also providing the results of
                our analysis of proposed MS-DRG classification changes using claims
                data from the September 2020 update of the FY 2020 MedPAR file. As a
                result, for this FY 2022 IPPS/LTCH PPS proposed rule, our MS-DRG
                analysis was based on ICD-10 claims data from the March 2020 update of
                the FY 2019 MedPAR file, which contains hospital bills received from
                October 1, 2018 through March 31, 2020, for discharges occurring
                through September 30, 2019. In addition, we also analyzed ICD-10 claims
                data from the September 2020 update of the FY 2020 MedPAR file, which
                contains hospital bills received from October 1, 2019 through September
                30, 2020, for discharges occurring through September 30, 2020. In our
                discussion of the proposed MS-DRG reclassification changes, we refer to
                these claims data as the ``March 2020 update of the FY 2019 MedPAR
                file'' and ``the September 2020 update of the FY 2020 MedPAR file.''
                 As explained in previous rulemaking (76 FR 51487), in deciding
                whether to propose to make further modifications to the MS-DRGs for
                particular circumstances brought to our attention, we consider whether
                the resource consumption and clinical characteristics of the patients
                with a given set of conditions are significantly different than the
                remaining patients represented in the MS-DRG. We evaluate patient care
                costs using average costs and lengths of stay and rely on the judgment
                of our clinical advisors to determine whether patients are clinically
                distinct or similar to other patients represented in the MS-DRG. In
                evaluating resource costs, we consider both the absolute and percentage
                differences in average costs between the cases we select for review and
                the remainder of cases in the MS-DRG. We also consider variation in
                costs within these groups; that is, whether observed average
                differences are consistent across patients or attributable to cases
                that are extreme in terms of costs or length of stay, or both. Further,
                we consider the number of patients who will have a given set of
                characteristics and generally prefer not to create a new MS-DRG unless
                it would include a substantial number of cases.
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
                our proposal to expand our existing criteria to create a new
                complication or comorbidity (CC) or major complication or comorbidity
                (MCC) subgroup within a base MS-DRG. Specifically, we finalized the
                expansion of the criteria to include the NonCC subgroup for a three-way
                severity level split. We stated we believed that applying these
                criteria to the NonCC subgroup would better reflect resource
                stratification as well as promote stability in the relative weights by
                avoiding low volume counts for the NonCC level MS-DRGs. We noted that
                in our analysis of MS-DRG classification requests for FY 2021 that were
                received by November 1, 2019, as well as any additional analyses that
                were conducted in connection with those requests, we applied these
                criteria to each of the MCC, CC, and NonCC subgroups. We also noted
                that the application of the NonCC subgroup criteria going forward may
                result in modifications to certain MS-DRGs that are currently split
                into three severity levels and result in MS-DRGs that are split into
                two severity levels. We stated that any proposed modifications to the
                MS-DRGs would be addressed in future rulemaking consistent with our
                annual process and reflected in Table 5--Proposed List of Medicare
                Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting
                Factors, and Geometric and Arithmetic Mean Length of Stay for the
                applicable fiscal year.
                 In our analysis of the MS-DRG classification requests for FY 2022
                that we received by November 1, 2020, as well as any additional
                analyses that were conducted in connection with those requests, we
                applied these criteria to each of the MCC, CC, and NonCC subgroups, as
                described in the following table.
                [[Page 25093]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.005
                 In general, once the decision has been made to propose to make
                further modifications to the MS-DRGs as described previously, such as
                creating a new base MS-DRG, or in our evaluation of a specific MS-DRG
                classification request to split (or subdivide) an existing base MS-DRG
                into severity levels, all five criteria must be met for the base MS-DRG
                to be split (or subdivided) by a CC subgroup. We note that in our
                analysis of requests to create a new MS-DRG, we typically evaluate the
                most recent year of MedPAR claims data available. For example, we
                stated earlier that for this FY 2022 IPPS/LTCH PPS proposed rule, our
                MS-DRG analysis was based on ICD-10 claims data from both the March
                2020 update of the FY 2019 MedPAR file and the September 2020 update of
                the FY 2020 MedPAR file. However, in our evaluation of requests to
                split an existing base MS-DRG into severity levels, as noted in prior
                rulemaking (80 FR 49368), we typically analyze the most recent two
                years of data. This analysis includes 2 years of MedPAR claims data to
                compare the data results from 1 year to the next to avoid making
                determinations about whether additional severity levels are warranted
                based on an isolated year's data fluctuation and also, to validate that
                the established severity levels within a base MS-DRG are supported. The
                first step in our process of evaluating if the creation of a new CC
                subgroup within a base MS-DRG is warranted is to determine if all the
                criteria is satisfied for a three way split. If the criteria fail, the
                next step is to determine if the criteria are satisfied for a two way
                split. If the criteria for both of the two way splits fail, then a
                split (or CC subgroup) would generally not be warranted for that base
                MS-DRG. If the three way split fails on any one of the five criteria
                and all five criteria for both two way splits (1_23 and 12_3) are met,
                we would apply the two way split with the highest R2 value. We note
                that if the request to split (or subdivide) an existing base MS-DRG
                into severity levels specifies the request is for either one of the two
                way splits (1_23 or 12_3), in response to the specific request, we will
                evaluate the criteria for both of the two way splits, however we do not
                also evaluate the criteria for a three way split.
                 For this FY 2022 IPPS/LTCH PPS proposed rule, using the March 2020
                update of the FY 2019 MedPAR file and the September 2020 update of the
                FY 2020 MedPAR file, we also analyzed how applying the NonCC subgroup
                criteria to all MS-DRGs currently split into three severity levels
                would affect the MS-DRG structure beginning in FY 2022. Findings from
                our analysis indicated that approximately 32 MS-DRGs would be subject
                to change based on the three-way severity level split criterion
                finalized in FY 2021. Specifically, we found that applying the NonCC
                subgroup criteria to all MS-DRGs currently split into three severity
                levels would result in the deletion of 96 MS-DRGs (32 MS-DRGs x 3
                severity levels = 96) and the creation of 58 new MS-DRGs. These updates
                would also involve a redistribution of cases, which would impact the
                relative weights, and, thus, the payment rates proposed for particular
                types of cases. We refer the reader to Table 6P.1c for the list of the
                96 MS-DRGs that would be subject to deletion and the list of the 58 new
                MS-DRGs that would be proposed for creation for FY 2022 under this
                policy if the NonCC subgroup criteria were applied.
                [[Page 25094]]
                 In light of the public health emergency (PHE), we have concerns
                about the impact of implementing this volume of MS-DRG changes at this
                time, and believe it may be appropriate to delay application of the
                NonCC subgroup criteria to existing MS-DRGs in order to maintain more
                stability in the current MS-DRG structure. Therefore, we are proposing
                to delay the application of the NonCC subgroup criteria to existing MS-
                DRGs with a three-way severity level split until FY 2023, and proposing
                for FY 2022 to maintain the current structure of the 32 MS-DRGs that
                currently have a three-way severity level split (total of 96 MS-DRGs)
                that would otherwise be subject to these criteria.
                2. Pre-MDC: MS-DRG 018 Chimeric Antigen Receptor (CAR) T-Cell Therapy
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58451 through
                58453), we finalized our proposal to create Pre-MDC MS-DRG 018
                (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy) and to reassign
                cases reporting ICD-10-PCS procedure codes XW033C3 (Introduction of
                engineered autologous chimeric antigen receptor t-cell immunotherapy
                into peripheral vein, percutaneous approach, new technology group 3) or
                XW043C3 (Introduction of engineered autologous chimeric antigen
                receptor t-cell immunotherapy into central vein, percutaneous approach,
                new technology group 3) from Pre-MDC MS-DRG 016 (Autologous Bone Marrow
                Transplant with CC/MCC or T-cell Immunotherapy), to new Pre-MDC MS-DRG
                018 effective with discharges on and after October 1, 2020. We also
                finalized our proposal to revise the title for MS-DRG 016 from
                ``Autologous Bone Marrow Transplant with CC/MCC or T-cell
                Immunotherapy'' to ``Autologous Bone Marrow Transplant with CC/MCC'' to
                reflect these changes.
                 Additionally, in the FY 2021 IPPS/LTCH PPS final rule in response
                to public comments expressing concern that Pre-MDC MS-DRG 018 is
                specific to one mechanistic approach to cellular therapy, and in
                response to commenters who sought clarification on how future CAR T-
                cell and non-CAR T-cell therapy products would be assigned, we stated
                that if additional cellular therapies should become available, we would
                use our established process to determine the MS-DRG assignment. The
                commenters requested that CMS provide flexibility for future cellular
                therapies, as they are made available and not restrict Pre-MDC MS-DRG
                018 to CAR T-cell therapies alone. In this section of this rule, we
                discuss the assignment of these therapies in more detail.
                 During the September 8-9, 2020 ICD-10 Coordination and Maintenance
                Committee meeting, several topics involving requests for new procedure
                codes related to CAR T-cell therapies, non-CAR T-cell therapies and
                other immunotherapies were discussed. We refer the reader to the CMS
                website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional detailed information regarding these requests
                for new procedure codes. As noted in prior rulemaking (85 FR 32543),
                for new procedure codes that have been finalized through the ICD-10
                Coordination and Maintenance Committee meeting process and are proposed
                to be classified as O.R. procedures or non-O.R. procedures affecting
                the MS-DRG, our clinical advisors recommend the MS-DRG assignment which
                is then made available in association with the proposed rule (Table
                6B.--New Procedure Codes) and subject to public comment. These proposed
                assignments are generally based on the assignment of predecessor codes
                or the assignment of similar codes. As discussed in section II.D.13 of
                the preamble of this proposed rule, Table 6B.--New Procedure Codes,
                lists the new procedure codes that have been approved to date that will
                be effective with discharges on and after October 1, 2021. Included in
                Table 6B are the following new procedure codes that describe the
                administration of CAR T-cell and non-CAR T-cell therapies and other
                immunotherapies. Consistent with our established process, we examined
                the MS-DRG assignment for the predecessor codes to determine the most
                appropriate MS-DRG assignment and, consistent with the assignment of
                those predecessor codes, we are proposing to classify the following new
                procedure codes as non-O.R. procedures affecting Pre-MDC MS-DRG 018, as
                shown in Table 6B.--New Procedure Codes associated with this proposed
                rule and available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/.
                [[Page 25095]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.006
                 In connection with our proposed assignment of the listed procedure
                codes to Pre-MDC MS-DRG 018, we are also proposing to revise the title
                for Pre-MDC MS-DRG 018 ``Chimeric Antigen Receptor (CAR) T-cell
                Immunotherapy'' to ``Chimeric Antigen Receptor (CAR) T-cell and Other
                Immunotherapies'' to better reflect the cases reporting the
                administration of non-CAR T-cell therapies and other immunotherapies
                that would also be assigned to this MS-DRG (for example, Introduction
                of lifileucel immunotherapy into peripheral vein, percutaneous
                approach, new technology group 7), in addition to CAR T-cell therapies.
                3. MDC 03 (Diseases and Disorders of Ear, Nose and Throat)
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58462 through
                58471), we finalized our proposal to create two new base MS-DRGs, 140
                and 143, with a three-way severity level split for new MS-DRGs 140,
                141, and 142 (Major Head and Neck Procedures with MCC, with CC, and
                without CC/MCC, respectively) and new MS-DRGs 143, 144, and 145 (Other
                Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and
                without CC/MCC, respectively). We provided the list of procedure codes
                that were finalized to define the logic for the new MS-DRGs in Tables
                6P.2a, 6P.2b, and 6P.2c associated with the final rule and available
                via the internet on the CMS website at https://www.cms.gov/
                [[Page 25096]]
                Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/. We
                received two separate but related requests to review and reconsider the
                MS-DRG assignments for a subset of the procedure codes listed in Table
                6P.2a (procedure codes assigned to MS-DRGs 140, 141, and 142) and Table
                6P.2b (procedure codes assigned to MS-DRGs 143, 144, and 145). In this
                section of this proposed rule, we discuss each of these separate, but
                related requests.
                a. Major Head and Neck Procedures
                 The requestor provided the following procedure codes from Table
                6P.2a associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to
                examine.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.368
                 The requestor stated that the listed procedure codes do not appear
                appropriately assigned to MS-DRGs 140, 141, and 142. According to the
                requestor, if any one of the five procedure codes describing a
                procedure performed on the cranial cavity (0W9100Z, 0W910ZZ, 0WC10ZZ,
                0WC13ZZ, or 0WX14ZZ) is assigned in conjunction with a principal
                diagnosis from MDC 03 (Diseases and Disorders of Ear, Nose, Mouth, and
                Throat), it appears more appropriate that cases reporting the diagnosis
                and procedure combination would group to MS-DRGs 25, 26, and 27
                (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
                and without CC/MCC, respectively) (for example, ``craniotomy'' MS-DRGs)
                in MDC 01 (Diseases and Disorders of the Central Nervous System) or to
                MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively). The requestor stated that drainage and extirpation from
                the cranial cavity always involves drilling or cutting through the
                skull regardless of the approach, therefore the five procedure codes
                identified warrant assignment to the ``craniotomy'' MS-DRGs. For the
                three procedure codes describing excision of subcutaneous tissue of
                chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), the requestor
                stated those codes should group to MS-DRGs 987, 988, and 989 (Non-
                extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) because they are not
                pertinent to the ear, nose, mouth, or throat.
                 We reviewed this request and note that the five procedure codes
                describing procedures performed on the cranial cavity are already
                assigned to MDC 01 and group to the ``craniotomy'' MS-DRGs (25, 26, and
                27) when reported with a principal diagnosis from MDC 01, and are also
                currently classified as Extensive O.R. procedures, resulting in
                assignment to MS-DRGs 981, 982, and 983 when any one of the five
                procedure codes is reported on the claim and is unrelated to the MDC to
                which the case was assigned based on the principal diagnosis. We also
                note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23 (Craniotomy
                with Major Device Implant or Acute Complex CNS Principal Diagnosis with
                MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-
                DRG 24 (Craniotomy with Major Device Implant or Acute Complex CNS
                Principal Diagnosis without MCC) include procedures performed on
                structures located within the cranial cavity, are included in the range
                of MS-DRGs known as the ``craniotomy'' MS-DRGs in MDC 01, and the five
                procedure codes submitted by the requestor describing procedures
                performed on the cranial cavity are also assigned to these MS-DRGs. We
                refer the requestor to Appendix E of the ICD-10 MS-DRG Definitions
                Manual for further discussion of how each procedure code may be
                assigned to multiple MDCs and MS-DRGs under the IPPS. The ICD-10 MS-DRG
                Definitions Manual is located on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software. We also note
                that these five procedure codes were previously assigned to MS-DRGs 131
                and 132 (Cranial and Facial Procedures with and without CC/MCC,
                respectively) in MDC 03 under version 37 of the ICD-10 MS-DRGs prior to
                the restructuring that was finalized effective FY 2021 for MS-DRG 129
                (Major Head and Neck Procedures with CC/MCC or Major Device) and MS-DRG
                130 (Major Head and Neck Procedures without CC/MCC), MS-DRGs 131 and
                132, and MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R.
                Procedures with and without CC/MCC, respectively).
                 With regard to the three procedure codes describing excision of
                subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and
                0JB80ZZ), the requestor suggested that the codes should group to MS-
                DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) specifically because they are not pertinent to the ear,
                nose, mouth, or throat, however, it is unclear if the requestor was
                concerned more broadly that the three procedure codes should not group
                to any MS-DRGs in MDC 03 (Diseases and Disorders of Ear, Nose and
                Throat), given the stated rationale for the request.
                 Upon our review, we believe that the three procedure codes
                describing excision of subcutaneous tissue of chest, back, and abdomen
                (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), which do not describe major head and
                neck procedures, were inadvertently included in Table 6P.2a for
                assignment to MS-DRGs 140, 141, and 142. However, we also believe that
                the codes are appropriate for assignment
                [[Page 25097]]
                in MDC 03 and note that the three procedure codes were previously
                assigned to MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R.
                Procedures with and without CC/MCC, respectively) in MDC 03 prior to
                the restructuring that was finalized effective FY 2021 for MS-DRGs 129,
                130, 131, 132, 133, and 134. We also provided the following
                clarification in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58470), as
                stated in the ICD-10 MS-DRG Definitions Manual, ``In each MDC there is
                usually a medical and a surgical class referred to as ``other medical
                diseases'' and ``other surgical procedures,'' respectively. The
                ``other'' medical and surgical classes are not as precisely defined
                from a clinical perspective. The other classes would include diagnoses
                or procedures, which were infrequently encountered or not well defined
                clinically. For example, the ``other'' medical class for the
                Respiratory System MDC would contain the diagnoses ``other somatoform
                disorders'' and ``congenital malformation of the respiratory system,''
                while the ``other'' surgical class for the female reproductive MDC
                would contain the surgical procedures ``excision of liver'' (liver
                biopsy in ICD-9-CM) and ``inspection of peritoneal cavity''
                (exploratory laparotomy in ICD-9-CM). The ``other'' surgical category
                contains surgical procedures which, while infrequent, could still
                reasonably be expected to be performed for a patient in the particular
                MDC.''
                 During our review of procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ
                (describing excision of subcutaneous tissue of chest, back, and
                abdomen, respectively) we also confirmed that these procedures are
                currently designated as Extensive O.R. procedures. Consistent with
                other procedure codes on the Non-extensive procedure code list, we do
                not believe the procedures described by these procedure codes
                necessarily utilize the resources or have the level of technical
                complexity as the procedures on the Extensive O.R. procedures list.
                Therefore, we agree that the procedure codes describing these
                procedures would be more appropriately designated as Non-extensive
                procedures and group to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
                Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
                without CC/MCC, respectively) when any one of the three procedure codes
                is reported on a claim and is unrelated to the MDC to which the case
                was assigned based on the principal diagnosis. We refer the reader to
                section II.D.10. of the preamble of this proposed rule for further
                discussion regarding our proposal to reassign these procedure codes
                from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
                Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
                without CC/MCC, respectively) for FY 2022.
                 Therefore, we are proposing to reassign the three procedure codes
                describing excision of subcutaneous tissue of chest, back, or abdomen
                (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ) from MS-DRGs 140, 141, and 142 (Major
                Head and Neck Procedures with MCC, with CC, and without CC/MCC,
                respectively) to MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And
                Throat O.R. Procedures with MCC, with CC, and without CC/MCC,
                respectively) in MDC 03 for FY 2022. We refer the reader to section
                II.D.10. of the preamble of this proposed rule for further discussion
                regarding the designation of these codes as Extensive O.R. procedures
                versus Non-extensive O.R. procedures and our proposed reassignment of
                these codes from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989
                for FY 2022.
                b. Other Ear, Nose, Mouth and Throat O.R. Procedures
                 As stated earlier, we received two separate but related requests to
                review and reconsider the MS-DRG assignments for a subset of the
                procedure codes listed in Table 6P.2a and Table 6P.2b. In this section
                of this proposed rule, we discuss the second request related to
                procedure codes listed in Table 6P.2b associated with the FY 2021 IPPS/
                LTCH PPS final rule and currently assigned to MS-DRGs 143, 144 and 145.
                 The requestor provided a list of 82 procedure codes from Table
                6P.2b associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to
                examine. We refer the reader to Table 6P.1d associated with this FY
                2022 IPPS/LTCH PPS proposed rule and available via the internet at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/ for the list of procedure codes that were
                provided by the requestor. According to the requestor, if any one of
                the 82 procedure codes is assigned in conjunction with a principal
                diagnosis code from MDC 03, it appears more appropriate that cases
                reporting the diagnosis and procedure code combination would group to
                MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) or to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
                Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
                without CC/MCC, respectively) versus MS-DRGs 143, 144, and 145 (Other
                Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and
                without CC/MCC, respectively). However, the requestor also stated that
                of the 82 procedure codes, the following three procedure codes
                describing control of bleeding in the cranial cavity warrant grouping
                to MS-DRGs 25, 26, and 27 (for example, ``craniotomy'' MS-DRGs) in MDC
                01, for the same reasons previously described in the prior section
                pertaining to the five other procedures performed on the cranial
                cavity.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.007
                 We reviewed this request and similar to the discussion in the prior
                section for the separate but related request, we note that the
                ``other'' surgical category contains surgical procedures which, while
                infrequent, could still reasonably be expected to be performed for a
                patient in the particular MDC. We continue to believe that the 82
                [[Page 25098]]
                procedure codes provided by the requestor are appropriately assigned to
                MS-DRGs 143, 144, and 145 in MDC 03. With regard to the requestor's
                assertion that cases reporting any one of the 82 procedure codes would
                more appropriately group to the MS-DRGs for Extensive O.R. procedures
                or Non-extensive O.R. procedures when reported in conjunction with a
                principal diagnosis from MDC 03, we note that, as shown in Table 6P.2b
                associated with the FY 2021 IPPS/LTCH PPS final rule, the procedure
                codes that were finalized for assignment to MS-DRGs 143, 144, and 145
                were previously assigned to MS-DRGs 129 and 130, 131 and 132, or 133
                and 134 in MDC 03. We also note that, as discussed in prior rulemaking,
                cases that contain O.R. procedures will map to MS-DRG 981, 982, or 983
                (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) or MS-DRG 987, 988, or 989
                (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with
                MCC, with CC, and without CC/MCC, respectively) when they do not
                contain a principal diagnosis that corresponds to one of the MDCs to
                which that procedure is assigned. For these reasons, we are proposing
                to maintain the current structure for MS-DRGs 143, 144, and 145 for FY
                2022.
                 With regard to the three procedure codes describing control of
                bleeding in the cranial cavity (0W310ZZ, 0W313ZZ, and 0W314ZZ), and the
                requestor's suggestion that the codes should group to MS-DRGs 25, 26,
                and 27 in MDC 01, we consulted with our clinical advisors who stated
                these procedures are consistent with the existing procedure codes
                included in the logic for case assignment to MS-DRGs 25, 26, and 27. We
                refer the reader to section II.D.10. of the preamble of this proposed
                rule for further discussion of this request, as well as our proposed
                assignment of these codes to MS-DRGs 23, 24, 25, 26, and 27 for FY
                2022.
                4. MDC 04 (Diseases and Disorders of the Respiratory System)
                a. Bronchiectasis
                 We received a request to reassign cases reporting diagnosis codes
                describing bronchiectasis from MS-DRGs 190, 191, and 192 (Chronic
                Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC,
                respectively) to MS-DRGs 177, 178, and 179 (Respiratory Infections and
                Inflammation with MCC, with CC, and without CC/MCC, respectively).
                Bronchiectasis is described by the following diagnosis codes
                [GRAPHIC] [TIFF OMITTED] TP10MY21.008
                 According to the requestor, the underlying pathophysiology of
                bronchiectasis is more similar to cystic fibrosis than it is to chronic
                obstructive pulmonary disease (COPD). The requestor stated that in
                bronchiectasis, there is an inciting event that creates scarring in the
                lung which prevents the lung from clearing out mucous like it normally
                would. The accumulation of abnormal mucous results in an environment
                conducive to bacterial growth and commonly found bacteria in this
                setting is very similar to those of cystic fibrosis with staphylococcus
                aureus, pseudomonas aeruginosa, and non-tuberculous mycobacterium. The
                requestor reported that when patients develop an exacerbation of
                bronchiectasis, this is because of a buildup of mucous compounded by
                overwhelming growth of the previously mentioned bacteria. The requestor
                also stated that patients admitted to the hospital for bronchiectasis
                exacerbation are treated aggressively with intravenous (IV) antibiotics
                to suppress the bacterial infection in combination with airway
                clearance therapies. The requestor further stated that, unlike in an
                acute COPD exacerbation, these patients do not always require steroids
                as there is not necessarily airway reactivity.
                 The requestor maintained that the underlying reason for admission
                to the hospital for these patients is the bacterial infection component
                of the exacerbation, with the standard course of treatment for these
                pulmonary bacterial infections averaging a minimum of 10-14 days due to
                the slow growing nature of the bacteria commonly encountered in these
                patients.
                 We reviewed this request and believe that bronchiectasis is
                appropriately assigned to MS-DRGs 190, 191, and 192 (Chronic
                Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC,
                respectively) because bronchiectasis, like COPD, is a chronic
                condition. With respect to the requestor's comments, cystic fibrosis, a
                genetic disease that affects mucous producing cells resulting in
                recurring lung infections, can lead to bronchiectasis. However, our
                clinical advisors indicated that the cause of bronchiectasis can be
                multifactorial or even remain undefined. Regardless of the cause, when
                present, bronchiectasis is an irreversible chronic pulmonary condition
                due to abnormal change to or destruction of normal pulmonary anatomy
                (the major bronchi and bronchiole walls), resulting in impaired air
                movement in and out of the lungs. COPD, regardless of the cause
                (smoking, pollution, other exposures), is a chronic pulmonary condition
                due to change/destruction of normal pulmonary anatomy, resulting in
                impaired air movement in and out of the lungs. Both bronchiectasis and
                COPD patients have abnormal pulmonary function tests and abnormal
                anatomic findings on chest x-ray and/or chest CT. Therefore, for these
                reasons, we are proposing to maintain the structure of MS-DRGs 190,
                191, and 192 for FY 2022.
                b. Major Chest Procedures
                 In the FY 2020 IPPS/LTCH PPS proposed (84 FR 19234) and final rules
                (84 FR 42148), we stated that in review of the procedures that are
                currently assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures
                with MCC, with CC and without CC/MCC, respectively) and 166, 167, and
                168 (Other Respiratory System O.R. Procedures with MCC, with CC, and
                without CC/MCC, respectively), that further refinement of these MS-DRGs
                may be warranted. In this section of this proposed rule, we discuss our
                review of the procedures and our proposal for
                [[Page 25099]]
                restructuring these MS-DRGs for FY 2022.
                 We began our review of MS-DRGs 163, 164, 165, 166, 167, and 168 by
                first examining all the procedures currently assigned to these MS-DRGs.
                We refer the reader to the ICD-10 MS-DRG Definitions Manual Version
                38.1, which is available via the internet on the CMS website at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS for complete documentation of the GROUPER logic for
                MS-DRGs 163, 164, 165, 166, 167, and 168.
                 In our review of the procedures currently assigned to MS-DRGs 163,
                164, 165, 166, 167, and 168, we found 17 procedure codes in MS-DRGs
                163, 164, and 165 describing laser interstitial thermal therapy (LITT)
                of body parts that do not describe areas within the respiratory system,
                which would not be clinically appropriate to maintain in the logic.
                These procedure codes are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.009
                 During our review of these 17 procedure codes, we identified
                additional MDCs and MS-DRG assignments that are also not clinically
                appropriate to maintain in the logic because the body parts described
                by the codes are not consistent with the organ system, etiology or
                clinical specialty of the MDC to which the procedure code is currently
                assigned. For example, 16 of the 17 procedure codes (all except
                procedure code DVY0KZZ) are included in the logic for case assignment
                to MDC 12 (Diseases and Disorders of the Male Reproductive System) in
                MS-DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for
                Malignancy with and without CC/MCC, respectively) and MS-DRGs 717 and
                718 (Other Male Reproductive System O.R. Procedures Except Malignancy
                with and without CC/MCC, respectively) which is not clinically
                appropriate. Therefore, we are proposing to reassign these 17 procedure
                codes from their current MS-DRG assignments in MDC 04, and from the
                additional MDCs and MS-DRGs identified during our review that were
                found to be clinically inappropriate, to their clinically appropriate
                MDC and MS-DRGs as shown in Table 6P.2b associated with this proposed
                rule (which is available via the internet on the CMS website at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
                 During our review of the procedure codes describing LITT of various
                body parts we also confirmed that these procedures are currently
                designated as Extensive O.R. procedures. We do not believe the
                procedures described by these procedure codes necessarily utilize the
                resources or have the level of technical complexity as the other
                procedures on the Extensive O.R. procedures list. We believe that the
                procedure codes describing these procedures would be more appropriately
                designated as Non-extensive procedures and group to MS-DRGs 987, 988,
                and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis
                with MCC, with CC, and without CC/MCC, respectively) when any one of
                the procedure codes is reported on a claim and is unrelated to the MDC
                to which the case was assigned based on the principal diagnosis. We
                refer the reader to section II.D.10. of the preamble of this proposed
                rule for further discussion regarding our proposal to reassign these
                procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R.
                Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
                without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-
                extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) for FY 2022.
                 We also identified five procedure codes describing repair of the
                esophagus procedures currently assigned to MS-DRGs 163, 164, and 165
                that would not be clinically appropriate to maintain in the logic. The
                procedure codes are 0DQ50ZZ (Repair esophagus, open approach), 0DQ53ZZ
                (Repair esophagus, percutaneous approach), 0DQ54ZZ (Repair esophagus,
                percutaneous
                [[Page 25100]]
                endoscopic approach), 0DQ57ZZ (Repair esophagus, via natural or
                artificial opening), and 0DQ58ZZ (Repair esophagus, via natural or
                artificial opening endoscopic), and are currently assigned to the
                following MDCs and MS-DRGs.
                BILLING CODE 4120-01-P
                [[Page 25101]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.010
                [[Page 25102]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.011
                BILLING CODE 4120-01-C
                 The five procedure codes describing repair of esophagus procedures
                are not clinically coherent with the other procedures in MS-DRGs 163,
                164, and 165 that describe procedures performed on major chest
                structures. Therefore, we are proposing to remove procedure codes
                0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ from the logic in MDC
                04 for FY 2022.
                 During our review of procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ,
                0DQ57ZZ, and 0DQ58ZZ (describing repair of esophagus procedures) we
                also confirmed that these procedures are currently designated as
                Extensive O.R. procedures. We do not believe the procedures described
                by procedure codes 0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ necessarily utilize
                the resources or have the level of technical complexity as the other
                procedures on the Extensive O.R. procedures list. We believe that the
                procedure codes describing these procedures would be more appropriately
                designated as Non-extensive procedures and group to MS-DRGs 987, 988,
                and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis
                with MCC, with CC, and without CC/MCC, respectively) when any one of
                the three procedure codes is reported on a claim and is unrelated to
                the MDC to which the case was assigned based on the principal
                diagnosis. We refer the reader to section II.D.10. of the preamble of
                this proposed rule for further discussion regarding our proposal to
                reassign these procedure codes from MS-DRGs 981, 982, and 983
                (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989
                (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with
                MCC, with CC, and without CC/MCC, respectively) for FY 2022.
                 Next, we examined claims data from the March 2020 update of the FY
                2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
                file for all cases in MS-DRGs 163, 164, 165, 166, 167, and 168. Our
                findings are shown in the following tables.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.012
                [[Page 25103]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.013
                 As shown in the tables, there were a higher number of cases
                reported in MS-DRGs 163, 164, 165, 166, 167, and 168 from the March
                2020 update of the FY 2019 MedPAR file in comparison to the September
                2020 update of the FY 2020 MedPAR file and overall, the cases reported
                have comparable average lengths of stay and comparable average costs
                for both fiscal years.
                 We then examined claims data from both the March 2020 update of the
                FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
                file for MS-DRGs 163, 164, 165, 166, 167, and 168 to compare costs,
                complexity of service and clinical coherence for each procedure code
                currently assigned to these MS-DRGs to assess any potential
                reassignment of the procedures. We refer the reader to Table 6P.1e and
                Table 6P.1f associated with this proposed rule (which is available via
                the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the detailed
                claims data analysis. Table 6P.1e contains the data analysis findings
                of procedure codes currently assigned to MS-DRGs 163, 164, 165, 166,
                167, and 168 from the March 2020 update of the FY 2019 MedPAR file and
                Table 6P.1f contains the data analysis findings of procedure codes
                currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168 from the
                September 2020 update of the FY 2020 MedPAR file. We note that if a
                procedure code that is currently assigned to MS-DRGs 163, 164, 165,
                166, 167, or 168 is not displayed, it is because there were no cases
                found reporting that code in the assigned MS-DRG.
                 As shown in Table 6P.1e and Table 6P.1f associated with this
                proposed rule, in our examination of the claims data from both the
                March 2020 update of the FY 2019 MedPAR file and September 2020 update
                of the FY 2020 MedPAR file, we found there is wide variation in the
                volume, length of stay, and average costs for the procedures currently
                assigned to MS-DRGs 163, 164, 165, 166, 167, and 168. There were
                several instances in which only one occurrence of a procedure was
                reported with a procedure code from MS-DRGs 163, 164, 165, 166, 167, or
                168, and the average length of stay for these specific cases ranged
                from 1 day to 97 days. For example, in the analysis of claims data from
                the March 2020 update of the FY 2019 MedPAR file, during our review of
                MS-DRG 163, we found 153 procedures for which only one occurrence of
                the procedure was reported with the average length of stay ranging from
                2 days to 65 days and the average costs ranging from $3,760 to $195,447
                for these cases. For MS-DRG 164, we found 145 procedures for which only
                one occurrence of the procedure was reported with the average length of
                stay ranging from 1 day to 28 days and the average costs ranging from
                $1,886 to $137,810 for these cases. For MS-DRG 165, we found 111
                procedures for which only one occurrence of the procedure was reported
                with the average length of stay ranging from 1 day to 23 days and the
                average costs ranging from $2,656 to $73,092 for these cases. For MS-
                DRG 166, we found 150 procedures for which only one occurrence of the
                procedure was reported with the average length of stay ranging from 1
                day to 61 days and the average costs ranging from $3,230 to $246,679
                for these cases. For MS-DRG 167, we found 110 procedures for which only
                one occurrence of the procedure was reported with the average length of
                stay ranging from 1 day to 23 days and the average costs ranging from
                $2,058 to $149,220 for these cases. For MS-DRG 168, we found 68
                procedures for which only one occurrence of the procedure was reported
                with the average length of stay ranging from 1 day to 18 days and the
                average costs ranging from $2,033 to $35,576 for these cases.
                 Our analysis of the claims data from the September 2020 update of
                the FY 2020 MedPAR file resulted in similar findings to those from the
                March 2020 update of the FY 2019 MedPAR file; there were several
                instances in which only one occurrence of a procedure was reported with
                a procedure code from MS-DRGs 163, 164, 165, 166, 167, or 168. During
                our review of MS-DRG 163, we found 139 procedures for which only one
                occurrence of the procedure was reported with the average length of
                stay ranging from 2 days to 97 days and the average costs ranging from
                $5,697 to $205,696 for these cases. For MS-DRG 164, we found 122
                procedures for which only one occurrence of the procedure was reported
                with the average length of stay ranging from 1 day to 35 days and the
                average costs ranging from $3,204 to $120,128 for these cases. For MS-
                DRG 165, we found 92 procedures for which only one occurrence of the
                procedure was reported with the average length of stay ranging from 1
                day to 16 days and the average costs ranging from $2,682 to $164,014
                for these cases. For MS-DRG 166, we found 141 procedures for which only
                one occurrence of the procedure was reported with the average length of
                stay ranging from 1 day to 45 days and the average costs ranging from
                $3,230 to $246,679 for these cases. For MS-DRG 167, we found 105
                procedures for which only one occurrence of the procedure was reported
                with the average length of stay ranging from 1 day to 22 days and the
                average costs ranging from $2,150 to $112,465 for these cases. For MS-
                DRG 168, we found 72 procedures for which only one occurrence of the
                procedure was reported with the average length of stay ranging from 1
                day to 9 days and the average costs ranging from $1,563 to $76,061 for
                these cases.
                 Our clinical advisors reviewed the procedures currently assigned to
                MS-DRGs 163, 164, 165, 166, 167, and 168 to identify the patient
                attributes that currently define each of these procedures and to group
                them with respect to complexity of service and resource intensity. This
                process included separating the procedures according to the surgical
                approach (open, percutaneous, percutaneous endoscopic, via natural or
                artificial opening, via natural or artificial opening endoscopic, and
                external).
                [[Page 25104]]
                 We also considered the claims data from the March 2020 update of
                the FY 2019 MedPAR file and the September 2020 update of the FY 2020
                MedPAR file for MS-DRGs 163, 164, 165, 166, 167, and 168 to further
                analyze the average length of stay and average costs for the cases
                reporting procedures assigned to any one of these MS-DRGs as well as
                clinical coherence for these cases. For example, procedures that we
                believe represent greater treatment difficulty and reflect a class of
                patients who are similar clinically with regard to consumption of
                hospital resources were grouped separately from procedures that we
                believe to be less complex but still reflect patients who are similar
                clinically with regard to consumption of hospital resources. This
                approach differentiated the more complex procedures, such as procedures
                performed on the sternum and ribs (for example, major chest) from the
                less complex procedures such as bypass procedures performed on
                peripheral vessels or diagnostic biopsies.
                 As an initial step in our proposed restructuring of these MS-DRGs,
                we identified the following 26 procedure codes that are currently
                assigned to MS-DRGs 166, 167, and 168 that we believe represent
                procedures performed on structures that align more appropriately with
                the procedures assigned to MS-DRGs 163, 164, and 165 that describe
                major chest procedures.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.014
                 We analyzed claims data from the March 2020 update of the FY 2019
                MedPAR file for the listed procedure codes in MS-DRGs 166, 167, and
                168. We note that if a listed procedure code is not displayed, it is
                because there were no cases found reporting that code among MS-DRGs
                166, 167, and 168. Our findings are shown in the following table.
                [[Page 25105]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.015
                 We then analyzed claims data from the September 2020 update of the
                FY 2020 MedPAR file for the listed procedure codes in MS-DRGs 166, 167,
                and 168. We note that if a listed procedure code is not displayed, it
                is because there were no cases found reporting that code among MS-DRGs
                166, 167, and 168. Our findings are shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.016
                [[Page 25106]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.017
                 We refer the reader to Tables 6P.1e and 6P.1f for detailed claims
                data for the previously listed procedures in MS-DRGs 163, 164, 165,
                166, 167, and 168 from the March 2020 update of the FY 2019 MedPAR file
                and the September 2020 update of the FY 2020 MedPAR file, respectively,
                and note that while some of the 26 listed procedure codes identified in
                MS-DRGs 166, 167, and 168 may not have been reported in either year's
                MedPAR claims data or only had one occurrence in which the procedure
                was reported, we believe these procedures described by the listed 26
                procedure codes are clinically coherent with the other procedures that
                are currently assigned to MS-DRGs 163, 164, and 165. For example, in
                our analysis of the March 2020 update of the FY 2019 MedPAR file, as
                shown in the table, we found procedure code 02QW0ZZ reported with one
                occurrence with an average length of stay of 15 days and average costs
                of $46,829. Despite finding only one case, we believe procedures
                described by this procedure code, as well as related procedure codes
                describing procedures performed on the great vessels, are more
                clinically coherent with the procedures assigned to MS-DRGs 163, 164,
                and 165 and align more appropriately with the average length of stay
                and average costs of those MS-DRGs. Similarly, in our analysis of the
                September 2020 update of the FY 2020 MedPAR file, as shown in the
                table, we found procedure code 0PS204Z reported with 344 occurrences
                with an average length of stay of 9.6 days and average costs of
                $48,340. We believe procedures described by this procedure code, as
                well as related procedure codes describing procedures performed to
                repair or resect the ribs, are more clinically coherent with the
                procedures assigned to MS-DRGs 163, 164, and 165 and also align more
                appropriately with the average length of stay and average costs of
                those MS-DRGs.
                 As a result of our preliminary review of MS-DRGs 163, 164, 165,
                166, 167, and 168, for FY 2022 we are proposing the reassignment of the
                listed 26 procedure codes (9 procedure codes describing repair of
                pulmonary or thoracic structures, and 17 procedure codes describing
                procedures performed on the sternum or ribs) from MS-DRGs 166, 167, and
                168 to MS-DRGs 163, 164, and 165 in MDC 04. Our data analysis shows
                that for the cases reporting any one of the 26 procedure codes,
                generally, they have an average length of stay and average costs that
                appear more consistent with the average length of stay and average
                costs of cases in MS-DRGs 163, 164, and 165. Our clinical advisors also
                agree that these procedures clinically align with the other procedures
                that are currently assigned to MS-DRGs 163, 164, and 165. We refer the
                reader to Table 6P.2c associated with this proposed rule for the list
                of procedure codes we are proposing for reassignment from MS-DRGs 166,
                167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04.
                 After this initial review of all the procedures currently assigned
                to MS-DRGs 163, 164, 165, 166, 167, and 168, in combination with the
                results of the data analysis as reflected in Tables 6P.1e and 6P.1f,
                our clinical advisors support a phased restructuring of these MS-DRGs.
                We believe further analysis of the procedures assigned to these MS-DRGs
                is warranted based on the creation of new procedure codes that have
                been assigned to these MS-DRGs in recent years for which claims data
                are not yet available and the need for additional time to examine the
                procedures currently assigned to those MS-DRGs by clinical intensity,
                complexity of service and resource utilization. We will continue to
                evaluate the procedures assigned to these MS-DRGs as additional claims
                data become available.
                5. MDC 05 (Diseases and Disorders of the Circulatory System)
                a. Short-Term External Heart Assist Device
                 Impella[supreg] Ventricular Support Systems are temporary heart
                assist devices intended to support blood pressure and provide increased
                blood flow to critical organs in patients with cardiogenic shock, by
                drawing blood out of the heart and pumping it into the aorta, partially
                or fully bypassing the left ventricle to provide adequate circulation
                of blood (replace or supplement left ventricle pumping) while also
                allowing damaged heart muscle the opportunity to rest and recover in
                patients who need short-term support for up to 6 days. The ICD-10-PCS
                codes that describe the insertion of Impella[supreg] heart assist
                devices are
                [[Page 25107]]
                currently assigned to MS-DRG 215 (Other Heart Assist System Implant).
                We refer the reader to the ICD-10 MS-DRG Definitions Manual Version
                38.1, which is available via the internet on the CMS website at:
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
                documentation of the GROUPER logic for MS-DRG 215.
                 In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41159 through
                41170), we discussed public comments that recommended that CMS continue
                to monitor the data in MS-DRG 215 for future consideration of
                distinctions (for example, different approaches and evolving
                technologies) that may impact the clinical and resource use of
                procedures utilizing heart assist devices. Our data analysis showed a
                wide range in the average length of stay and the average costs for
                cases reporting procedures that involve a biventricular short-term
                external heart assist system versus a short-term external heart assist
                system. We noted we were aware that the AHA published Coding Clinic
                advice that clarified coding and reporting for certain external heart
                assist devices due to the technology being approved for new indications
                but the claims data current at that time did not yet reflect that
                updated guidance. We also noted that there had been recent updates to
                the descriptions of the codes for heart assist devices. The qualifier
                ``intraoperative'' was added effective October 1, 2017 (FY 2018) to the
                procedure codes describing the insertion of short-term external heart
                assist system procedures to distinguish between procedures where the
                device was only used intraoperatively and was removed at the conclusion
                of the procedure versus procedures where the device was not removed at
                the conclusion of the procedure and for which that qualifier would not
                be reported. We agreed with the commenters that continued monitoring of
                the data and further analysis was necessary prior to proposing any
                modifications to MS-DRG 215 and finalized our proposal to maintain the
                current structure of MS-DRG 215 for FY 2019.
                 In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42167) we discussed
                public comments on our proposals related to recalibration of the FY
                2020 relative weights and the changes in relative weights from FY 2019.
                Several commenters expressed concern about significant reductions to
                the relative weight for MS-DRG 215. Commenters stated that the
                reduction in the proposed relative weight was 29 percent, the largest
                decrease of any MS-DRG; commenters also noted that the cumulative
                decrease to the relative weight for MS-DRG 215 would be 43 percent
                since FY 2017. Commenters stated that the proposed relative weights
                would result in significant underpayments to facilities, which would in
                turn limit access to heart assist devices. After reviewing the comments
                received and the data used in our ratesetting calculations, we
                acknowledged an outlier circumstance where the weight for a MS-DRG was
                seeing a significant reduction for each of the 3 years since CMS began
                using the ICD-10 data in calculating the relative weights. Therefore,
                for the reasons discussed in the FY 2020 final rule, we adopted a
                temporary one-time measure for FY 2020 where the FY 2020 relative
                weight was set equal to the FY 2019 relative weight, which in turn had
                been set equal to the FY 2018 relative weight.
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58598) we again
                acknowledged an outlier circumstance where the weight for MS-DRG 215
                was seeing a significant reduction for each of the 4 years since CMS
                began using the ICD-10 data in calculating the relative weights. We
                stated while we would ordinarily consider this weight change to be
                appropriately driven by the underlying data, given the comments
                received, and in an abundance of caution because this may be the MS-DRG
                assigned when a hospital provides temporary right ventricular support
                for up to 14 days in critical care patients for the treatment of acute
                right heart failure or decompensation caused by complications related
                to COVID-19, including pulmonary embolism, we adopted a temporary one-
                time measure for FY 2021 for MS-DRG 215. Specifically, we set the 2021
                relative weight for MS-DRG 215 equal to the average of the FY 2020
                relative weight and the otherwise applicable FY 2021 weight.
                 For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request
                to reassign certain cases reporting procedure codes describing the
                insertion of a percutaneous short-term external heart assist device
                from MS-DRG 215 to MS-DRGs 216, 217, and 218 (Cardiac Valve and Other
                Major Cardiothoracic Procedures with Cardiac Catheterization with MCC,
                with CC, and without CC/MCC, respectively). According to the requestor,
                there are two distinct clinical populations within MS-DRG 215: High-
                risk Percutaneous Coronary Intervention (PCI) patients receiving short
                term ``intraoperative'' external heart assist systems where the device
                is only used intraoperatively and is removed at the conclusion of the
                procedure, and those patients in or at risk of cardiogenic shock
                requiring longer heart pump support and ICU stays. The requestor stated
                that cases in which short-term external heart assist systems are placed
                intraoperatively require fewer resources. The requestor suggested that
                moving the less resource intensive cases that report a procedure code
                that describes the intraoperative insertion of short-term external
                heart assist systems from MS-DRG 215 into MS-DRG 216, 217, and 218,
                will clinically align the two distinctly different patient populations,
                and consequently will address the potential decrease in the relative
                weight of MS-DRG 215.
                 The requestor stated it performed its own analysis of claims in MS-
                DRG 215 that involve the intraoperative insertion of a short-term
                external heart assist device (as identified by the presence of ICD-10-
                PCS codes 02HA3RJ (Insertion of short-term external heart assist system
                into heart, intraoperative, percutaneous approach) and 5A0221D
                (Assistance with cardiac output using impeller pump, continuous). The
                requestor stated that its analysis found that if procedures involving
                intraoperative placement of a short-term external heart assist device
                were moved into MS-DRGs 216, 217 and 218, it would result in an
                increase in the average costs and average lengths of stay for the cases
                that would remain to be assigned to MS-DRG 215.
                 During our review of this issue, we noted that when a patient is
                admitted and has an Impella[supreg] external heart assist device
                inserted two ICD-10-PCS codes are assigned: A code that describes the
                insertion of the device and code 5A0221D that describes assistance with
                an impeller pump. Therefore, our analysis included procedure code
                02HA3RJ as identified by the requestor as well as similar procedure
                codes 02HA0RJ (Insertion of short-term external heart assist system
                into heart, intraoperative, open approach) and 02HA4RJ (Insertion of
                short-term external heart assist system into heart, intraoperative,
                percutaneous endoscopic approach) that also describe the intraoperative
                insertion of a short-term heart assist device, differing only in
                approach. Because the assistance with an Impella[supreg] is coded with
                ICD-10-PCS code 5A0221D whether the device is used only
                intraoperatively or in instances where the device is left in place at
                the conclusion of the procedure, we did not include this code in our
                analysis. We also note that the requestor suggested that the cases
                reporting a procedure code describing
                [[Page 25108]]
                the intraoperative insertion of a short-term external heart assist
                device be moved to MS-DRGs 216, 217 and 218 but these MS-DRGs are
                defined by the performance of cardiac catheterization. Therefore, we
                expanded our analysis to also include MS-DRGs 219, 220 and 221 (Cardiac
                Valve and Other Major Cardiothoracic Procedures without Cardiac
                Catheterization with MCC, with CC, and without CC/MCC, respectively).
                 First, we examined claims data from the March 2020 update of the FY
                2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS
                codes 02HA0RJ, 02HA3RJ or 02HA4RJ and a procedure code describing the
                performance of a cardiac catheterization. Our findings are shown in the
                following table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.018
                 As shown in the table, we identified a total of 7,741 cases within
                MS-DRG 215 with an average length of stay of 7.8 days and average costs
                of $68,234. Of these 7,741 cases, there are 2,943 cases that include
                both a procedure code describing the intraoperative insertion of a
                short-term external heart assist device and a procedure code describing
                the performance of a cardiac catheterization with an average length of
                stay of 7.1 days and average costs of $60,449. Of these 2,943 cases,
                there are 23 cases reporting a procedure code describing the open
                intraoperative insertion of a short-term external heart assist device
                with a procedure code describing the performance of a cardiac
                catheterization with an average length of stay of 8.9 days and average
                costs of $85,806. There are 2,904 cases reporting a procedure code
                describing a percutaneous intraoperative insertion of a short-term
                external heart assist device with a procedure code describing the
                performance of a cardiac catheterization with an average length of stay
                of 7.1 days and average costs of $60,227. There are 16 cases reporting
                a procedure code describing a percutaneous endoscopic intraoperative
                insertion of a short-term external heart assist device with a procedure
                code describing the performance of a cardiac catheterization approach
                with an average length of stay of 6.4 days and average costs of
                $64,217. The data analysis shows that for the cases in MS-DRG 215
                reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure
                code describing the performance of a cardiac catheterization,
                generally, the average length of stay is shorter and the average costs
                are lower than the average length of stay and average costs (with the
                exception of the average costs and length of stay for the 23 cases
                reporting a procedure code describing the open intraoperative insertion
                of a short-term external heart assist device with a procedure code
                describing the performance of a cardiac catheterization which are
                higher) compared to all cases in that MS-DRG.
                 We also examined claims data from the March 2020 update of the FY
                2019 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are shown
                in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.019
                 Because MS-DRG 215 is a base DRG and there is a three-way split
                within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting
                a procedure code describing the intraoperative insertion of a short-
                term external heart assist device with a procedure code describing the
                performance of a cardiac catheterization for the presence or absence of
                a secondary diagnosis designated as a complication or comorbidity (CC)
                or a major complication or comorbidity (MCC).
                [[Page 25109]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.020
                 This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
                the performance of a cardiac catheterization when distributed based on
                the presence or absence of a secondary diagnosis designated as a
                complication or comorbidity (CC) or a major complication or comorbidity
                (MCC) have average costs generally more similar to the average costs in
                the FY 2019 MedPAR file for MS-DRGs 216, 217 and 218 respectively,
                while the average lengths of stay are shorter. While the cases from MS-
                DRG 215 reporting a procedure code describing the intraoperative
                insertion of a short-term external heart assist device with a procedure
                code describing the performance of a cardiac catheterization ``with
                CC'' and ``without CC/MCC'' have higher average costs than the average
                costs of MS-DRGs 217 and 218, these costs are closer to the average
                costs of those MS-DRGs than they are to the average costs of MS-DRG
                215. The average costs of the cases from MS-DRG 215 reporting a
                procedure code describing the intraoperative insertion of a short-term
                external heart assist device with a procedure code describing the
                performance of a cardiac catheterization ``with MCC'' are lower than
                the average costs of both MS-DRGs 215 and 216.
                 Next, we examined claims data from the March 2020 update of the FY
                2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS
                codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing
                the performance of a cardiac catheterization. Our findings are shown in
                the following table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.021
                 As shown in the table, of the 7,741 cases within MS-DRG 215, there
                are 432 cases that include a procedure code describing the
                intraoperative insertion of a short-term external heart assist device
                without a procedure code describing the performance of a cardiac
                catheterization with an average length of stay of 4.8 days and average
                costs of $53,607. Of these 432 cases, there are eight cases reporting a
                procedure code describing the open intraoperative insertion of a short-
                term external heart assist device without a procedure code describing
                the performance of a cardiac catheterization with an average length of
                stay of 8.8 days and average costs of $141,242. There are 423 cases
                reporting a procedure code describing a percutaneous intraoperative
                insertion of a short-term external heart assist device without a
                procedure code describing the performance of a cardiac catheterization
                with an average length of stay of 4.7 days and average costs of
                $51,964. There is one case reporting a procedure code describing a
                percutaneous endoscopic intraoperative insertion of a short-term
                external heart assist device without a procedure code describing the
                performance of a cardiac catheterization approach with a length of stay
                of 2 days and costs of $47,289. The data analysis shows that for the
                cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or
                02HA4RJ without a
                [[Page 25110]]
                procedure code describing the performance of a cardiac catheterization,
                generally, the average length of stay is shorter and the average costs
                are lower than the average length of stay and average costs (with the
                exception of the average costs and length of stay for the eight cases
                describing the open intraoperative insertion of a short-term external
                heart assist device without a procedure code describing the performance
                of a cardiac catheterization which are higher) compared to all cases in
                that MS-DRG.
                 We also examined claims data from the March 2020 update of the FY
                2019 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are shown
                in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.022
                 Similarly, because MS-DRG 215 is a base DRG and there is a three-
                way split within MS-DRGs 219, 220 and 221, we also analyzed the cases
                reporting a procedure code describing the intraoperative insertion of a
                short-term external heart assist device without a procedure code
                describing the performance of a cardiac catheterization for the
                presence or absence of a secondary diagnosis designated as a
                complication or comorbidity (CC) or a major complication or comorbidity
                (MCC).
                [GRAPHIC] [TIFF OMITTED] TP10MY21.023
                 This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
                describing the performance of a cardiac catheterization when
                distributed based on the presence or absence of a secondary diagnosis
                designated as a complication or comorbidity (CC) or a major
                complication or comorbidity (MCC) have average costs generally more
                similar to the average costs in the FY 2019 MedPAR file for MS-DRGs
                219, 220 and 221 respectively, while the average lengths of stay are
                shorter. While the cases from MS-DRG 215 reporting a procedure code
                describing the intraoperative insertion of a short-term external heart
                assist device, without a procedure code describing the performance of a
                cardiac catheterization ``with MCC'', ``with CC'' and ``without CC/
                MCC'' have higher average costs than the average costs MS-DRGs 219, 220
                and 221, respectively, these costs are closer to the average costs of
                those MS-DRGs than they are to the average costs of MS-DRG 215.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
                the performance of a cardiac catheterization. Our findings are shown in
                the following table:
                [[Page 25111]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.024
                 As shown in the table, we identified a total of 6,275 cases within
                MS-DRG 215 with an average length of stay of 7.9 days and average costs
                of $72,144. Of these 6,275 cases, there are 2,395 cases that include
                both a procedure code describing the intraoperative insertion of a
                short-term external heart assist device and a procedure code describing
                the performance of a cardiac catheterization with an average length of
                stay of 6.8 days and average costs of $62,260. Of these 2,395 cases,
                there were 25 cases reporting a procedure code describing the open
                intraoperative insertion of a short-term external heart assist device
                with a procedure code describing the performance of a cardiac
                catheterization with an average length of stay of 8.2 days and average
                costs of $85,954. There are 2,360 cases reporting a procedure code
                describing a percutaneous intraoperative insertion of a short-term
                external heart assist device with a procedure code describing the
                performance of a cardiac catheterization with an average length of stay
                of 6.8 days and average costs of $61,965. There are 10 cases reporting
                a procedure code describing a percutaneous endoscopic intraoperative
                insertion of a short-term external heart assist device with a procedure
                code describing the performance of a cardiac catheterization approach
                with an average length of stay of 6.9 days and average costs of
                $72,564. The data analysis shows that for the cases in MS-DRG 215
                reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure
                code describing the performance of a cardiac catheterization, when
                examined collectively, the average length of stay is shorter (6.8 days
                versus 7.9 days) and the average costs are lower ($62,260 versus
                $72,144) than the average length of stay and average costs (of all
                cases in that MS-DRG). There were some differences noted in cases
                reporting a procedure code describing the intraoperative insertion of a
                short-term external heart assist device with a procedure code
                describing the performance of a cardiac catheterization when examined
                by operative approach. For the 25 cases reporting a procedure code
                describing the open intraoperative insertion of a short-term external
                heart assist device with a procedure code describing the performance of
                a cardiac catheterization, the average costs were higher ($85,954
                versus $72,144) and average length of stay was slightly longer (8.2
                days versus 7.9 days) when compared to all cases in that MS-DRG. For
                the 10 cases reporting a procedure code describing the percutaneous
                endoscopic intraoperative insertion of a short-term external heart
                assist device with a procedure code describing the performance of a
                cardiac catheterization, the average costs were nearly equal ($72,564
                versus $72,144) and average length of stay was shorter (6.9 days versus
                7.9 days) when compared to all cases in that MS-DRG.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are
                shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.025
                 Because MS-DRG 215 is a base DRG and there is a three-way split
                within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting
                a procedure code describing the intraoperative insertion of a short-
                term external heart assist device with a procedure code describing the
                performance of a cardiac catheterization for the presence or absence of
                a secondary diagnosis designated as a complication or comorbidity (CC)
                or a major complication or comorbidity (MCC).
                [[Page 25112]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.026
                 This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
                the performance of a cardiac catheterization when distributed based on
                the presence or absence of a secondary diagnosis designated as a
                complication or comorbidity (CC) or a major complication or comorbidity
                (MCC) have average costs generally more similar to the average costs in
                the FY 2020 MedPAR file for MS-DRGs 216, 217 and 218 respectively,
                while the average lengths of stay are shorter. While the cases from MS-
                DRG 215 reporting a procedure code describing the intraoperative
                insertion of a short-term external heart assist device with a procedure
                code describing the performance of a cardiac catheterization ``with
                CC'' and ``without CC/MCC'' have higher average costs than the average
                costs of MS-DRGs 217 and 218, these costs are closer to the average
                costs of those MS-DRGs than they are to the average costs of MS-DRG
                215. The average costs of the cases from MS-DRG 215 reporting a
                procedure code describing the intraoperative insertion of a short-term
                external heart assist device with a procedure code describing the
                performance of a cardiac catheterization ``with MCC'' are lower than
                the average costs of both MS-DRGs 215 and 216.
                 Next, we examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
                describing the performance of a cardiac catheterization. Our findings
                are shown in the following table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.027
                 As shown in the table, of the 6,275 cases within MS-DRG 215, there
                are 331 cases that include a procedure code describing the
                intraoperative insertion of a short-term external heart assist device
                without a procedure code describing the performance of a cardiac
                catheterization with an average length of stay of 4.5 days and average
                costs of $52,181. Of these 331 cases, there are eight cases reporting a
                procedure code describing the open intraoperative insertion of a short-
                term external heart assist device without a procedure code describing
                the performance of a cardiac catheterization with an average length of
                stay of 8.9 days and average costs of $80,314. There are 332 cases
                reporting a procedure code describing a percutaneous intraoperative
                insertion of a short-term external heart assist device without a
                procedure code describing the performance of a cardiac catheterization
                with an average length of stay of 4.4 days and average costs of
                $51,569. There is one case reporting a procedure code describing a
                percutaneous endoscopic intraoperative insertion of a short-term
                external heart assist device without a procedure code describing the
                performance of a cardiac catheterization approach with a length of stay
                of 2 days and costs of $24,379. The data analysis shows that for the
                cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or
                02HA4RJ without a
                [[Page 25113]]
                procedure code describing the performance of a cardiac catheterization,
                generally, the average length of stay is shorter and the average costs
                are lower than the average length of stay and average costs (with the
                exception of the average costs and length of stay for the eight cases
                reporting a procedure code describing the open intraoperative insertion
                of a short-term external heart assist device without a procedure code
                describing the performance of a cardiac catheterization which are
                higher) compared to all cases in that MS-DRG.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are
                shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.028
                 Similarly, because MS-DRG 215 is a base DRG and there is a three-
                way split within MS-DRGs 219, 220 and 221, we also analyzed the 331
                cases reporting a procedure code describing the intraoperative
                insertion of a short-term external heart assist device without a
                procedure code describing the performance of a cardiac catheterization
                for the presence or absence of a secondary diagnosis designated as a
                complication or comorbidity (CC) or a major complication or comorbidity
                (MCC).
                [GRAPHIC] [TIFF OMITTED] TP10MY21.029
                 This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
                PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
                describing the performance of a cardiac catheterization when
                distributed based on the presence or absence of a secondary diagnosis
                designated as a complication or comorbidity (CC) or a major
                complication or comorbidity (MCC) have average costs generally more
                similar to the average costs in the FY 2020 MedPAR file for MS-DRGs
                219, 220 and 221 respectively, while the average lengths of stay are
                shorter. While the cases from MS-DRG 215 reporting a procedure code
                describing the intraoperative insertion of a short-term external heart
                assist device without a procedure code describing the performance of a
                cardiac catheterization ``with CC'' and ``without CC/MCC'' have higher
                average costs than the average costs of MS-DRGs 220 and 221, these
                costs are closer to the average costs of those MS-DRGs than they are to
                the average costs of MS-DRG 215. The average costs of the cases from
                MS-DRG 215 reporting a procedure code describing the intraoperative
                insertion of a short-term external heart assist device without a
                procedure code describing the performance of a cardiac catheterization
                ``with MCC'' are lower than the average costs of both MS-DRGs 215 and
                219.
                 Our clinical advisors reviewed the clinical issues and the claims
                data and agreed that cases reporting a procedure code that describes
                the intraoperative insertion of a short-term external heart assist
                device are generally less resource intensive and are clinically
                distinct from other cases reporting procedure codes describing the
                insertion of other types of heart assist devices currently assigned to
                MS-DRG 215. Our clinical advisors state that critically ill patients
                who are experiencing or at risk for cardiogenic shock from an emergent
                event such as heart attack or virus that impacts the functioning of the
                heart and requires longer heart pump support are different from those
                patients who require intraoperative support only. Patients receiving a
                short-term external heart assist device intraoperatively during
                coronary interventions often have an underlying disease pathology such
                as heart failure related to occluded coronary vessels that is broadly
                similar in kind to other patients also receiving these interventions
                without the need for an insertion of a short-term external heart assist
                device. In the post-operative period, these patients can recover and
                can be sufficiently rehabilitated prior to discharge. For these
                reasons, our clinical advisors support reassigning
                [[Page 25114]]
                ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ that describe the
                intraoperative insertion of a short-term external heart assist device
                to MS-DRGs 216, 217, 218, 219, 220 and 221 in MDC 05. They stated this
                reassignment would improve clinical coherence in these MS-DRGs.
                 To compare and analyze the impact of our suggested modifications,
                we ran a simulation using the Version 38.1 ICD-10 MS-DRG GROUPER and
                the claims data from the March 2020 update of the FY 2019 MedPAR file.
                The following table reflects our simulation for ICD-10-PCS procedure
                codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative
                insertion of a short-term external heart assist device if they were
                moved to MS-DRGS 216, 217, 218, 219, 220 and 221.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.030
                 We believe the resulting proposed MS-DRG assignments would be more
                clinically homogeneous, coherent and better reflect hospital resource
                use while at the same time addressing concerns related to the relative
                weight of MS-DRG 215. A review of this simulation shows that this
                distribution of ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that
                describe the intraoperative insertion of a short-term external heart
                assist device if moved to MS-DRGs 216, 217, 218, 219, 220 and 221,
                increases the average costs of the cases remaining in MS-DRG 215 by
                over $4,500, while generally having a more limited effect on the
                average costs of MS-DRGs 216, 217, 218, 219, 220 and 221.
                 We also ran a simulation using the Version 38.1 ICD-10 MS-DRG
                GROUPER and the claims data from the September 2020 update of the FY
                2020 MedPAR file. The following table reflects our simulation for ICD-
                10-PCS procedure codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the
                intraoperative insertion of a short-term external heart assist device
                if they were moved to MS-DRGS 216, 217, 218, 219, 220 and 221.
                [[Page 25115]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.031
                 As with our simulation based on the March 2020 update of the FY
                2019 MedPAR file, we believe that this simulation supports that the
                resulting proposed MS-DRG assignments would be more clinically
                homogeneous, coherent and better reflect hospital resource use while at
                the same time addressing concerns related to the relative weight of MS-
                DRG 215. A review of this simulation shows that this distribution of
                ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the
                intraoperative insertion of a short-term external heart assist device
                if moved to MS-DRGs 216, 217, 218, 219, 220 and 221, increases the
                average costs of the cases remaining in MS-DRG 215 by over $6,000,
                while generally having a more limited effect on the average costs of
                MS-DRGS 216, 217, 218, 219, 220 and 221.
                 Therefore, for FY 2022, we are proposing to reassign ICD-10-PCS
                codes 02HA0RJ, 02HA3RJ, and 02HA4RJ from MDC 05 in MS-DRG 215 to MS-
                DRGs 216, 217, 218, 219, 220 and 221 in MDC 05.
                b. Type II Myocardial Infarction
                 We received a request to review the MS-DRG assignment of ICD-10-CM
                diagnosis code I21.A1 (Myocardial infarction type 2). The requestor
                stated that when a type 2 myocardial infarction is documented, per
                coding guidelines, it is to be coded as a secondary diagnosis since it
                is due to an underlying cause. This requestor also noted that when a
                type 2 myocardial infarction is coded with a principal diagnosis in MDC
                05 (Diseases and Disorders of the Circulatory System), the GROUPER
                logic assigns MS-DRGs 280 through 282 (Acute Myocardial Infarction,
                Discharged Alive with MCC, with CC, and without CC/MCC, respectively).
                The requestor questioned if this GROUPER logic was correct or if the
                logic should be changed so that a type 2 myocardial infarction, coded
                as a secondary diagnosis, does not result in the assignment of a MS-DRG
                that describes an acute myocardial infarction.
                 To begin our analysis, we reviewed the GROUPER logic. The requestor
                is correct that when diagnosis code I21.A1 is reported as a secondary
                diagnosis in combination with a principal diagnosis in MDC 05, the case
                currently groups to medical MS-DRGs 280 through 282 in the absence of a
                surgical procedure, when the patient is discharged alive. We note that
                if the patient expires, GROUPER logic instead will assign MS-DRGs 283
                through 285 (Acute Myocardial Infarction, Expired with MCC, with CC,
                and without CC/MCC, respectively) when diagnosis code I21.A1 is
                reported as a secondary diagnosis in combination with a principal
                diagnosis in MDC 05.
                 According to the Universal Definition of Myocardial Infarction
                (MI), developed by a global task force that included the European
                Society of Cardiology, the American College of Cardiology, the American
                Heart Association and the World Heart Federation (WHF), the diagnosis
                of MI requires the rise and/or fall of cardiac biomarkers with clinical
                evidence of ischemia in which there is evidence of myocardial injury or
                necrosis, defined by symptoms, electrocardiographic (ECG) changes, or
                new regional wall motion abnormalities. Since 2007, this definition
                further classifies myocardial infarctions into five distinct subtypes.
                While a type 1 MI is defined as a MI due to an acute coronary syndrome,
                type 2 MI is defined as a mismatch in myocardial oxygen supply and
                demand due to other causes such as coronary dissection, vasospasm,
                emboli, or hypotension that is not attributed to unstable coronary
                artery disease (CAD).
                 Our clinical advisors reviewed this issue and do not recommend
                changing the current MS-DRG assignment of ICD-10-CM diagnosis code
                I21.A1. As noted by the requestor, the ICD-10-CM Official Guidelines
                for Coding and Reporting state ``Type 2 myocardial infarction,
                (myocardial infarction due to demand ischemia or secondary to ischemic
                imbalance) is assigned to code I21.A1, Myocardial infarction type 2
                with a code for the underlying cause coded first.'' Our clinical
                advisors believe that cases reporting diagnosis code I21.A1 as a
                secondary diagnosis are associated with a severity of illness on par
                with cases reporting a principal diagnosis of another type myocardial
                infarction. They state the diagnosis of myocardial infarction describes
                myocardial cell death due to inadequate
                [[Page 25116]]
                oxygen supply to the myocardium for a prolonged period, regardless of
                the subtype. Our clinical advisors state, for clinical consistency, it
                is more appropriate to maintain the current assignment of ICD-10-CM
                diagnosis code I21.A1 with the other codes that describe myocardial
                infarction. Therefore, we are not proposing to reassign diagnosis code
                I21.A1 from MS-DRGs 280 through 285.
                 During our review of this issue we noted that code I21.A1
                (Myocardial infarction type 2) is currently one of the listed principal
                diagnoses in the GROUPER logic for MS-DRGs 222 and 223 (Cardiac
                Defibrillator Implant with Cardiac Catheterization with AMI, HF or
                Shock with and without MCC, respectively). However, code I21.A1 is not
                currently recognized in these same MS-DRGs when coded as a secondary
                diagnosis. As a result, when coded as a secondary diagnosis in
                combination with a principal diagnosis in MDC 05, MS-DRGs 224 and 225
                (Cardiac Defibrillator Implant with Cardiac Catheterization without
                AMI, HF, or Shock with and without MCC, respectively) are instead
                assigned when reported with a listed procedure code. We refer the
                reader to the ICD-10 MS-DRG Definitions Manual Version 38.1, which is
                available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete documentation of the GROUPER
                logic for MS-DRGs 222, 223, 224, and 225.
                 Acknowledging that coding guidelines instruct to code I21.A1 after
                the diagnosis code that describes the underlying cause, our clinical
                advisors recommend adding special logic in MS-DRGs 222 and 223 to have
                code I21.A1 also qualify when coded as a secondary diagnosis in
                combination with a principal diagnosis in MDC 05 since these diagnosis
                code combinations also describe acute myocardial infarctions.
                 As a result, we are proposing modifications to the GROUPER logic to
                allow cases reporting diagnosis code I21.A1 (Myocardial infarction type
                2) as a secondary diagnosis to group to MS-DRGs 222 and 223 when
                reported with a listed procedure code for clinical consistency with the
                other MS-DRGs describing acute myocardial infarction.
                 A diagnosis code may define the logic for a specific MS-DRG
                assignment in three different ways. The diagnosis code may be listed as
                principal or as any one of the secondary diagnoses, as a secondary
                diagnosis, or only as a secondary diagnosis as noted in more detail in
                this proposed rule.
                 Principal or secondary diagnoses. Indicates that a
                specific set of diagnoses are used in the definition of the MS-DRG. The
                diagnoses may be listed as principal or as any one of the secondary
                diagnoses. A special case of this condition is MS-DRG 008 in which two
                diagnoses (for example, renal and diabetic) must both be present
                somewhere in the list of diagnoses in order to be assigned to MS-DRG
                008.
                 Secondary diagnoses. Indicates that a specific set of
                secondary diagnoses are used in the definition of the MS-DRG. For
                example, a secondary diagnosis of acute leukemia with chemotherapy is
                used to define MS-DRG 839.
                 Only secondary diagnoses. Indicates that in order to be
                assigned to the specified MS-DRG no secondary diagnoses other than
                those in the specified list may appear on the patient's record. For
                example, in order to be assigned to MS-DRG 795, only secondary
                diagnoses from the specified list may appear on the patient's record.
                 We note that whenever there is a secondary diagnosis component to
                the MS-DRG logic, the diagnosis code can either be used in the logic
                for assignment to the MS-DRG or to act as a CC/MCC. For this specific
                scenario, we propose that code I21.A1, as a secondary diagnosis, be
                used in the definition of the logic for assignment to MS-DRGs 222 and
                223, similar to the example described previously, where a secondary
                diagnosis of acute leukemia with chemotherapy is used to define MS-DRG
                839, and therefore will not act as a MCC in these MS-DRGs.
                 In summary, for FY 2022, we are proposing to maintain the current
                structure of MS-DRGs 280 through 285. We are also proposing to modify
                the GROUPER logic to allow cases reporting diagnosis code I21.A1
                (Myocardial infarction type 2) as a secondary diagnosis to group to MS-
                DRGs 222 and 223 when reported with qualifying procedures.
                c. Viral Cardiomyopathy
                 We received three separate but related requests to add ICD-10-CM
                diagnosis code B33.24 (Viral cardiomyopathy) to the list of principal
                diagnoses for MS-DRGs 314, 315, and 316 (Other Circulatory System
                Diagnoses with MCC, with CC, and without CC/MCC, respectively) in MDC
                05. The requestors noted that a discontinuity exists in the current MDC
                assignment of diagnosis codes in ICD-10-CM subcategory B33.2. The list
                of the five ICD-10-CM diagnosis codes in subcategory B33.2, as well as
                their current MDC assignments, is found in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.369
                 A requestor noted ICD-10-CM codes B33.20, B33.21, B33.22, and
                B33.23 are assigned to MDC 05 (Diseases and Disorders of the
                Circulatory System), while code B33.24 is assigned to MDC 18
                (Infectious and Parasitic Diseases, Systemic or Unspecified Sites). The
                requestor stated that the placement of ICD-10-CM diagnosis code B33.24
                within subcategory B33.2 is clinically appropriate, as all the
                diagnoses within this subcategory share a common etiology, involve the
                heart and supporting structures, and require the same intensity of
                hospital care. However, the assignment of code B33.24 to a different
                MDC is clinically incongruous with the placement of the other codes in
                the subcategory. According to the requestor, all of the conditions
                share similar etiology, anatomic location, and needs for care,
                therefore the five codes should all be assigned to MDC 05. This
                requestor also stated that reassigning code B33.24 to MDC 05 would
                ensure both clinical continuity and coding consistency within the B33.2
                subcategory. Another requestor stated MDC 05 surgical MS-DRGs should be
                assigned when
                [[Page 25117]]
                procedures such as cardiac catheterization or coronary angioplasty are
                performed for a principal diagnosis of viral cardiomyopathy.
                 To begin our analysis, we reviewed the GROUPER logic. Currently,
                cases reporting ICD-10-CM diagnosis code B33.24 as a principal
                diagnosis group to medical MS-DRGs 865 and 866 (Viral Illness with and
                without MCC, respectively) in MDC 18 in the absence of a surgical
                procedure. Our clinical advisors reviewed this issue and noted viral
                cardiac infections may present as endocarditis (inflammation of the
                heart's inner lining), myocarditis (inflammation of the middle layer of
                the heart), pericarditis (inflammation of the pericardium), or
                cardiomyopathy (disease of the heart muscle). The infection usually
                begins somewhere other than the heart, often in the nose, lungs, or
                stomach. As the infection progresses, and the microbe multiplies and
                gets into the bloodstream, it can infiltrate the heart muscle. The
                growth and replication of viruses inside the heart can endanger the
                heart by destroying heart cells. The management of viral cardiomyopathy
                is similar to the management of other viral cardiac infections and can
                include bed rest, control of pain with non-steroidal anti-inflammatory
                agents and anti-microbial therapy to avoid permanent myocardial damage,
                cardiomegaly, and/or congestive cardiac failure.
                 Our clinical advisors agree that the diagnosis of viral
                cardiomyopathy is clinically related to the other diagnoses in ICD-10-
                CM subcategory B33.2. They believe it is clinically appropriate for all
                five diagnoses in subcategory B33.2 to group to MDC 05 (Diseases and
                Disorders of the Circulatory System) as these conditions describe
                circulatory system conditions and complications and that this
                modification will improve clinical coherence. Therefore, we are
                proposing to reassign ICD-10-CM diagnosis code B33.24 from MDC 18 in MS
                DRGs 865 and 866 (Viral Illness with and without MCC, respectively) to
                MDC 05 in MS DRGs 314, 315, and 316 (Other Circulatory System Diagnoses
                with MCC, with CC, and without CC/MCC, respectively). Under this
                proposal, cases reporting procedure codes from MDC 05 in conjunction
                with principal diagnosis B33.24, would group to MS-DRGs in MDC 05.
                d. Left Atrial Appendage Closure (LAAC)
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58471 through
                58477), we identified nine ICD-10-PCS procedure codes that describe
                Left Atrial Appendage Closure (LAAC) procedures and noted their
                corresponding MS-DRG assignments in the ICD-10 MS-DRGs Version 37 as
                listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.032
                 As discussed in the FY 2021 IPPS/LTCH PPS final rule, we examined
                claims data from the September 2019 update of the FY 2019 MedPAR file
                for cases reporting LAAC procedures with an open approach in MS-DRGs
                250 and 251 (Percutaneous Cardiovascular Procedures without Coronary
                Artery Stent with and without MCC, respectively). Our analysis showed
                that the cases reporting a LAAC procedure with an open approach in MS-
                DRGs 250 and 251 had higher average costs and longer average length of
                stay compared to all cases in MS-DRGs 250 and 251. We also stated our
                clinical advisors believed that ICD-10-PCS codes 02L70CK, 02L70DK, and
                02L70ZK that describe a LAAC procedure with an open approach were more
                suitably grouped to MS-DRGs 273 and 274 (Percutaneous Intracardiac
                Procedures with and without MCC, respectfully). Therefore, we finalized
                our proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK,
                and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274. We also
                finalized a revision to the titles for MS-DRG 273 and 274 to
                Percutaneous and Other Intracardiac Procedures with and without MCC,
                respectively to reflect this reassignment for FY 2021.
                 In response to this final policy, for this FY 2022 IPPS/LTCH PPS
                proposed rule, we received a request to again review the MS-DRG
                assignment of cases involving LAAC procedures with an open approach.
                The requestor disagreed with CMS's FY 2021 IPPS/LTCH PPS final rule
                decision to move the three procedure codes describing the open
                occlusion of left atrial appendage to MS-DRGs 273 and 274 (Percutaneous
                and Other Intracardiac Procedures with and without MCC, respectively).
                The requestor stated they believe that MS-DRGs 228 and 229 (Other
                Cardiothoracic Procedures with and without MCC, respectively), would
                more appropriately correspond with the open procedural resources and
                longer length of stay expected with open heart procedures.
                 Our clinical advisors reviewed this request and continue to support
                the reassignment of ICD-10-PCS procedure
                [[Page 25118]]
                codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs
                273 and 274 because it allows all LAAC procedures to be grouped
                together under the same MS-DRGs and improves clinical coherence. Our
                clinical advisors state open LAAC procedures are primarily performed in
                the absence of another O.R. procedure and generally are not performed
                with a more intensive open chest procedure. When performed as
                standalone procedures, open LAAC procedures share similar factors such
                as complexity and resource utilization with all other LAAC procedures.
                Our clinical advisors continue to state our FY 2021 final policy
                results in MS-DRG assignments that are more clinically homogeneous and
                better reflect hospital resource use. Therefore, we are proposing to
                maintain the assignment of codes 02L70CK, 02L70DK, and 02L70ZK that
                describe the open occlusion of the left atrial appendage in MS-DRGs 273
                and 274.
                e. Surgical Ablation
                 We received a two-part request to review the MS-DRG assignments for
                cases involving the surgical ablation procedure for atrial
                fibrillation. Atrial fibrillation (AF) is an irregular and often rapid
                heart rate that occurs when the two upper chambers of the heart
                experience chaotic electrical signals. AF presents as either paroxysmal
                (lasting 7 days, but less than 1 year),
                or long standing persistent (chronic) (lasting >1 year) based on time
                duration and can increase the risk for stroke, heart failure, and
                mortality. Management of AF has two primary goals: Optimizing cardiac
                output through rhythm or rate control, and decreasing the risk of
                cerebral and systemic thromboembolism. Patients that worsen in
                symptomology or fail to respond to pharmacological treatment or other
                interventions may be referred for surgical ablation to treat their AF.
                Surgical ablation is a procedure that works by burning or freezing
                tissue on the inside of the heart to disrupt faulty electrical signals
                causing the arrhythmia, which can help the heart maintain a normal
                heart rhythm.
                 The first part of this request was to create a new classification
                of surgical ablation MS-DRGs to better accommodate the costs of open
                concomitant surgical ablations. According to the requestor, patients
                undergoing surgical ablation are treated under two potential scenarios:
                (1) Open concomitant (combination) surgical ablation, meaning open
                surgical ablation performed during another open-heart surgical
                procedure such as mitral valve repair or replacement (MVR), aortic
                valve repair or replacement (AVR), or coronary artery bypass grafting
                (CABG) and (2) minimally invasive, percutaneous endoscopic, standalone
                surgical ablation as the sole therapeutic procedure performed.
                According to the requestor, open concomitant surgical ablation is an
                efficient procedure, as it allows treatment of AF and another clinical
                pathology in one procedure thereby decreasing the risk of future
                readmits, need for future repeat catheter ablation procedures, and
                patient mortality.
                 The requestor identified the following potential procedure
                combinations that would comprise an ``open concomitant surgical
                ablation'' procedure.
                 Open CABG + open surgical ablation
                 Open MVR + open surgical ablation
                 Open AVR + open surgical ablation
                 Open MVR + open AVR + open surgical ablation
                 Open MVR + open CABG + open surgical ablation
                 Open MVR + open AVR + open CABG + open surgical ablation
                 Open AVR + open CABG + open surgical ablation
                 The requestor performed its own analysis of these procedure code
                combinations and stated that it found the average costs for open
                concomitant surgical ablation procedures were consistently higher
                compared to the average costs within their respective MS-DRGs, which
                could limit beneficiary access to these procedures.
                 The requestor suggested that the following four MS-DRGs be created
                to address the differences in average costs and average lengths of stay
                it found in its data analysis:
                 Suggested New MS-DRG XXX--Open Surgical Ablation with or
                without Other Cardiothoracic Procedure with Cardiac Catheterization
                with MCC;
                 Suggested New MS-DRG XXX--Open Surgical Ablation with or
                without Other Cardiothoracic Procedure with Cardiac Catheterization
                without MCC;
                 Suggested New MS-DRG XXX--Open Surgical Ablation with or
                without Other Cardiothoracic Procedure without Cardiac Catheterization
                with MCC; and
                 Suggested New MS-DRG XXX--Open Surgical Ablation with or
                without Other Cardiothoracic Procedure without Cardiac Catheterization
                without MCC.
                 In reviewing this request, we identified nine ICD-10-PCS codes that
                describe open surgical ablation. These codes and their corresponding
                MDC and MS-DRG assignments are listed in the following table.
                [[Page 25119]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.033
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, for open
                concomitant surgical ablation procedures, the GROUPER logic assigns MS-
                DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC,
                respectively) in most instances because MS-DRGs 228 and 229 are high in
                the surgical hierarchy GROUPER logic of MDC 05 (Diseases and Disorders
                of the Circulatory System). Since patients can have multiple procedures
                reported with a principal diagnosis during a particular hospital stay,
                and a patient can be assigned to only one MS-DRG, the surgical
                hierarchy GROUPER logic provides a hierarchical order of surgical
                classes from the most resource-intensive to the least resource-
                intensive. Patients with multiple procedures are generally assigned to
                the MS-DRG that correlates to the most resource-intensive surgical
                class.
                 Our clinical advisors reviewed this grouping issue and noted in
                open concomitant surgical ablation procedures, the CABG, MVR, and/or
                AVR components of the procedure are more technically complex than the
                open surgical ablation procedure. Our clinical advisors stated that in
                open concomitant surgical ablation procedures, the MS-DRG assigned
                should be based on the most resource-intensive procedure performed.
                Therefore, we believe this request would be better addressed by
                proposing to revise the surgical hierarchy in MDC 05 rather than
                creating four new MS-DRGs. For FY 2022, we are proposing to revise the
                surgical hierarchy for the MS-DRGs in MDC 05 to sequence MS-DRGs 231-
                236 (Coronary Bypass) above MS-DRGs 228 and 229 to enable more
                appropriate MS-DRG assignment for these types of cases. Under this
                proposal, if a procedure code describing a CABG and a procedure code
                describing an open surgical ablation are present, the GROUPER logic
                would assign the CABG surgical class because a CABG would be sequenced
                higher in the hierarchy than an open surgical ablation. We refer the
                reader to section II.D.15. of the preamble of this proposed rule for
                the discussion of the surgical hierarchy and the complete list of our
                proposed modifications to the surgical hierarchy in MDC 05.
                 As mentioned earlier in this section, this request involved two
                parts. The second part of the request was to reassign cases describing
                standalone percutaneous endoscopic surgical ablation. According to the
                requestor, standalone, percutaneous endoscopic surgical ablation is a
                rapidly growing therapy, indicated for highly symptomatic patients that
                have already failed medical management and/or percutaneous catheter
                ablation procedures. The requestor identified nine ICD-10-PCS codes
                that they stated describe percutaneous endoscopic surgical ablation.
                These codes and their corresponding MDC and MS-DRG assignments are
                listed in the following table.
                [[Page 25120]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.034
                 The requestor performed its own analysis and stated that it found
                the most common MS-DRG assignment for cases describing standalone
                percutaneous endoscopic surgical ablation was MS-DRGs 228 and 229
                (Other Cardiothoracic Procedures with and without MCC, respectively)
                and that in those MS-DRGs, the standalone surgical ablation procedures
                cost more than all the procedures in their currently assigned MS-DRGs
                228 and 229. Therefore, the requestor recommended CMS reassign these
                procedures to higher weighted MS-DRGs 219 and 220 (Cardiac Valve and
                Other Major Cardiothoracic Procedures without Cardiac Catheterization
                with MCC and with CC, respectively).
                 We examined claims data from the March 2020 update of the FY 2019
                MedPAR file for all cases in MS-DRGs 228 and 229 and compared the
                results to cases with a procedure code describing a standalone
                percutaneous endoscopic surgical ablation procedure. Our findings are
                shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.035
                 As shown in the table, the data analysis performed indicates that
                the 99 cases in MS-DRG 228 reporting a procedure code that describes
                percutaneous endoscopic surgical ablation have an average length of
                stay that is shorter than the average length of stay for all the cases
                in MS-DRG 228 (7.1 days versus 10.7 days) and higher average costs when
                compared to all the cases in MS-DRG 228 ($48,281 versus $45,772). The
                497 cases in MS-DRG 229 reporting a procedure code that describes
                percutaneous endoscopic surgical ablation have an average length of
                stay that is shorter than the average length of stay for all the cases
                in MS-DRG 229 (3.7 days versus 5.8 days) and higher average costs when
                compared to all the cases in MS-DRG 229 ($35,516 versus $29,454).
                 We then examined the claims data from the March 2020 update of the
                FY 2019 MedPAR file to identify the average length of stay and average
                costs for all cases in MS-DRGs 219 and 220. Our findings are shown in
                the table.
                [[Page 25121]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.036
                 As shown in the table, for MS-DRG 219, there were a total of 15,597
                cases with an average length of stay of 10.9 days and average costs of
                $57,845. For MS-DRG 220, there were a total of 15,074 cases with an
                average length of stay of 6.5 days and average costs of $39,565.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for all cases in MS-DRGs 228 and 229 and compared
                the results to cases with a procedure code describing a standalone
                percutaneous endoscopic surgical ablation procedure. Our findings are
                shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.037
                 As shown in the table, the data analysis performed indicates that
                the 84 cases in MS-DRG 228 reporting a procedure code that describes
                percutaneous endoscopic surgical ablation have an average length of
                stay that is shorter than the average length of stay for all the cases
                in MS-DRG 228 (6.9 days versus 10.2 days) and lower average costs when
                compared to all the cases in MS-DRG 228 ($44,710 versus $46,508). The
                393 cases in MS-DRG 229 reporting a procedure code that describes
                percutaneous endoscopic surgical ablation have an average length of
                stay that is shorter than the average length of stay for all the cases
                in MS-DRG 229 (3.4 days versus 4.9 days) and higher average costs when
                compared to all the cases in MS-DRG 229 ($34,237 versus $29,885).
                 We then examined the claims data from the September 2020 update of
                the FY 2020 MedPAR file to identify the average length of stay and
                average costs for all cases in MS-DRGs 219 and 220. Our findings are
                shown in the table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.038
                 As shown in the table, for MS-DRG 219, there were a total of 11,863
                cases with an average length of stay of 10.9 days and average costs of
                $61,934. For MS-DRG 220, there were a total of 10,072 cases with an
                average length of stay of 6.5 days and average costs of $41,800.
                 Our analysis indicates that MS-DRGs 219 and 220 generally have much
                higher average costs and longer average lengths of stay than the cases
                with a procedure code describing a standalone percutaneous endoscopic
                surgical ablation procedure currently assigned to MS-DRGs 228 and 229.
                Instead, the average costs and average length of stay for cases
                reporting a standalone percutaneous endoscopic surgical ablation appear
                to be generally more aligned with the average costs and average length
                of stay for all cases in MS-DRGs 228 and 229, where they are currently
                assigned. Our clinical advisors reviewed this issue and do not
                recommend changing the assignment of procedure codes describing
                percutaneous endoscopic surgical ablation. Therefore, for these
                reasons, we are proposing to maintain the current structure of MS-DRGs
                219 and 220.
                f. Drug-Eluting Stents
                 We received a request to review the MS-DRG assignments of claims
                involving the insertion of coronary stents in percutaneous coronary
                interventions. The requestor suggested that CMS eliminate the
                distinction between drug-eluting and bare-metal coronary stents in the
                MS-DRG classification. According to the requestor, coated stents have a
                clinical performance comparable to drug-eluting stents however they are
                grouped with bare-metal stents because they do not contain a drug. The
                requestor asserted that this comingling muddies the
                [[Page 25122]]
                clinical coherence of the MS-DRG structure, as one cannot infer
                distinctions in clinical performance or benefits among the groups and
                potentially creates a barrier (based on hospital decision-making) to
                patient access to modern coated stents.
                 The requestor listed the following MS-DRGs in its request.
                 MS-DRG 246 (Percutaneous Cardiovascular Procedures with
                Drug-Eluting Stent with MCC or 4+ Arteries or Stents);
                 MS-DRG 247 (Percutaneous Cardiovascular Procedures with
                Drug-Eluting Stent without MCC);
                 MS-DRG 248 (Percutaneous Cardiovascular Procedures with
                Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents); and
                 MS-DRG 249 (Percutaneous Cardiovascular Procedures with
                Non-Drug-Eluting Stent without MCC).
                 According to the requestor, the non-drug-eluting stent MS-DRGs have
                outlived their usefulness in the stent market. The requestor performed
                its own analysis of MedPAR data from FY 2015 through FY 2019 and stated
                that it found the volume of cases describing non-drug-eluting coronary
                stents has declined since 2015, culminating in FY 2019, with drug-
                eluting stents accounting for 96.1% of all stent cases within the
                Medicare program, while non-drug-eluting stents accounted for only 3.9%
                that year. The requestor asserted that the assignment of coated stents
                to the non-drug-eluting stent category creates a market distortion as
                this newer technology is being comingled with very old technology at a
                payment disadvantage large enough to influence hospitals' willingness
                to prescribe, while at the same time acknowledging that the separation
                in average charges and costs between the non-drug-eluting stent
                category and the drug-eluting stent category is minimal in their
                analysis of the claims data.
                 Based on a review of the procedure codes that are currently
                assigned to MS-DRGs 246, 247, 248 and 249, our clinical advisors agree
                that further refinement of these MS-DRGs may be warranted. However, in
                ICD-10-PCS, a stent is considered an intraluminal device. The
                distinction between drug-eluting and non-drug eluting intraluminal
                devices is found elsewhere in the ICD-10-PCS procedure code
                classification and evaluating this request requires a more extensive
                analysis to assess potential impacts across the MS-DRGs. For these
                reasons, at this time, our clinical advisors recommend that rather than
                evaluating the procedure codes assigned to MS-DRGs 246, 247, 248 and
                249 in isolation, additional analysis should be performed for this
                subset of procedure codes across the MS-DRGs, as part of the
                comprehensive procedure code review described in section II.D.11. of
                the preamble of this proposed rule. Therefore, we believe it would be
                more appropriate to consider this request further during our
                comprehensive procedure code review in future rulemaking.
                6. MDC 08 (Diseases and Disorders of the Musculoskeletal System and
                Connective Tissue)
                a. Knee Joint Procedures
                 We received a request to examine the procedure code combinations
                for procedures describing a right knee joint removal and replacement
                and procedures describing a left knee joint removal and replacement in
                MS-DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with
                MCC, with CC, and without CC/MCC, respectively). According to the
                requestor, when using the MS-DRG GROUPER software version 37, the left
                knee joint procedure combinations group correctly to MS-DRG 468, while
                the exact same right knee procedure code combinations group incorrectly
                to MS-DRG 465 (Wound Debridement and Skin Graft Except Hand for
                Musculoskeletal and Connective Tissue Disorders without CC/MCC).
                 The requestor provided the following procedure codes that describe
                the procedure code combinations for the left knee joint removal and
                replacement procedures currently assigned to MS-DRGs 466, 467, and 468.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.039
                 The requestor also provided the following procedure codes that
                describe the procedure code combinations for right knee joint removal
                and replacement procedures for CMS's review and consideration.
                [[Page 25123]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.040
                 We reviewed the procedure code combinations listed and agree with
                the requestor that the procedure codes that describe the procedure code
                combinations for right knee joint removal and replacement procedures
                were inadvertently excluded from the logic for MS-DRGs 466, 467, and
                468.
                 During our review of the previously listed procedure code
                combinations describing removal and replacement of the right and left
                knee joints, we identified additional MS-DRGs in which the listed
                procedure code combinations for the left knee joint are in the logic,
                however, the listed procedure code combinations for the right knee
                joint were inadvertently excluded from the logic. Specifically, the
                listed procedure code combinations describing removal and replacement
                of the left knee joint are also included in the logic for case
                assignment to MS-DRGs 461 and 462 (Bilateral or Multiple Major Joint
                Procedures of Lower Extremity with and without MCC, respectively) in
                MDC 08 and in the logic for case assignment to MS-DRGs 628, 629, and
                630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures with
                MCC, with CC, and without CC/MCC, respectively) in MDC 10 (Endocrine,
                Nutritional and Metabolic Diseases and Disorders). Our clinical
                advisors stated that the procedure code combinations describing removal
                and replacement of the right knee joint should be added to MS-DRGs 461,
                462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629, and 630 in MDC
                10 for consistency with the procedure code combinations describing
                removal and replacement of the left knee joint that are currently
                assigned to those MS-DRGs. Adding these procedure codes will improve
                clinical coherence and ensure more appropriate MS-DRG assignment for
                these cases.
                 Therefore, for FY 2022, we are proposing to add the three procedure
                code combinations listed previously describing removal and replacement
                of the right knee joint that were inadvertently omitted from the logic
                to MS-DRGs 461, 462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629,
                and 630 in MDC 10.
                b. Pelvic Trauma With Internal Fixation
                 We received a request to reassign cases reporting a diagnosis code
                describing a pelvic fracture in combination with a procedure code
                describing repair of a pelvic fracture with internal fixation, from the
                lower (NonCC) severity level MS-DRG of its current base MS-DRG
                assignment to the higher (MCC) severity level MS-DRG of its current
                base MS-DRG assignment. According to the requestor, there has been
                steady growth in the volume of internal fixation procedures performed
                for pelvic fractures since 2008. The requestor stated that due to this
                growth rate and the anticipated increase in utilization of these
                internal fixation devices in these procedures in the future that CMS
                should reconsider the payment structure for these cases it referred to
                as ``internal fixation for pelvic trauma''.
                 The requestor provided data for the Healthcare Common Procedural
                Coding System (HCPCS) code G0413 (Percutaneous skeletal fixation of
                posterior pelvic bone fracture and/or dislocation, for fracture
                patterns which disrupt the pelvic ring, unilateral or bilateral,
                (includes ileum, sacroiliac joint and/or sacrum) and current procedural
                terminology (CPT) code 22848 (Pelvic fixation (attachment of caudal end
                of instrumentation to pelvic bony structures) other than sacrum) from
                2008 through 2018 that it crosswalked to ICD-10-PCS procedure codes.
                The requestor stated that this CPT coded data indicated that physicians
                have used pelvic fracture fixation, and pelvic instrumentation, for an
                increasing number of trauma/fracture repair cases, demonstrating
                expanded use of these devices in the pelvic area overall.
                 The requestor reported that sacral fractures are often
                underdiagnosed and once the diagnosis is made, bedrest is common,
                although prolonged bedrest is not recommended for the elderly. In
                addition, the requestor stated that pelvic fractures may be isolated or
                they may be associated with surrounding structures. For example, the
                requester reported that the sacroiliac joint is involved in
                approximately 30 to 35% of pelvic fracture cases. According to the
                requestor, the standard of care has also transitioned, from bedrest-
                only to surgery, and current medical practice has evolved to lower the
                threshold for fracture repair surgery. For instance, the requestor
                stated that smaller 5mm
                [[Page 25124]]
                fractures that were once left untreated now have standard treatment
                protocols involving the use of pelvic instrumentation. As a result, the
                requestor asserted that there will be greater utilization of internal
                fixation devices to treat these smaller pelvic fractures.
                 The requestor provided the following procedure codes that it stated
                describe procedures involving the use of internal fixation devices for
                pelvic fracture repair.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.041
                 The requestor also provided the following diagnosis code
                subcategories that it stated identify diagnoses describing pelvic
                fracture.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.042
                 The requestor performed its own analysis of claims data and
                reported findings for cases reporting a combination of the diagnosis
                codes found in the listed diagnosis code subcategories and the listed
                procedure codes (internal fixation for pelvic trauma) for MS-DRGs 515,
                516, and 517 (Other Musculoskeletal System and Connective Tissue O.R.
                Procedures with MCC, with CC, and without CC/MCC, respectively); MS-
                DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC,
                with CC, and without CC/MCC, respectively); and MS-DRGs 957, 958, and
                959 (Other O.R. Procedures for Multiple Significant Trauma with MCC,
                with CC, and without CC/MCC, respectively). According to the requestor,
                its findings support reassignment of these internal fixation for pelvic
                trauma cases from the lower severity level MS-DRG 517 to the higher
                severity level MS-DRG 515, from the lower severity level MS-DRG 909 to
                the higher severity level 907, and from the lower severity level MS-DRG
                959 to the higher severity level 957. The requestor suggested that
                approximately 2,000 cases would be impacted by its recommendation to
                reassign internal fixation for pelvic trauma cases. The requestor also
                stated that these internal fixation for pelvic trauma cases currently
                result in a high rate of CMS outlier payments to institutions that
                perform a high volume of these procedures. Finally, the requestor
                stated that there is precedent for reassignment of cases from the lower
                severity level MS-DRGs to the higher severity level MS-DRG for cases
                involving the use of a device in orthopedic surgery. The requestor
                provided the examples of total ankle replacement procedures, spinal
                disc replacement procedures and neurostimulator implantation procedures
                to demonstrate how CMS has previously reassigned cases from the lower
                severity level MS-DRG to the higher severity level MS-DRG.
                 We first examined the claims data from the March 2020 update of the
                FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
                file for all cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and
                909; and MS-DRGs 957, 958, and 959. Our findings are shown in the
                following tables.
                [[Page 25125]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.043
                [GRAPHIC] [TIFF OMITTED] TP10MY21.044
                 We then examined claims data from the March 2020 update of the FY
                2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
                file for cases reporting any combination of the diagnosis and procedure
                codes that the requestor provided to identify internal fixation for
                pelvic trauma cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and
                909; and MS-DRGs 957, 958, and 959.
                 We note that our analysis identified two types of cases in which
                the combination of a diagnosis code and a procedure code (that the
                requestor provided to identify internal fixation for pelvic trauma
                cases) was reported. The first type of case consisted of a diagnosis
                code describing a pelvic fracture reported in combination with a single
                procedure code describing repair of a pelvic fracture with internal
                fixation on a claim, and the second type of case consisted of a
                diagnosis code describing a pelvic fracture reported in combination
                with two procedure codes describing repair of a pelvic fracture with
                internal fixation (for example, one for the right side and one for the
                left side) on a claim. These cases are described as single and
                bilateral internal fixation procedures for pelvic trauma, respectively.
                We refer the reader to Tables 6P.1h and 6P.1i associated with this
                proposed rule (which are available via the internet on the CMS website
                at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of diagnosis and procedure code
                combinations reflecting single internal fixation for pelvic trauma
                procedures reported by case ID in each MS-DRG, by fiscal year, along
                with the detailed claims analysis. We refer the reader to Tables 6P.1j
                and 6P.1k associated with this proposed rule (which are available via
                the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of
                diagnosis and procedure code combinations reflecting bilateral internal
                fixation for pelvic trauma procedures reported by case ID in each MS-
                DRG, by fiscal year, along with the detailed claims analysis. For
                example, Table 6P.1h shows the claims data analysis findings from the
                March 2020 update of the FY 2019 MedPAR file. Line 2 identifies the
                section for single cases reported in MS-DRG 515, line 13 identifies the
                section for single cases reported in MS-DRG 516, and line 42 identifies
                the single cases reported in MS-DRG 517. The following table summarizes
                the information found in each column of the tables.
                [[Page 25126]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.045
                 As shown in Table 6P.1h, line 4, column A, displays the Case ID
                ``Single-A'' for the first case; column B displays MS-DRG 515; column C
                displays the diagnosis code S32.111A; column D displays the description
                of the diagnosis code (Minimally displaced Zone 1 fracture of sacrum,
                initial encounter for closed fracture); column E displays the procedure
                code 0QS234Z; column F displays the description of the procedure code
                (Reposition right pelvic bone with internal fixation device,
                percutaneous approach); column G displays the case count 1; column H
                displays an average length of stay of 3.0 days; column I displays
                average costs of $8,433 for the case; column J displays the frequency
                of the procedure reported was one (1) occurrence; column K displays a
                3.0 day length of stay for the case; and column L displays $8,433 for
                the cost of the case.
                 In our analysis of the claims data from the March 2020 update of
                the FY 2019 MedPAR file, we found that there were no cases reporting
                any combination of the diagnosis codes and procedure codes previously
                listed in MS-DRGs 907, 908, and 909 or MS-DRGs 957, 958, and 959. Our
                findings are shown in the following table for any cases found to report
                a diagnosis code describing a pelvic trauma in combination with a
                procedure code describing single internal fixation in MS-DRGs 515, 516,
                and 517.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.046
                [[Page 25127]]
                 As shown in the table, there were only three cases found in MS-DRG
                517 reporting single internal fixation for pelvic trauma procedures,
                with an average length of stay of 5.33 days and average costs of
                $12,147. The average length of stay is longer and the average costs of
                these three cases higher compared to the average length of stay and the
                average costs for all cases in MS-DRG 517 (5.33 days versus 2.6 days
                and $12,147 versus $10,316, respectively); however, overall, we believe
                the data findings are comparable. Our clinical advisors did not support
                reassignment of the three cases from MS-DRG 517 to MS-DRG 515 based on
                the claims data analysis and also stated it would not be appropriate to
                reassign these cases into the higher severity level MS-DRG in the
                absence of a MCC and noted that the cases would not be clinically
                coherent with regard to resource utilization.
                 In our analysis of the claims data from the March 2020 update of
                the FY 2019 MedPAR file for cases in which a bilateral internal
                fixation for pelvic trauma procedure was performed, we identified one
                case in MS-DRG 517. As shown in Table 6P.1j, the average length of stay
                for this case was 4.0 days and the average costs were $24,258, which is
                longer than the average length of stay and greater than the average
                costs for all cases in MS-DRG 517 (2.6 days and $10,316, respectively).
                We also identified cases reporting various code combinations for MS-
                DRGs 515 and 516, and provide the details in Table 6P.1j associated
                with this proposed rule (which is available via the internet on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
                 In our analysis of the claims data from the September 2020 update
                of the FY 2020 MedPAR file we found that there were no cases reporting
                any combination of the diagnosis codes and procedure codes previously
                listed in MS-DRG 909 or in MS-DRGs 957, 958, and 959. Our findings are
                shown in the following table for any cases found to report a diagnosis
                code describing a pelvic trauma in combination with a procedure code
                describing single internal fixation in MS-DRGs 515, 516, 517, 907, and
                908.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.047
                 As shown in the table, there were only four cases found in MS-DRG
                517 reporting single internal fixation for pelvic trauma procedures,
                with an average length of stay of 2.5 days and average costs of
                $10,136. For the same reasons described previously based on the FY 2019
                analysis, our clinical advisors did not support reassignment of the
                cases in the lower severity level MS-DRG 517 to the higher severity
                level MS-DRG 515. In addition, the average length of stay and average
                costs for these four cases reporting single internal fixation for
                pelvic trauma procedures are less than the average length of stay and
                average costs for all the cases in MS-DRG 517 (2.5 days versus 2.6 days
                and $10,136 versus $11,301, respectively)); however, overall, we
                believe the data findings are comparable.
                 In our analysis of the claims data from the September 2020 update
                of the FY 2020 MedPAR file for cases in which a bilateral internal
                fixation for pelvic trauma procedure was performed, we identified one
                case in MS-DRG 517. As shown in Table 6P.1k, the average length of stay
                for this case was 2.0 days and the average costs were $10,103, which is
                shorter than the average length of stay and less than the average costs
                for all cases in MS-DRG 517 (2.6 days and $11,301, respectively). We
                also identified cases reporting various combinations for MS-DRGs 515,
                516 and MS-DRG 907, and provide the details in Table 6P.1k associated
                with this proposed rule (which is available via the internet on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
                 We believe further analyses of these internal fixation for pelvic
                trauma cases in the claims data is warranted. We note that our analysis
                for both the single and bilateral cases was centered on the reporting
                of a principal diagnosis code describing a pelvic trauma (fracture) in
                combination with a procedure code describing internal fixation based on
                the codes provided by the requestor. However, we also identified cases
                in the claims data in which a pelvic trauma diagnosis code was reported
                as a secondary diagnosis code in combination with a procedure code
                describing internal fixation and believe these cases require further
                evaluation. In addition, during our review of the diagnosis and
                procedure codes that the requestor provided, we identified diagnosis
                codes that we believe do not warrant consideration for purposes of this
                request and additional procedure codes that describe internal fixation
                for pelvic trauma procedures, which we believe do warrant further
                analysis. For example, as previously noted, the requestor provided the
                subcategories for
                [[Page 25128]]
                the diagnosis codes that it requested we consider for analysis. We do
                not agree that diagnosis codes describing a pelvic fracture that
                include the term ``sequela'' should be considered in the analysis to
                examine this request because, in the ICD-10-CM classification, the term
                sequela is defined as the residual effect (condition produced) after
                the acute phase of an illness or injury has terminated.
                 We refer the reader to Table 6P.1g for the list of diagnosis codes
                that are included in the diagnosis subcategories provided by the
                requestor and the list of procedure codes provided by the requestor,
                which also contains the procedure codes we identified. Additional time
                is needed for data analysis given the volume of these code combinations
                and corresponding data. We also believe that additional time is needed
                to allow for further analysis of the claims data to determine the
                causes of the fractures and other possible contributing factors with
                respect to the length of stay and costs of these cases, as well as the
                rate of outlier payments as identified by the requestor. Our clinical
                advisors also believe that future data findings may demonstrate
                additional variance in resource utilization for this patient
                population. We further note that, as discussed in the FY 2021 IPPS/LTCH
                PPS final rule, we finalized the addition of 161 procedure codes to MS-
                DRGs 957, 958, and 959 in MDC 24 (Multiple Significant Trauma) that
                include the insertion of internal fixation devices. We believe it would
                be beneficial to examine future claims data to determine if there is a
                change in the volume of cases in those specific MS-DRGs as a result of
                that update. For these reasons, we are proposing to maintain the
                structure of MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and 909; and
                MS-DRGs 957, 958, and 959 for FY 2022.
                7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract):
                Chronic Renal Replacement Therapy (CRRT)
                 We received a request to create new MS-DRGs for cases where the
                patient receives continuous renal replacement therapy (CRRT) during the
                inpatient stay. According to the requestor, hospitals incur higher
                costs related to CRRT and current MS-DRG definitions do not adequately
                account for the clinical and resource requirements of CRRT. The
                requestor stated Medicare reimbursement is insufficient to cover the
                costs of administering CRRT, creating a disincentive in offering this
                dialysis modality and is a barrier to further adoption of CRRT. The
                requestor suggested that the following two new MS-DRGs be created:
                 Suggested New MS-DRG XXX--Continuous Renal Replacement
                Therapy with CC/MCC; and
                 Suggested New MS-DRG XXX--Continuous Renal Replacement
                Therapy without CC/MCC.
                 Renal replacement therapy (RRT) replaces kidney function by
                exchanging solute and removing fluid from the blood as a means to
                prevent or treat renal failure in patients with acute kidney injury
                (AKI). Modalities of renal support include CRRT, conventional
                intermittent hemodialysis (IHD), and prolonged intermittent renal
                replacement therapies (PIRRTs), which are a hybrid of CRRT and IHD. IHD
                provides solute clearance and filtration during relatively brief
                treatment sessions, generally lasting from three to five hours. CRRT
                provides gradual fluid removal and solute clearance over prolonged
                treatment times, typically over a 24-hour period, mimicking the natural
                function of the kidney to allow for the continuous removal or
                replacement of fluid. The most common CRRT modalities are continuous
                venovenous hemofiltration, continuous venovenous hemodialysis, and
                continuous venovenous hemodiafiltration.
                 According to the requestor, CRRT is used primarily to treat
                critically ill, hospitalized patients who experience AKI requiring more
                intensive and continuous treatment than other dialysis modalities. The
                requestor stated that CRRT offers fluid balance and convective
                clearance that may be precisely adjusted for each patient, and has been
                associated with a higher likelihood of kidney recovery as compared to
                other modalities of RRT. The requestor asserted that IHD may worsen the
                neurological status of patients with acute brain injury or other causes
                of increased intracranial pressure by compromising their cerebral
                perfusion by raising intracranial pressure. The ongoing modulation of
                fluid balance and targeted fluid management capabilities of CRRT
                enables its use in situations other than renal failure. According to
                the requestor, CRRT, a slow continuous therapy, is preferred for
                patients who are hemodynamically unstable because it helps prevent the
                hemodynamic fluctuations common with the more rapid IHD. In light of
                the COVID-19 pandemic, the requestor noted the National Institutes of
                Health's Coronavirus Disease 2019 (COVID-19) Treatment Guidelines and
                The American Society of Nephrology recommend CRRT as the preferred
                renal replacement therapy for critically ill, COVID-19 patients
                experiencing AKI, who develop indications for renal replacement
                therapy, due to the hemodynamic instability often experienced in this
                condition.
                 The requestor acknowledged that under the current MS-DRG
                definitions, Medicare cases with beneficiaries receiving CRRT are
                assigned to more than 300 MS-DRGs. Although these beneficiaries are
                clinically similar in that they are critically ill patients who
                experience AKI requiring more intensive and continuous treatment than
                other dialysis modalities, the principal diagnoses for their inpatient
                stays vary. The requestor stated their analysis of the variability in
                principal diagnosis of the cases examined with beneficiaries receiving
                CRRT indicated that, in general, IHD tends to be used more for patients
                with chronic illnesses, and CRRT tends to be used for more acute
                injuries and end of life scenarios. Therefore, the requestor suggested
                that CMS create new MS-DRGs specific to CRRT, without regard to
                principal diagnosis, in order to group the resource intensive,
                clinically coherent, CRRT cases together in contrast to the existing
                GROUPER definitions.
                 According to the requestor, continuing to assign CRRT to existing
                MS-DRGs would be clinically inappropriate and remain financially
                devastating to providers even when treating the most routine,
                uncomplicated CRRT patients. The requestor performed its own data
                analysis and stated hospitals lose over $22,000 per CRRT case on
                average, even when outliers are considered, which they state is a
                shortfall of more than 30 percent. The requestor asserted these losses
                create a disincentive for providers to offer CRRT despite its clinical
                benefits. The requestor also asserted the magnitude of financial losses
                associated with the provision of CRRT at the current level of MS-DRG
                payment could force many hospitals to examine the capacity and scope of
                their CRRT programs if facilities continue to determine that the
                financial burden of treating Medicare beneficiaries with CRRT is more
                than the facility can sustain. As COVID-19 continues to strain hospital
                resources, the requestor asserts the availability of CRRT should not be
                impeded by inadequate MS-DRG payments related to CRRT.
                 The following ICD-10-PCS procedure code identifies the performance
                of CRRT.
                [[Page 25129]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.048
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                code 5A1D90Z is currently recognized as a non-O.R. procedure that
                affects the MS-DRG to which it is assigned. Our clinical advisors agree
                that the principal diagnosis assigned for inpatient admissions where
                continuous renal replacement of therapy is utilized can vary. To
                examine the impact of the use of CRRT, we examined claims data from the
                March 2020 update of the FY 2019 MedPAR file for the top ten MS-DRGs
                reporting the use of CRRT. Our findings are reflected in the following
                table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.049
                [[Page 25130]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.050
                 As shown in this table, our data findings demonstrate the average
                lengths of stay were longer and the average costs were higher for the
                cases reporting the use of CRRT when compared to all cases in their
                respective MS-DRG. We note that the claims data demonstrate that the
                MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871
                with 2,912 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with
                the smallest number of cases is MS-DRG 682 with 401 cases. The average
                length of stay of this subset of cases ranges from a high of 35.5 days
                in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting
                the use of CRRT. The average costs of this subset of cases ranges from
                a high of $174,085 in MS-DRG 003 to a low of $27,681 in MS-DRG 871 for
                cases reporting the use of CRRT.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for the top ten MS-DRGs reporting the use of CRRT.
                Our similar findings are reflected in the following table:
                [[Page 25131]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.051
                 As shown in this table, our data findings show that the average
                lengths of stay were longer and the average costs were higher for the
                cases reporting the use of CRRT when compared to all cases in their
                respective MS-DRG. We note that the claims data demonstrate that the
                MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871
                with 3,023 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with
                the smallest number of cases is MS-DRG 219 with 374 cases. The average
                length of stay of this subset of cases ranges from a high of 34.9 days
                in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting
                the use of CRRT. The average costs of this subset of cases ranges from
                a high of $182,952 in MS-DRG 003 to a low of $29,248 in MS-DRG 871 for
                cases reporting the use of CRRT.
                 While the results of the claims analysis indicate that the average
                costs and average lengths of stay for cases reporting the use of CRRT
                are higher compared to the average costs for all cases in their
                assigned MS-DRG, we are unable to ascertain from the claims data the
                resource use specifically attributable to CRRT during a hospital stay.
                There is large variability in the differences in average costs from MS-
                DRG to MS-DRG, indicating there may have been other factors
                contributing to the higher costs. When reviewing consumption of
                hospital resources for this subset of cases, the claims data clearly
                demonstrate the patients typically have a major complication or co-
                morbid (MCC) condition reported based on the MS-DRGs assigned. The
                claims data also reflects, based on the top ten MS-DRGS, that the
                procedure frequently occurs in cases with other procedures with higher
                than average resource use such as mechanical ventilation, tracheostomy,
                extracorporeal membrane oxygenation (ECMO) and other major
                cardiovascular procedures that also may be contributing to the higher
                average costs for these cases.
                 To further examine the variability in cases reporting the use of
                CRRT, we also reviewed the claims data to identify the number
                (frequency) and types of principal diagnoses that were reported to
                determine what factors may also be contributing to the higher average
                costs for these cases.
                [[Page 25132]]
                 Our findings for the top 10 principal diagnoses that were reported
                within the claims data from the March 2020 update of the FY 2019 MedPAR
                file for this subset of cases is shown in the following table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.052
                 The claims data in this table reflects a wide variance with regard
                to the frequency and types of principal diagnoses that were reported
                along with the procedure code describing the use of CRRT. We note that
                the claims data demonstrate that the diagnosis with the largest number
                of cases reporting CRRT is A41.9 (Sepsis, unspecified organism) with
                4,226 cases. Of the top 10 principal diagnoses reporting CRRT, the
                diagnosis with the smallest number of cases is A41.01 (Sepsis due to
                Methicillin susceptible Staphylococcus aureus) with 271 cases. The
                average length of stay of this subset of cases ranges from a high of 20
                days with a diagnosis of I13.0 (Hypertensive heart and chronic kidney
                disease with heart failure and stage 1 through stage 4 chronic kidney
                disease, or unspecified chronic kidney disease) to a low of 12.6 days
                with a diagnosis of A41.9 (Sepsis, unspecified organism) for cases
                reporting the use of CRRT. The average costs of this subset of cases
                ranges from a high of $85,557 with a diagnosis of I21.4 (Non-ST
                elevation (NSTEMI) myocardial infarction) to a low of $40,908 with a
                diagnosis of N17.9 (Acute kidney failure, unspecified) for cases
                reporting the use of CRRT.
                 Our findings for the top 10 principal diagnoses that were reported
                within the claims data from the September 2020 update of the FY 2020
                MedPAR file for this subset of cases is shown in the following table:
                [[Page 25133]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.053
                 The claims data in this table also reflects a wide variance with
                regard to the frequency and types of principal diagnoses that were
                reported along with the procedure code describing the use of CRRT. As
                shown, the claims data demonstrate that the diagnosis with the largest
                number of cases reporting CRRT is A41.9 (Sepsis, unspecified organism)
                with 4,128 cases. Of the top 10 principal diagnoses reporting CRRT, the
                diagnosis with the smallest number of cases is N17.0 (Acute kidney
                failure with tubular necrosis) with 270 cases. The average length of
                stay of this subset of cases ranges from a high of 21.4 days with a
                diagnosis of U07.1 (COVID-19) to a low of 11.8 days with a diagnosis of
                J96.01 (Acute respiratory failure with hypoxia) for cases reporting the
                use of CRRT. The average costs of this subset of cases ranges from a
                high of $ 86,717 with a diagnosis of I21.4 (Non-ST elevation (NSTEMI)
                myocardial infarction) to a low of $ 48,882 with a diagnosis of J96.01
                (Acute respiratory failure with hypoxia) for cases reporting the use of
                CRRT.
                 To evaluate the frequency with which the use of CRRT is reported
                for different clinical scenarios, we examined claims from the March
                2020 update of the FY 2019 MedPAR file across each of the 25 MDCs to
                determine the number of cases reporting the use of CRRT. Our findings
                are shown in this table.
                BILLING CODE 4120-01-P
                [[Page 25134]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.054
                [[Page 25135]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.055
                 As shown in the table, the top five MDCs with the largest number of
                cases reporting CRRT are MDC 18, with 6,761 cases; MDC 05, with 6,027
                cases; MDC 04, with 1,370 cases; MDC 11, with 1,134 cases; and MDC 06,
                with 987 cases. The top five MDCs with the highest average costs for
                cases reporting the use of CRRT were MDC 13, with average costs of
                $131,252; MDC 22, with average costs of $104,749; MDC 17, with average
                costs of $95,309; MDC 07, with average costs of $87,272; and MDC 05,
                with average costs of $86,024. The claims data indicate that the
                average length of stay ranges from a high of 47.3 days in MDC 13 to a
                low of 8 days in MDC 14 for cases reporting the use of CRRT across each
                of the 25 MDCs.
                 We also examined claims from the September 2020 update of the FY
                2020 MedPAR file across each of the 25 MDCs to determine the number of
                cases
                [[Page 25136]]
                reporting the use of CRRT. Our findings are shown in this table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.056
                [[Page 25137]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.057
                BILLING CODE 4120-01-C
                 As shown in the table, the top five MDCs with the largest number of
                cases reporting CRRT are MDC 18, with 7,678 cases; MDC 05, with 5,516
                cases; MDC
                [[Page 25138]]
                04, with 2,191 cases; MDC 11, with 1,066 cases; and MDC 06, with 838
                cases. The top five MDCs with the highest average costs for cases
                reporting the use of CRRT were MDC 22, with average costs of $139,244;
                MDC 17, with average costs of $88,182; MDC 05, with average costs of
                $87,875; MDC 07, with average costs of $86,894; and MDC 08, with
                average costs of $ 77,515. The claims data indicate that the average
                length of stay ranges from a high of 26.7 days in MDC 22 to a low of 11
                days in MDC 20 for cases reporting the use of CRRT across each of the
                25 MDCs.
                 Our clinical advisors reviewed the clinical issues and the claims
                data, and did not support creating new MS-DRGs for CRRT without regard
                to principal diagnosis. Our clinical advisors noted that more than one
                modality for RRT can be utilized for managing patients with AKI given
                the needs of the patient. For example, a patient may initially start on
                CRRT when they are hemodynamically unstable, but transition to IHD as
                their condition is managed during the admission. While patients
                requiring CRRT can be more resource intensive, it would not be
                practical to create new MS-DRGs specifically for this subset of
                patients given the various clinical presentations for which CRRT may be
                utilized, and the variation of costs in their assigned MS-DRGs. We
                believe that additional analysis and efforts toward a broader approach
                to refining the MS-DRGs for cases of patients requiring renal
                replacement therapy would be needed to address the concerns expressed
                by the requestor. These data do show cases reporting the use of CRRT
                can present greater treatment difficulty. However, when reviewing
                consumption of hospital resources for this subset of cases, the claims
                data also suggest that the increased costs may be attributable to the
                severity of illness of the patient and other circumstances of the
                admission.
                 In summary, the claims data reflect a wide variance with regard to
                the frequency and average costs for cases reporting the use of CRRT.
                Depending on the number of cases in each MS-DRG, it is difficult to
                detect patterns of complexity and resource intensity. We believe the
                creation of new MS-DRGs for cases with procedure codes reporting the
                use of CRRT has the potential for creating instability in the relative
                weights and disrupting the integrity of the MS-DRG system. Therefore,
                we are not proposing to create new MS-DRGs for cases reporting the use
                of continuous renal replacement therapy.
                8. MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs and
                Immunologic Disorders)
                a. ANDEXXA[supreg] (Coagulation Factor Xa (Recombinant), Inactivated-
                zhzo)
                 ANDEXXA[supreg] (coagulation factor Xa (recombinant), inactivated-
                zhzo) is a recombinant decoy protein that rapidly reverses the
                anticoagulant effects of two direct oral anticoagulants, apixaban and
                rivaroxaban, when reversal of anticoagulation is needed due to life-
                threatening or uncontrolled bleeding in indications such as
                intracranial hemorrhages (ICHs) and gastrointestinal bleeds (GIBs).
                ANDEXXA[supreg] received FDA approval on May 3, 2018. When administered
                as a bolus followed by continuous infusion, ANDEXXA[supreg] blocks the
                anticoagulants ability to inhibit FXa. ANDEXXA[supreg] was approved for
                new technology add on payments in FY 2019 (83 FR 41362). We refer
                readers to section II.H.5.j. of the preamble of the FY 2019 IPPS/LTCH
                PPS final rule (83 FR 41355 through 41362), and section II.H.4.k. of
                the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42193
                through 42194) for a complete discussion of the new technology add on
                payment application and payment amount for ANDEXXA[supreg] for FY 2019
                and FY 2020.
                 In section II.H.4.i. of the preamble of the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 58614 through 58615), we noted the 3-year anniversary
                date of the entry of ANDEXXA[supreg] onto the U.S. market (May 3, 2021)
                will occur in the second half of FY 2021. We stated in general, we
                extend new technology add-on payments for an additional year only if
                the 3-year anniversary date of the product's entry onto the U.S. market
                occurs in the latter half of the upcoming fiscal year. After
                consideration of the public comments received, we finalized our
                proposal to continue new technology add-on payments for this technology
                for FY 2021.
                 We received a request from the manufacturer to review potential
                access issues in the inpatient setting for this drug in the future. The
                requestor acknowledged that CMS approved the new technology add-on
                payment for ANDEXXA[supreg] beginning in FY 2019 and noted that FY 2021
                will be the last year before the add-on payments expire. According to
                the requestor, ANDEXXA[supreg] is the only indicated factor Xa
                inhibitor reversal agent, and the requestor stated a concern for the
                future of access to ANDEXXA[supreg] for patients experiencing
                uncontrolled bleeds caused by factor Xa inhibitors. The requestor
                stated their claims modeling showed a significant drop in hospital
                payment for cases involving use of ANDEXXA[supreg] following the
                expiration of new technology add-on payments. Specifically, after new
                technology add-on payments expire, the requestor stated their model
                projects that approximately 59% of cases are likely to be paid less
                than the wholesale acquisition costs for ANDEXXA[supreg].
                 The following ICD-10-PCS procedure codes identify the intravenous
                administration of ANDEXXA[supreg].
                [GRAPHIC] [TIFF OMITTED] TP10MY21.058
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes XW03372 and XW04372 are designated as non-O.R. procedures for
                purposes of MS-DRG assignment. Our clinical advisors agree that the
                principal diagnosis assigned for inpatient admissions where the
                intravenous administration of ANDEXXA[supreg] is indicated can vary.
                 To evaluate the frequency with which the intravenous administration
                of
                [[Page 25139]]
                ANDEXXA[supreg] is reported for different clinical scenarios, we
                examined claims data from the March 2020 update of the FY 2019 MedPAR
                file across the Pre-MDC category, each of the 25 MDCs and the surgical
                class referred to as ``unrelated operating room procedures'' to
                determine the number of cases reporting the use of ANDEXXA[supreg]. Our
                findings are shown in the following table.
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TP10MY21.059
                [[Page 25140]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.060
                BILLING CODE 4120-01-C
                 As shown in the table, there were 461 cases reporting the
                intravenous administration of ANDEXXA[supreg] with procedure codes
                XW03372 or XW04372. The top five MDCs with the largest number of cases
                reporting ANDEXXA[supreg] are MDC 01, with 250 cases; MDC 06 with 53
                cases; MDC 05, with 33 cases; MDC 18, with 25 cases; and the Pre-MDC
                category, with 16 cases. The claims data indicate that the average
                costs range from a high of $107,741 in the Pre-MDC category to a low of
                $22,242 in MDC 09 for cases reporting the use of ANDEXXA[supreg] across
                the claims data. The claims data also indicates that the average length
                of stay ranges from a high of 19.9 days in the Pre-MDC category to a
                low of 4 days in MDC 09 for cases reporting the use of ANDEXXA[supreg].
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file across the Pre-MDC category, each of the 25 MDCs
                and the surgical class referred to as ``unrelated operating room
                procedures'' to determine the number of cases reporting the use of
                ANDEXXA[supreg]. Our findings are shown in the following table.
                BILLING CODE 4120-01-P
                [[Page 25141]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.061
                [[Page 25142]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.062
                BILLING CODE 4120-01-C
                 As shown in the table, there were 719 cases reporting the
                intravenous administration of ANDEXXA[supreg] with procedure codes
                XW03372 or XW04372. The top five MDCs with the largest number of cases
                reporting ANDEXXA[supreg] are MDC 01, with 364 cases; MDC 06 with 98
                cases; MDC 18, with 52 cases; MDC 05, with 50 cases; and MDC 24, with
                30 cases. The claims data indicate that the average costs range from a
                high
                [[Page 25143]]
                of $123,750 in the Pre-MDC category to a low of $27,922 in MDC 09 for
                cases reporting the use of ANDEXXA[supreg] across the claims data. The
                claims data also indicates that the average length of stay ranges from
                a high of 25 days in the Pre-MDC category to a low of 4.2 days in MDC
                21 for cases reporting the use of ANDEXXA[supreg] across the claims
                data.
                 To further examine the impact of the intravenous administration of
                ANDEXXA[supreg], we examined claims data from the March 2020 update of
                the FY 2019 MedPAR file for the top ten MS-DRGs reporting procedure
                codes XW03372 or XW04372. Our findings are reflected in the following
                table:
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TP10MY21.063
                [[Page 25144]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.064
                BILLING CODE 4120-01-C
                 As shown in this table, the claims data demonstrate that the MS-DRG
                with the largest number of cases reporting ANDEXXA[supreg] is MS-DRG
                064 with 78 cases. Of the top 10 MS-DRGs reporting ANDEXXA[supreg], the
                MS-DRG with the smallest number of cases is MS-DRG 003 with 13 cases.
                The average length of stay of this subset of cases ranges from a high
                of 21.5 days in MS-DRG 003 to a low of 4.2 days in MS-DRG 086 for cases
                reporting the use of ANDEXXA[supreg]. The average costs of this subset
                of cases ranges from a high of $117,265 in MS-DRG 003 to a low of
                $26,992 in MS-DRG 083 for cases reporting the use of ANDEXXA[supreg].
                We note while our data findings demonstrate the average costs were
                higher for the cases reporting the intravenous administration of
                ANDEXXA[supreg] when compared to all cases in their respective MS-DRG,
                these cases represent a very small percentage of the total number of
                cases reported in these MS-DRGs. We also note that the top 10 MS-DRGs
                identified only account for 239 of the 461 cases in total that were
                identified in the March 2020 update of the FY 2019 MedPAR file
                reporting ICD-10-PCS codes XW03372 or XW04372. The remainder of the
                cases are distributed in small numbers across the MS-DRGs.
                 We also examined claims data from the September 2020 update of the
                FY 2020 MedPAR file for the top ten MS-DRGs reporting procedure codes
                XW03372 or XW04372. Our findings are reflected in the following table:
                BILLING CODE 4120-01-P
                [[Page 25145]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.065
                BILLING CODE 4120-01-C
                 As shown in this table, the claims data demonstrate that the MS-DRG
                with the largest number of cases reporting ANDEXXA[supreg] is MS-DRG
                064 with 111 cases. Of the top 10 MS-DRGs reporting ANDEXXA[supreg],
                the MS-DRG with the smallest number of cases is MS-DRG 083 with 23
                cases. The average length of stay of this subset of cases ranges from a
                high of 10 days in MS-DRG 023 to a low of 3.5 days in MS-DRG 378 for
                cases reporting the use of ANDEXXA[supreg]. The average costs of this
                subset of cases ranges from a high of $59,478 in MS-DRG 025 to a low of
                $24,348 in MS-DRG 378 for cases reporting the use of ANDEXXA[supreg].
                As with our analysis of the
                [[Page 25146]]
                FY 2019 claims data, while these data findings demonstrate the average
                costs were higher for the cases reporting the intravenous
                administration of ANDEXXA[supreg] when compared to all cases in their
                respective MS-DRG, these cases represent a very small percentage of the
                total number of cases reported in these MS-DRGs. We also note that the
                top 10 MS-DRGs identified only account for 385 of the 719 cases in
                total that were identified in the September 2020 update of the FY 2020
                MedPAR file reporting ICD-10-PCS codes XW03372 or XW04372. The
                remainder of the cases are distributed in small numbers across the MS-
                DRGs.
                 After reviewing the claims data, we believe it is premature to
                consider a proposal for cases involving ANDEXXA[supreg] therapy for FY
                2022. While the March 2020 update of the FY 2019 MedPAR file and the
                September 2020 update of the FY 2020 MedPAR file do contain claims
                reporting the procedure codes identifying the intravenous
                administration of ANDEXXA[supreg], the number of cases is small across
                the MDCs and MS-DRGs. The claims data also reflect a wide variance with
                regard to the frequency and average costs for these cases reporting the
                use of ANDEXXA[supreg]. Moreover, we were unable to identify another
                MS-DRG that would be a more appropriate MS-DRG assignment for these
                cases based on the indication for this therapeutic drug. As noted
                previously, ANDEXXA[supreg] reverses the anticoagulant effects of
                apixaban and rivaroxaban, when reversal of anticoagulation is needed
                due to life-threatening or uncontrolled bleeding. The underlying cause
                of the life-threatening or uncontrolled bleeding can vary which means
                the principal diagnosis assigned for inpatient admissions where
                ANDEXXA[supreg] is administered can vary. The MS-DRGs are a
                classification system intended to group together diagnoses and
                procedures with similar clinical characteristics and utilization of
                resources. We generally seek to identify sufficiently large sets of
                claims data with a resource/cost similarity and clinical similarity in
                developing diagnostic-related groups rather than smaller subsets based
                on the drugs administered. In reviewing this issue, our clinical
                advisors expressed concern regarding making potential MS-DRG changes
                based on a specific, single therapeutic agent, identified by unique
                procedure codes rather than based on a group of related procedure codes
                that can be reported to describe that same type or class of treatment
                or technology, which is more consistent with the intent of the MS-DRGs.
                 We recognize the average costs of the small numbers of cases
                involving the intravenous administration of ANDEXXA[supreg] are greater
                when compared to the average costs of all cases in their respective MS-
                DRG. The MS-DRG system is a system of averages and it is expected that
                within the diagnostic related groups, some cases may demonstrate higher
                than average costs, while other cases may demonstrate lower than
                average costs. We further note that section 1886(d)(5)(A) of the Act
                provides for Medicare payments to Medicare-participating hospitals in
                addition to the basic prospective payments for cases incurring
                extraordinarily high costs.
                 We acknowledge the importance of ensuring that patients diagnosed
                with an indication for a factor Xa inhibitor reversal agent have
                adequate access to care and receive the necessary treatment. While we
                are sensitive to the requestors' concerns about continued access to
                treatment for beneficiaries who require the reversal of anticoagulation
                due to life-threatening or uncontrolled bleeding, additional time is
                needed to explore options and other mechanisms through which to address
                low volume high-cost drugs outside of the MS-DRGs.
                 Furthermore, we note that we are proposing to continue new
                technology add-on payments for ANDEXXA[supreg] for FY 2022. We refer
                the reader to section II.F.4.b of the preamble of this proposed rule
                for further discussion regarding our proposal to allow a one-time
                extension of new technology add-on payments for FY 2022 for 15
                technologies for which the new technology add-on payment would
                otherwise be discontinued, in connection with our proposal to use the
                FY 2019 data to develop the proposed FY 2022 relative weights.
                 Therefore for the reasons stated previously, for FY 2022 we are not
                proposing any MS-DRG changes for cases involving the intravenous
                administration of ANDEXXA[supreg].
                b. Cytokine Release Syndrome (CRS) Logic
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58557 through
                58561), we finalized modifications to the proposed severity level
                designations for a subset of the diagnosis codes describing Cytokine
                Release Syndrome (CRS) based upon further review of the conditions and
                in response to public comments. We provided the following table to
                display the finalized severity level designations and stated that we
                will continue to monitor the CRS codes and their impact on resource use
                once the claims data becomes available to determine if further
                modifications to the severity level are warranted.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.066
                 In connection with the finalized severity level designations for
                the listed CRS codes, we also finalized modifications to the ICD-10 MS-
                DRG GROUPER logic V38 for MS-DRGs 814, 815, and 816
                (Reticuloendothelial and Immunity Disorders with MCC, with CC, and
                without CC/MCC, respectively) to conform to the updates the CDC
                finalized in the ICD-10-CM Tabular List instructions for assigning and
                reporting the CRS codes effective with discharges on and after October
                1, 2020. The following modifications to the GROUPER logic were
                finalized effective with discharges on and after October 1, 2020, for
                case assignment involving CRS following CAR T-cell therapy to MS-
                [[Page 25147]]
                DRGs 814, 815, and 816. We noted that the GROUPER logic for MS-DRGs
                814, 815, and 816 will include a principal diagnosis of T89.89XA with a
                secondary diagnosis of any CRS code as shown in this section of this
                proposed rule.
                Principal Diagnosis
                T80.89XA Other complications following infusion, transfusion and
                therapeutic injection, initial encounter
                with
                Secondary Diagnosis
                D89.831 Cytokine release syndrome, grade 1
                D89.832 Cytokine release syndrome, grade 2
                D89.833 Cytokine release syndrome, grade 3
                D89.834 Cytokine release syndrome, grade 4
                D89.835 Cytokine release syndrome, grade 5
                D89.839 Cytokine release syndrome, grade unspecified
                 As discussed in section II.D.13 of the preamble of this proposed
                rule, Table 6A.-New Diagnosis Codes, lists the new diagnosis codes that
                have been approved to date and will be effective with discharges on and
                after October 1, 2021. Included in Table 6A are the following codes
                that describe complication of immune effector cellular therapy
                identifying the timeframe of the encounter.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.067
                 Also included in Table 6A are the following diagnosis codes that
                describe immune effector cell-associated neurotoxicity syndrome
                (ICANS), with varying degrees of severity.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.068
                 Consistent with the Tabular List instruction for these two sets of
                diagnosis codes as presented and discussed by the CDC at the September
                8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting, the
                diagnosis codes describing a complication of the immune effector
                cellular therapy (T80.82XA, T80.82XD, and T80.82XS) are to be sequenced
                first, followed by the applicable diagnosis code to identify the
                specified condition resulting from the complication. For example, the
                types of complications that may result from immune effector cellular
                therapy treatment (for example, CAR T-cell therapy) include ICANS or
                CRS, as described by the listed diagnosis codes. Accordingly, the CDC
                included the following instructional note in the Tabular List
                modifications for code T80.82-
                 ``Use additional code to identify the specific complication, such
                as:
                 cytokine release syndrome (D89.83-) immune effector cell-associated
                neurotoxicity syndrome (G92.0-)''
                 Materials relating to the discussions involving the diagnosis codes
                from the September 8-9, 2020 ICD-10 Coordination and Maintenance
                Committee meeting can be obtained from the CDC website at: https://www.cdc.gov/nchs/icd/icd10cm_maintenance.htm.
                 As noted previously, the current logic for case assignment
                involving CRS following CAR T-cell therapy to MS-DRGs 814, 815, and 816
                includes a principal diagnosis of T89.89XA with a secondary diagnosis
                of any CRS code. However, with the finalization of new diagnosis code
                T80.82-, diagnosis code T89.89XA would no longer be reported and these
                cases would instead report new diagnosis code T80.82XA, effective with
                discharges on and after October 1, 2020. As shown in Table 6A
                associated with this proposed rule, we are proposing to assign
                diagnosis code T80.82XA to MDC 16 (Diseases and Disorders of Blood,
                Blood Forming Organs, and Immunologic Disorders) in MS-DRGs 814, 815,
                and 816. If the MDC and MS-DRG assignment for new diagnosis code
                T80.82XA is finalized, the current logic for MS-DRGs 814, 815, and 816
                that includes a principal diagnosis code of T89.89XA with a secondary
                diagnosis code of any CRS code would no longer be appropriate or
                necessary.
                 Therefore, we are proposing to revise the structure of MS-DRGs 814,
                815, and 816 by removing the logic that includes a principal diagnosis
                of T89.89XA with a secondary diagnosis of any CRS code from MS-DRGs
                814, 815, and 816 effective FY 2022.
                9. MDC 17 (Myeloproliferative Diseases and Disorders, and Poorly
                Differentiated Neoplasms): Inferior Vena Cava Filter Procedures
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58517 through
                58520), we
                [[Page 25148]]
                discussed the ICD-10-PCS codes that describe the insertion of an
                intraluminal device into the inferior vena cava that are listed in the
                following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.069
                 We finalized a change in the designation of ICD-10-PCS procedure
                code 06H03DZ from O.R. procedure to non-O.R. procedure and maintained
                the O.R. designation of procedure codes 06H00DZ and 06H04DZ. In that
                discussion, we noted our clinical advisors supported changing the O.R.
                designation of procedures describing insertion of an intraluminal
                device into the inferior vena cava performed via a percutaneous
                approach since the procedure does not require the resources of an
                operating room, while concurring that procedures describing the
                insertion of an intraluminal device into the inferior vena cava
                performed via an open or a percutaneous endoscopic approach could
                require greater resources than a procedure describing insertion of an
                intraluminal device into the inferior vena cava performed via a
                percutaneous approach. We also noted that the goals of changing the
                designation of procedures from non-O.R. to O.R., or vice versa, are to
                better clinically represent the resources involved in caring for these
                patients and to enhance the overall accuracy of the system and not
                whether the change in designation would impact payment in a particular
                direction.
                 In response to this final policy, for this FY 2022 IPPS/LTCH PPS
                proposed rule, we received a request to revise MS-DRGs 829 and 830
                (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with
                Other Procedures with and without CC/MCC, respectively) by removing the
                current two-way severity level split and creating a three-way severity
                level split. The requestor respectfully disagreed with the FY 2021
                IPPS/LTCH PPS final rule decision to change the designation of the
                procedure code describing the insertion of an inferior vena cava
                intraluminal device via percutaneous approach to a non-O.R. procedure,
                and stated vena cava filters are most often placed in interventional
                radiology suites and require a high level of skill to prevent rupture
                of the vena cava; and although they are long-term devices, they must be
                placed skillfully to allow for removal later if needed.
                 According to the requestor, it is a conundrum that patients with
                principal and secondary diagnoses that qualify for medical MS-DRGs 837
                (Chemotherapy with Acute Leukemia as Secondary Diagnosis or with High
                Dose Chemotherapy Agent with MCC), MS-DRG 838 (Chemotherapy with Acute
                Leukemia as Secondary Diagnosis with CC or High Dose Chemotherapy
                Agent), and MS-DRG 839 (Chemotherapy with Acute Leukemia as Secondary
                Diagnosis without CC/MCC) group to lower weighted surgical MS-DRGs 829
                and 830 (Myeloproliferative Disorders or Poorly Differentiated
                Neoplasms with Other Procedures with and without CC/MCC, respectively)
                when a non-major O.R. procedure is performed. The requestor stated the
                difference in relative weights might be occurring because of the two-
                way split within MS-DRGs 829 and 830 and the three-way split within MS-
                DRGs 837, 838 and 839. The requestor theorized that removing the
                current two-way severity level split of MS-DRGs 829 and 830 and
                creating a three-way severity level split could help resolve the
                relative weight discrepancy when any non-major O.R. procedures are
                performed during hospitalizations for chemotherapy for acute leukemia.
                 This requestor also suggested that if CMS' analysis did not support
                creating a three-way split for MS-DRGs 829 and 830, exclusion of PCS
                code 06H03DZ from the list of qualifying procedures and reinstatement
                of O.R. procedure status to appropriately compensate providers for the
                cost of devices and resources to place inferior vena cava filters
                across the patient population should be proposed.
                 To evaluate the request to create a three-way severity split MS-DRG
                for cases reporting myeloproliferative disorders or poorly
                differentiated neoplasms with other procedures, we conducted an
                analysis of base MS-DRG 829. This analysis includes 2 years of MedPAR
                claims data to compare the data results from 1 year to the next to
                avoid making determinations about whether additional severity levels
                are warranted based on an isolated year's data fluctuation and also, to
                validate that the established severity levels within a base MS-DRG are
                supported.
                 Therefore, we reviewed the claims data for base MS-DRG 829 using
                the September 2018 update of the FY 2018 MedPAR file and the March 2020
                update of the FY 2019 MedPAR file, which were used in our analysis of
                claims data for MS-DRG reclassification requests for FY 2020 and FY
                2022, respectively. Our findings are shown in the table:
                [[Page 25149]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.070
                 We applied the criteria to create subgroups for the three-way
                severity level split. We found that the criterion that there be at
                least 500 cases for each subgroup was not met based on the data in both
                the FY 2018 and FY 2019 MedPAR files, as shown in the table for both
                years. Specifically, for the ``with MCC'', ``with CC'', and ``without
                CC/MCC'' split, there were only 333 cases in the ``without CC/MCC''
                subgroup based on the data in the FY 2019 MedPAR file and only 333
                cases in the ``without CC/MCC'' subgroup based on the data in the FY
                2018 MedPAR file. Accordingly, the claims data do not support a three-
                way severity level split for base MS-DRG 829.
                 We also reviewed the claims data for base MS-DRG 829 using the
                September 2019 update of the FY 2019 MedPAR file and the September 2020
                update of the FY 2020 MedPAR file, which were used in our analysis of
                claims data for MS-DRG reclassification requests for FY 2021 and FY
                2022, respectively. Our findings are shown in the table:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.071
                 We applied the criteria to create subgroups for the three-way
                severity level split. We found that the criterion that there be at
                least 500 cases for each subgroup was not met based on the data in both
                the FY 2019 and FY 2020 MedPAR files, as shown in the table for both
                years. Specifically, for the ``with MCC'', ``with CC'', and ``without
                CC/MCC'' split, there were only 303 cases in the ``without CC/MCC''
                subgroup based on the data in the FY 2020 MedPAR file and, as
                previously noted, only 333 cases in the ``without CC/MCC'' subgroup
                based on the data in the FY 2019 MedPAR file. As shown in both sets of
                data and stated previously, the claims data do not support a three-way
                severity level split for base MS-DRG 829.
                 In response to the request to exclude ICD-10-PCS code 06H03DZ from
                a list of qualifying procedures if CMS's analysis did not support
                creating a three-way split for MS-DRGs 829 and 830, by definition,
                procedure codes designated as non-O.R. procedures, not further
                classified as ``affecting the MS-DRG assignment'', do not influence the
                MS-DRG assignment. As stated previously, in the FY 2021 IPPS/LTCH PPS
                final rule we finalized our proposal to change the designation of ICD-
                10-PCS procedure code 06H03DZ from O.R. procedure to non-O.R.
                procedure, therefore as a non-O.R. procedure, there is no need to
                exclude ICD-10-PCS code 06H03DZ from a list of qualifying procedure
                codes for MS-DRGs 829 and 830.
                 In response to the request to reinstate the O.R. procedure
                designation of ICD-10-PCS code 06H03DZ if CMS's analysis did not
                support creating a three-way split for MS-DRGs 829 and 830, the change
                in designation from O.R. procedure to non-O.R. procedure is recent,
                only becoming effective October 1, 2020. Our clinical advisors continue
                to indicate that code 06H03DZ, describing the percutaneous insertion of
                an intraluminal device into the inferior vena cava, does not require
                the resources of an operating room, that the procedure to insert an IVC
                filter percutaneously is not surgical in nature and that the resources
                involved in furnishing this procedure are comparable to the related
                ICD-10-PCS procedure codes that describe the insertion of infusion
                devices into the inferior vena cava that are currently designated as
                non-O.R. procedures. Our clinical advisors state our FY 2021 final
                policy results in an O.R. designation of 06H03DZ that better reflects
                the associated technical complexity and hospital resource use of this
                procedure. We continue to explore alternatives on how we may
                restructure the current O.R. and non-O.R. designations for procedures
                by leveraging the detail that is now available in the ICD-10 claims
                data, as discussed in the FY 2021 IPPS/LTCH PPS final rule and in
                section II.D.11. of the preamble of this proposed rule. We continue to
                develop our process and methodology, and will provide more detail in
                future rulemaking.
                 In summary, based on the results of our analysis, for FY 2022, we
                are proposing to maintain the current structure of MS-DRGs 829 and 830.
                10. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987
                Through 989
                 We annually conduct a review of procedures producing assignment to
                MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) or MS-DRGs 987 through 989 (Non-Extensive O.R. Procedure
                Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) on the basis of volume, by procedure, to see if it would
                be appropriate to move cases reporting these procedure codes out of
                these MS-DRGs into one of the surgical MS-DRGs for the MDC into which
                the principal diagnosis falls. The data are arrayed in two ways for
                comparison purposes. We look at a frequency count of each major
                operative procedure code. We also compare procedures across MDCs by
                volume of procedure codes within each MDC. We use this information to
                determine which procedure codes and diagnosis codes to examine.
                 We identify those procedures occurring in conjunction with certain
                principal diagnoses with sufficient frequency to justify adding them to
                one of the surgical MS-DRGs for the MDC in which the diagnosis falls.
                We also consider whether it would be more appropriate to move the
                principal diagnosis codes into the MDC to which the procedure is
                currently assigned.
                 In addition to this internal review, we also consider requests that
                we receive to examine cases found to group to MS-DRGs 981 through 983
                or MS-DRGs 987 through 989 to determine if it would be appropriate to
                add procedure codes to one of the surgical MS DRGs for the MDC into
                which the principal diagnosis falls or to move the principal diagnosis
                to the surgical MS DRGs to which the procedure codes are assigned.
                [[Page 25150]]
                 Based on the results of our review of the claims data from the
                March 2020 update of the FY 2019 MedPAR file and the September 2020
                update of the FY 2020 MedPAR file, as well as our review of the
                requests that we received to examine cases found to group to MS-DRGs
                981 through 983 or MS-DRGs 987 through 989, we are proposing to move
                the cases reporting the procedures and/or principal diagnosis codes
                described in this section of this rule from MS-DRGs 981 through 983 or
                MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC
                into which the principal diagnosis or procedure is assigned.
                 As discussed in section II.D.3.b. of the preamble of this proposed
                rule, we received a request to reassign cases with procedures
                describing control of bleeding in the cranial cavity when reported with
                a central nervous system diagnosis from MS-DRGs 981, 982, and 983
                (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) to MDC 01 (Diseases and
                Disorders of the Central Nervous System) in MS-DRGs 25, 26, and 27
                (Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
                and without CC/MCC, respectively (for example, ``craniotomy'' MS-DRGs).
                We note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23
                (Craniotomy with Major Device Implant or Acute Complex CNS Principal
                Diagnosis with MCC or Chemotherapy Implant or Epilepsy with
                Neurostimulator) and MS-DRG 24 (Craniotomy with Major Device Implant or
                Acute Complex CNS Principal Diagnosis without MCC) also include
                procedures performed on structures located within the cranial cavity
                and are included in the range of MS-DRGs known as the ``craniotomy''
                MS-DRGs in MDC 01.
                 The management and treatment for bleeding (or hemorrhage) within
                the cranial cavity varies depending on the location, cause and the
                severity (or extent) of the bleed. Common causes include head trauma or
                cerebral aneurysm. Control of bleeding in the cranial cavity procedures
                are identified by ICD-10-PCS procedure codes 0W310ZZ (Control bleeding
                in cranial cavity, open approach), 0W313ZZ (Control bleeding in cranial
                cavity, percutaneous approach) and 0W314ZZ (Control bleeding in cranial
                cavity, percutaneous endoscopic approach) and are currently assigned to
                the following MDCs and MS-DRGs.
                BILLING CODE 4120-01-P
                [[Page 25151]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.072
                BILLING CODE 4120-01-C
                 According to the requestor, procedures performed within the cranial
                cavity always involve drilling or cutting through the skull regardless
                of the
                [[Page 25152]]
                approach, therefore the three procedure codes identified (0W310ZZ,
                0W313ZZ, and 0W314ZZ) warrant assignment to the ``craniotomy'' MS-DRGs.
                 Our analysis of this grouping issue confirmed that when a procedure
                describing control of bleeding in the cranial cavity is reported with a
                principal diagnosis from MDC 01, these cases group to MS-DRGs 981, 982,
                and 983. Whenever there is a surgical procedure reported on the claim
                that is unrelated to the MDC to which the case was assigned based on
                the principal diagnosis, it results in a MS-DRG assignment to a
                surgical class referred to as ``unrelated operating room procedures''.
                 We examined claims data from the March 2020 update of the FY 2019
                MedPAR file and the September 2020 update of the FY 2020 MedPAR file
                for cases reporting any one of the three procedure codes (0W310ZZ,
                0W313ZZ or 0W314ZZ) in MS-DRGs 981 through 983 with a principal
                diagnosis from MDC 01. Our findings are shown in the following tables.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.074
                [GRAPHIC] [TIFF OMITTED] TP10MY21.075
                 As noted previously, the requestor asked that we consider
                reassignment of these cases to the craniotomy MS-DRGs (identified as
                MS-DRGs 23, 24, 25, 26, and 27). We therefore examined the data for all
                cases in MS-DRGs 23, 24, 25, 26, and 27. Our findings are shown in the
                following tables.
                [[Page 25153]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.076
                [GRAPHIC] [TIFF OMITTED] TP10MY21.077
                 As shown, in our analyses of the claims data for MS-DRGs 981
                through 983, we found a total of ten cases reporting procedures
                describing control of bleeding in cranial cavity with a principal
                diagnosis from MDC 01 in the March 2020 update of the FY 2019 MedPAR
                file, and a total of two cases reporting procedures describing control
                of bleeding in cranial cavity with a principal diagnosis from MDC 01 in
                the September 2020 update of the FY 2020 MedPAR file.
                 Our clinical advisors stated these procedures describing control of
                bleeding in the cranial cavity are consistent with the existing
                procedure codes included in the logic for case assignment to MS-DRGs
                25, 26, and 27, in addition to MS-DRG 23 (Craniotomy with Major Device
                Implant or Acute Complex CNS Principal Diagnosis with MCC or
                Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-DRG 24
                (Craniotomy with Major Device Implant or Acute Complex CNS Principal
                Diagnosis without MCC) that also describe procedures performed on
                structures located within the cranial cavity and are included in the
                range of MS-DRGs known as the ``craniotomy'' MS-DRGs. While the claims
                analysis based on the March 2020 update of the FY 2019 MedPAR file
                identified only ten cases and the September 2020 update of the FY 2020
                MedPAR file identified only two cases for which these procedures were
                reported as a stand-alone procedure resulting in assignment to MS-DRGs
                981 through 983, and the average length of stay and average costs for
                these cases vary in comparison to the average length of stay and
                average costs of all cases in MS-DRGs 23, 24, 25, 26, and 27, given the
                nature of head trauma cases, the resource use would be expected to vary
                based on the extent of the patient's injuries. We believe it is
                clinically appropriate to add these procedure codes describing control
                of bleeding in the cranial cavity to MS-DRGs 23, 24, 25, 26, and 27 in
                MDC 01.
                 Therefore, we are proposing to add procedure codes 0W310ZZ,
                0W313ZZ, and 0W314ZZ to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27
                (``craniotomy'' MS-DRGs) for FY 2022.
                 We also review the list of ICD-10-PCS procedures that, when in
                combination with their principal diagnosis code, result in assignment
                to MS-DRGs 981 through 983, or 987 through 989, to ascertain whether
                any of those procedures should be reassigned from one of those two
                groups of MS-DRGs to the other group of MS-DRGs based on average costs
                and the length of stay. We look at the data for trends such as shifts
                in treatment practice or reporting practice that would make the
                resulting MS-DRG assignment illogical. If we find these shifts, we
                would propose to move cases to keep the MS-DRGs clinically similar or
                to provide payment for the cases in a similar manner.
                 In addition to this internal review, we also consider requests that
                we receive to examine cases found to group to MS-DRGs 981 through 983
                or MS-DRGs 987 through 989 to determine if it would be appropriate for
                the cases to be reassigned from one of the MS-DRG groups to the other.
                 Based on the results of our review of the claims data from the
                March 2020 update of the FY 2019 MedPAR file and the September 2020
                update of the FY 2020 MedPAR file, as well as our review of the
                requests that we received to examine cases found to group to MS-DRGs
                981 through 983 or MS-DRGs 987 through 989, we are proposing to move
                the cases reporting the procedures codes described in this section of
                this rule from MS-DRGs 981 through 983 to MS-DRGs 987 through 989.
                [[Page 25154]]
                 As discussed in section II.D.3.a. of the preamble of this proposed
                rule, we received a request that we understood to be for our
                consideration of the reassignment of the following three procedure
                codes from Extensive O.R. procedures to Non-extensive O.R. procedures.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.078
                 In conducting our review of this request, our clinical advisors
                noted that ICD-10-PCS codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ currently
                group to MS-DRGs 981 through 983 when reported with a principal
                diagnosis that is not assigned to one of the MDCs to which these
                procedure codes are assigned. While our claims analysis of both the
                March 2020 update of the FY 2019 MedPAR file and the September 2020
                update of the FY 2020 MedPAR file did not identify any cases reporting
                any one of the three listed procedure codes in MS-DRGs 981, 982, or
                983, our clinical advisors believe that these procedures would be more
                appropriately designated as Non-extensive procedures because they are
                more consistent with other procedures on the Non-extensive procedure
                code list. They stated that these procedures do not consume the
                resources or require a similar level of technical complexity as the
                procedures on the Extensive O.R. procedures list.
                 Therefore, we are proposing to reassign the three procedure codes
                listed from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure
                Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC,
                respectively) to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure
                Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC,
                respectively) for FY 2022.
                 As discussed in section II.D.4.b. of the preamble of this proposed
                rule, we identified 17 procedure codes describing laser interstitial
                thermal therapy (LITT) that are currently designated as extensive O.R.
                procedures. In addition to those 17 procedure codes, we identified
                additional procedure codes describing LITT of various body parts that
                are also designated as extensive O.R. procedures. The ICD-10-PCS codes
                describing LITT of various body parts are as follows.
                [[Page 25155]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.079
                 Whenever one of these listed procedure codes is reported on a claim
                that is unrelated to the MDC to which the case was assigned based on
                the principal diagnosis, it currently results in assignment to MS-DRGs
                981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal
                Diagnosis with MCC, with CC, without CC/MCC, respectively). Our
                clinical advisors stated that all of the listed procedure codes warrant
                redesignation from the extensive procedure list and MS-DRGs 981, 982,
                and 983 to the non-extensive procedure list and to MS-DRGs 987, 988,
                and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with
                MCC, with CC, without CC/MCC, respectively). Specifically, our clinical
                advisors stated the procedures described by these codes are minimally
                invasive and are consistent with other ablation (root operation
                Destruction) type procedures that are designated as non-extensive
                procedures in the ICD-10-PCS classification.
                 In our analysis of claims from the March 2020 update of the FY 2019
                MedPAR file, we identified a total of six cases reporting procedure
                codes describing LITT of various body sites in MS-DRGs 981, 982, and
                983 with an average length of stay of 2.5 days and average costs of
                $7,734. Specifically, we found one case reporting procedure code
                DVY0KZZ (Laser interstitial thermal therapy of prostate) in MS-DRG 981
                with an average length of stay of 4.0 days and average costs of $7,348.
                For MS-DRG 982, we found five cases in which procedure codes describing
                LITT of various body sites were reported. The first case reported
                procedure code D0Y0KZZ (Laser interstitial thermal therapy of brain)
                with an average length of stay of 1.0 day and average costs of $4,142,
                the second case reported procedure code D0Y6KZZ (Laser interstitial
                thermal therapy of spinal cord) with an average length of stay of 3.0
                days and average costs of $20,007, the third case reported procedure
                code DDY1KZZ (Laser interstitial thermal therapy of stomach) with an
                average length of stay of 2.0 days and average costs of $3,424, the
                fourth case reported procedure code DDY7KZZ (Laser interstitial thermal
                therapy of rectum) with an average length of stay of 3.0 days and
                average costs of $3,735, and
                [[Page 25156]]
                the fifth case reported procedure code DVY0KZZ (Laser interstitial
                thermal therapy of prostate) with an average length of stay of 2.0 days
                and average costs of $7,750. There were no cases found to report
                procedures describing LITT in MS-DRG 983. Our findings are summarized
                in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.081
                 In our analysis of claims from the September 2020 update of the FY
                2020 MedPAR file, we identified one case reporting procedure code
                D0Y6KZZ (Laser interstitial thermal therapy of spinal cord) with an
                average length of stay of 6 days and average costs of $5,130, and two
                cases reporting procedure code DVY0KZZ (Laser interstitial thermal
                therapy of prostate) with an average length of stay of 8.5 days and
                average costs of $20,329 in MS-DRGs 981, 982, or 983. Although our
                claims analysis identified a limited number of cases reporting
                procedures describing LITT, our clinical advisors believe that these
                procedures would be more appropriately designated as Non-extensive
                procedures because they are more consistent with other procedures on
                the Non-extensive procedure code list.
                 Therefore, we are proposing to reassign the listed procedure codes
                describing LITT of various body parts from MS-DRGs 981, 982, and 983
                (Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
                with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989
                (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with
                MCC, with CC, and without CC/MCC, respectively) for FY 2022.
                 As also discussed in section II.D.4.b. of the preamble of this
                proposed rule, we identified five procedure codes describing repair of
                the esophagus that are currently designated as extensive O.R.
                procedures. The procedure codes are 0DQ50ZZ (Repair esophagus, open
                approach), 0DQ53ZZ (Repair esophagus, percutaneous approach), 0DQ54ZZ
                (Repair esophagus, percutaneous endoscopic approach), 0DQ57ZZ (Repair
                esophagus, via natural or artificial opening), and 0DQ58ZZ (Repair
                esophagus, via natural or artificial opening endoscopic). Whenever one
                of these five procedure codes is reported on a claim that is unrelated
                to the MDC to which the case was assigned based on the principal
                diagnosis, it currently results in assignment to MS-DRGs 981, 982, and
                983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with
                MCC, with CC, without CC/MCC, respectively). Our clinical advisors
                stated that three of these five procedures warrant redesignation from
                the extensive procedure list and MS-DRGs 981, 982, and 983 to the non-
                extensive procedure list and to MS-DRGs 987, 988, and 989 (Non-
                Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC,
                without CC/MCC, respectively). Specifically, our clinical advisors
                stated the procedures identified by procedure codes 0DQ53ZZ, 0DQ57ZZ,
                and 0DQ58ZZ do not involve the same utilization of resources with
                respect to the performance of the procedure in comparison to the
                procedures identified by procedure codes 0DQ50ZZ and 0DQ540ZZ. In our
                analysis of claims from the March 2020 update of the FY 2019 MedPAR
                file, we identified three cases reporting procedure code 0DQ58ZZ in MS-
                DRGs 981, 982, and 983 with an average length of stay of 14 days and
                average costs of $34,894. In our analysis of claims from the September
                2020 update of the FY 2020 MedPAR file, we identified two cases
                reporting procedure code 0DQ58ZZ in MS-DRGs 981, 982, or 983 with an
                average length of stay of 8 days and average costs of $12,037. Our
                clinical advisors believe that these procedures would be more
                appropriately designated as Non-extensive procedures because they are
                more consistent with other procedures on the Non-extensive procedure
                code list. Therefore, we are proposing to reassign these three
                procedure codes (0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ) from MS-DRGs 981, 982,
                and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis
                with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987,
                988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal
                Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY
                2022.
                 As discussed in section II.D.11.c.24. of the preamble of this
                proposed rule, we identified procedure code 0T9D0ZZ (Drainage of
                urethra, open approach) during our review of procedure code 0U9L0ZZ
                (Drainage of vestibular gland, open approach), which is currently
                designated as a non-O.R. procedure. We noted that the procedure
                described by procedure code 0T9D0ZZ represents the male equivalent of
                the female procedure described by procedure code 0U9L0ZZ. Procedure
                code 0T9D0ZZ is currently designated as an extensive O.R. procedure and
                is reported to describe procedures performed on the Cowper's
                (bulbourethral) gland in males. Whenever this procedure code is
                reported on a claim that is unrelated to the MDC to which the case was
                assigned based on the principal diagnosis, it currently results in
                assignment to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure
                Unrelated to Principal
                [[Page 25157]]
                Diagnosis with MCC, with CC, without CC/MCC, respectively).
                 Our clinical advisors stated that this procedure warrants
                redesignation from the extensive procedure list and MS-DRGs 981, 982,
                and 983 to the non-extensive procedure list and to MS-DRGs 987, 988,
                and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with
                MCC, with CC, without CC/MCC, respectively). Specifically, our clinical
                advisors stated that the procedure described by procedure code 0T9D0ZZ
                continues to warrant an O.R. designation because it is performed on
                deeper structures and requires a higher level of technical skill and it
                is a more complex procedure when compared to the non-O.R. procedure
                described by procedure code 0U9L0ZZ, however, abscess formation in the
                Cowper's (bulbourethral) glands is uncommon and can often be treated
                with ultrasound guided percutaneous aspiration. The need for open
                surgical management is rare and includes chronic infection unresponsive
                to non-operative management and complicated acute infection such as
                perineal fistula formation. Open surgical management would require use
                of the operating room for both appropriate anesthesia and for the
                resources required to perform the more invasive perineal surgical
                dissection. Therefore, our clinical advisors believe a non-extensive
                O.R. designation is suitable for this procedure.
                 We analyzed claims data from the March 2020 update of the FY 2019
                MedPAR file and the September 2020 update of the FY 2020 MedPAR file
                for cases reporting procedure code 0T9D0ZZ in MS-DRGs 981, 982, and
                983. We found one case in MS-DRG 981 with an average length of stay of
                8.0 days and average costs of $23,566 in the March 2020 update of the
                FY 2019 MedPAR file, and no cases in the September 2020 update of the
                FY 2020 MedPAR file. Although our claims analysis identified only one
                case reporting procedure code 0T9D0ZZ, our clinical advisors believe
                that these procedures would be more appropriately designated as Non-
                extensive procedures because they are more consistent with other
                procedures on the Non-extensive procedure code list.
                 Therefore, we are proposing to reassign procedure code 0T9D0ZZ from
                MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
                Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
                without CC/MCC, respectively) for FY 2022.
                11. Operating Room (O.R.) and Non-O.R. Issues
                a. Background
                 Under the IPPS MS-DRGs (and former CMS MS-DRGs), we have a list of
                procedure codes that are considered operating room (O.R.) procedures.
                Historically, we developed this list using physician panels that
                classified each procedure code based on the procedure and its effect on
                consumption of hospital resources. For example, generally the presence
                of a surgical procedure which required the use of the operating room
                would be expected to have a significant effect on the type of hospital
                resources (for example, operating room, recovery room, and anesthesia)
                used by a patient, and therefore, these patients were considered
                surgical. Because the claims data generally available do not precisely
                indicate whether a patient was taken to the operating room, surgical
                patients were identified based on the procedures that were performed.
                Generally, if the procedure was not expected to require the use of the
                operating room, the patient would be considered medical (non-O.R.).
                 Currently, each ICD-10-PCS procedure code has designations that
                determine whether and in what way the presence of that procedure on a
                claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure
                code is either designated as an O.R. procedure for purposes of MS-DRG
                assignment (``O.R. procedures'') or is not designated as an O.R.
                procedure for purposes of MS-DRG assignment (``non-O.R. procedures'').
                Second, for each procedure that is designated as an O.R. procedure,
                that O.R. procedure is further classified as either extensive or non-
                extensive. Third, for each procedure that is designated as a non-O.R.
                procedure, that non-O.R. procedure is further classified as either
                affecting the MS-DRG assignment or not affecting the MS-DRG assignment.
                We refer to these designations that do affect MS-DRG assignment as
                ``non O.R. affecting the MS-DRG.'' For new procedure codes that have
                been finalized through the ICD-10 Coordination and Maintenance
                Committee meeting process and are proposed to be classified as O.R.
                procedures or non-O.R. procedures affecting the MS-DRG, our clinical
                advisors recommend the MS-DRG assignment which is then made available
                in association with the proposed rule (Table 6B.--New Procedure Codes)
                and subject to public comment. These proposed assignments are generally
                based on the assignment of predecessor codes or the assignment of
                similar codes. For example, we generally examine the MS-DRG assignment
                for similar procedures, such as the other approaches for that
                procedure, to determine the most appropriate MS-DRG assignment for
                procedures proposed to be newly designated as O.R. procedures. As
                discussed in section II.D.13 of the preamble of this proposed rule, we
                are making Table 6B.--New Procedure Codes--FY 2022 available on the CMS
                website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. We also refer readers to the ICD-
                10 MS-DRG Version 38.1 Definitions Manual at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for detailed information regarding
                the designation of procedures as O.R. or non-O.R. (affecting the MS-
                DRG) in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG
                Index.
                 In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that, given
                the long period of time that has elapsed since the original O.R.
                (extensive and non-extensive) and non-O.R. designations were
                established, the incremental changes that have occurred to these O.R.
                and non-O.R. procedure code lists, and changes in the way inpatient
                care is delivered, we plan to conduct a comprehensive, systematic
                review of the ICD-10-PCS procedure codes. This will be a multi year
                project during which we will also review the process for determining
                when a procedure is considered an operating room procedure. For
                example, we may restructure the current O.R. and non O.R. designations
                for procedures by leveraging the detail that is now available in the
                ICD-10 claims data. We refer readers to the discussion regarding the
                designation of procedure codes in the FY 2018 IPPS/LTCH PPS final rule
                (82 FR 38066) where we stated that the determination of when a
                procedure code should be designated as an O.R. procedure has become a
                much more complex task. This is, in part, due to the number of various
                approaches available in the ICD-10-PCS classification, as well as
                changes in medical practice. While we have typically evaluated
                procedures on the basis of whether or not they would be performed in an
                operating room, we believe that there may be other factors to consider
                with regard to resource utilization,
                [[Page 25158]]
                particularly with the implementation of ICD-10.
                 We discussed in the FY 2020 IPPS/LTCH PPS proposed rule that as a
                result of this planned review and potential restructuring, procedures
                that are currently designated as O.R. procedures may no longer warrant
                that designation, and conversely, procedures that are currently
                designated as non-O.R. procedures may warrant an O.R. type of
                designation. We intend to consider the resources used and how a
                procedure should affect the MS-DRG assignment. We may also consider the
                effect of specific surgical approaches to evaluate whether to subdivide
                specific MS DRGs based on a specific surgical approach. We plan to
                utilize our available MedPAR claims data as a basis for this review and
                the input of our clinical advisors. As part of this comprehensive
                review of the procedure codes, we also intend to evaluate the MS-DRG
                assignment of the procedures and the current surgical hierarchy because
                both of these factor into the process of refining the ICD-10 MS-DRGs to
                better recognize complexity of service and resource utilization.
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58540 through
                58541), we provided a summary of the comments we had received in
                response to our request for feedback on what factors or criteria to
                consider in determining whether a procedure is designated as an O.R.
                procedure in the ICD-10-PCS classification system for future
                consideration.
                 In consideration of the PHE, we believe it may be appropriate to
                allow additional time for the claims data to stabilize prior to
                selecting the timeframe to analyze for this review. Additional time is
                also necessary as we continue to develop our process and methodology.
                Therefore, we will provide more detail on this analysis and the
                methodology for conducting this review in future rulemaking.
                 In this proposed rule, we are addressing requests that we received
                regarding changing the designation of specific ICD-10-PCS procedure
                codes from non-O.R. to O.R. procedures, or changing the designation
                from O.R. procedure to non-O.R. procedure. In this section of the rule
                we discuss the process that was utilized for evaluating the requests
                that were received for FY 2022 consideration. For each procedure, our
                clinical advisors considered--
                 Whether the procedure would typically require the
                resources of an operating room;
                 Whether it is an extensive or a nonextensive procedure;
                and
                 To which MS-DRGs the procedure should be assigned.
                 We note that many MS-DRGs require the presence of any O.R.
                procedure. As a result, cases with a principal diagnosis associated
                with a particular MS-DRG would, by default, be grouped to that MS-DRG.
                Therefore, we do not list these MS-DRGs in our discussion in this
                section of this rule. Instead, we only discuss MS-DRGs that require
                explicitly adding the relevant procedure codes to the GROUPER logic in
                order for those procedure codes to affect the MS-DRG assignment as
                intended. In cases where we are proposing to change the designation of
                procedure codes from non-O.R. procedures to O.R. procedures, we also
                are proposing one or more MS-DRGs with which these procedures are
                clinically aligned and to which the procedure code would be assigned.
                 In addition, cases that contain O.R. procedures will map to MS-DRG
                981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal
                Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-
                DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to
                Principal Diagnosis with MCC, with CC, and without CC/MCC,
                respectively) when they do not contain a principal diagnosis that
                corresponds to one of the MDCs to which that procedure is assigned.
                These procedures need not be assigned to MS-DRGs 981 through 989 in
                order for this to occur. Therefore, if requestors included some or all
                of MS-DRGs 981 through 989 in their request or included MS-DRGs that
                require the presence of any O.R. procedure, we did not specifically
                address that aspect in summarizing their request or our response to the
                request in this section of this rule.
                 For procedures that would not typically require the resources of an
                operating room, our clinical advisors determined if the procedure
                should affect the MS-DRG assignment.
                 We received several requests to change the designation of specific
                ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures,
                or to change the designation from O.R. procedures to non-O.R.
                procedures. In this section of this rule, we detail and respond to some
                of those requests. With regard to the remaining requests, our clinical
                advisors believe it is appropriate to consider these requests as part
                of our comprehensive review of the procedure codes as previously
                discussed.
                b. O.R. Procedures to Non-O.R. Procedures
                (1) Open Drainage of Subcutaneous Tissue and Fascia
                 One requestor identified the following ICD-10-PCS procedure code
                that describes the open drainage of right lower leg subcutaneous tissue
                and fascia, shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.082
                 In the ICD-10 MS-DRG Version 38.1 Definitions Manual, this ICD-10-
                PCS procedure code is currently recognized as an O.R. procedure for
                purposes of MS-DRG assignment. The requestor noted that this procedure
                consumes resources comparable to related ICD-10-PCS procedure code
                0J9N00Z (Drainage of right lower leg subcutaneous tissue and fascia
                with drainage device, open approach) that describes the open drainage
                of right lower leg subcutaneous tissue and fascia with a drainage
                device, which is currently designated as a Non-O.R. procedure. The
                requestor stated that these comparable procedures should be recognized
                similarly for purposes of MS-DRG assignment.
                 During our review of this issue, we identified 21 ICD-10-PCS
                procedure codes that describe the open drainage of subcutaneous tissue
                and fascia, shown in the following table that are clinically similar to
                ICD-10-PCS code 0J9N0ZZ, and are also designated as O.R.
                [[Page 25159]]
                procedures in the ICD-10 MS-DRG Version 38.1 Definitions Manual.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.083
                 We reviewed these procedures and our clinical advisors agree that
                procedures that describe the open drainage of subcutaneous tissue and
                fascia consume resources comparable to the related ICD-10-PCS procedure
                codes that describe the open drainage of subcutaneous tissue and fascia
                with a drainage device that are currently designated as non-O.R.
                procedures. These procedures do not typically require the resources of
                an operating room, and are not surgical in nature. Therefore, we are
                proposing to remove the 22 codes listed in the following table from the
                FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E--
                Operating Room Procedures and Procedure Code/MS-DRG Index as O.R.
                procedures. Under this proposal, these procedures would no longer
                impact MS-DRG assignment.
                [[Page 25160]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.084
                [GRAPHIC] [TIFF OMITTED] TP10MY21.085
                [[Page 25161]]
                c. Non-O.R. Procedures to O.R. Procedures
                (1) Percutaneous Introduction of Substance Into Cranial Cavity and
                Brain
                 One requestor identified ICD-10-PCS procedure code XW0Q316
                (Introduction of eladocagene exuparvovec into cranial cavity and brain,
                percutaneous approach, new technology group 6) that the requestor
                stated is currently not recognized as an O.R. procedure for purposes of
                MS-DRG assignment. The requestor recommended that this procedure be
                designated as an O.R. procedure because the procedure requires
                traversing the skull in order to place a substance within the cranial
                cavity or brain. The requestor noted that CMS disagreed with
                designating this procedure as an O.R. procedure last year in the
                absence of claims data; however, the requestor stated that because the
                skull must be opened by drilling or cutting a burr hole through the
                skull, this procedure warrants O.R. status similar to other
                transcranial procedures performed with an open or percutaneous approach
                that are classified as O.R. procedures.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                code XW0Q316 is currently designated as a non-O.R. procedure for
                purposes of MS-DRG assignment. We agree with the requestor that
                procedure code XW0Q316 describes a procedure that involves the creation
                of a burr hole in the skull. In the FY 2021 IPPS/LTCH PPS final rule
                (85 FR 58579 through 58580), we stated that, consistent with our annual
                process of assigning new procedure codes to MDCs and MS-DRGs, and
                designating a procedure as an O.R. or non-O.R. procedure, we reviewed
                the predecessor procedure code assignment. The predecessor code for
                procedure code XW0Q316 is procedure code 3E0Q3GC (Introduction of other
                therapeutic substance into cranial cavity and brain, percutaneous
                approach) which is designated as a non-O.R. procedure. In the absence
                of claims data, our clinical advisors also considered the indication
                for the specific procedure being described by the new procedure code,
                the treatment difficulty, and the resources utilized.
                 Upon further review and consideration, our clinical advisors agree
                that procedure code XW0Q316 describing a procedure that is performed by
                creating a burr hole in the skull warrants designation as an O.R.
                procedure consistent with other percutaneous procedures performed on
                the cranial cavity and brain body parts. Therefore, we are proposing to
                add this procedure code to the FY 2022 ICD-10 MS-DRGs Version 39
                Definitions Manual in Appendix E- Operating Room Procedures and
                Procedure Code/MS-DRG Index as an O.R. procedure, assigned to MS-DRGs
                628, 629, and 630 (Other Endocrine, Nutritional and Metabolic O.R.
                Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC
                10 (Endocrine, Nutritional and Metabolic Diseases and Disorders) and to
                MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to
                Principal Diagnosis with MCC, with CC and without MCC/CC,
                respectively).
                (2) Open Drainage of Maxilla and Mandible
                 One requestor identified three ICD-10-PCS procedure codes that
                describe the open drainage of maxilla or mandible that the requestor
                stated are currently not recognized as O.R. procedures for purposes of
                MS-DRG assignment. The three procedure codes are listed in the
                following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.086
                 The requestor stated that procedures that describe the open
                drainage of the maxilla or mandible should be designated as O.R.
                procedures because these procedures, indicated for diagnoses such as
                subperiosteal abscesses, are performed in the operating room under
                general anesthesia and involve making open incisions through muscle and
                stripping away the periosteum. The requestor identified procedure codes
                0W950ZZ (Drainage of lower jaw, open approach) and 0W940ZZ (Drainage of
                upper jaw, open approach) that are currently designated as O.R.
                procedures. The requestor noted that ICD-10-PCS guidelines instruct
                that the procedure codes in Anatomical Regions, General, can be used
                when the procedure is performed on an anatomical region rather than a
                specific body part, or on the rare occasion when no information is
                available to support assignment of a code to a specific body part. The
                requestor stated that because bone is a specific body part in ICD-10-
                PCS, procedure codes should be assigned for subperiosteal drainage of
                mandible and maxilla bones from table 0N9, Drainage of Head and Facial
                Bones, instead of codes from table 0W9, Drainage of Anatomical Regions,
                General, when these procedures are performed. Therefore, the requestor
                stated that procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ should also
                be recognized as O.R. procedures for purposes of MS-DRG assignment.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ are currently designated as non-
                O.R. procedures for purposes of MS-DRG assignment. Our clinical
                advisors reviewed this issue and disagree that the procedures
                describing the open drainage of the maxilla or mandible are typically
                performed in the operating room under general anesthesia. Our clinical
                advisors state that these procedures can be done in an oral surgeon's
                office or an outpatient setting and are rarely performed in the
                inpatient setting. Our clinical advisors also state a correlation
                cannot be made between procedures performed in general anatomic regions
                and procedures performed in specific body parts because these
                procedures coded with the general anatomic regions body part represent
                a broader range of procedures that cannot be coded to a specific body
                part. Therefore, we are proposing to maintain the current non-O.R.
                designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and
                0N9V0ZZ.
                (3) Thoracoscopic Extirpation of Pleural Cavities
                 One requestor identified ICD-10-PCS procedure codes 0WC94ZZ
                (Extirpation of matter from right pleural cavity, percutaneous
                endoscopic approach) and 0WCB4ZZ (Extirpation of matter from left
                pleural cavity, percutaneous
                [[Page 25162]]
                endoscopic approach) that the requestor stated are currently not
                recognized as O.R. procedures for purposes of MS-DRG assignment. The
                requestor stated that these procedures should be designated as O.R.
                procedures because they are thoracoscopic procedures that are always
                performed in the operating room under general anesthesia. The requestor
                stated procedure codes 0W994ZZ (Drainage of right pleural cavity,
                percutaneous endoscopic approach) and 0W9B4ZZ (Drainage of left pleural
                cavity, percutaneous endoscopic approach) are currently designated as
                O.R. procedures, therefore procedure codes 0WC94ZZ and 0WCB4ZZ should
                also be recognized as O.R. procedures for purposes of MS-DRG assignment
                because they utilize the same resources.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0WC94ZZ and 0WCB4ZZ are currently designated as non-O.R.
                procedures for purposes of MS-DRG assignment. Our clinical advisors
                reviewed this issue and disagree that procedure codes describing the
                thoracoscopic drainage of the pleural cavities should necessarily have
                the same designation as procedure codes describing the thoracoscopic
                extirpation of matter from the pleural cavities. We note that our
                review of the designation of ICD-10-PCS codes as an O.R. procedure or a
                non-O.R. procedure considers the resources used as well as whether that
                procedure should affect the MS-DRG assignment, and if so, in what way.
                Our clinical advisors state that thoracoscopic drainage of the pleural
                cavities is performed for distinct indications in clinically different
                scenarios. Our clinical advisors state that drainage is the process of
                taking out, or letting out, fluids and/or gases from a body part and is
                typically performed in the pleural cavity for indications such as
                congestive heart failure, infection, hemothorax and empyema. In
                contrast, the procedures describing the thoracoscopic extirpation of
                the pleural cavities are performed for a wider range of indications
                because the solid matter removed may be an abnormal byproduct of a
                biological function or a foreign body. Our clinical advisors note that
                the thoracoscopic extirpation of the pleural cavities is generally
                performed with other procedures such as heart transplant, lung
                transplant mechanical ventilation, and other major chest procedures and
                would not be the main reason for inpatient hospitalization or be
                considered the principal driver of resource expenditure.
                 Therefore, we are proposing to maintain the current non-O.R.
                designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ.
                (4) Open Pleural Biopsy
                 One requestor identified ICD-10-PCS procedure codes 0BBN0ZX
                (Excision of right pleura, open approach, diagnostic) and 0BBP0ZX
                (Excision of left pleura, open approach, diagnostic), that describe an
                open pleural biopsy that the requestor stated are performed in the
                operating room with general anesthesia. The requestor also stated that
                procedure codes 0BBN0ZZ (Excision of right pleura, open approach) and
                0BBP0ZZ (Excision of left pleura, open approach) describing open
                pleural biopsy for non-diagnostic purposes are justifiably designated
                as O.R. procedures. According to the requestor, these procedure codes
                describing an open pleural biopsy should be designated as O.R.
                procedures regardless of whether they are performed for diagnostic or
                therapeutic purposes.
                 We note that under the ICD-10-PCS procedure classification, biopsy
                procedures are identified by the 7th digit qualifier value
                ``diagnostic'' in the code description. In response to the requestor's
                suggestion that procedures performed for a pleural biopsy by an open
                approach, regardless of whether it is a diagnostic or therapeutic
                procedure, should be designated as an O.R. procedure, we examined
                procedure codes 0BBN0ZX, 0BBN0ZZ, 0BBP0ZX, and 0BBP0ZZ.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0BBN0ZZ and 0BBP0ZZ are currently designated as O.R. procedures,
                however, procedure codes 0BBN0ZX and 0BBP0ZX are not recognized as O.R.
                procedures for purposes of MS-DRG assignment. We agree with the
                requestor that procedure codes 0BBN0ZX and 0BBP0ZX would typically
                require the resources of an operating room. Our clinical advisors also
                agree that procedure codes 0BBN0ZX and 0BBP0ZX would typically require
                the resources of an operating room. Therefore, we are proposing to add
                these 2 procedure codes to the FY 2022 ICD-10 MS-DRGs Version 39
                Definitions Manual in Appendix E--Operating Room Procedures and
                Procedure Code/MS- DRG Index as O.R. procedures, assigned to MS-DRGs
                166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC,
                with CC, and without CC/MCC, respectively) in MDC 04 (Diseases and
                Disorders of the Respiratory System).
                (5) Percutaneous Revision of Intraluminal Devices
                 One requestor identified five ICD-10-PCS procedure codes that
                describe the percutaneous revision of intraluminal vascular devices
                that the requestor stated are currently not recognized as O.R.
                procedures for purposes of MS-DRG assignment. The five procedure codes
                are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.087
                 The requestor stated that the procedure codes that describe the
                percutaneous revision of intraluminal vascular devices within arteries,
                veins, and great vessels should be designated as O.R. procedures to
                compensate for the resources needed to perform these procedures. The
                requestor also stated procedures to reattach, realign, or otherwise
                revise intraluminal devices percutaneously require anesthesia,
                specialized equipment for intravascular visualization, significant
                skill, and time, therefore, it is important for these codes
                [[Page 25163]]
                to be designated with O.R. procedure status.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 02WY3DZ, 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ are currently
                designated as non-O.R. procedures for purposes of MS-DRG assignment. We
                agree with the requestor that these five ICD-10-PCS procedure codes
                typically require the resources of an operating room. Therefore, to the
                FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E--
                Operating Room Procedures and Procedure Code/MS-DRG Index, we are
                proposing to add code 02WY3DZ as an O.R. procedure assigned to MS-DRGs
                270, 271, and 272 (Other Major Cardiovascular Procedures, with MCC,
                with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and
                Disorders of the Circulatory System). We are also proposing to add
                codes 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ as O.R. procedures
                assigned to MS-DRGs 252, 253, and 254 (Other Vascular Procedures with
                MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and
                Disorders of the Circulatory System).
                (6) Occlusion of Left Atrial Appendage
                 One requestor identified nine ICD-10-PCS procedure codes that
                describe left atrial appendage closure (LAAC) procedures that the
                requestor stated are currently not recognized as O.R. procedures for
                purposes of MS-DRG assignment in all instances. The nine procedure
                codes are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.088
                 The requestor stated that these procedures are currently designated
                as non-O.R. procedures that route to surgical MS-DRGs only when
                assigned in combination with a principal diagnosis within MDC 05
                (Diseases and Disorders of the Circulatory System). The requestor
                stated these procedures should also be designated as O.R. procedures
                when assigned in combination with diagnoses outside of the circulatory
                system, such as sepsis or trauma, to compensate for the associated
                resource use, skill requirements, and device costs.
                 In the ICD-10 MS-DRG Version 38.1 Definitions Manual, the nine ICD-
                10-PCS procedure codes that describe left atrial appendage closure are
                currently recognized as non-O.R. procedures that affect the MS-DRG to
                which they are assigned. We refer readers to section II.D.5.d of the
                preamble of this proposed rule, where we address ICD-10-PCS procedure
                codes 02L70CK, 02L70DK, and 02L70ZK that describe a LAAC procedure
                performed with an open approach. These codes were discussed in response
                to a request to reassign these codes to MS-DRGs 228 and 229 (Other
                Cardiothoracic Procedures with and without MCC, respectively) and, for
                the reasons discussed, we are proposing to maintain the assignment in
                MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures
                with and without MCC, respectively) in MDC 05.
                 Our clinical advisors reviewed this related issue and believe the
                current designation of LAAC procedures as non-O.R. procedures that
                affect the assignment for MS-DRGs 273 and 274 is clinically appropriate
                to account for the subset of patients undergoing left atrial appendage
                closure specifically. LAAC is indicated and approved as a treatment
                option for patients diagnosed with atrial fibrillation, a heart rhythm
                disorder that can lead to cardiovascular blood clot formation, who are
                also at increased risk for stroke. LAAC procedures block off the left
                atrial appendage to prevent emboli that may form in the left atrial
                appendage from exiting and traveling to other sites in the vascular
                system, thereby preventing the occurrence of ischemic stroke and
                systemic thromboembolism. The ICD-10-CM diagnosis codes used to report
                atrial fibrillation are currently assigned to MDC 05 (Diseases and
                Disorders of the Circulatory System). Our clinical advisors believe
                that circumstances in which a patient is admitted for a principal
                diagnosis outside of MDC 05 and a left atrial appendage closure is
                performed as the only surgical procedure in the same admission are
                infrequent, and if they do occur, the LAAC procedure would not be a
                significant contributing factor in the increased intensity of resources
                needed for facilities to manage these complex cases. Our clinical
                advisors state LAAC procedures generally do not require the resources
                of an operating room. LAAC procedures are most often performed
                percutaneously in settings such as cardiac catheterization laboratories
                and take approximately one hour. When performed with an open approach
                or percutaneous endoscopic approach, these procedures share similar
                factors such as complexity, and resource
                [[Page 25164]]
                utilization with all other LAAC procedures. Therefore, we are proposing
                to maintain the current designation of ICD-10-PCS procedure codes
                02L70CK, 02L70DK, 02L70ZK, 02L73CK, 02L73DK, 02L73ZK, 02L74CK, 02L74DK,
                and 02L74ZK as non-O.R. procedures affecting the MS-DRGs to which they
                are assigned.
                (7) Arthroscopic Drainage of Joints
                 One requestor identified six ICD-10-PCS procedure codes that
                describe the percutaneous endoscopic drainage of joints that the
                requestor stated are currently not recognized as O.R. procedures for
                purposes of MS-DRG assignment. The six procedure codes are listed in
                the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.089
                 The requestor stated that these procedures should be designated as
                O.R. procedures because procedures describing the arthroscopic drainage
                of major joints such as knee, hip, and shoulder are performed in the
                operating room under general anesthesia. The requestor stated these
                procedures are indicated for conditions such as symptomatic septic/
                pyogenic arthritis, which can require inpatient admission for
                intravenous antibiotics and arthroscopic drainage to resolve infection.
                Therefore, the requestor stated it is reasonable for these arthroscopic
                procedures to be designated as O.R. procedures to compensate for
                operating room resources.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ are
                currently designated as non-O.R. procedures for purposes of MS-DRG
                assignment. Our clinical advisors reviewed this issue and disagree that
                procedures describing the percutaneous endoscopic drainage of major
                joints such as knee, hip, and shoulder are typically performed in the
                operating room under general anesthesia. With development of better
                instrumentation and surgical techniques, many patients now have
                arthroscopic procedures performed in an outpatient setting and return
                home several hours after the procedure. Our clinical advisors also
                state the percutaneous endoscopic drainage of joints can be performed
                using local or regional anesthesia, and general anesthesia is not
                always required. In cases where the patient is admitted for diagnoses
                such as septic/pyogenic arthritis, as identified by the requestor, the
                requirement for intravenous antibiotics would be the main reason for
                admission because the percutaneous endoscopic drainage procedure could
                be done as an outpatient. Therefore, we are proposing to maintain the
                current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ,
                0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ.
                (8) Arthroscopic Irrigation of Joints
                 One requestor identified ICD-10-PCS procedure codes 3E1U48X
                (Irrigation of joints using irrigating substance, percutaneous
                endoscopic approach, diagnostic) and 3E1U48Z (Irrigation of joints
                using irrigating substance, percutaneous endoscopic approach) that the
                requestor stated are currently not recognized as O.R. procedures for
                purposes of MS-DRG assignment. The requestor stated that these
                procedures should be designated as O.R. procedures because the
                arthroscopic irrigation of joints such as knee, hip, and shoulder is
                performed in the operating room under general anesthesia. The requestor
                states procedure codes 3E1U48X and 3E1U48Z are used to describe
                surgical joint irrigations in the absence of more definitive
                procedures, therefore procedure codes 3E1U48X and 3E1U48Z should be
                recognized as O.R. procedures for purposes of MS-DRG assignment.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 3E1U48X and 3E1U48Z are currently designated as non-O.R.
                procedures for purposes of MS-DRG assignment. Our clinical advisors
                reviewed this issue and disagree that procedure codes describing the
                arthroscopic irrigation of joints should be designated as O.R.
                procedures. Our clinical advisors note the arthroscopic irrigation of
                joints is rarely performed independently as a standalone procedure in
                the inpatient setting to be considered the principal driver of resource
                expenditure in those admissions. Instead, the arthroscopic irrigation
                of joints is generally performed with other definitive procedures such
                as debridement or synovectomy. We note that in the operative note sent
                by the requestor to support the requested change in O.R. status, the
                arthroscopic irrigation of the joint was performed along with a
                surgical debridement procedure. Therefore, we are proposing to maintain
                the current non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X
                and 3E1U48Z.
                (9) Percutaneous Reposition With Internal Fixation
                 One requestor identified four ICD-10-PCS procedure codes describing
                procedures performed on the sacroiliac and hip joints that involve
                percutaneous repositioning with internal fixation that the requestor
                stated are not recognized as O.R. procedures for purposes of MS-DRG
                assignment but warrant an O.R. designation. The procedure codes are
                listed in the following table.
                [[Page 25165]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.090
                 Our clinical advisors reviewed the procedures described by these
                four procedure codes and agree that these percutaneous reposition
                procedures involving internal fixation in the sacroiliac and hip joint
                warrant an O.R. designation. They noted that these procedures are major
                operations that would require the resources of an operating room,
                involve a higher level of technical complexity and a greater
                utilization of hospital resources.
                 Therefore, we are proposing to add the two procedure codes
                describing percutaneous reposition of the sacroiliac joint with
                internal fixation procedures (0SS734Z and 0SS834Z) to the FY 2022 ICD-
                10 MS-DRGs Version 39 Definitions Manual in Appendix E--Operating Room
                Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned
                to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and
                Connective Tissue O.R. Procedures with MCC, with CC, and without CC/
                MCC, respectively) in MDC 08 (Diseases and Disorders of the
                Musculoskeletal System and Connective Tissue) and to MS-DRGs 987, 988,
                and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis
                with MCC, with CC and without MCC/CC, respectively). We are also
                proposing to add the two procedure codes describing percutaneous
                reposition of the hip joint with internal fixation procedures (0SS934Z
                and 0SSB34Z) to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions
                Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-
                DRG Index as O.R. procedures, assigned to MS-DRGs 480, 481, and 482
                (Hip and Femur Procedures Except Major Joint with MCC, with CC, and
                without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the
                Musculoskeletal System and Connective Tissue) and to MS-DRGs 987, 988,
                and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis
                with MCC, with CC and without MCC/CC, respectively).
                (10) Open Insertion and Removal of Spacer Into Shoulder Joint
                 One requestor identified four ICD-10-PCS procedure codes describing
                procedures performed on the shoulder joint that involve the insertion
                or removal of a spacer by an open approach that the requestor stated
                are not recognized as O.R. procedures for purposes of MS-DRG
                assignment. The procedure codes are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.091
                 According to the requestor, insertion and removal of joint spacers
                from the hips and knees are designated with an O.R. procedure status
                and although similar procedures performed on the shoulder joint may be
                performed less frequently, these procedures warrant an O.R. designation
                because they are performed in the operating room under general
                anesthesia. During our review, we noted that the following procedure
                codes describing procedures performed on the shoulder joint that
                involve the insertion or removal of a spacer by a percutaneous
                endoscopic approach are also not recognized as O.R. procedures for
                purposes of MS-DRG assignment.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.092
                [[Page 25166]]
                 Our clinical advisors reviewed the procedures described by these
                eight procedure codes and agree that these procedures involving the
                insertion or removal of a spacer in the shoulder joint with an open or
                percutaneous endoscopic approach warrant an O.R. designation. They
                noted that the insertion of a spacer is typically performed to treat an
                infection at the site of a previously placed prosthesis and the removal
                of a spacer is typically performed once the infection is healed and the
                site is ready for a new prosthetic replacement or to exchange for a new
                spacer if the infection is not yet healed.
                 Therefore, we are proposing to add the listed procedure codes
                describing the insertion or removal of spacer in the shoulder joint to
                the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix
                E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R.
                procedures, assigned to MS-DRGs 510, 511, and 512 (Shoulder, Elbow or
                Forearm Procedures, Except Major Joint Procedures with MCC, with CC,
                and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of
                the Musculoskeletal System and Connective Tissue) and to MS-DRGs 987,
                988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal
                Diagnosis with MCC, with CC and without MCC/CC, respectively).
                (11) Open/Percutaneous Extirpation of Jaw
                 One requestor identified four ICD-10-PCS procedure codes that
                describe the extirpation of matter from the upper or lower jaw that the
                requestor stated are currently not recognized as O.R. procedures for
                purposes of MS-DRG assignment. The four procedure codes are listed in
                the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.093
                 The requestor stated that the procedure codes that describe the
                extirpation of matter from the upper or lower jaw by an open or
                percutaneous endoscopic approach should be designated as O.R.
                procedures. The requestor stated these procedures would commonly be
                performed under general anesthesia and require the resources of an
                operating room. The requestor also stated that these ICD-10-PCS codes
                were specifically created to describe the surgical evacuation of solid
                matter from deep jaw structures therefore, it is important for these
                codes to be designated with O.R. procedure status.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ are currently designated as
                non-O.R. procedures for purposes of MS-DRG assignment. We agree with
                the requestor that these four ICD-10-PCS procedure codes typically
                require the resources of an operating room. Therefore, to the FY 2022
                ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E--Operating
                Room Procedures and Procedure Code/MS-DRG Index, we are proposing to
                add codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ as O.R. procedures
                assigned to MS-DRGs 143, 144 and 145 (Other Ear, Nose, Mouth and Throat
                O.R. procedures, with MCC, with CC, and without CC/MCC, respectively)
                in MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat).
                (12) Open Extirpation of Subcutaneous Tissue and Fascia
                 One requestor identified 22 ICD-10-PCS procedure codes that
                describe the open extirpation of matter from the subcutaneous tissue
                and fascia that the requestor stated are currently not recognized as
                O.R. procedures for purposes of MS-DRG assignment. The 22 procedure
                codes are listed in the following table.
                [[Page 25167]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.094
                 The requestor stated that procedure codes that describe the open
                extirpation of matter from the subcutaneous tissue and fascia should be
                designated as O.R. procedures because these procedures are performed
                through open incisions with direct visualization of subcutaneous tissue
                and fascia in the operating room under general anesthesia. The
                requestor noted procedure codes that describe the open drainage of
                subcutaneous tissue and fascia and use comparable resources are
                currently designated as O.R. procedures. The requestor noted that root
                operation ``Drainage'' is assigned when fluid is drained; and root
                operation of ``Extirpation'' is assigned when any of the substance
                evacuated is solid. The requestor stated whether the evacuated
                substance is fluid, gelatinous, or solid, a procedure involving an open
                incision with direct visualization of subcutaneous tissue and fascia
                for evacuation of substances should be classified as an O.R. procedure.
                Therefore, the requestor stated that these procedures should also be
                recognized as O.R. procedures for purposes of MS-DRG assignment.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, the 22 ICD-
                10-PCS procedure codes listed in the table are currently designated as
                non-O.R. procedures for purposes of MS-DRG assignment. While we
                disagree that drainage procedures are comparable to extirpation
                procedures, we agree with the requestor that these 22 ICD-10-PCS
                procedure codes typically require the resources of an operating room.
                Our clinical advisors state that drainage is the process of taking out,
                or letting out, fluids and/or gases from a body part and is typically
                performed for indications such as abscess, infection, and other
                systemic conditions. In contrast, extirpation procedures are performed
                for a wider range of indications because the solid matter removed may
                be an abnormal byproduct of a biological function or a retained foreign
                body. Therefore, to the FY 2022 ICD-10 MS-DRG Version 39 Definitions
                Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-
                DRG Index, we are proposing to add the 22 ICD-10-PCS listed previously
                as O.R. procedures assigned to MS-DRGs 579, 580 and 581 (Other Skin,
                Subcutaneous Tissue and Breast Procedures, with MCC, with CC, and
                without CC/MCC, respectively) in MDC 09 (Diseases and Disorders of the
                Skin, Subcutaneous Tissue and Breast) and MS-DRGs 907, 908, and 909
                (Other O.R. Procedures for Injuries with MCC, with CC, and without CC/
                MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of
                Drugs).
                (13) Open Revision and Removal of Devices From Subcutaneous Tissue and
                Fascia
                 One requestor identified six ICD-10-PCS procedure codes describing
                open revision and removal of neurostimulator generators, monitoring
                devices, and totally implantable vascular access devices (TIVADs)
                procedures that are not currently designated as O.R. procedures for
                purposes of MS-DRG assignment. The six procedure codes are listed in
                the following table.
                [[Page 25168]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.096
                 The requestor stated that although removal of these devices is
                often performed in outpatient surgery, device complications can require
                removal or revision during inpatient hospitalizations. The requestor
                indicated it is reasonable for these open procedures to be designated
                as O.R. procedures to compensate for operating room resources during
                such inpatient stays.
                 Our clinical advisors reviewed this request and do not agree that
                these procedures warrant an O.R. designation. They noted that these
                procedures are generally performed in the outpatient setting and when
                performed during a hospitalization, it is typically in conjunction with
                another O.R. procedure. Therefore, we are proposing to maintain the
                current non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z,
                0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z for FY 2022.
                (14) Open Insertion of Feeding Device
                 One requestor identified ICD-10-PCS procedure code 0DHA0UZ
                (Insertion of feeding device into jejunum, open approach) that the
                requestor stated is currently not recognized as an O.R. procedure for
                purposes of MS-DRG assignment. The requestor stated the open insertion
                of a feeding device into the jejunum should be designated as an O.R.
                procedure because this procedure is performed in the operating room
                under general anesthesia. The requestor noted comparable procedure code
                0DH60UZ (Insertion of feeding device into stomach, open approach) is
                currently designated as an O.R. procedure. Therefore, the requestor
                stated that procedure code 0DHA0UZ should also be recognized as an O.R.
                procedure for purposes of MS-DRG assignment.
                 Our analysis of this issue confirmed that in the ICD-10 MS-DRG
                Version 38.1 Definitions Manual, for purposes of MS-DRG assignment,
                0DHA0UZ is recognized as a non-O.R. procedure and 0DH60UZ is currently
                recognized as an O.R. procedure. In reviewing this request, we also
                identified the following four related codes:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.097
                 In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are
                currently recognized as non-O.R. procedure for purposes of MS-DRG
                assignment. While we agree with the requestor that procedures
                describing the open insertion of a feeding device into the jejunum are
                comparable to procedures describing the open insertion of a feeding
                device into the stomach, we do not agree that these procedures should
                be designated as O.R. procedures. Our clinical advisors state the
                procedures that describe the open insertion of a feeding device into
                the jejunum or the stomach should instead have the same designation as
                the related ICD-10-PCS procedure codes that describe the open insertion
                of a feeding device into the esophagus, small intestine, duodenum and
                ileum that are currently designated as non-O.R. procedures.
                 With advancements in procedural techniques, feeding devices are
                most commonly placed using a percutaneous endoscopic approach. Our
                clinical advisors state feeding devices are usually not placed using an
                open surgical approach; this approach is
                [[Page 25169]]
                generally only used if the patient requires another surgical procedure
                at the same time. When placed at the same time as another surgical
                procedure, our clinical advisors state the surgical procedure, as the
                main determinant of resource use for those cases, should drive the MS-
                DRG assignment, not the procedure that describes the open insertion of
                a feeding device. For these reasons, our clinical advisors state
                procedures that describe the open insertion of a feeding device in the
                gastrointestinal system should all have the same non-O.R. designation
                in the ICD-10 MS-DRGs Version 39 for coherence.
                 Therefore, we are proposing to maintain the current non-O.R.
                designation of ICD-10-PCS procedure code 0DHA0UZ. We are also proposing
                to remove ICD-10-PCS procedure code 0DH60UZ from the FY 2022 ICD-10 MS-
                DRG Version 39 Definitions Manual in Appendix E--Operating Room
                Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under
                this proposal, this procedure would no longer impact MS-DRG assignment.
                (15) Laparoscopic Insertion of Feeding Tube
                 One requestor identified ICD-10-PCS procedure codes 0DH64UZ
                (Insertion of feeding device into stomach, percutaneous endoscopic
                approach) and 0DHA4UZ (Insertion of feeding device into jejunum,
                percutaneous endoscopic approach) that the requestor stated are
                currently not recognized as O.R. procedures for purposes of MS-DRG
                assignment. The requestor stated the procedures describing the
                percutaneous endoscopic insertion of a feeding device into the stomach
                or the jejunum should be designated as O.R. procedures because these
                procedures are performed in the operating room under general
                anesthesia. The requestor stated all laparoscopic procedures,
                regardless if they are diagnostic or therapeutic, should be classified
                as O.R. procedures to compensate for operating room resources.
                 Our analysis of this issue confirmed that in the ICD-10 MS-DRG
                Version 38.1 Definitions Manual, 0DH64UZ and 0DHA4UZ are currently
                designated as non-O.R. procedures for purposes of MS-DRG assignment. In
                reviewing this request, we also identified the following four related
                codes:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.098
                 In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are
                currently recognized as non-O.R. procedures for purposes of MS-DRG
                assignment. Our clinical advisors reviewed this request and do not
                agree that unilaterally all laparoscopic procedures should be
                designated as O.R. procedures. While the procedural approach is an
                important consideration in the designation of a procedure, there are
                other clinical factors such as the site of procedure, the procedure
                complexity, and resource utilization that should also be considered. In
                this regard, our clinical advisors indicated that codes 0DH64UZ and
                0DHA4UZ describing the percutaneous endoscopic insertion of a feeding
                device into the stomach or the jejunum, do not require the resources of
                an operating room, are not surgical in nature, and are generally
                performed in the outpatient setting. The percutaneous endoscopic
                insertion of a feeding device also does not require general anesthesia.
                As opposed to being rendered unconscious, patients can receive a local
                anesthetic (usually a lidocaine spray), an intravenous (IV) pain
                reliever, and a mild sedative if needed. Patients receiving these
                devices usually return home the same day after placement, unless they
                are in the hospital for treatment of another condition.
                 Our clinical advisors state the percutaneous endoscopic insertion
                of a feeding device into the stomach or the jejunum is comparable to
                the related ICD-10-PCS procedure codes that describe the insertion of
                feeding devices of other gastrointestinal system body parts that are
                currently designated as non-O.R. procedures. Our clinical advisors
                believe all procedures that describe the percutaneous endoscopic
                insertion of a feeding device in the gastrointestinal system should
                continue to have the same non-O.R. designation in the ICD-10 MS-DRGs
                Version 39 for coherence. Therefore, for the reasons discussed, we are
                proposing to maintain the current non-O.R. designation of ICD-10-PCS
                procedure codes 0DH64UZ and 0DHA4UZ.
                (16) Endoscopic Fragmentation and Extirpation of Matter of Urinary
                Tract
                 One requestor sent two separate but related requests related to
                endoscopic procedures performed in the urinary system. With regard to
                the first request, the requestor identified six ICD-10-PCS procedure
                codes that describe endoscopic fragmentation in the kidney pelvis,
                ureter, bladder, and bladder neck that the requestor stated are
                currently not recognized as O.R. procedures for purposes of MS-DRG
                assignment. The six procedure codes are listed in the following table.
                [[Page 25170]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.099
                 The requestor stated that these procedures should be designated as
                O.R. procedures because procedures such as the endoscopic fragmentation
                of calculi within the kidney pelvis, ureter, bladder, and bladder neck
                are performed in the operating room under anesthesia. The requestor
                stated that procedures that describe the endoscopic extirpation of
                calculi from the kidney pelvis or ureter use comparable resources, and
                are designated as O.R. procedures. Therefore, the requestor asserted it
                is reasonable that procedure codes that describe endoscopic
                fragmentation in kidney pelvis, ureter, bladder, and bladder neck also
                be designated as O.R. procedures.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and 0TFC8ZZ are
                designated as non-O.R. procedures for purposes of MS-DRG assignment.
                Our clinical advisors reviewed this issue and disagree that procedures
                describing the endoscopic fragmentation of calculi within the kidney
                pelvis, ureter, bladder, and bladder neck are typically performed in
                the operating room. In endoscopic fragmentation procedures in the
                kidney pelvis, ureter, bladder, and bladder neck, the scope is passed
                through a natural or artificial orifice. The procedure is not surgical
                in nature and involves no skin incisions. With advancements in scope
                size, deflection capabilities, video imaging, and instrumentation, many
                patients now have these endoscopic urinary procedures performed in an
                outpatient setting, instead of the inpatient setting. Therefore, we are
                proposing to maintain the current non-O.R. designation of ICD-10-PCS
                procedure codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and
                0TFC8ZZ.
                 In the second request, the requestor also identified two ICD-10-PCS
                procedure codes that describe endoscopic extirpation of matter from the
                bladder and bladder neck that the requestor stated are also currently
                not recognized as O.R. procedures for purposes of MS-DRG assignment.
                The two procedure codes are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.100
                 The requestor stated that these procedures also should be
                designated as O.R. procedures because they performed in the operating
                room under anesthesia.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0TCB8ZZ and 0TCC8ZZ are currently designated as a non-O.R.
                procedure for purposes of MS-DRG assignment. To review the request to
                designate 0TCB8ZZ and 0TCC8ZZ as O.R. procedures and in response to the
                requestor's suggestion that resource consumption is comparable in
                procedures describing endoscopic fragmentation in the urinary system
                and procedures describing the endoscopic extirpation in the urinary
                system, we examined the following procedure codes:
                [[Page 25171]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.101
                 In the ICD-10 MS-DRG Version 38.1 Definitions Manual, these six
                ICD-10-PCS procedure codes are currently recognized as O.R. procedures
                for purposes of MS-DRG assignment. Our clinical advisors indicated that
                these procedures are not surgical in nature. In endoscopic extirpation
                procedures, the scope enters the urinary tract through the urethra,
                which is the tube that carries urine out of the body, or through an
                artificial orifice. Our clinical advisors state the urinary system is
                one conduit so the scope continues to pass through the urethra,
                bladder, and into the ureter or kidney (if necessary) to access the
                stone. For that reason, the procedures describing endoscopic
                extirpation from a urinary body part should all have the same non-O.R.
                designation in the ICD-10 MS-DRGs Version 39 for coherence.
                 Therefore, we are proposing to maintain the current non-O.R.
                designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ. We are
                also proposing to remove ICD-10-PCS procedure codes 0TC08ZZ, 0TC18ZZ,
                0TC38ZZ, 0TC48ZZ, 0TC68ZZ, and 0TC78ZZ from the FY 2022 ICD-10 MS-DRG
                Version 39 Definitions Manual in Appendix E--Operating Room Procedures
                and Procedure Code/MS-DRG Index as O.R. procedures. Under this
                proposal, these procedures would no longer impact MS-DRG assignment.
                (17) Endoscopic Removal of Ureteral Stent
                 One requestor identified ICD-10-PCS procedure code 0TP98DZ (Removal
                of intraluminal device from ureter, via natural or artificial opening
                endoscopic) that the requestor stated is not recognized as an O.R.
                procedure for purposes of MS-DRG assignment. The requestor suggested
                that this procedure warrants an O.R. designation because the procedure
                code describes a procedure that is performed in the operating room with
                anesthesia. The requestor stated that while most ureteral stents can be
                removed by string, some complicated cases require endoscopic removal
                using forceps in the operating room under general anesthesia and may be
                performed during inpatient stays precipitated by severe urinary tract
                infection, sepsis, or urinary obstructions. The requestor asserted that
                procedure codes for insertion of ureteral stent(s) via a ureteroscopic,
                endoscopic approach have been justifiably designated as O.R. procedures
                because they are performed in the O.R. under anesthesia. Therefore, the
                requestor suggested it is reasonable for endoscopic removal of the
                stent to be designated with OR procedure status to compensate for
                operating room resources and anesthesia.
                 Our clinical advisors reviewed this procedure and do not agree that
                it warrants an O.R. designation. They noted that this procedure is
                generally not the focus of the admission when it is performed and does
                not reflect the technical complexity or resource intensity in
                comparison to other procedures that are designated as O.R. procedures.
                Therefore, we are proposing to maintain the current non-O.R.
                designation for procedure code 0TP98DZ for FY 2022.
                (18) Endoscopic/Transorifice Inspection of Ureter
                 One requestor identified ICD-10-PCS procedure code 0TJ98ZZ
                (Inspection of ureter, via natural or artificial opening endoscopic),
                that describes procedures involving endoscopic viewing of the ureter
                that the requestor stated is currently not recognized as an O.R.
                procedure for purposes of MS-DRG assignment.
                 The requestor stated this ureteroscopy procedure is performed in
                the operating room with anesthesia. According to the requestor, the
                inspection of ureter procedure code is assigned when obstruction is
                found during the ureteroscopy and procedures to break up
                (fragmentation), remove calculi (extirpation), or place a ureteral
                stent cannot be performed.
                 Our clinical advisors reviewed this procedure and disagree that it
                warrants an O.R. designation. They noted that this procedure typically
                does not require hospitalization and is generally not the reason for
                the patient's admission since it is often performed in connection with
                another O.R. procedure when it is performed. Therefore, we are
                proposing to maintain the current non-O.R. designation for procedure
                code 0TJ789ZZ for FY 2022.
                (19) Endoscopic Biopsy of Ureter and Kidney
                 One requestor identified six ICD-10-PCS procedure codes that
                describe endoscopic biopsy procedures performed on the ureter and
                kidney structures that the requestor stated are currently not
                recognized as O.R. procedures for purposes of MS-DRG assignment.
                According to the requestor, regardless of whether it is a diagnostic or
                therapeutic procedure, these procedures should be designated as O.R.
                procedures because the procedures utilize operating room, anesthesia
                and recovery room resources. The requestor stated that after the
                surgeon places the scope into the bladder that ureteral orifices must
                be identified and instruments carefully navigated to obtain excisional
                biopsies from within the ureter or further within the kidney.
                [[Page 25172]]
                The six procedure codes are listed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.102
                 We note that under the ICD-10-PCS procedure classification, biopsy
                procedures are identified by the 7th digit qualifier value
                ``diagnostic'' in the code description.
                 Our clinical advisors do not agree that endoscopic biopsy
                procedures performed on the ureter and kidney structures warrant an
                O.R. designation. They stated these procedures are typically not the
                focus for the patient's admission and are frequently performed in
                conjunction with another O.R. procedure. Therefore, we are proposing to
                maintain the current non-O.R. designation for procedure codes 0TB08ZX,
                0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, and 0TB78ZX for FY 2022.
                (20) Transorifice Insertion of Ureteral Stent
                 One requestor identified three ICD-10-PCS procedure codes that the
                requestor stated are not recognized as O.R. procedures for purposes of
                MS-DRG assignment. The requestor suggested that the procedure described
                by these procedure codes warrants an O.R. designation because it
                involves the insertion of an indwelling ureteral stent through a
                nephrostomy with image-guidance in the interventional radiology suite.
                According to the requestor, image-guided technology now allows
                placement of ureteral stents through nephrostomy tracts. The requestor
                stated this procedure may or may not be performed in the operating
                room, however, it involves placement of device(s), interventional
                radiology resources, sedation, and continuous monitoring of vital
                signs. The three procedure codes are shown in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.103
                 Our clinical advisors reviewed this request and do not agree that
                this procedure warrants an O.R. designation. They noted that this
                procedure is not surgical in nature, does not require the resources of
                an operating room and is not a technically complex procedure requiring
                increased hospital resources. Therefore, we are proposing to maintain
                the current non-O.R. designation for procedure codes 0T767DZ, 0T777DZ,
                and 0T787DZ for FY 2022.
                (21) Percutaneous Insertion of Ureteral Stent
                 One requestor identified three ICD-10-PCS procedure codes that the
                requestor stated are not recognized as O.R. procedures for purposes of
                MS-DRG assignment. The requestor suggested that the procedure described
                by these procedure codes warrants an O.R. designation because the
                procedure is typically performed following a failed ureteral stent
                insertion procedure in the operating room, which can only be reported
                as a cystoscopy or ureteroscopy, neither of which are designated as
                O.R. procedures. According to the requestor, percutaneous ureteral
                stenting through the abdominal wall is subsequently performed in an
                interventional radiology suite with image-guidance, sedation, and
                continuous vital sign monitoring. The three procedure codes are shown
                in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.104
                [[Page 25173]]
                 Our clinical advisors reviewed this request and do not agree that
                the procedure warrants an O.R. designation. They noted that this
                procedure is not surgical in nature, does not involve technical
                complexity or require the resources of an operating rom. Therefore, we
                are proposing to maintain the current non-O.R. designation for
                procedure codes 0T763DZ, 0T773DZ, and 0T783DZ for FY 2022.
                (22) Endoscopic Dilation of Urethra
                 One requestor identified ICD-10-PCS procedure code 0T7D8DZ
                (Dilation of urethra with intraluminal device, via natural or
                artificial opening endoscopic) that the requestor stated is not
                recognized as an O.R. procedure for purposes of MS-DRG assignment. The
                requestor suggested that this procedure warrants an O.R. designation
                because the procedure code describes a procedure that utilizes the
                UroLift[supreg] System, a minimally invasive technology to treat lower
                urinary tract symptoms (LUTS) due to benign prostatic hyperplasia
                (BPH). According to the requestor, the technology is placed
                endoscopically within the prostatic urethra in the operating room under
                anesthesia.
                 Our clinical advisors reviewed this request and do not agree that
                the procedure warrants an O.R. designation. They noted that this
                procedure is performed without incision, resection or thermal injury to
                the prostate and is primarily performed in the outpatient setting. It
                is generally not the cause for the patient's admission and utilization
                of resources when it is performed. Therefore, we are proposing to
                maintain the current non-O.R. designation for procedure code 00T7D8DZ
                for FY 2022.
                (23) Open Repair of Scrotum
                 One requestor identified ICD-10-PCS procedure code 0VQ50ZZ (Repair
                scrotum, open approach) that the requestor stated is not recognized as
                an O.R. procedure for purposes of MS-DRG assignment. The requestor
                suggested that this procedure warrants an O.R. designation because it
                involves repair of scrotal tissue deeper than the skin with direct
                visualization and utilizes general anesthesia in the operating room.
                 Our clinical advisors do not agree that open repair of the scrotum
                merits an O.R. designation. They stated this procedure would not
                typically require the resources of an operating room and would
                generally not be a contributing factor impacting hospital resource use
                during the patient's admission when it is performed. Therefore, we are
                proposing to maintain the current non-O.R. designation for procedure
                code 0VQ50ZZ for FY 2022.
                (24) Open Drainage of Vestibular Gland
                 One requestor identified ICD-10-PCS procedure code 0U9L0ZZ
                (Drainage of vestibular gland, open approach) that describes a
                procedure commonly performed for the treatment of an abscess that the
                requestor stated is performed in the operating room under general
                anesthesia and therefore warrants an O.R designation. The requestor
                stated this procedure is comparable to the procedure described by
                procedure code 0UBL0ZZ (Excision of vestibular gland, open approach)
                which is currently designated as an O.R. procedure.
                 During our review of procedure code 0U9L0ZZ, we also examined
                procedure codes 0U9L0ZX (Drainage of vestibular gland, open approach,
                diagnostic), 0U9LXZX (Drainage of vestibular gland, external approach,
                diagnostic), and 0UBL0ZZ. Separately, we reviewed procedure code
                0T9D0ZZ (Drainage of urethra, open approach) because it represents the
                male equivalent of the female procedure described by procedure code
                0U9L0ZZ.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                codes 0T9D0ZZ, 0U9L0ZX, 0U9LXZX, and 0UBL0ZZ are currently designated
                as O.R. procedures, however, procedure code 0U9L0ZZ is not recognized
                as an O.R. procedure for purposes of MS-DRG assignment. We examined
                procedure code 0U9L0ZZ and do not believe this drainage procedure
                warrants an O.R. designation, nor do we agree that this drainage of the
                vestibular gland procedure (0U9L0ZZ) is comparable to an excision of
                the vestibular gland procedure (0UBL0ZZ), which is currently designated
                as an O.R. procedure.
                 In the ICD-10-PCS classification, drainage is defined as taking or
                letting out fluids and/or gases from a body part and excision is
                defined as cutting out or off, without replacement, a portion of a body
                part. Therefore, the classification specifically defines and
                distinguishes the underlying objectives of each distinct procedure. Our
                clinical advisors stated a drainage procedure is frequently performed
                in the outpatient setting and is generally not the cause for the
                patient's admission and utilization of resources when it is performed.
                Drainage of the vestibular gland, also known as Bartholin's glands, is
                typically indicated when a cyst or abscess is present and may or may
                not involve the placement of a Word catheter. Conversely, excision of
                the vestibular gland is not considered an office-based procedure and is
                generally reserved for a vulvar mass or for patients who have not
                responded to more conservative attempts to create a drainage tract. In
                addition, after review, our clinical advisors recommended changing the
                O.R. status for procedure codes 0U9L0ZX and 0U9LXZX from O.R. to non-
                O.R. for similar reasons. These procedures do not typically require the
                resources of an operating room.
                 Therefore, we are proposing to remove procedure codes 0U9L0ZX and
                0U9LXZX from the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual
                in Appendix E- Operating Room Procedures and Procedure Code/MS-DRG
                Index as O.R. procedures. Under this proposal, these procedure codes
                would no longer impact MS-DRG assignment. We refer the reader to
                section II.D.10 of the preamble of this proposed rule for further
                discussion related to procedure code 0T9D0ZZ.
                (25) Transvaginal Repair of Vagina
                 One requestor identified ICD-10-PCS procedure code 0UQG7ZZ (Repair
                vagina, via natural or artificial opening) that the requestor stated is
                currently not recognized as an O.R. procedure for purposes of MS-DRG
                assignment. The requestor stated that procedures described by this code
                such as the non-obstetric transvaginal repair of the vaginal cuff and
                the non-obstetric transvaginal repair of vaginal lacerations should be
                designated as O.R. procedures because these procedures are performed in
                the operating room under general anesthesia. The requestor noted
                procedure codes 0USG7ZZ (Reposition vagina, via natural or artificial
                opening), 0UBG7ZZ (Excision of vagina, via natural or artificial
                opening), and 0UQG8ZZ (Repair vagina, via natural or artificial opening
                endoscopic) are currently designated as O.R. procedures, therefore
                procedure code 0UQG7ZZ should also be recognized as an O.R. procedure
                for purposes of MS-DRG assignment.
                 In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
                code 0UQG7ZZ is currently designated as a non-O.R. procedure for
                purposes of MS-DRG assignment. Our clinical advisors reviewed this
                issue and disagree that a correlation can be made between procedures
                described as the transvaginal repair of the vagina and the procedures
                described by ICD-10-PCS codes 0USG7ZZ, 0UBG7ZZ, and 0UQG8ZZ. The root
                operation ``repair'' represents a broad range of procedures for
                restoring the anatomic structure of a body part such as suture of
                lacerations, while the root operations ``reposition,'' and ``excision''
                define procedures with more
                [[Page 25174]]
                distinct objectives. Also the approach ``via natural or artificial
                opening'', for example, transvaginal, is defined as the entry of
                instrumentation through a natural or artificial external opening to
                reach the site of the procedure while the ``via natural or artificial
                opening endoscopic approach'' is defined as the entry of
                instrumentation (for example a scope) through a natural or artificial
                external opening to both reach and visualize the site of the procedure.
                Our clinical advisors also disagree that procedures described as the
                transvaginal repair of the vagina are typically performed in the
                operating room under general anesthesia. Our clinical advisors state
                transvaginal repair can be performed using regional anesthesia, used to
                numb only the area of the body that requires surgery instead of
                rendering the patient unconscious. Therefore, for the reasons
                described, we are proposing to maintain the current non-O.R.
                designation of ICD-10-PCS procedure code 0UQG7ZZ.
                (26) Percutaneous Tunneled Vascular Access Devices
                 One requestor identified ten ICD-10-PCS procedure codes describing
                percutaneous insertion of tunneled vascular access devices into various
                body parts that the requestor stated are not recognized as an O.R.
                procedure for purposes of MS-DRG assignment. The requestor suggested
                that these procedures warrant an O.R. designation because they are
                placed in an interventional radiology suite or in the operating room
                under anesthesia. The ten procedure codes are shown in the following
                table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.105
                 According to the requestor, it does not make sense for tunneled
                vascular access devices to group to procedural MS-DRGs in limited
                circumstances as is the case currently with the logic in MDC 9
                (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast)
                and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract).
                The requestor stated that these procedures should be grouping to
                procedural MS-DRGs across all MDCs.
                 We note that we have addressed requests related to these procedures
                in previous rulemaking (85 FR 58511 through 58517). Our clinical
                advisors reviewed this request and disagree that procedures performed
                to insert a tunneled vascular access device should group to procedural
                MS-DRGs across all MDCs. They stated that these percutaneous procedures
                are generally performed in the outpatient setting and when performed
                during a hospitalization, they are frequently performed in combination
                with another O.R. procedure. Therefore, we are proposing to maintain
                the current non-O.R. status for the ten procedure codes listed
                previously for FY 2022.
                12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2022
                a. Background of the CC List and the CC Exclusions List
                 Under the IPPS MS-DRG classification system, we have developed a
                standard list of diagnoses that are considered CCs. Historically, we
                developed this list using physician panels that classified each
                diagnosis code based on whether the diagnosis, when present as a
                secondary condition, would be considered a substantial complication or
                comorbidity. A substantial complication or comorbidity was defined as a
                condition that, because
                [[Page 25175]]
                of its presence with a specific principal diagnosis, would cause an
                increase in the length-of-stay by at least 1 day in at least 75 percent
                of the patients. However, depending on the principal diagnosis of the
                patient, some diagnoses on the basic list of complications and
                comorbidities may be excluded if they are closely related to the
                principal diagnosis. In FY 2008, we evaluated each diagnosis code to
                determine its impact on resource use and to determine the most
                appropriate CC subclassification (NonCC, CC, or MCC) assignment. We
                refer readers to sections II.D.2. and 3. of the preamble of the FY 2008
                IPPS final rule with comment period for a discussion of the refinement
                of CCs in relation to the MS-DRGs we adopted for FY 2008 (72 FR 47152
                through 47171).
                b. Overview of Comprehensive CC/MCC Analysis
                 In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described
                our process for establishing three different levels of CC severity into
                which we would subdivide the diagnosis codes. The categorization of
                diagnoses as a MCC, a CC, or a NonCC was accomplished using an
                iterative approach in which each diagnosis was evaluated to determine
                the extent to which its presence as a secondary diagnosis resulted in
                increased hospital resource use. We refer readers to the FY 2008 IPPS/
                LTCH PPS final rule (72 FR 47159) for a complete discussion of our
                approach. Since the comprehensive analysis was completed for FY 2008,
                we have evaluated diagnosis codes individually when assigning severity
                levels to new codes and when receiving requests to change the severity
                level of specific diagnosis codes.
                 We noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235
                through 19246) that with the transition to ICD-10-CM and the
                significant changes that have occurred to diagnosis codes since the FY
                2008 review, we believed it was necessary to conduct a comprehensive
                analysis once again. Based on this analysis, we proposed changes to the
                severity level designations for 1,492 ICD-10-CM diagnosis codes and
                invited public comments on those proposals. As summarized in the FY
                2020 IPPS/LTCH PPS final rule, many commenters expressed concern with
                the proposed severity level designation changes overall and recommended
                that CMS conduct further analysis prior to finalizing any proposals.
                After careful consideration of the public comments we received, as
                discussed further in the FY 2020 final rule, we generally did not
                finalize our proposed changes to the severity designations for the ICD-
                10-CM diagnosis codes, other than the changes to the severity level
                designations for the diagnosis codes in category Z16- (Resistance to
                antimicrobial drugs) from a NonCC to a CC. We stated that postponing
                adoption of the proposed comprehensive changes in the severity level
                designations would allow further opportunity to provide additional
                background to the public on the methodology utilized and clinical
                rationale applied across diagnostic categories to assist the public in
                its review. We refer readers to the FY 2020 IPPS/LTCH PPS final rule
                (84 FR 42150 through 42152) for a complete discussion of our response
                to public comments regarding the proposed severity level designation
                changes for FY 2020.
                 We discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550
                through 58554) that we plan to continue a comprehensive CC/MCC
                analysis, using a combination of mathematical analysis of claims data
                as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235)
                and the application of nine guiding principles and plan to present the
                findings and proposals in future rulemaking. The nine guiding
                principles are as follows:
                 Represents end of life/near death or has reached an
                advanced stage associated with systemic physiologic decompensation and
                debility.
                 Denotes organ system instability or failure.
                 Involves a chronic illness with susceptibility to
                exacerbations or abrupt decline.
                 Serves as a marker for advanced disease states across
                multiple different comorbid conditions.
                 Reflects systemic impact.
                 Post-operative/post-procedure condition/complication
                impacting recovery.
                 Typically requires higher level of care (that is,
                intensive monitoring, greater number of caregivers, additional testing,
                intensive care unit care, extended length of stay).
                 Impedes patient cooperation and/or management of care.
                 Recent (last 10 years) change in best practice, or in
                practice guidelines and review of the extent to which these changes
                have led to concomitant changes in expected resource use.
                 We refer readers to the FY 2021 IPPS/LTCH PPS final rule for a
                complete discussion of our response to public comments regarding the
                nine guiding principles. We continue to solicit feedback regarding
                these guiding principles, as well as other possible ways we can
                incorporate meaningful indicators of clinical severity. When providing
                additional feedback or comments, we encourage the public to provide a
                detailed explanation of how applying a suggested concept or principle
                would ensure that the severity designation appropriately reflects
                resource use for any diagnosis code.
                 For new diagnosis codes approved for FY 2022, consistent with our
                annual process for designating a severity level (MCC, CC or NonCC) for
                new diagnosis codes, we first review the predecessor code designation,
                followed by review and consideration of other factors that may be
                relevant to the severity level designation, including the severity of
                illness, treatment difficulty, complexity of service and the resources
                utilized in the diagnosis and/or treatment of the condition. We note
                that this process does not automatically result in the new diagnosis
                code having the same designation as the predecessor code. We refer the
                reader to II.D.13 of this proposed rule for the discussion of the
                proposed changes to the ICD-10-CM and ICD-10-PCS coding systems for FY
                2022.
                 For this FY 2022 IPPS/LTCH PPS proposed rule, we received several
                requests to change the severity level designations of specific ICD-10-
                CM diagnosis codes. Our clinical advisors believe it is appropriate to
                consider these requests in connection with our continued comprehensive
                CC/MCC analysis in future rulemaking, rather than proposing to change
                the designation of individual ICD-10-CM diagnosis codes at this time.
                As stated earlier in this section, we plan to continue a comprehensive
                CC/MCC analysis, using a combination of mathematical analysis of claims
                data and the application of nine guiding principles. We will consider
                these individual requests received for changes to severity level
                designations as we continue our comprehensive CC/MCC analysis and will
                provide more detail in future rulemaking.
                c. Potential Change to Severity Level Designation for Unspecified
                Diagnosis Codes for FY 2022
                 For this FY 2022 IPPS/LTCH PPS proposed rule, as another interval
                step as we continue to address the comprehensive review of the severity
                designations of ICD-10-CM diagnosis codes in which we have been engaged
                over the past two years, we are requesting public comments on a
                potential change to the severity level designations for ``unspecified''
                ICD-10-CM diagnosis codes that we are considering adopting for FY 2022.
                [[Page 25176]]
                Specifically, we are considering changing the severity level
                designation of all ``unspecified'' diagnosis codes to a NonCC where
                there are other codes available in that code subcategory that further
                specify the anatomic site, effective for FY 2022, after consideration
                of the public comments we receive in response to this proposed rule.
                 According to the ICD-10-CM Official Guidelines for Coding and
                Reporting, codes titled ``unspecified'' are for use when the
                information in the medical record is insufficient to assign a more
                specific code. In our review of severity level designation of the codes
                in the ICD-10-CM classification, we noted 3,490 ``unspecified''
                diagnosis codes designated as either CC or MCC, where there are other
                codes available in that code subcategory that further specify the
                anatomic site with an equivalent severity level designation. For
                example, ICD-10-CM code L89.003 (Pressure ulcer of unspecified elbow,
                stage 3) is currently designated as a MCC. In the same code subcategory
                of L89.0- (Pressure ulcer of elbow), ICD-10-CM codes L89.013 (Pressure
                ulcer of right elbow, stage 3) and code L89.023 (Pressure ulcer of left
                elbow, stage 3) are also designed as MCCs.
                 In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described
                the categorization of diagnoses as an MCC, a CC, or a NonCC,
                accomplished using an iterative approach in which each diagnosis was
                evaluated to determine the extent to which its presence as a secondary
                diagnosis resulted in increased hospital resource use. As such, the
                designation of CC or MCC is intended to account for the increased
                resources required to address a condition as a secondary diagnosis. The
                usage of ``unspecified'' diagnosis codes where there are other codes
                available in that code subcategory that further specify the anatomic
                site may contribute to and eventually result in less reliable data for
                researching clinical outcomes. If documentation is not available to
                code to the highest level of specificity as to the laterality of the
                condition treated, and an unspecified code is reported by the hospital,
                it may be harder to quantify in the claims data what additional
                resources were expended to address that condition in terms of requiring
                clinical evaluation, therapeutic treatment, diagnostic procedures,
                extended length of hospital stay, increased nursing care and/or
                monitoring.
                 As stated previously, we discussed in the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 58550 through 58554) that we plan to continue a
                comprehensive CC/MCC analysis, using a combination of mathematical
                analysis of claims data, and the application of nine guiding
                principles, and plan to present the findings and proposals in future
                rulemaking. As patients present with a variety of diagnoses, in
                examining the secondary diagnoses, we stated we would consider what
                additional resources are required, that surpasses those that are
                already being utilized to address the principal diagnosis and/or other
                secondary diagnoses that might also be present on the claim. The goal
                of our comprehensive analysis is to create stratification for
                reimbursing inpatient hospitalization in the fewest amount of
                categories with the most explanatory power in a clinically cohesive
                way. We believe more robust claims data would facilitate this effort to
                determine the impact on resource use and inform our decision-making in
                determining the most appropriate CC subclass (NonCC, CC, or MCC)
                assignment for each diagnosis as a secondary diagnosis. As part of this
                effort, we are soliciting comments on adopting a change to the severity
                level designation of the 3,490 ``unspecified'' diagnosis codes
                currently designated as either CC or MCC, where there are other codes
                available in that code subcategory that further specify the anatomic
                site, to a NonCC for FY 2022.
                 As discussed in the HIPAA Administrative Simplification:
                Modification to Medical Data Code Set Standards To Adopt ICD-10-CM and
                ICD-10-PCS proposed rule (73 FR 49796 through 49803), in proposing the
                adoption of ICD-10-CM and ICD-10-PCS, we listed that the addition of
                laterality in ICD-10-CM-- specifying which organ or part of the body is
                involved when the location could be on the right, the left, or could be
                bilateral, was one of several improvements over ICD-9-CM. We also noted
                that in comparison to ICD-9-CM, ICD-10-CM diagnosis codes are very
                specific and that this specificity improves the richness of data for
                analysis and improves the accuracy of data used for medical research.
                In the Modifications to Medical Data Code Set Standards To Adopt ICD-
                10-CM and ICD-10-PCS final rule (74 FR 3328 through 3362), we adopted
                the ICD-10-CM and ICD-10-PCS as medical data code sets under HIPAA,
                replacing ICD-9-CM Volumes 1 and 2, and Volume 3 and noted that ICD-10-
                CM and ICD-10-PCS provide specific diagnosis and treatment information
                that can improve quality measurements and patient safety, and the
                evaluation of medical processes and outcomes. We continue to believe
                that reporting the most specific diagnosis codes supported by the
                available medical record documentation and clinical knowledge of the
                patient's health condition would more accurately reflect the health
                care encounter and improve the reliability and validity of the coded
                data.
                 We believe that changing the severity level for these ``unspecified
                codes'' as compared to the more specific codes in the same subcategory
                recognizing laterality would leverage the additional specificity
                available under the ICD-10 system, by fostering the reporting of the
                most specific diagnosis codes supported by the available medical record
                documentation and clinical knowledge of the patient's health condition
                to more accurately reflect each health care encounter and improve the
                reliability and validity of the coded data. However in consideration of
                the PHE, and to the extent that some providers may not currently have
                programs in place that focus on improving documentation, we are
                requesting public comments on making this change to the severity level
                designation for these unspecified ICD-10-CM diagnosis codes for FY
                2022.
                 The diagnosis codes for which we are soliciting comments on a
                change in severity level designation as described in this proposed rule
                are shown in Table 6P.2a (which is available via the internet on the
                CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We note we are also
                making available the data describing the impact on resource use when
                reported as a secondary diagnosis for all 3,490 ICD-10-CM unspecified
                diagnosis codes. While these claims data were not used in our
                identification of the ``unspecified'' diagnosis codes for which there
                are other codes available in the code subcategory that further specify
                the anatomic site, as mentioned earlier in this section, these data are
                consistent with data historically used to mathematically measure impact
                on resource use for secondary diagnoses, and the data which we plan to
                use in combination with application of the nine guiding principles as
                we continue a comprehensive CC/MCC analysis. Therefore, we are
                displaying the data on these unspecified codes in order to facilitate
                public comment on these potential changes in the severity level
                designation for these codes.
                 In Table 6P.2a associated with this proposed rule, column C
                displays the FY 2020 severity level designation for these diagnosis
                codes in MS-DRG Grouper Version 37.2. Column D displays CMS' current FY
                2021 severity level designation in MS-DRG Grouper
                [[Page 25177]]
                Version 38.1 and column E displays the potential changes to the
                severity level designation that we are considering adopting. Columns F-
                O show data on the impact on resource use generated using discharge
                claims from the September 2019 update of the FY 2019 MedPAR file and
                MS-DRG Grouper Version 37.2. Columns Q-Z show data on the impact on
                resource use generated using discharge claims from the September 2020
                update of the FY 2020 MedPAR file and MS-DRG Grouper Version 38.1.
                 For further information on the data on the impact on resource use
                as displayed in Columns F-O and Columns Q-Z, we refer readers to the FY
                2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion
                of the methodology utilized to mathematically measure the impact on
                resource use. Also, as discussed in the FY 2021 IPPS/LTCH PPS proposed
                rule (85 FR 32550), to provide the public with more information on the
                CC/MCC comprehensive analysis discussed in the FY 2020 IPPS/LTCH PPS
                proposed and final rules, CMS hosted a listening session on October 8,
                2019. The listening session included a review of this methodology
                utilized to mathematically measure the impact on resource use. We refer
                readers to https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts.html for the transcript and audio
                file of the listening session. We also refer readers to https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for the supplementary file
                containing the data describing the impact on resource use of specific
                ICD-10-CM diagnosis codes when reported as a secondary diagnosis that
                was made available for the listening session.
                 This table shows the Version 38.1 ICD-10 MS-DRG categorization of
                diagnosis codes by severity level.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.106
                 We are requesting public comments on a modification to the Version
                38.1 severity level subclass assignments for 4.8 percent of the ICD-10-
                CM diagnosis codes, potentially effective with the Version 39 ICD-10
                MS-DRG MCC/CC list. The following table compares the Version 38.1 ICD-
                10 MS-DRG MCC/CC list and the potential Version 39 ICD-10 MS-DRG MCC/CC
                list. There are 17,957 diagnosis codes on the Version 38.1 MCC/CC
                lists. These potential MCC/CC severity level changes would reduce the
                number of diagnosis codes on the MCC/CC lists to 14,467 (2,771+
                11,696).
                [GRAPHIC] [TIFF OMITTED] TP10MY21.107
                 The net result of these potential changes to the Version 39 ICD-10
                MS-DRG MCC/CC list, for the 72,621 diagnosis codes in the ICD-10-CM
                classification, would be a decrease of 507 (3,278-2,771) codes
                designated as an MCC, a decrease of 2,983 (14,679-11,696) codes
                designated as a CC, and an increase of 3,490 (58,154-54,664) codes
                designated as a NonCC.
                 The following table compares the Version 38.1 ICD-10 MS-DRG
                severity level list and the potential Version 39 ICD-10 MS-DRG severity
                level list by each of the 22 chapters of the ICD-10-CM classification
                to display how each chapter of ICD-10-CM might be affected by these
                modifications.
                BILLING CODE 4120-01-P
                [[Page 25178]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.108
                [[Page 25179]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.109
                BILLING CODE 4120-01-C
                 As shown in the table, the Diseases of the Musculoskeletal System
                and Connective Tissue (M00-M99) chapter of ICD-10-CM would have the
                largest percentage reduction in codes designated as CC/MCC. Twelve
                chapters would have a zero percentage change to the percentage of codes
                designated as CC/MCC.
                 As stated previously, we are requesting public comments on our
                possible adoption of a change to the severity level designation of
                these 3,490 ``unspecified'' diagnosis codes currently designated as
                either CC or MCC, where there are other codes available in that code
                subcategory that further specify the anatomic site, to a NonCC,
                potentially effective with the Version 39 ICD-10 MS-DRG MCC/CC list. As
                part of this request, we would be interested in comments regarding
                whether this modification might present operational challenges and how
                we might otherwise foster the reporting of the most specific diagnosis
                codes supported by the available medical record documentation and
                clinical knowledge of the patient's health condition to more accurately
                [[Page 25180]]
                reflect each health care encounter and improve the reliability and
                validity of the coded data.
                d. Proposed Additions and Deletions to the Diagnosis Code Severity
                Levels for FY 2022
                 The following tables identify the proposed additions and deletions
                to the diagnosis code MCC severity levels list and the proposed
                additions to the diagnosis code CC severity levels list for FY 2022 and
                are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
                 Table 6I.1--Proposed Additions to the MCC List--FY2022;
                 Table 6I.2-- Proposed Deletions to the MCC List--FY2022; and
                 Table 6J.1-- Proposed Additions to the CC List--FY2022.
                e. Proposed CC Exclusions List for FY 2022
                 In the September 1, 1987 final notice (52 FR 33143) concerning
                changes to the DRG classification system, we modified the GROUPER logic
                so that certain diagnoses included on the standard list of CCs would
                not be considered valid CCs in combination with a particular principal
                diagnosis. We created the CC Exclusions List for the following reasons:
                (1) To preclude coding of CCs for closely related conditions; (2) to
                preclude duplicative or inconsistent coding from being treated as CCs;
                and (3) to ensure that cases are appropriately classified between the
                complicated and uncomplicated DRGs in a pair.
                 In the May 19, 1987 proposed notice (52 FR 18877) and the September
                1, 1987 final notice (52 FR 33154), we explained that the excluded
                secondary diagnoses were established using the following five
                principles:
                 Chronic and acute manifestations of the same condition
                should not be considered CCs for one another;
                 Specific and nonspecific (that is, not otherwise specified
                (NOS)) diagnosis codes for the same condition should not be considered
                CCs for one another;
                 Codes for the same condition that cannot coexist, such as
                partial/total, unilateral/bilateral, obstructed/unobstructed, and
                benign/malignant, should not be considered CCs for one another;
                 Codes for the same condition in anatomically proximal
                sites should not be considered CCs for one another; and
                 Closely related conditions should not be considered CCs
                for one another.
                 The creation of the CC Exclusions List was a major project
                involving hundreds of codes. We have continued to review the remaining
                CCs to identify additional exclusions and to remove diagnoses from the
                master list that have been shown not to meet the definition of a CC. We
                refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541
                through 50544) for detailed information regarding revisions that were
                made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs.
                 The ICD-10 MS-DRGs Version 38.1 CC Exclusion List is included as
                Appendix C in the ICD-10 MS-DRG Definitions Manual, which is available
                via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html, and
                includes two lists identified as Part 1 and Part 2. Part 1 is the list
                of all diagnosis codes that are defined as a CC or MCC when reported as
                a secondary diagnosis. For all diagnosis codes on the list, a link is
                provided to a collection of diagnosis codes which, when reported as the
                principal diagnosis, would cause the CC or MCC diagnosis to be
                considered as a NonCC. Part 2 is the list of diagnosis codes designated
                as a MCC only for patients discharged alive; otherwise, they are
                assigned as a NonCC.
                 As discussed in section II.D.12.c. of the preamble of this proposed
                rule, we are requesting public comments on potential changes to the
                severity level for 3,490 diagnosis codes describing an ``unspecified''
                anatomic site, from a CC severity level to a NonCC severity level, for
                FY 2022. We refer the reader to Table 6P.3a associated with this
                proposed rule (which is available via the internet on the CMS website
                at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the list of the 3,490 diagnosis codes
                that are currently listed in Part 1 of the CC Exclusions List and are
                defined as a CC when reported as a secondary diagnosis. Table 6P.3a is
                divided into several tabs, with the first tab titled ``SDX Codes and
                Exclu Categories'' containing columns A, B, and C. Column A (titled
                ``ICD-10-CM Code'') lists the ``unspecified'' diagnosis codes that are
                currently listed in Part 1 of Appendix C of the CC Exclusions List,
                column B (titled ``Description'') lists the narrative description of
                each diagnosis code, and column C (titled Exclusion Category) contains
                a hyperlink to the collection of diagnosis codes which, when reported
                as the principal diagnosis, would cause the CC diagnosis to be
                considered as a NonCC. For example, for line 2, Column A displays
                diagnosis code C34.00, column B displays ``Malignant neoplasm of
                unspecified main bronchus'' and column C displays a hyperlink to
                Exclusion Category number 280. When the user clicks on the hyperlink
                for number 280, they are directed to another tab labeled ``PDX Category
                280'' that contains the list of diagnosis codes which, when reported as
                the principal diagnosis, would cause the corresponding CC diagnosis to
                be considered as a NonCC. In connection with the request for public
                comments on the potential changes to the severity level for 3,490
                diagnosis codes describing an ``unspecified'' anatomic site, from a CC
                severity level to a NonCC severity level for FY 2022, Table 6P.3a is
                being made available for readers to review and consider the list of the
                3,490 ``unspecified'' diagnosis codes that are currently included in
                Part 1 of the CC Exclusions List and the principal diagnosis exclusion
                category with which they are currently associated. If we were to
                finalize the potential changes to the severity level for the 3,490
                diagnosis codes describing an ``unspecified'' anatomic site from a CC
                severity level to a NonCC severity level for FY 2022, we would also
                finalize the removal of these codes from the CC Exclusions List for FY
                2022.
                 We received three requests related to the CC Exclusions List logic,
                as we discuss in this section of this proposed rule.
                 We received a request to review the secondary diagnoses that are
                excluded as a CC or MCC in the CC Exclusions List logic when any one of
                the following three diagnosis codes is reported as the principal
                diagnosis.
                [[Page 25181]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.110
                 According to the requestor, in the ICD-10 MS-DRGs version 37.2 CC
                Exclusions List logic, the predecessor code for the listed diagnosis
                codes, diagnosis code O99.89 (Other specified diseases and conditions
                complicating pregnancy, childbirth and the puerperium) is listed in the
                collection of principal diagnosis list number 1000, therefore, when a
                CC or MCC secondary diagnosis associated with that principal diagnosis
                list describes a condition as occurring in pregnancy, childbirth or the
                puerperium, the CC Exclusions List logic will render that diagnosis
                code as a NonCC. The requestor stated that because diagnosis code
                O99.89 under version 37.2 of the ICD-10 MS-DRGs is now a subcategory
                under version 38.1 of the ICD-10 MS-DRGs, with three unique diagnosis
                codes to specify which obstetric stage the patient is in, that further
                analysis of the new diagnosis codes (O99.891, O99.892, and O99.893)
                should occur to determine if changes to the collection of principal
                diagnosis list is warranted. The requestor provided three examples for
                CMS to review and consider for possible changes to the CC Exclusions
                List logic.
                 In the first example, the requestor noted that diagnosis code O72.1
                (Other immediate postpartum hemorrhage) is listed as a CC secondary
                diagnosis associated with the collection of principal diagnosis list
                number 1000, and that under the ICD-10 MS-DRGs version 38.1 CC
                Exclusions List logic, the diagnosis listed in principal diagnosis
                collection 1000 is now diagnosis code O99.893 (Other specified diseases
                and conditions complicating puerperium). Thus, both diagnosis codes
                (O72.1 and O99.893) are describing conditions occurring specifically in
                the postpartum or puerperium period. The postpartum period is defined
                as the period beginning immediately after delivery and continues for
                six weeks following delivery. A postpartum complication is any
                complication occurring within the six-week period. The requestor stated
                that because diagnosis code O72.1 is assigned for documented postpartum
                uterine atony with hemorrhage when it occurs immediately following the
                delivery of the baby and placenta, that CMS should review diagnosis
                code O99.892 (Other specified diseases and conditions complicating
                childbirth) and determine if it should be added to the collection of
                principal diagnosis list number 1000 to cause diagnosis code O72.1 to
                be considered as a NonCC when diagnosis code O99.892 is reported as the
                principal diagnosis.
                 In the second example, the requestor noted that diagnosis code
                O98.32 (Other infections with a predominantly sexual mode of
                transmission complicating childbirth) is associated with principal
                diagnosis collection number 1012. The requestor also noted that
                principal diagnosis collection number 1012 does not list diagnosis
                codes O99.891, O99.892, or O99.893 as a principal diagnosis to exclude
                the CC secondary diagnosis code O98.32, however, it does list diagnosis
                codes O98.311 (Other infections with a predominantly sexual mode of
                transmission complicating pregnancy, first trimester), O98.312 (Other
                infections with a predominantly sexual mode of transmission
                complicating pregnancy, second trimester), and O98.313 (Other
                infections with a predominantly sexual mode of transmission
                complicating pregnancy, third trimester) as a principal diagnosis to
                exclude the CC secondary diagnosis code O98.32. The requestor
                recommended CMS review diagnosis codes O98.32 (Other infections with a
                predominantly sexual mode of transmission complicating childbirth) and
                O98.33 (Other infections with a predominantly sexual mode of
                transmission complicating the puerperium), to determine if diagnosis
                codes O99.891, O99.892 or O99.893, when reported as a principal
                diagnosis, should exclude CC secondary diagnosis codes O98.32 and
                O98.33. Thus, the requestor suggested CMS consider if it is appropriate
                to add diagnosis codes O99.891, O99.892 and O99.893 to principal
                diagnosis collection number 1012 to cause diagnosis code O98.32 to be
                considered as a NonCC when diagnosis codes O99.891, O99.892 or O99.893
                are reported as the principal diagnosis.
                 In the third example, the requestor noted that diagnosis code O87.2
                (Hemorrhoids in the puerperium) is associated with principal diagnosis
                collection number 4041. The requestor also noted that principal
                diagnosis collection number 4041 lists diagnosis code O99.893 as a
                principal diagnosis to exclude the CC diagnosis code O87.2, however, it
                does not list diagnosis code O99.892. The requestor further noted that
                the ``Includes'' note at Category O87 (Venous complications and
                hemorrhoids in the puerperium) in the FY 2021 ICD-10-CM Tabular List
                includes ``venous complications in labor, delivery and the
                puerperium'', therefore, diagnosis code O87.2 would also be reported
                for documented hemorrhoids during labor and delivery. The requestor
                recommended CMS review diagnosis code O99.892 to determine if, when
                reported as a principal diagnosis, it should exclude CC diagnosis code
                O87.2. Thus, the requestor suggested CMS consider if it is appropriate
                to add diagnosis code O99.892 to principal diagnosis collection number
                4041 to cause diagnosis code O87.2 to be considered as a NonCC when
                diagnosis code O99.892 is reported as the principal diagnosis.
                 We reviewed diagnosis codes O99.891, O99.892 and O99.893 with
                respect to the principal diagnosis collection list and because these
                diagnosis codes are specifically describing ``other specified diseases
                and conditions complicating pregnancy, childbirth, and the
                puerperium,'' respectively, we do not believe that any of these three
                diagnosis codes, when reported as a principal diagnosis, should exclude
                any CC secondary diagnosis. In cases where any one of these three
                diagnosis codes is reported as a principal diagnosis, which are
                generally anticipated to be rare, it is understood that there is not a
                more specific diagnosis code available in the classification to report
                as the principal diagnosis that identifies the underlying or associated
                cause of the disease or the condition complicating the specific
                obstetric stage (pregnancy, childbirth, or puerperium), hence the
                ``other specified'' in the code title. Specifically, the title of
                category O99 is ``Other maternal diseases classifiable elsewhere but
                complicating pregnancy, childbirth and the puerperium'' and there are
                nine subcategories, each of which is generally associated with a single
                organ
                [[Page 25182]]
                system or etiology, with the exception of the ``other specified''
                subcategory (O99.8) as displayed in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.111
                 The instructional note at category O99 states ``use additional code
                to identify specific condition'' and included at each subcategory
                (O99.0-O99.7) are a range of codes that refer to diagnoses that are
                associated with the condition in the title of the subcategory that are
                to be reported in addition to the applicable code within the respective
                subcategory. For example, at subcategory O99.0 (Anemia complicating
                pregnancy, childbirth, and the puerperium), the range of associated
                codes to identify the specific condition (for example, type of anemia)
                includes conditions in diagnosis code range D50-D64, meaning that when
                any one of the diagnosis codes under subcategory O99.0 describing
                anemia complicating a specific obstetric stage (pregnancy, childbirth,
                or puerperium) is reported, a code within the D50-D64 code range to
                identify the specific type of anemia would also be expected to be
                reported when supported by the medical record documentation. It is
                therefore reasonable to associate the two conditions (one from
                subcategory O99.0 and one from code range D50-D64) when reported on a
                claim. However, the same cannot be stated for subcategory O99.8. There
                is no range of associated codes from which users are instructed to
                report located at this particular subcategory in addition to the
                specific code under sub-subcategory O99.89 (Other specified diseases
                and conditions complicating pregnancy, childbirth and the puerperium).
                We note that subcategory O99.8 and sub-subcategory O99.89 have the same
                title. Therefore, when a diagnosis code from other than that sub-
                subcategory is reported that describes a condition occurring in any one
                of the obstetric stages (pregnancy, childbirth, or puerperium) it is
                not clear if the condition can reasonably be associated to correspond
                to the ``other specified diseases and conditions'' diagnosis. In
                addition, the code ranges included at subcategory O99.8 are D00-D48,
                H00-H95, M00-N99, and Q00-Q99. Consequently, diagnosis codes within
                those code ranges would be expected to be reported with one of the
                diagnosis codes under subcategory O99.8 when reported as a principal
                diagnosis.
                 In all three of the requestor's examples, the diagnosis codes
                provided for CMS to review and consider are located in the ``O'' code
                range (O72.1, O98.32, and O87.2 in addition to O99.891, O99.892, and
                O99.893). As noted previously, the code ranges included at subcategory
                O99.8 as listed, do not include any codes in ``O'' code range. Upon
                review of the diagnosis codes provided by the requestor, it is also
                reasonable to expect that any one of those diagnosis codes (O72.1,
                O98.32, and O87.2) could be reported as a principal diagnosis alone.
                For instance, there are no instructional notes at diagnosis code O72.1
                that preclude that diagnosis code from being reported as the principal
                diagnosis.
                 During our review of the CC Exclusions List logic in response to
                the requestor's recommendations, we also identified some diagnosis
                codes describing the specific trimester of pregnancy that we believe
                warrant further examination. We are unable to fully evaluate these
                conditions for FY 2022, therefore, we will continue to analyze for
                future rulemaking.
                 For the reasons discussed, we do not believe that any of the three
                diagnosis codes (O99.891, O99.892, and O99.893), when reported as a
                principal diagnosis, should exclude any CC secondary diagnosis.
                Therefore, we are proposing to remove diagnosis codes O99.891, O99.892,
                and O99.893 from the CC Exclusions List logic principal diagnosis
                collection lists. Specifically, we are proposing to remove those
                diagnosis codes from the following principal
                [[Page 25183]]
                diagnosis collection list numbers 0085, 0954, 0956 through 0963, 0972,
                0988, 0991 through 0998, 1000 through 1002, 1004, 1006, 1009, 1011,
                1014, 1015, 1019, 3999, 4000, 4002 through 4006, 4008, 4010, through
                4013, 4017, 4020, 4021, 4023 through 4026, 4030, 4031, 4033 through
                4043, 4050 through 4054, 4059 through 4063, 4065 and 4067, effective FY
                2022.
                 We also received a request to review diagnosis codes describing
                oxygen dependence, chronic obstructive pulmonary disease with
                exacerbation, and chronic respiratory failure with regard to assignment
                in MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC) and to
                consider whether any changes to principal diagnosis collection number
                0744 in the CC Exclusions List logic are warranted.
                 The requestor provided diagnosis codes J44.1 (Chronic obstructive
                pulmonary disease with (acute) exacerbation), J96.11 (Chronic
                respiratory failure with hypoxia (CC)) and Z99.81 (Dependence on
                supplemental oxygen) for CMS to review. Specifically, the requestor
                suggested that if oxygen dependence, by definition, is clinically
                inherent to chronic respiratory failure, then CMS should consider
                adding diagnosis code J44.1 to the CC Exclusions List logic principal
                diagnosis collection list number 0744 and cause diagnosis code J96.11
                to be considered as a NonCC when J44.1 is reported as the principal
                diagnosis.
                 We reviewed the diagnosis codes and MS-DRG assignment as the
                requestor suggested. We confirmed that when diagnosis code J44.1 is
                reported as the principal diagnosis with the CC secondary diagnosis
                code J96.11, and secondary diagnosis code Z99.81, the resulting MS-DRG
                assignment is MS-DRG 191. We believe that diagnosis code J96.11 should
                continue to group as a CC, to the ``with CC'' MS-DRG 191, when reported
                as a secondary diagnosis code with diagnosis code J44.1 reported as the
                principal diagnosis. We disagree with the requestor's suggestion that
                every oxygen-dependent COPD patient has chronic respiratory failure,
                and that separately reporting the chronic respiratory failure is
                clinically redundant. Patients can be oxygen-dependent with COPD and
                not have a diagnosis of chronic respiratory failure. Therefore, we are
                proposing to maintain the structure of principal diagnosis collection
                list number 0744 in the CC Exclusions List logic for FY 2022.
                 Finally, we received a request to reconsider the MCC exclusions for
                diagnosis code I11.0 (Hypertensive heart disease with heart failure)
                when reported as the principal diagnosis. According to the requestor,
                there appears to be an inconsistency for the CC Exclusions List logic.
                Specifically, the requestor noted that when diagnosis code I11.0 is
                reported as the principal diagnosis, it causes the following MCC
                secondary diagnosis codes to be considered as a NonCC.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.112
                 However, the requestor stated that diagnosis codes I50.21 (Acute
                systolic (congestive) heart failure) and I50.31 (Acute diastolic
                (congestive) heart failure) are not excluded from acting as MCCs when
                diagnosis code I11.0 is reported as the principal diagnosis. The
                requestor also stated that all diagnosis codes in category I50 (Heart
                Failure) share common etiologies and demonstrate comparable severity of
                illness. Therefore, the requestor suggested that none of the conditions
                in this category (I50) should be excluded from acting as a MCC when
                diagnosis code I11.0 is reported as a principal diagnosis.
                 We examined all the diagnosis codes in category I50 with regard to
                the CC Exclusions List logic. In addition to diagnosis code I11.0, we
                also reviewed diagnosis code I13.2 (Hypertensive heart and chronic
                kidney disease with heart failure and with stage 5 chronic kidney
                disease, or end stage renal disease) when reported as a principal
                diagnosis because that diagnosis code also has the Tabular instruction
                ``use additional code to identify the type of heart failure''.
                 We found additional inconsistencies in the CC secondary diagnosis
                heart failure codes where some diagnoses were excluded depending on the
                principal diagnosis reported and others were not excluded. As a result,
                we are proposing to revise the CC Exclusions Logic list for diagnosis
                codes I11.0 and I13.2 when reported as a principal diagnosis to ensure
                they are consistent in the CC and MCC diagnoses they exclude. In the
                following table we show the findings for each diagnosis code in
                category I50 with respect to the current severity level (MCC, CC or
                NonCC), if it is currently excluded as a CC or MCC when reported with
                either diagnosis code I11.0 or I13.2 as the principal diagnosis, and
                what our proposal is under the CC Exclusions List logic for FY 2022.
                BILLING CODE 4120-01-P
                [[Page 25184]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.113
                [[Page 25185]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.114
                BILLING CODE 4120-01-C
                 We are proposing additional changes to the ICD-10 MS-DRGs Version
                39 CC Exclusion List based on the diagnosis and procedure code updates
                as discussed in section II.D.13. of this FY 2022 IPPS/LTCH PPS proposed
                rule. Therefore, we have developed Table 6G.1.--Proposed Secondary
                Diagnosis Order Additions to the CC Exclusions List--FY 2022; Table
                6G.2.--Proposed Principal Diagnosis Order Additions to the CC
                Exclusions List--FY 2022; Table 6H.1.--Proposed Secondary Diagnosis
                Order Deletions to the CC Exclusions List--FY 2022; and Table 6H.2.--
                Proposed Principal Diagnosis Order Deletions to the CC Exclusions
                List--FY 2022. For Table 6G.1, each secondary diagnosis code proposed
                for addition to the CC Exclusion List is shown with an asterisk and the
                principal diagnoses proposed to exclude the secondary diagnosis code
                are provided in the indented column immediately following it. For Table
                6G.2, each of the principal diagnosis codes for which there is a CC
                exclusion is shown with an asterisk and the conditions proposed for
                addition to the CC Exclusion List that will not count as a CC are
                provided in an indented column immediately following the affected
                principal diagnosis. For Table 6H.1, each secondary diagnosis code
                proposed for deletion from the CC Exclusion List is shown with an
                asterisk followed by the principal diagnosis codes that currently
                exclude it. For Table 6H.2, each of the principal diagnosis codes is
                shown with an asterisk and the proposed deletions to the CC Exclusions
                List are provided in an indented column immediately following the
                affected principal diagnosis. Tables 6G.1., 6G.2., 6H.1., and 6H.2.
                associated with this proposed rule are available via the internet on
                the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
                [[Page 25186]]
                13. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
                 To identify new, revised and deleted diagnosis and procedure codes,
                for FY 2022, we have developed Table 6A.--New Diagnosis Codes, Table
                6B.--New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table
                6D.--Invalid Procedure Codes and Table 6E.--Revised Diagnosis Code
                Titles for this proposed rule.
                 These tables are not published in the Addendum to this proposed
                rule, but are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in section VI. of the
                Addendum to this proposed rule. As discussed in section II.D.16. of the
                preamble of this proposed rule, the code titles are adopted as part of
                the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
                meeting process. Therefore, although we publish the code titles in the
                IPPS proposed and final rules, they are not subject to comment in the
                proposed or final rules.
                 We are proposing the MDC and MS-DRG assignments for the new
                diagnosis codes and procedure codes as set forth in Table 6A.--New
                Diagnosis Codes and Table 6B.--New Procedure Codes. In addition, the
                proposed severity level designations for the new diagnosis codes are
                set forth in Table 6A. and the proposed O.R. status for the new
                procedure codes are set forth in Table 6B. Consistent with our
                established process, we examined the MS-DRG assignment and the
                attributes (severity level and O.R. status) of the predecessor
                diagnosis or procedure code, as applicable, to inform our proposed
                assignments and designations. Specifically, we review the predecessor
                code and MS-DRG assignment most closely associated with the new
                diagnosis or procedure code, and in the absence of claims data, we
                consider other factors that may be relevant to the MS-DRG assignment,
                including the severity of illness, treatment difficulty, complexity of
                service and the resources utilized in the diagnosis and/or treatment of
                the condition. We note that this process does not automatically result
                in the new diagnosis or procedure code being proposed for assignment to
                the same MS-DRG or to have the same designation as the predecessor
                code.
                 We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
                the following tables associated with this proposed rule:
                 Table 6A.--New Diagnosis Codes--FY 2022;
                 Table 6B.--New Procedure Codes--FY 2022;
                 Table 6C.--Invalid Diagnosis Codes--FY 2022;
                 Table 6D.--Invalid Procedure Codes--FY 2022;
                 Table 6E.--Revised Diagnosis Code Titles--FY 2022;
                 Table 6G.1.--Proposed Secondary Diagnosis Order Additions
                to the CC Exclusions List--FY 2022;
                 Table 6G.2.--Proposed Principal Diagnosis Order Additions
                to the CC Exclusions List--FY 2022;
                 Table 6H.1.--Proposed Secondary Diagnosis Order Deletions
                to the CC Exclusions List--FY 2022;
                 Table 6H.2.--Proposed Principal Diagnosis Order Deletions
                to the CC Exclusions List--FY 2022;
                 Table 6I.1.--Proposed Additions to the MCC List--FY 2022;
                 Table 6I.2.--Proposed Deletions to the MCC List--FY 2022;
                and
                 Table 6J.1.--Proposed Additions to the CC List--FY 2022.
                14. Proposed Changes to the Medicare Code Editor (MCE)
                 The Medicare Code Editor (MCE) is a software program that detects
                and reports errors in the coding of Medicare claims data. Patient
                diagnoses, procedure(s), and demographic information are entered into
                the Medicare claims processing systems and are subjected to a series of
                automated screens. The MCE screens are designed to identify cases that
                require further review before classification into an MS-DRG.
                 As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448),
                we made available the FY 2021 ICD-10 MCE Version 38 manual file. The
                manual contains the definitions of the Medicare code edits, including a
                description of each coding edit with the corresponding diagnosis and
                procedure code edit lists. The link to this MCE manual file, along with
                the link to the mainframe and computer software for the MCE Version 38
                (and ICD-10 MS-DRGs) are posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
                 For this FY 2022 IPPS/LTCH PPS proposed rule, we address the MCE
                requests we received by the November 1, 2020 deadline. We also discuss
                the proposals we are making based on our internal review and analysis.
                a. External Causes of Morbidity Codes as Principal Diagnosis
                 In the MCE, the external cause codes (V, W, X, or Y codes) describe
                the circumstance causing an injury, not the nature of the injury, and
                therefore should not be used as a principal diagnosis.
                 As discussed in section II.D.13. of the preamble of this proposed
                rule, Table 6A.--New Diagnosis Codes, lists the diagnosis codes that
                have been approved to date which will be effective with discharges on
                and after October 1, 2021. We are proposing to add the following new
                ICD-10-CM diagnosis codes to the External Causes of Morbidity edit code
                list.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.115
                [[Page 25187]]
                b. Age Conflict Edit
                 In the MCE, the Age conflict edit exists to detect inconsistencies
                between a patient's age and any diagnosis on the patient's record; for
                example, a 5-year-old patient with benign prostatic hypertrophy or a
                78-year-old patient coded with a delivery. In these cases, the
                diagnosis is clinically and virtually impossible for a patient of the
                stated age. Therefore, either the diagnosis or the age is presumed to
                be incorrect. Currently, in the MCE, the following four age diagnosis
                categories appear under the Age conflict edit and are listed in the
                manual and written in the software program:
                 Perinatal/Newborn--Age 0 years only; a subset of diagnoses
                which will only occur during the perinatal or newborn period of age 0
                (for example, tetanus neonatorum, health examination for newborn under
                8 days old).
                 Pediatric--Age is 0-17 years inclusive (for example,
                Reye's syndrome, routine child health exam).
                 Maternity--Age range is 9-64 years inclusive (for example,
                diabetes in pregnancy, antepartum pulmonary complication).
                 Adult--Age range is 15-124 years inclusive (for example,
                senile delirium, mature cataract).
                (1) Pediatric Diagnoses
                 Under the ICD-10 MCE, the Pediatric diagnoses category for the Age
                conflict edit considers the age range of 0 to 17 years inclusive. For
                that reason, the diagnosis codes on this Age conflict edit list would
                be expected to apply to conditions or disorders specific to that age
                group only.
                 As discussed in section II.D.13. of the preamble of this proposed
                rule, Table 6A.--New Diagnosis Codes, lists the diagnosis codes that
                have been approved to date which will be effective with discharges on
                and after October 1, 2021. We are proposing to add the following new
                ICD-10-CM diagnosis codes to the Pediatric diagnoses category code list
                under the Age conflict edit.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.116
                c. Sex Conflict Edit
                 In the MCE, the Sex conflict edit detects inconsistencies between a
                patient's sex and any diagnosis or procedure on the patient's record;
                for example, a male patient with cervical cancer (diagnosis) or a
                female patient with a prostatectomy (procedure). In both instances, the
                indicated diagnosis or the procedure conflicts with the stated sex of
                the patient. Therefore, the patient's diagnosis, procedure, or sex is
                presumed to be incorrect.
                (1) Diagnoses for Females Only Edit
                 As discussed in section II.D.13. of the preamble of this proposed
                rule, Table 6A.--New Diagnosis Codes, lists the new diagnosis codes
                that have been approved to date which will be effective with discharges
                on and after October 1, 2021. We are proposing to add the following new
                ICD-10-CM diagnosis codes to the edit code list for the Diagnoses for
                Females Only edit.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.117
                d. Unacceptable Principal Diagnosis Edit
                 In the MCE, there are select codes that describe a circumstance
                which influences an individual's health status but does not actually
                describe a current illness or injury. There also are codes that are not
                specific manifestations but may be due to an underlying cause. These
                codes are considered unacceptable as a principal diagnosis. In limited
                situations, there are a few codes on the MCE Unacceptable Principal
                Diagnosis edit code list that are considered ``acceptable'' when a
                specified secondary diagnosis is also coded and reported on the claim.
                 As discussed in Section II.D.13. of the preamble of this proposed
                rule, Table 6A.--New Diagnosis Codes, lists the new diagnosis codes
                that have been approved to date which will be effective with discharges
                on and after October 1, 2021. In addition, as a result of proposed new
                instructional notes to ``Code first underlying disease'' (which
                indicate the proper sequencing order of the codes) for existing
                diagnosis codes found at subcategory M40.1 (Other secondary kyphosis)
                and subcategory M41.5 (Other secondary scoliosis) discussed at the
                September 8-9, 2020 ICD-10 Coordination and Maintenance Committee
                meeting, we are proposing to add the following new and, if these
                instructional notes are finalized, existing ICD-10-CM diagnosis codes
                at subcategories M40.1 and M41.5, to the Unacceptable Principal
                Diagnosis edit code list.
                BILLING CODE 4120-01-P
                [[Page 25188]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.118
                BILLING CODE 4120-01-C
                 In addition, as discussed in section II.D.13. of the preamble of
                this proposed rule, Table 6C.--Invalid Diagnosis Codes, lists the
                diagnosis codes that are
                [[Page 25189]]
                no longer effective October 1, 2021. Included in this table are the
                following ICD-10-CM diagnosis codes that are currently listed on the
                Unacceptable Principal Diagnosis edit code list. We are proposing to
                delete these codes from the Unacceptable Principal Diagnosis edit code
                list.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.119
                e. Unspecified Codes
                 As discussed in section II.D.12.c. of the preamble of this proposed
                rule, we are requesting public comments on a potential change to the
                severity level designations for ``unspecified'' ICD-10-CM diagnosis
                codes that we are considering adopting for FY 2022. In connection with
                that request, we are also requesting public comments on the potential
                creation of a new MCE code edit involving these ``unspecified'' codes
                for FY 2022. Specifically, this MCE code edit could trigger when an
                ``unspecified'' diagnosis code currently designated as either a CC or
                MCC, that includes other codes available in that code subcategory that
                further specify the anatomic site, is entered. We refer the reader to
                table 6P.3a (which is available via the internet on the CMS website at:
                http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the list of unspecified diagnosis
                codes that would be subject to this edit. This edit could signal to the
                provider that a more specific code is available to report. We believe
                this edit aligns with documentation improvement efforts and leverages
                the specificity within ICD-10. As part of our request for comment on
                the potential creation of this new MCE code edit for these
                ``unspecified'' codes, we are interested in comments on how this MCE
                code edit may be developed for FY 2022 to more accurately reflect each
                health care encounter and improve the reliability and validity of the
                coded data.
                f. Future Enhancement
                 In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 38054)
                we noted the importance of ensuring accuracy of the coded data from the
                reporting, collection, processing, coverage, payment and analysis
                aspects. Subsequently, in the FY 2019 IPPS/LTCH PPS proposed rule (83
                FR 20235) we stated that we engaged a contractor to assist in the
                review of the limited coverage and non-covered procedure edits in the
                MCE that may also be present in other claims processing systems that
                are utilized by our MACs. The MACs must adhere to criteria specified
                within the National Coverage Determinations (NCDs) and may implement
                their own edits in addition to what is already incorporated into the
                MCE, resulting in duplicate edits. The objective of this review is to
                identify where duplicate edits may exist and to determine what the
                impact might be if these edits were to be removed from the MCE.
                 We have also noted that the purpose of the MCE is to ensure that
                errors and inconsistencies in the coded data are recognized during
                Medicare claims processing. As we indicated in the FY 2019 IPPS/LTCH
                PPS final rule (83 FR 41228), we are considering whether the inclusion
                of coverage edits in the MCE necessarily aligns with that specific goal
                because the focus of coverage edits is on whether or not a particular
                service is covered for payment purposes and not whether it was coded
                correctly.
                 As we continue to evaluate the purpose and function of the MCE with
                respect to ICD-10, we encourage public input for future discussion. As
                we have discussed in prior rulemaking, we recognize a need to further
                examine the current list of edits and the definitions of those edits.
                We continue to encourage public comments on whether there are
                additional concerns with the current edits, including specific edits or
                language that should be removed or revised, edits that should be
                combined, or new edits that should be added to assist in detecting
                errors or inaccuracies in the coded data. Comments should be directed
                to the MS-DRG Classification Change Mailbox located at
                [email protected] by November 1, 2021.
                15. Proposed Changes to Surgical Hierarchies
                 Some inpatient stays entail multiple surgical procedures, each one
                of which, occurring by itself, could result in assignment of the case
                to a different MS-DRG within the MDC to which the principal diagnosis
                is assigned. Therefore, it is necessary to have a decision rule within
                the GROUPER by which these cases are assigned to a single MS-DRG. The
                surgical hierarchy, an ordering of surgical classes from most resource-
                intensive to least resource-intensive, performs that function.
                Application of this hierarchy ensures that cases involving multiple
                surgical procedures are assigned to the MS-DRG associated with the most
                resource-intensive surgical class.
                 A surgical class can be composed of one or more MS-DRGs. For
                example, in MDC 11, the surgical class ``kidney transplant'' consists
                of a single MS-DRG (MS-DRG 652) and the class ``major bladder
                procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655).
                Consequently, in many cases, the surgical hierarchy has an impact on
                more than one MS-DRG. The methodology for determining the most
                resource-intensive surgical class involves weighting the average
                resources for each MS-DRG by frequency to determine the weighted
                average resources for each surgical class. For example, assume surgical
                class A includes MS-DRGs 001 and 002 and surgical class B includes MS-
                DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG
                001 are higher than that of MS-DRG 003, but the average costs of MS-
                DRGs 004 and 005
                [[Page 25190]]
                are higher than the average costs of MS-DRG 002. To determine whether
                surgical class A should be higher or lower than surgical class B in the
                surgical hierarchy, we would weigh the average costs of each MS-DRG in
                the class by frequency (that is, by the number of cases in the MS-DRG)
                to determine average resource consumption for the surgical class. The
                surgical classes would then be ordered from the class with the highest
                average resource utilization to that with the lowest, with the
                exception of ``other O.R. procedures'' as discussed in this proposed
                rule.
                 This methodology may occasionally result in assignment of a case
                involving multiple procedures to the lower-weighted MS-DRG (in the
                highest, most resource-intensive surgical class) of the available
                alternatives. However, given that the logic underlying the surgical
                hierarchy provides that the GROUPER search for the procedure in the
                most resource-intensive surgical class, in cases involving multiple
                procedures, this result is sometimes unavoidable.
                 We note that, notwithstanding the foregoing discussion, there are a
                few instances when a surgical class with a lower average cost is
                ordered above a surgical class with a higher average cost. For example,
                the ``other O.R. procedures'' surgical class is uniformly ordered last
                in the surgical hierarchy of each MDC in which it occurs, regardless of
                the fact that the average costs for the MS-DRG or MS-DRGs in that
                surgical class may be higher than those for other surgical classes in
                the MDC. The ``other O.R. procedures'' class is a group of procedures
                that are only infrequently related to the diagnoses in the MDC, but are
                still occasionally performed on patients with cases assigned to the MDC
                with these diagnoses. Therefore, assignment to these surgical classes
                should only occur if no other surgical class more closely related to
                the diagnoses in the MDC is appropriate.
                 A second example occurs when the difference between the average
                costs for two surgical classes is very small. We have found that small
                differences generally do not warrant reordering of the hierarchy
                because, as a result of reassigning cases on the basis of the hierarchy
                change, the average costs are likely to shift such that the higher-
                ordered surgical class has lower average costs than the class ordered
                below it.
                 For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request
                to examine the MS-DRG hierarchy within MDC 05 (Diseases and Disorders
                of the Circulatory System). The requestor stated its request to review
                the hierarchy within MDC 05 was based on the relative weights within
                each MS-DRG subdivision which they stated are supportive of higher
                position within the hierarchy. The requestor stated that when multiple
                procedures are performed, it is reasonable for providers to be
                compensated for the highest weighted procedure. The requestor did not
                specify which data year it analyzed to identify the relative weights.
                As discussed in this section, in reviewing the surgical hierarchy, we
                weigh the average costs of each MS-DRG in the class by frequency (that
                is, by the number of cases in the MS-DRG), not the relative weights of
                each MS-DRG as suggested by the requestor, to determine average
                resource consumption for the surgical class; therefore, consistent with
                our annual process, we used the methodology as described previously to
                review the surgical hierarchy within MDC 05.
                 Based on our review of the surgical hierarchy within MDC 05 in
                response to this request, and in response to the request we received to
                review the MS-DRG assignments for cases involving the surgical ablation
                procedure for atrial fibrillation as discussed in section II.D.5.e. of
                the preamble of this proposed rule, we are proposing to revise the
                surgical hierarchy for the MS-DRGs in MDC 05 for FY 2022. Specifically,
                we are proposing to sequence MS-DRGs 231-236 above MS-DRGs 222-227 and
                below MS-DRGs 216-221, sequence MS-DRGs 222-227 above MS-DRGs 266-227
                and below MS-DRGs 231-236, sequence MS-DRGs 266-267 above MS-DRGs 268-
                269 and below MS-DRGs 222-227, sequence MS-DRGs 228-229 above MS-DRGs
                319-320 and below MS-DRGs 268-269.
                 Our proposal for Appendix D MS-DRG Surgical Hierarchy by MDC and
                MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 39 is
                illustrated in the following table.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.120
                16. Maintenance of the ICD-10-CM and ICD-10-PCS Coding Systems
                 In September 1985, the ICD-9-CM Coordination and Maintenance
                Committee was formed. This is a Federal interdepartmental committee,
                co-chaired by the Centers for Disease Control and Prevention's (CDC)
                National Center for Health Statistics (NCHS) and CMS, charged with
                maintaining and updating the ICD-9-CM system. The final update to ICD-
                9-CM codes was made on October 1, 2013. Thereafter, the name of the
                Committee was changed to the ICD-10 Coordination and Maintenance
                Committee, effective with the March 19-20, 2014 meeting. The ICD-10
                Coordination and Maintenance Committee addresses updates to the ICD-10-
                CM and ICD-10-PCS coding systems. The Committee is jointly responsible
                for approving coding changes, and developing errata, addenda, and other
                modifications to the coding systems to reflect newly developed
                procedures and technologies and newly identified diseases. The
                Committee is also responsible for promoting the use of Federal and non-
                Federal educational programs and other communication techniques with a
                view toward standardizing coding applications and upgrading the quality
                of the classification system.
                 The official list of ICD-9-CM diagnosis and procedure codes by
                fiscal year can be found on the CMS website at: http://cms.hhs.gov/
                Medicare/Coding/ICD9ProviderDiagnosticCodes/
                [[Page 25191]]
                codes.html. The official list of ICD-10-CM and ICD-10-PCS codes can be
                found on the CMS website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html.
                 The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM
                diagnosis codes included in the Tabular List and Alphabetic Index for
                Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-
                9-CM procedure codes included in the Tabular List and Alphabetic Index
                for Procedures.
                 The Committee encourages participation in the previously mentioned
                process by health-related organizations. In this regard, the Committee
                holds public meetings for discussion of educational issues and proposed
                coding changes. These meetings provide an opportunity for
                representatives of recognized organizations in the coding field, such
                as the American Health Information Management Association (AHIMA), the
                American Hospital Association (AHA), and various physician specialty
                groups, as well as individual physicians, health information management
                professionals, and other members of the public, to contribute ideas on
                coding matters. After considering the opinions expressed during the
                public meetings and in writing, the Committee formulates
                recommendations, which then must be approved by the agencies.
                 The Committee presented proposals for coding changes for
                implementation in FY 2022 at a public meeting held on September 8-9,
                2020 and finalized the coding changes after consideration of comments
                received at the meetings and in writing by November 09, 2020.
                 The Committee held its 2021 meeting on March 9-10, 2021. The
                deadline for submitting comments on these code proposals was April 9,
                2021. It was announced at this meeting that any new diagnosis and
                procedure codes for which there was consensus of public support and for
                which complete tabular and indexing changes would be made by June 2021
                would be included in the October 1, 2021 update to the ICD-10-CM
                diagnosis and ICD-10-PCS procedure code sets. As discussed in earlier
                sections of the preamble of this proposed rule, there are new, revised,
                and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
                that are captured in Table 6A.--New Diagnosis Codes, Table 6B.--New
                Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table 6D.--Invalid
                Procedure Codes, and Table 6E.--Revised Diagnosis Code Titles for this
                proposed rule, which are available via the internet on the CMS website
                at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of
                the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
                process. Therefore, although we make the code titles available for the
                IPPS proposed rule, they are not subject to comment in the proposed
                rule. Because of the length of these tables, they are not published in
                the Addendum to the proposed rule. Rather, they are available via the
                internet as discussed in section VI. of the Addendum to the proposed
                rule.
                 Recordings for the virtual meeting discussions of the procedure
                codes at the Committee's September 8-9, 2020 meeting and the March 9-
                10, 2021 meeting can be obtained from the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials. The
                materials for the discussions relating to diagnosis codes at the
                September 8-9, 2020 meeting and March 9-10, 2021 meeting can be found
                at: http://www.cdc.gov/nchs/icd/icd10cm_maintenance.html. These
                websites also provide detailed information about the Committee,
                including information on requesting a new code, participating in a
                Committee meeting, timeline requirements and meeting dates.
                 We encourage commenters to submit questions and comments on coding
                issues involving diagnosis codes via Email to: cdc.gov">[email protected]cdc.gov.
                 Questions and comments concerning the procedure codes should be
                submitted via Email to: [email protected].
                 As a result of the ongoing COVID-19 public health emergency, the
                CDC implemented six new diagnosis codes describing conditions related
                to COVID-19 into the ICD-10-CM effective with discharges on and after
                January 1, 2021. The diagnosis codes are
                [GRAPHIC] [TIFF OMITTED] TP10MY21.121
                 We refer the reader to the CDC web page at https://www.cdc.gov/nchs/icd/icd10cm.htm for additional details regarding the
                implementation of these new diagnosis codes.
                 We provided the MS-DRG assignments for the six diagnosis codes
                effective with discharges on and after January 1, 2021, consistent with
                our established process for assigning new diagnosis codes.
                Specifically, we review the predecessor diagnosis code and MS-DRG
                assignment most closely associated with the new diagnosis code, and
                consider other factors that may be relevant to the MS-DRG assignment,
                including the severity of illness, treatment difficulty, and the
                resources utilized for the specific condition/diagnosis. We note that
                this process does not automatically result in the new
                [[Page 25192]]
                diagnosis code being assigned to the same MS-DRG as the predecessor
                code. The assignments for the previously listed diagnosis codes are
                reflected in Table 6A- New Diagnosis Codes (which is available via the
                internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS). As with the other new
                diagnosis codes and MS-DRG assignments included in Table 6A of this
                proposed rule, we are soliciting public comments on the most
                appropriate MDC, MS-DRG, and severity level assignments for these codes
                for FY 2022, as well as any other options for the GROUPER logic.
                 In addition, CMS implemented 21 new procedure codes describing the
                introduction or infusion of therapeutics, including monoclonal
                antibodies and vaccines for COVID-19 treatment, into the ICD-10-PCS
                effective with discharges on and after January 01, 2021. The 21
                procedure codes listed in this section of this rule are designated as
                non-O.R. and do not affect any MDC or MS-DRG assignment as shown in the
                following table
                BILLING CODE 4120-01-P
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                [[Page 25193]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.123
                BILLING CODE 4120-01-C
                 The ICD-10 MS-DRG assignment for cases reporting any one of the 21
                procedure codes is dependent on the reported principal diagnosis, any
                secondary diagnoses defined as a CC or MCC, procedures or services
                performed, age, sex, and discharge status. The 21 procedure codes are
                reflected in Table 6B--New Procedure Codes (which is available via the
                internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.) As with the other new
                procedure codes and MS-DRG assignments included in Table 6B of this
                proposed rule, we are soliciting public comments on the most
                appropriate MDC, MS-DRG, and operating room status assignments for
                [[Page 25194]]
                these codes for FY 2022, as well as any other options for the GROUPER
                logic.
                 We note that Change Request (CR) 11895, Transmittal 10654, titled
                ``Fiscal Year (FY) 2021 Annual Update to the Medicare Code Editor (MCE)
                and International Classification of Diseases, Tenth Revision, Clinical
                Modification (ICD-10-CM) and Procedure Coding System (ICD-10-PCS)'',
                was issued on March 12, 2021 (available via the internet on the CMS
                website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r10654cp) regarding the release of an updated
                version of the ICD-10 MS-DRG GROUPER and Medicare Code Editor software,
                Version 38.1, effective with discharges on and after January 1, 2021,
                reflecting the new diagnosis and procedure codes. The updated software,
                along with the updated ICD-10 MS-DRG V38.1 Definitions Manual and the
                Definitions of Medicare Code Edits V38.1 manual is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
                 In the September 7, 2001 final rule implementing the IPPS new
                technology add-on payments (66 FR 46906), we indicated we would attempt
                to include proposals for procedure codes that would describe new
                technology discussed and approved at the Spring meeting as part of the
                code revisions effective the following October.
                 Section 503(a) of Public Law 108-173 included a requirement for
                updating diagnosis and procedure codes twice a year instead of a single
                update on October 1 of each year. This requirement was included as part
                of the amendments to the Act relating to recognition of new technology
                under the IPPS. Section 503(a) of Public Law 108-173 amended section
                1886(d)(5)(K) of the Act by adding a clause (vii) which states that the
                Secretary shall provide for the addition of new diagnosis and procedure
                codes on April 1 of each year, but the addition of such codes shall not
                require the Secretary to adjust the payment (or diagnosis-related group
                classification) until the fiscal year that begins after such date. This
                requirement improves the recognition of new technologies under the IPPS
                by providing information on these new technologies at an earlier date.
                Data will be available 6 months earlier than would be possible with
                updates occurring only once a year on October 1.
                 While section 1886(d)(5)(K)(vii) of the Act states that the
                addition of new diagnosis and procedure codes on April 1 of each year
                shall not require the Secretary to adjust the payment, or DRG
                classification, under section 1886(d) of the Act until the fiscal year
                that begins after such date, we have to update the DRG software and
                other systems in order to recognize and accept the new codes. We also
                publicize the code changes and the need for a mid-year systems update
                by providers to identify the new codes. Hospitals also have to obtain
                the new code books and encoder updates, and make other system changes
                in order to identify and report the new codes.
                 The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance
                Committee holds its meetings in the spring and fall in order to update
                the codes and the applicable payment and reporting systems by October 1
                of each year. Items are placed on the agenda for the Committee meeting
                if the request is received at least 3 months prior to the meeting. This
                requirement allows time for staff to review and research the coding
                issues and prepare material for discussion at the meeting. It also
                allows time for the topic to be publicized in meeting announcements in
                the Federal Register as well as on the CMS website. A complete addendum
                describing details of all diagnosis and procedure coding changes, both
                tabular and index, is published on the CMS and NCHS websites in June of
                each year. Publishers of coding books and software use this information
                to modify their products that are used by health care providers.
                Historically, this 5-month time period has proved to be necessary for
                hospitals and other providers to update their systems.
                 A discussion of this timeline and the need for changes are included
                in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance
                Committee Meeting minutes. The public agreed that there was a need to
                hold the fall meetings earlier, in September or October, in order to
                meet the new implementation dates. The public provided comment that
                additional time would be needed to update hospital systems and obtain
                new code books and coding software. There was considerable concern
                expressed about the impact this April update would have on providers.
                 In the FY 2005 IPPS final rule, we implemented section
                1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law
                108-173, by developing a mechanism for approving, in time for the April
                update, diagnosis and procedure code revisions needed to describe new
                technologies and medical services for purposes of the new technology
                add-on payment process. We also established the following process for
                making these determinations. Topics considered during the Fall ICD-10
                (previously ICD-9-CM) Coordination and Maintenance Committee meeting
                are considered for an April 1 update if a strong and convincing case is
                made by the requestor during the Committee's public meeting. The
                request must identify the reason why a new code is needed in April for
                purposes of the new technology process. Meeting participants and those
                reviewing the Committee meeting materials are provided the opportunity
                to comment on this expedited request. All other topics are considered
                for the October 1 update. Participants of the Committee meeting and
                those reviewing the Committee meeting materials are encouraged to
                comment on all such requests. There were no code requests approved for
                an expedited April 1, 2021 implementation at the September 8-9, 2020
                Committee meetings. Therefore, there were no new codes implemented
                April 1, 2021.
                 At the March 9-10, 2021 ICD-10 Coordination and Maintenance
                Committee meeting we announced our consideration of an April 1
                implementation date for ICD-10-CM diagnosis and ICD-10-PCS procedure
                code updates, in addition to the current October 1 annual update for
                ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes. We stated
                that this April 1 code update would be in addition to the existing
                April 1 update under section 1886(d)(5)(k)(vii) of the Act for
                diagnosis or procedure code revisions needed to describe new
                technologies and medical services for purposes of the new technology
                add-on payment process. As explained during the March 9-10, 2021
                meeting, we believe this additional April 1 implementation date for new
                codes would allow for earlier recognition of diagnoses, conditions, and
                illnesses as well as procedures, services, and treatments in the claims
                data. We also believe this earlier recognition would be beneficial for
                purposes of reporting, data collection, tracking clinical outcomes,
                claims processing, surveillance, research, policy decisions and data
                interoperability. We note, as previously summarized, that in 2005, in
                connection with the implementation of the current April 1 update for
                diagnosis or procedure code revisions for purposes of the new
                technology add-on payment process, stakeholders expressed concerns with
                an April 1 update, specifically with regard to the time needed to
                update hospital systems and obtain new code books and coding software.
                We believe that the advances in technology that have occurred since
                [[Page 25195]]
                that time, including the use of electronic health records (EHRs),
                electronic coding books, and updated encoder software that are now
                utilized by the majority of providers, would alleviate those concerns
                and make a broader April 1 update more feasible today. Consistent with
                our established process for the existing April 1 update under section
                1886(d)(5)(k)(vii) of the Act, if adopted, any new ICD-10 code updates
                finalized for implementation on the following April 1 would be
                announced in November of the prior year, which would provide a 4-month
                timeframe for the public to receive notice about the diagnosis and/or
                procedure code updates with respect to the codes, code descriptions,
                code designations (severity level for diagnosis codes or O.R. status
                for procedure code) and code assignment under the ICD-10 MS-DRGs. As
                discussed during the March 9-10, 2021 meeting, all April 1 code update
                files would be made publicly available by February 1, providing a 2-
                month timeframe for providers to incorporate systems updates. We also
                do not anticipate any need for code book publishers to issue new code
                books as a result of an April 1 code update, if adopted. Rather, as was
                done in the past at the publisher's discretion, supplemental pages
                containing the code update information were made available and sent to
                purchasers of the code book products. We further note that
                historically, coders would hand-write any updates or notes directly
                into their code books. In addition, with the availability of electronic
                code book files, we would anticipate any April 1 code updates, if
                adopted, could be reasonably completed in the allotted timeframe. For
                these same reasons, we also do not believe a 5-month time period would
                continue to be needed to update providers' systems to reflect newly
                approved coding changes. We further note that if an April 1 update were
                to be adopted, it could be through a phased approach, such that
                initially, the number and nature of the code updates would be fewer and
                less comprehensive as compared to the existing October 1 update. For
                example, it was discussed during the meeting that consideration could
                first be given to proposals identified as ``Addenda''. For diagnosis
                codes, the proposed addenda updates typically consist primarily of
                minor revisions to the Index and Tabular List, such as corrections to
                typos and changes to instructional notes. For procedure codes, the
                proposed addenda updates typically consist primarily of minor revisions
                to the Index and Tables, such as adding or deleting entries to describe
                a body part or approach value or making changes to the Substance and
                Device Keys. We would use our established process to implement an April
                1 code update, which would include presenting proposals for April 1
                consideration at the September ICD-10 Coordination and Maintenance
                Committee meeting, requesting public comments, reviewing the public
                comments, finalizing codes, and announcing the new codes with their
                assignments consistent with the new GROUPER release information. Under
                our contemplated process, requestors would indicate whether they are
                submitting their code request for consideration for an April 1
                implementation date, if adopted, or an October 1 implementation date.
                The ICD-10 Coordination and Maintenance Committee would make efforts to
                accommodate the requested implementation date for each request
                submitted. However, the Committee would determine which requests would
                be presented for consideration for an April 1 implementation date or an
                October 1 implementation date. We refer the reader to the Agenda packet
                from the meeting at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional information regarding this
                announcement and our request for comments.
                 If this new April 1 implementation date is adopted, we would assign
                the codes approved for the April 1 update to an MS-DRG(s) using our
                established process for GROUPER assignments for new diagnosis and
                procedure codes. Specifically, consistent with our established process
                for assigning new diagnosis and procedure codes, we would review the
                predecessor code and MS-DRG assignment most closely associated with the
                new diagnosis or procedure code, and in the absence of claims data, we
                would consider other factors that may be relevant to the MS-DRG
                assignment, including the severity of illness, treatment difficulty,
                complexity of service and the resources utilized in the diagnosis and/
                or treatment of the condition. We note that this process would not
                automatically result in the new diagnosis or procedure code being
                assigned to the same MS-DRG or having the same designation as the
                predecessor code.
                 ICD-9-CM addendum and code title information is published on the
                CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and
                ICD-10-PCS addendum and code title information is published on the CMS
                website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS
                also sends electronic files containing all ICD-10-CM and ICD-10-PCS
                coding changes to its Medicare contractors for use in updating their
                systems and providing education to providers.
                 Information on ICD-10-CM diagnosis codes, along with the Official
                ICD-10-CM Coding Guidelines, can be found on the CDC website at:
                https://www.cdc.gov/nchs/icd/icd10cm.htm.
                 Additionally, information on new, revised, and deleted ICD-10-CM
                diagnosis and ICD-10-PCS procedure codes is provided to the AHA for
                publication in the Coding Clinic for ICD-10. The AHA also distributes
                coding update information to publishers and software vendors.
                 For FY 2021, there are currently 72,621 diagnosis codes and 78,136
                ICD-10-PCS procedure codes. As displayed in Table 6A.--New Diagnosis
                Codes and in Table 6B.--New Procedure Codes associated with this
                proposed rule (and available via the internet on the CMS website at
                https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/, there are 147 new diagnosis codes and 106 new
                procedure codes that have been finalized for FY 2022 at the time of the
                development of this proposed rule. The code titles are adopted as part
                of the ICD-10 Coordination and Maintenance Committee process. Thus,
                although we publish the code titles in the IPPS proposed and final
                rules, they are not subject to comment in the proposed or final rules.
                We will continue to provide the October updates in this manner in the
                IPPS proposed and final rules.
                17. Replaced Devices Offered Without Cost or With a Credit
                a. Background
                 In the FY 2008 IPPS final rule with comment period (72 FR 47246
                through 47251), we discussed the topic of Medicare payment for devices
                that are replaced without cost or where credit for a replaced device is
                furnished to the hospital. We implemented a policy to reduce a
                hospital's IPPS payment for certain MS-DRGs where the implantation of a
                device that subsequently failed or was recalled determined the base MS-
                DRG assignment. At that time, we specified that we will reduce a
                hospital's IPPS payment for those MS-DRGs where the hospital received a
                credit for a replaced device equal to 50 percent or more of the cost of
                the device.
                [[Page 25196]]
                 In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through
                51557), we clarified this policy to state that the policy applies if
                the hospital received a credit equal to 50 percent or more of the cost
                of the replacement device and issued instructions to hospitals
                accordingly.
                b. Proposed Changes for FY 2022
                 For FY 2022 we are proposing not to add any MS-DRGs to the policy
                for replaced devices offered without cost or with a credit. We are
                proposing to continue to include the existing MS-DRGs currently subject
                to the policy as displayed in the following table.
                BILLING CODE 4120-01-P
                [[Page 25197]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.124
                [[Page 25198]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.125
                BILLING CODE 4120-01-C
                 The final list of MS-DRGs subject to the IPPS policy for replaced
                devices offered without cost or with a credit will be included in the
                FY 2022 IPPS/LTCH PPS final rule and also will be issued to providers
                in the form of a Change Request (CR).
                II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
                DRG) Classifications and Relative Weights
                E. Recalibration of the FY 2022 MS-DRG Relative Weights
                1. Data Sources for Developing the Relative Weights
                 In accordance with our proposal as discussed in section I.F. of
                this proposed rule, for the purposes of establishing the FY 2022 MS-DRG
                relative weights, we are proposing to use the FY 2019 MedPAR claims
                data, based on claims received by CMS through March 31, 2020, and the
                March 2020 update of the FY 2018 HCRIS file where we ordinarily would
                have used the FY 2020 MedPAR claims data, based on claims received by
                CMS through December 31, 2020, and the December 2020 update of the FY
                2019 HCRIS file. We refer the reader to section I.F. of this
                [[Page 25199]]
                proposed rule for further discussion of our analysis of the best
                available data for purposes of the FY 2022 ratesetting and our related
                proposals.
                 Consistent with our established policy, in developing the MS-DRG
                relative weights for FY 2022, we are proposing to use two data sources:
                Claims data and cost report data. The claims data source is the MedPAR
                file, which includes fully coded diagnostic and procedure data for all
                Medicare inpatient hospital bills. The FY 2019 MedPAR data used in this
                proposed rule include discharges occurring on October 1, 2018, through
                September 30, 2019, based on bills received by CMS through March 31,
                2020, from all hospitals subject to the IPPS and short-term, acute care
                hospitals in Maryland (which at that time were under a waiver from the
                IPPS).
                 The FY 2019 MedPAR file used in calculating the proposed relative
                weights includes data for approximately 9,217,828 Medicare discharges
                from IPPS providers. Discharges for Medicare beneficiaries enrolled in
                a Medicare Advantage managed care plan are excluded from this analysis.
                These discharges are excluded when the MedPAR ``GHO Paid'' indicator
                field on the claim record is equal to ``1'' or when the MedPAR DRG
                payment field, which represents the total payment for the claim, is
                equal to the MedPAR ``Indirect Medical Education (IME)'' payment field,
                indicating that the claim was an ``IME only'' claim submitted by a
                teaching hospital on behalf of a beneficiary enrolled in a Medicare
                Advantage managed care plan. In addition, the March 31, 2020 update of
                the FY 2019 MedPAR file complies with version 5010 of the X12 HIPAA
                Transaction and Code Set Standards, and includes a variable called
                ``claim type.'' Claim type ``60'' indicates that the claim was an
                inpatient claim paid as fee-for-service. Claim types ``61,'' ``62,''
                ``63,'' and ``64'' relate to encounter claims, Medicare Advantage IME
                claims, and HMO no-pay claims. Therefore, the calculation of the
                proposed relative weights for FY 2022 also excludes claims with claim
                type values not equal to ``60.'' The data exclude CAHs, including
                hospitals that subsequently became CAHs after the period from which the
                data were taken. We note that the proposed FY 2022 relative weights are
                based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
                from the FY 2019 MedPAR claims data, grouped through the ICD-10 version
                of the proposed FY 2022 GROUPER (Version 39).
                 The second data source used in the cost-based relative weighting
                methodology is the Medicare cost report data files from the HCRIS.
                Normally, we use the HCRIS dataset that is 3 years prior to the IPPS
                fiscal year. However, as discussed earlier in this section, we are
                proposing to use the March 31, 2020 update of the FY 2018 HCRIS for
                calculating the proposed FY 2022 cost-based relative weights.
                Consistent with our historical practice, for this FY 2022 proposed
                rule, we are providing the version of the HCRIS from which we
                calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the
                screen titled ``FY 2022 IPPS Proposed Rule Home Page'' or ``Acute
                Inpatient Files for Download.'' We note that this file is identical to
                the file used for the FY 2021 IPPS/LTCH PPS final rule. As discussed
                previously, we are also making available the FY 2019 HCRIS and the FY
                2020 MedPAR file as well as other related information and data files
                for purposes of public comment on our alternative approach of using the
                same FY 2020 data that we would ordinarily use for purposes of FY 2022
                ratesetting.
                2. Methodology for Calculation of the Relative Weights
                a. General
                 We calculated the proposed FY 2022 relative weights based on 19
                CCRs, as we did for FY 2021. The methodology we are proposing to use to
                calculate the FY 2022 MS-DRG cost-based relative weights based on
                claims data in the FY 2019 MedPAR file and data from the FY 2018
                Medicare cost reports is as follows:
                 To the extent possible, all the claims were regrouped
                using the proposed FY 2022 MS-DRG classifications discussed in sections
                II.B. and II.F. of the preamble of this proposed rule.
                 The transplant cases that were used to establish the
                relative weights for heart and heart-lung, liver and/or intestinal, and
                lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively)
                were limited to those Medicare-approved transplant centers that have
                cases in the FY 2019 MedPAR file. (Medicare coverage for heart, heart-
                lung, liver and/or intestinal, and lung transplants is limited to those
                facilities that have received approval from CMS as transplant centers.)
                 Organ acquisition costs for kidney, heart, heart-lung,
                liver, lung, pancreas, and intestinal (or multivisceral organs)
                transplants continue to be paid on a reasonable cost basis.
                 Because these acquisition costs are paid separately from the
                prospective payment rate, it is necessary to subtract the acquisition
                charges from the total charges on each transplant bill that showed
                acquisition charges before computing the average cost for each MS-DRG
                and before eliminating statistical outliers.
                 Section 108 of the Further Consolidated Appropriations Act, 2020
                provides that, for cost reporting periods beginning on or after October
                1, 2020, costs related to hematopoietic stem cell acquisition for the
                purpose of an allogeneic hematopoietic stem cell transplant shall be
                paid on a reasonable cost basis. We refer the reader to the FY 2021
                IPPS/LTCH PPS final rule for further discussion of the reasonable cost
                basis payment for cost reporting periods beginning on or after October
                1, 2020 (85 FR 58835 to 58842). For FY 2022 and subsequent years, we
                are proposing to subtract the hematopoietic stem cell acquisition
                charges from the total charges on each transplant bill that showed
                hematopoietic stem cell acquisition charges before computing the
                average cost for each MS-DRG and before eliminating statistical
                outliers.
                 Claims with total charges or total lengths of stay less
                than or equal to zero were deleted. Claims that had an amount in the
                total charge field that differed by more than $30.00 from the sum of
                the routine day charges, intensive care charges, pharmacy charges,
                implantable devices charges, supplies and equipment charges, therapy
                services charges, operating room charges, cardiology charges,
                laboratory charges, radiology charges, other service charges, labor and
                delivery charges, inhalation therapy charges, emergency room charges,
                blood and blood products charges, anesthesia charges, cardiac
                catheterization charges, CT scan charges, and MRI charges were also
                deleted.
                 At least 92.8 percent of the providers in the MedPAR file
                had charges for 14 of the 19 cost centers. All claims of providers that
                did not have charges greater than zero for at least 14 of the 19 cost
                centers were deleted. In other words, a provider must have no more than
                five blank cost centers. If a provider did not have charges greater
                than zero in more than five cost centers, the claims for the provider
                were deleted.
                 Statistical outliers were eliminated by removing all cases
                that were beyond 3.0 standard deviations from the geometric mean of the
                log distribution of both the total charges per case and the total
                charges per day for each MS-DRG.
                [[Page 25200]]
                 Effective October 1, 2008, because hospital inpatient
                claims include a POA indicator field for each diagnosis present on the
                claim, only for purposes of relative weight-setting, the POA indicator
                field was reset to ``Y'' for ``Yes'' for all claims that otherwise have
                an ``N'' (No) or a ``U'' (documentation insufficient to determine if
                the condition was present at the time of inpatient admission) in the
                POA field.
                 Under current payment policy, the presence of specific HAC codes,
                as indicated by the POA field values, can generate a lower payment for
                the claim. Specifically, if the particular condition is present on
                admission (that is, a ``Y'' indicator is associated with the diagnosis
                on the claim), it is not a HAC, and the hospital is paid for the higher
                severity (and, therefore, the higher weighted MS-DRG). If the
                particular condition is not present on admission (that is, an ``N''
                indicator is associated with the diagnosis on the claim) and there are
                no other complicating conditions, the DRG GROUPER assigns the claim to
                a lower severity (and, therefore, the lower weighted MS-DRG) as a
                penalty for allowing a Medicare inpatient to contract a HAC. While the
                POA reporting meets policy goals of encouraging quality care and
                generates program savings, it presents an issue for the relative
                weight-setting process. Because cases identified as HACs are likely to
                be more complex than similar cases that are not identified as HACs, the
                charges associated with HAC cases are likely to be higher as well.
                Therefore, if the higher charges of these HAC claims are grouped into
                lower severity MS-DRGs prior to the relative weight-setting process,
                the relative weights of these particular MS-DRGs would become
                artificially inflated, potentially skewing the relative weights. In
                addition, we want to protect the integrity of the budget neutrality
                process by ensuring that, in estimating payments, no increase to the
                standardized amount occurs as a result of lower overall payments in a
                previous year that stem from using weights and case-mix that are based
                on lower severity MS-DRG assignments. If this would occur, the
                anticipated cost savings from the HAC policy would be lost.
                 To avoid these problems, we reset the POA indicator field to ``Y''
                only for relative weight-setting purposes for all claims that otherwise
                have an ``N'' or a ``U'' in the POA field. This resetting ``forced''
                the more costly HAC claims into the higher severity MS-DRGs as
                appropriate, and the relative weights calculated for each MS-DRG more
                closely reflect the true costs of those cases.
                 In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013
                and subsequent fiscal years, we finalized a policy to treat hospitals
                that participate in the Bundled Payments for Care Improvement (BPCI)
                initiative the same as prior fiscal years for the IPPS payment modeling
                and ratesetting process without regard to hospitals' participation
                within these bundled payment models (77 FR 53341 through 53343).
                Specifically, because acute care hospitals participating in the BPCI
                Initiative still receive IPPS payments under section 1886(d) of the
                Act, we include all applicable data from these subsection (d) hospitals
                in our IPPS payment modeling and ratesetting calculations as if the
                hospitals were not participating in those models under the BPCI
                initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule
                for a complete discussion on our final policy for the treatment of
                hospitals participating in the BPCI initiative in our ratesetting
                process. For additional information on the BPCI initiative, we refer
                readers to the CMS' Center for Medicare and Medicaid Innovation's
                website at: http://innovation.cms.gov/initiatives/Bundled-Payments/index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/
                LTCH PPS final rule (77 FR 53341 through 53343).
                 The participation of hospitals in the BPCI initiative concluded on
                September 30, 2018. The participation of hospitals in the BPCI Advanced
                model started on October 1, 2018. The BPCI Advanced model, tested under
                the authority of section 1115A of the Act, is comprised of a single
                payment and risk track, which bundles payments for multiple services
                beneficiaries receive during a Clinical Episode. Acute care hospitals
                may participate in BPCI Advanced in one of two capacities: As a model
                Participant or as a downstream Episode Initiator. Regardless of the
                capacity in which they participate in the BPCI Advanced model,
                participating acute care hospitals will continue to receive IPPS
                payments under section 1886(d) of the Act. Acute care hospitals that
                are Participants also assume financial and quality performance
                accountability for Clinical Episodes in the form of a reconciliation
                payment. For additional information on the BPCI Advanced model, we
                refer readers to the BPCI Advanced web page on the CMS Center for
                Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/initiatives/bpci-advanced/. Consistent with our
                policy for FY 2021, and consistent with how we have treated hospitals
                that participated in the BPCI Initiative, for FY 2022, we continue to
                believe it is appropriate to include all applicable data from the
                subsection (d) hospitals participating in the BPCI Advanced model in
                our IPPS payment modeling and ratesetting calculations because, as
                noted previously, these hospitals are still receiving IPPS payments
                under section 1886(d) of the Act. Consistent with the FY 2021 IPPS/LTCH
                PPS final rule, we are also proposing to include all applicable data
                from subsection (d) hospitals participating in the Comprehensive Care
                for Joint Replacement (CJR) Model in our IPPS payment modeling and
                ratesetting calculations. The charges for each of the 19 cost groups
                for each claim were standardized to remove the effects of differences
                in area wage levels, IME and DSH payments, and for hospitals located in
                Alaska and Hawaii, the applicable cost-of-living adjustment. Because
                hospital charges include charges for both operating and capital costs,
                we standardized total charges to remove the effects of differences in
                geographic adjustment factors, cost-of-living adjustments, and DSH
                payments under the capital IPPS as well. Charges were then summed by
                MS-DRG for each of the 19 cost groups so that each MS-DRG had 19
                standardized charge totals. Statistical outliers were then removed.
                These charges were then adjusted to cost by applying the proposed
                national average CCRs developed from the FY 2018 cost report data,
                consistent with our proposed FY 2022 ratesetting discussed in section
                II.A.4 of the Addendum of this proposed rule.
                 The 19 cost centers that we used in the proposed relative weight
                calculation are shown in a supplemental data file, Cost Center HCRIS
                Lines Supplemental Data File, posted via the internet on the CMS
                website for this proposed rule and available at http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
                The supplemental data file shows the lines on the cost report and the
                corresponding revenue codes that we used to create the proposed 19
                national cost center CCRs. If we receive comments about the groupings
                in this supplemental data file, we may consider these comments as we
                finalize our policy.
                 Consistent with historical practice, we account for rare situations
                of non-monotonicity in a base MS-DRG and its severity levels, where the
                mean cost in the higher severity level is less than the mean cost in
                the lower severity level, in determining the relative weights for the
                different severity levels. If there are initially non-monotonic
                relative weights
                [[Page 25201]]
                in the same base DRG and its severity levels, then we combine the cases
                that group to the specific non-monotonic MS-DRGs for purposes of
                relative weight calculations. For example, if there are two non-
                monotonic MS-DRGs, combining the cases across those two MS-DRGs results
                in the same relative weight for both MS-DRGs. The relative weight
                calculated using the combined cases for those severity levels is
                monotonic, effectively removing any non-monotonicity with the base DRG
                and its severity levels. For this FY 2022 proposed rule, this
                calculation was applied to address non-monotonicity for cases that
                grouped to MS-DRG 504 and MS-DRG 505. We note that cases were also
                combined in calculating the relative weights for these two MS-DRGs for
                FY 2021. In the supplemental file titled AOR/BOR File, we include
                statistics for the affected MS-DRGs both separately and with cases
                combined.
                 We are inviting public comments on our proposals related to
                recalibration of the proposed FY 2022 relative weights and the changes
                in relative weights from FY 2021.
                b. Relative Weight Calculation for MS-DRG 018
                 As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58599
                through 58600), we created MS-DRG 018 for cases that include procedures
                describing CAR T-cell therapies, which were reported using ICD-10-PCS
                procedure codes XW033C3 or XW043C3. We refer the reader to section
                II.D.2. of this proposed rule for discussion of the procedure codes for
                CAR T-cell and non-CAR T-cell therapies and other immunotherapies that
                we are proposing for assignment to MS-DRG 018 for FY 2022.
                 In the FY 2021 IPPS/LTCH PPS final rule, we finalized our proposals
                to modify our existing relative weight methodology to ensure that the
                relative weight for new MS-DRG 018 appropriately reflects the relative
                resources required for providing CAR T-cell therapy outside of a
                clinical trial, while still accounting for the clinical trial cases in
                the overall average cost for all MS-DRGs, with additional refinements
                in response to comments. For cases that group to MS-DRG 018, we
                finalized to not include claims determined to be clinical trial claims
                that group to new MS-DRG 018 when calculating the average cost for new
                MS-DRG 018 that is used to calculate the relative weight for this MS-
                DRG, with the additional refinements that (a) when the CAR T-cell
                therapy product is purchased in the usual manner, but the case involves
                a clinical trial of a different product, the claim will be included
                when calculating the average cost for new MS-DRG 018 to the extent such
                claims can be identified in the historical data, and (b) when there is
                expanded access use of immunotherapy, these cases will not be included
                when calculating the average cost for new MS-DRG 018 to the extent such
                claims can be identified in the historical data (85 FR 58600). We also
                finalized our proposal to calculate an adjustment to account for the
                CAR T-cell therapy cases determined to be clinical trial cases, as
                described in the FY 2021 IPPS/LTCH PPS final rule, with the additional
                refinement of including revenue center 891 in our calculation of
                standardized drug charges for MS-DRG 018. Applying this finalized
                methodology, based on the March 2020 update of the FY 2019 MedPAR file
                for the FY 2021 IPPS/LTCH PPS final rule, we estimated that the average
                costs of CAR T-cell therapy cases determined to be clinical trial cases
                ($46,062) were 17 percent of the average costs of CAR T cell therapy
                cases determined to be non-clinical trial cases ($276,042), and
                therefore, in calculating the national average cost per case for
                purposes of the FY 2021 IPPS/LTCH PPS final rule, each case identified
                as a clinical trial case was adjusted by 0.17. We also noted that we
                were applying this adjustor for cases determined to be CAR T-cell
                therapy clinical trial cases for purposes of budget neutrality and
                outlier simulations. We refer the reader to the FY 2021 IPPS/LTCH PPS
                final rule for complete discussion of our finalized modifications to
                the relative weight calculation for MS-DRG 018.
                 Since we are proposing to use the same FY 2019 MedPAR claims data
                for FY 2022 ratesetting that we did for the FY 2021 final rule, we are
                also proposing to continue to use the same process to identify clinical
                trial claims in the FY 2019 MedPAR for purposes of calculating the FY
                2022 relative weights. We continue to use the proxy of standardized
                drug charges of less than $373,000, which was the average sales price
                of KYMRIAH and YESCARTA, which are the two CAR T-cell biological
                products in the MedPAR data used for the FY 2021 final rule and this
                proposed rule. Using the same methodology from the FY 2021 IPPS/LTCH
                PPS final rule, we are proposing to apply an adjustment to account for
                the CAR T cell therapy cases identified as clinical trial cases in
                calculating the national average standardized cost per case that is
                used to calculate the relative weights for all MS-DRGs:
                 Calculate the average cost for cases to be assigned to new
                MS-DRG 018 that contain ICD-10-CM diagnosis code Z00.6 or contain
                standardized drug charges of less than $373,000.
                 Calculate the average cost for cases to be assigned to new
                MS-DRG 018 that do not contain ICD-10-CM diagnosis code Z00.6 or
                standardized drug charges of at least $373,000.
                 Calculate an adjustor by dividing the average cost
                calculated in step 1 by the average cost calculated in step 2.
                 Apply the adjustor calculated in step 3 to the cases
                identified in step 1 as clinical trial cases, then add this adjusted
                case count to the non-clinical trial case count prior to calculating
                the average cost across all MS-DRGs.
                 Additionally, we are continuing our finalized methodology for
                calculating this payment adjustment, such that: (a) When the CAR T-cell
                therapy product is purchased in the usual manner, but the case involves
                a clinical trial of a different product, the claim will be included
                when calculating the average cost for cases not determined to be
                clinical trial cases and (b) when there is expanded access use of
                immunotherapy, these cases will be included when calculating the
                average cost for cases determined to be clinical trial cases. However,
                we continue to believe to the best of our knowledge there are no claims
                in the historical data (FY 2019 MedPAR) used in the calculation of the
                adjustment for cases involving a clinical trial of a different product,
                and to the extent the historical data contain claims for cases
                involving expanded access use of immunotherapy we believe those claims
                would have drug charges less than $373,000. Consistent with our
                proposal to use the FY 2019 data for the FY 2022 ratesetting, we are
                also proposing to calculate this adjustor based on the March 2020
                update of the FY 2019 MedPAR file for purposes of establishing the FY
                2022 relative weights. Accordingly, as we did for FY 2021, we are
                proposing to adjust the transfer-adjusted case count for MS-DRG 018 by
                applying the proposed adjustor of 17 percent to the applicable clinical
                trial cases, and to use this adjusted case count for MS-DRG 018 in
                calculating the national average cost per case, which is used in the
                calculation of the relative weights. Therefore, in calculating the
                national average cost per case for purposes of this proposed rule, each
                case identified as a clinical trial case was adjusted by 17 percent. As
                we did for FY 2021, we are proposing to apply this same adjustor for
                the applicable cases that group to MS-DRG 018 for purposes of budget
                neutrality and outlier simulations.
                 As discussed in section I.F. of this proposed rule, we are also
                soliciting
                [[Page 25202]]
                comments on an alternative approach of using the same FY 2020 data that
                we would ordinarily use for purposes of the FY 2022 rulemaking, which
                we may consider finalizing for FY 2022 based on consideration of
                comments received. We note that using the methodology as finalized in
                the FY 2021 IPPS/LTCH PPS final rule, we calculated an adjustor of 0.25
                based on this alternative approach of using the FY 2020 MedPAR file.
                3. Development of Proposed National Average CCRs
                 Consistent with our proposal to use the FY 2019 data for the FY
                2022 ratesetting, as discussed earlier in this section, we are
                proposing to continue to use the national average CCRs that were
                calculated for the FY 2021 final rule using that same data.
                Specifically, we calculated these national average CCRs as follows:
                 Using the FY 2018 cost report data, we removed CAHs, Indian Health
                Service hospitals, all-inclusive rate hospitals, and cost reports that
                represented time periods of less than 1 year (365 days). We included
                hospitals located in Maryland because we include their charges in our
                claims database. Then we created CCRs for each provider for each cost
                center (see the supplemental data file for line items used in the
                calculations) and removed any CCRs that were greater than 10 or less
                than 0.01. We normalized the departmental CCRs by dividing the CCR for
                each department by the total CCR for the hospital for the purpose of
                trimming the data. Then we took the logs of the normalized cost center
                CCRs and removed any cost center CCRs where the log of the cost center
                CCR was greater or less than the mean log plus/minus 3 times the
                standard deviation for the log of that cost center CCR. Once the cost
                report data were trimmed, we calculated a Medicare-specific CCR. The
                Medicare-specific CCR was determined by taking the Medicare charges for
                each line item from Worksheet D-3 and deriving the Medicare-specific
                costs by applying the hospital-specific departmental CCRs to the
                Medicare-specific charges for each line item from Worksheet D-3. Once
                each hospital's Medicare-specific costs were established, we summed the
                total Medicare-specific costs and divided by the sum of the total
                Medicare-specific charges to produce national average, charge-weighted
                CCRs.
                 After we multiplied the total charges for each MS-DRG in each of
                the 19 cost centers by the corresponding national average CCR, we
                summed the 19 ``costs'' across each MS-DRG to produce a total
                standardized cost for the MS-DRG. The average standardized cost for
                each MS-DRG was then computed as the total standardized cost for the
                MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The
                average cost for each MS-DRG was then divided by the national average
                standardized cost per case to determine the proposed relative weight.
                 The proposed FY 2022 cost-based relative weights were then
                normalized by an adjustment factor of 1.820783 so that the average case
                weight after recalibration was equal to the average case weight before
                recalibration. The normalization adjustment is intended to ensure that
                recalibration by itself neither increases nor decreases total payments
                under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.
                 The proposed 19 national average CCRs for FY 2022 are as follows:
                 [GRAPHIC] [TIFF OMITTED] TP10MY21.126
                
                 [GRAPHIC] [TIFF OMITTED] TP10MY21.127
                
                [[Page 25203]]
                 Since FY 2009, the relative weights have been based on 100 percent
                cost weights based on our MS-DRG grouping system.
                 When we recalibrated the DRG weights for previous years, we set a
                threshold of 10 cases as the minimum number of cases required to
                compute a reasonable weight. We are proposing to use that same case
                threshold in recalibrating the proposed MS-DRG relative weights for FY
                2022. Using data from the FY 2019 MedPAR file, there were 7 MS-DRGs
                that contain fewer than 10 cases. For FY 2022, because we do not have
                sufficient MedPAR data to set accurate and stable cost relative weights
                for these low-volume MS-DRGs, we are proposing to compute relative
                weights for the low-volume MS-DRGs by adjusting their final FY 2021
                relative weights by the percentage change in the average weight of the
                cases in other MS-DRGs from FY 2021 to FY 2022. The crosswalk table is
                as follows.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.128
                F. Add-On Payments for New Services and Technologies for FY 2022
                1. Background
                 Sections 1886(d)(5)(K) and (L) of the Act establish a process of
                identifying and ensuring adequate payment for new medical services and
                technologies (sometimes collectively referred to in this section as
                ``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the
                Act specifies that a medical service or technology will be considered
                new if it meets criteria established by the Secretary after notice and
                opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act
                specifies that a new medical service or technology may be considered
                for new technology add-on payment if, based on the estimated costs
                incurred with respect to discharges involving such service or
                technology, the DRG prospective payment rate otherwise applicable to
                such discharges under this subsection is inadequate. We note that,
                beginning with discharges occurring in FY 2008, CMS transitioned from
                CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these
                provisions and 42 CFR 412.87(b) specifies three criteria for a new
                medical service or technology to receive the additional payment: (1)
                The medical service or technology must be new; (2) the medical service
                or technology must be costly such that the DRG rate otherwise
                applicable to discharges involving the medical service or technology is
                determined to be inadequate; and (3) the service or technology must
                demonstrate a substantial clinical improvement over existing services
                or technologies. In addition, certain transformative new devices and
                antimicrobial products may qualify under an alternative inpatient new
                technology add-on payment pathway, as set forth in the regulations at
                Sec. 412.87(c) and (d). We note that section 1886(d)(5)(K)(i) of the
                Act requires that the Secretary establish a mechanism to recognize the
                costs of new medical services and technologies under the payment system
                established under that subsection, which establishes the system for
                paying for the operating costs of inpatient hospital services. The
                system of payment for capital costs is established under section
                1886(g) of the Act. Therefore, as discussed in prior rulemaking (72 FR
                47307 through 47308), we do not include capital costs in the add-on
                payments for a new medical service or technology or make new technology
                add-on payments under the IPPS for capital-related costs. In this rule,
                we highlight some of the major statutory and regulatory provisions
                relevant to the new technology add-on payment criteria, as well as
                other information. For a complete discussion of the new technology add-
                on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS
                final rule (76 FR 51572 through 51574), FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42288 through 42300) and the FY 2021 IPPS/LTCH PPS final
                rule (85 FR 58736 through 58742).
                a. New Technology Add On Payment Criteria
                (1) Newness Criterion
                 Under the first criterion, as reflected in Sec. 412.87(b)(2), a
                specific medical service or technology will no longer be considered
                ``new'' for purposes of new medical service or technology add-on
                payments after CMS has recalibrated the MS-DRGs, based on available
                data, to reflect the cost of the technology. We note that we do not
                consider a service or technology to be new if it is substantially
                similar to one or more existing technologies. That is, even if a
                medical product receives a new FDA approval or clearance, it may not
                necessarily be considered ``new'' for purposes of new technology add-on
                payments if it is ``substantially similar'' to another medical product
                that was approved or cleared by FDA and has been on the market for more
                than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74
                FR 43813 through 43814), we established criteria for evaluating whether
                a new technology is substantially similar to an existing technology,
                specifically: (1)
                [[Page 25204]]
                Whether a product uses the same or a similar mechanism of action to
                achieve a therapeutic outcome; (2) whether a product is assigned to the
                same or a different MS-DRG; and (3) whether the new use of the
                technology involves the treatment of the same or similar type of
                disease and the same or similar patient population. If a technology
                meets all three of these criteria, it would be considered substantially
                similar to an existing technology and would not be considered ``new''
                for purposes of new technology add-on payments. For a detailed
                discussion of the criteria for substantial similarity, we refer readers
                to the FY 2006 IPPS final rule (70 FR 47351 through 47352) and the FY
                2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).
                (2) Cost Criterion
                 Under the second criterion, Sec. 412.87(b)(3) further provides
                that, to be eligible for the add-on payment for new medical services or
                technologies, the MS-DRG prospective payment rate otherwise applicable
                to discharges involving the new medical service or technology must be
                assessed for adequacy. Under the cost criterion, consistent with the
                formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess
                the adequacy of payment for a new technology paid under the applicable
                MS-DRG prospective payment rate, we evaluate whether the charges of the
                cases involving a new medical service or technology will exceed a
                threshold amount that is the lesser of 75 percent of the standardized
                amount (increased to reflect the difference between cost and charges)
                or 75 percent of one standard deviation beyond the geometric mean
                standardized charge for all cases in the MS-DRG to which the new
                medical service or technology is assigned (or the case-weighted average
                of all relevant MS-DRGs if the new medical service or technology occurs
                in many different MS-DRGs). The MS-DRG threshold amounts generally used
                in evaluating new technology add-on payment applications for FY 2022
                are presented in a data file that is available, along with the other
                data files associated with the FY 2021 IPPS/LTCH PPS final rule and
                correction notice, on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.
                 We note that, under the policy finalized in the FY 2021 IPPS/LTCH
                PPS final rule (85 FR 58603 through 58605), beginning with FY 2022, we
                use the proposed threshold values associated with the proposed rule for
                that fiscal year to evaluate the cost criterion for all applications
                for new technology add-on payments and previously approved technologies
                that may continue to receive new technology add-on payments, if those
                technologies would be assigned to a proposed new MS-DRG for that same
                fiscal year.
                 As finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275),
                beginning with FY 2020, we include the thresholds applicable to the
                next fiscal year (previously included in Table 10 of the annual IPPS/
                LTCH PPS proposed and final rules) in the data files associated with
                the prior fiscal year. Accordingly, the proposed thresholds for
                applications for new technology add-on payments for FY 2023 are
                presented in a data file that is available on the CMS website, along
                with the other data files associated with this FY 2022 proposed rule,
                by clicking on the FY 2022 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index. We note, for the reasons discussed in section
                I.F of the preamble of this proposed rule, we are proposing to use the
                FY 2019 MedPAR claims data where we ordinarily would have used the FY
                2020 MedPAR claims data for purposes of proposed FY 2022 ratesetting.
                We refer the reader to section I.F. of the preamble of this proposed
                rule for further discussion of our analysis of the best available data
                for FY 2022 ratesetting and our related proposals. For the FY 2023
                proposed threshold values, consistent with our proposal, we are
                proposing to use FY 2019 claims data to evaluate whether the charges of
                the cases involving a new medical service or technology will exceed a
                threshold amount that is the lesser of 75 percent of the proposed FY
                2022 standardized amount (increased to reflect the difference between
                cost and charges) or 75 percent of one standard deviation beyond the
                geometric mean standardized charge (using FY 2019 claims data) for all
                cases in the MS-DRG (using FY 2019 claims data) to which the new
                medical service or technology is assigned (or the case-weighted average
                of all relevant MS-DRGs if the new medical service or technology occurs
                in many different MS-DRGs), rather than the FY 2020 data we would
                otherwise use. As discussed in section I.F of the preamble of this
                proposed rule, we are also considering, as an alternative to our
                proposal, the use of the same FY 2020 data that we would ordinarily use
                for purposes of FY 2022 ratesetting. If we were to finalize this
                alternative approach for FY 2022, we would use the FY 2020 claims data
                for purposes of the final thresholds for applications for new
                technology add-on payments for FY 2023 in the FY 2022 IPPS/LTCH PPS
                final rule. We are making available the threshold values calculated
                using the FY 2020 claims data at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. In the September 7, 2001
                final rule that established the new technology add-on payment
                regulations (66 FR 46917), we discussed that applicants should submit a
                significant sample of data to demonstrate that the medical service or
                technology meets the high-cost threshold. Specifically, applicants
                should submit a sample of sufficient size to enable us to undertake an
                initial validation and analysis of the data. We also discussed in the
                September 7, 2001 final rule (66 FR 46917) the issue of whether the
                Health Insurance Portability and Accountability Act (HIPAA) Privacy
                Rule at 45 CFR parts 160 and 164 applies to claims information that
                providers submit with applications for new medical service or
                technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH
                PPS final rule (76 FR 51573) for complete information on this issue.
                (3) Substantial Clinical Improvement Criterion
                 Under the third criterion at Sec. 412.87(b)(1), a medical service
                or technology must represent an advance that substantially improves,
                relative to technologies previously available, the diagnosis or
                treatment of Medicare beneficiaries. In the FY 2020 IPPS/LTCH PPS final
                rule (84 FR 42288 through 42292), we prospectively codified in our
                regulations at Sec. 412.87(b) the following aspects of how we evaluate
                substantial clinical improvement for purposes of new technology add-on
                payments under the IPPS:
                 The totality of the circumstances is considered when
                making a determination that a new medical service or technology
                represents an advance that substantially improves, relative to services
                or technologies previously available, the diagnosis or treatment of
                Medicare beneficiaries.
                 A determination that a new medical service or technology
                represents an advance that substantially improves, relative to services
                or technologies previously available, the diagnosis or treatment of
                Medicare beneficiaries means--
                 ++ The new medical service or technology offers a treatment option
                for a patient population unresponsive to, or
                [[Page 25205]]
                ineligible for, currently available treatments;
                 ++ The new medical service or technology offers the ability to
                diagnose a medical condition in a patient population where that medical
                condition is currently undetectable, or offers the ability to diagnose
                a medical condition earlier in a patient population than allowed by
                currently available methods, and there must also be evidence that use
                of the new medical service or technology to make a diagnosis affects
                the management of the patient;
                 ++ The use of the new medical service or technology significantly
                improves clinical outcomes relative to services or technologies
                previously available as demonstrated by one or more of the following: A
                reduction in at least one clinically significant adverse event,
                including a reduction in mortality or a clinically significant
                complication; a decreased rate of at least one subsequent diagnostic or
                therapeutic intervention; a decreased number of future hospitalizations
                or physician visits; a more rapid beneficial resolution of the disease
                process treatment including, but not limited to, a reduced length of
                stay or recovery time; an improvement in one or more activities of
                daily living; an improved quality of life; or, a demonstrated greater
                medication adherence or compliance; or
                 ++ The totality of the circumstances otherwise demonstrates that
                the new medical service or technology substantially improves, relative
                to technologies previously available, the diagnosis or treatment of
                Medicare beneficiaries.
                 Evidence from the following published or unpublished
                information sources from within the United States or elsewhere may be
                sufficient to establish that a new medical service or technology
                represents an advance that substantially improves, relative to services
                or technologies previously available, the diagnosis or treatment of
                Medicare beneficiaries: Cinical trials, peer reviewed journal articles;
                study results; meta-analyses; consensus statements; white papers;
                patient surveys; case studies; reports; systematic literature reviews;
                letters from major healthcare associations; editorials and letters to
                the editor; and public comments. Other appropriate information sources
                may be considered.
                 The medical condition diagnosed or treated by the new
                medical service or technology may have a low prevalence among Medicare
                beneficiaries.
                 The new medical service or technology may represent an
                advance that substantially improves, relative to services or
                technologies previously available, the diagnosis or treatment of a
                subpopulation of patients with the medical condition diagnosed or
                treated by the new medical service or technology.
                 We refer the reader to the FY 2020 IPPS/LTCH PPS final rule for
                additional discussion of the evaluation of substantial clinical
                improvement for purposes of new technology add-on payments under the
                IPPS.
                 We note, consistent with the discussion in the FY 2003 IPPS final
                rule (67 FR 50015), that although we are affiliated with the FDA and we
                do not question the FDA's regulatory responsibility for decisions
                related to marketing authorization (for example, approval, clearance,
                etc.), we do not rely upon FDA criteria in our determination of what
                drugs, devices, or technologies qualify for new technology add-on
                payments under Medicare. Our criteria do not depend on the standard of
                safety and efficacy on which the FDA relies but on a demonstration of
                substantial clinical improvement in the Medicare population
                (particularly patients over age 65).
                c. Alternative Inpatient New Technology Add-On Payment Pathway
                 Beginning with applications for FY 2021 new technology add-on
                payments, under the regulations at Sec. 412.87(c), a medical device
                that is part of FDA's Breakthrough Devices Program may qualify for the
                new technology add-on payment under an alternative pathway.
                Additionally, under the regulations at Sec. 412.87(d) for certain
                antimicrobial products, beginning with FY 2021, a drug that is
                designated by the FDA as a Qualified Infectious Disease Product (QIDP),
                and, beginning with FY 2022, a drug that is approved by the FDA under
                the Limited Population Pathway for Antibacterial and Antifungal Drugs
                (LPAD), may also qualify for the new technology add-on payment under an
                alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS
                final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS
                final rule (85 FR 58737 through 58739) for a complete discussion on
                this policy. We note that a technology is not required to have the
                specified FDA designation at the time the new technology add-on payment
                application is submitted. CMS will review the application based on the
                information provided by the applicant under the alternative pathway
                specified by the applicant. However, to receive approval for the new
                technology add-on payment under that alternative pathway, the
                technology must have the applicable FDA designation and meet all other
                requirements in the regulations in Sec. 412.87(c) and (d), as
                applicable.
                (1) Alternative Pathway for Certain Transformative New Devices
                 For applications received for new technology add-on payments for FY
                2021 and subsequent fiscal years, if a medical device is part of FDA's
                Breakthrough Devices Program and received FDA marketing authorization,
                it will be considered new and not substantially similar to an existing
                technology for purposes of the new technology add-on payment under the
                IPPS, and will not need to meet the requirement under Sec.
                412.87(b)(1) that it represent an advance that substantially improves,
                relative to technologies previously available, the diagnosis or
                treatment of Medicare beneficiaries. This policy is codified at Sec.
                412.87(c). Under this alternative pathway, a medical device that has
                received FDA marketing authorization (that is, has been approved or
                cleared by, or had a De Novo classification request granted by, FDA)
                and that is part of FDA's Breakthrough Devices Program will need to
                meet the cost criterion under Sec. 412.87(b)(3), and will be
                considered new as reflected in Sec. 412.87(c)(2). We note, in the FY
                2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736), we clarified
                our policy that a new medical device under this alternative pathway
                must receive marketing authorization for the indication covered by the
                Breakthrough Devices Program designation. We refer the reader to the FY
                2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736) for a
                complete discussion regarding this clarification.
                (2) Alternative Pathway for Certain Antimicrobial Products
                 For applications received for new technology add-on payments for
                certain antimicrobial products, beginning with FY 2021, if a technology
                is designated by FDA as a QIDP and received FDA marketing
                authorization, and, beginning with FY 2022, if a drug is approved under
                FDA's LPAD pathway and used for the indication approved under the LPAD
                pathway, it will be considered new and not substantially similar to an
                existing technology for purposes of new technology add-on payments and
                will not need to meet the requirement that it represent an advance that
                substantially improves, relative to technologies previously available,
                the diagnosis or treatment of Medicare beneficiaries. We codified this
                policy at Sec. 412.87(d). Under this alternative pathway for QIDPs and
                LPADs, a medical product that has received FDA marketing authorization
                and is designated by FDA
                [[Page 25206]]
                as a QIDP or approved under the LPAD pathway will need to meet the cost
                criterion under Sec. 412.87(b)(3), and will be considered new as
                reflected in Sec. 412.87(d)(2).
                 We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR
                42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737
                through 58739) for a complete discussion on this policy. We note, in
                the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739), we
                clarified that a new medical product seeking approval for the new
                technology add-on payment under the alternative pathway for QIDPs must
                receive marketing authorization for the indication covered by the QIDP
                designation. We also finalized our policy to expand our alternative new
                technology add-on payment pathway for certain antimicrobial products to
                include products approved under the LPAD pathway and used for the
                indication approved under the LPAD pathway.
                d. Additional Payment for New Medical Service or Technology
                 The new medical service or technology add-on payment policy under
                the IPPS provides additional payments for cases with relatively high
                costs involving eligible new medical services or technologies, while
                preserving some of the incentives inherent under an average-based
                prospective payment system. The payment mechanism is based on the cost
                to hospitals for the new medical service or technology. As noted
                previously, we do not include capital costs in the add-on payments for
                a new medical service or technology or make new technology add-on
                payments under the IPPS for capital-related costs (72 FR 47307 through
                47308).
                 For discharges occurring before October 1, 2019, under Sec.
                412.88, if the costs of the discharge (determined by applying operating
                cost-to-charge ratios (CCRs) as described in Sec. 412.84(h)) exceed
                the full DRG payment (including payments for IME and DSH, but excluding
                outlier payments), CMS made an add-on payment equal to the lesser of:
                (1) 50 percent of the costs of the new medical service or technology;
                or (2) 50 percent of the amount by which the costs of the case exceed
                the standard DRG payment.
                 Beginning with discharges on or after October 1, 2019, for the
                reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297
                through 42300), we finalized an increase in the new technology add-on
                payment percentage, as reflected at Sec. 412.88(a)(2)(ii).
                Specifically, for a new technology other than a medical product
                designated by FDA as a QIDP, beginning with discharges on or after
                October 1, 2019, if the costs of a discharge involving a new technology
                (determined by applying CCRs as described in Sec. 412.84(h)) exceed
                the full DRG payment (including payments for IME and DSH, but excluding
                outlier payments), Medicare will make an add-on payment equal to the
                lesser of: (1) 65 percent of the costs of the new medical service or
                technology; or (2) 65 percent of the amount by which the costs of the
                case exceed the standard DRG payment. For a new technology that is a
                medical product designated by FDA as a QIDP, beginning with discharges
                on or after October 1, 2019, if the costs of a discharge involving a
                new technology (determined by applying CCRs as described in Sec.
                412.84(h)) exceed the full DRG payment (including payments for IME and
                DSH, but excluding outlier payments), Medicare will make an add-on
                payment equal to the lesser of: (1) 75 percent of the costs of the new
                medical service or technology; or (2) 75 percent of the amount by which
                the costs of the case exceed the standard DRG payment. For a new
                technology that is a medical product approved under FDA's LPAD pathway,
                beginning with discharges on or after October 1, 2020, if the costs of
                a discharge involving a new technology (determined by applying CCRs as
                described in Sec. 412.84(h)) exceed the full DRG payment (including
                payments for IME and DSH, but excluding outlier payments), Medicare
                will make an add-on payment equal to the lesser of: (1) 75 percent of
                the costs of the new medical service or technology; or (2) 75 percent
                of the amount by which the costs of the case exceed the standard DRG
                payment. As set forth in Sec. 412.88(b)(2), unless the discharge
                qualifies for an outlier payment, the additional Medicare payment will
                be limited to the full MS-DRG payment plus 65 percent (or 75 percent
                for certain antimicrobial products (QIDPs and LPADs)) of the estimated
                costs of the new technology or medical service.
                 We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR
                42297 through 42300) for complete discussion on the increase in the new
                technology add on payment beginning with discharges on or after October
                1, 2019.
                 Section 503(d)(2) of Public Law 108-173 provides that there shall
                be no reduction or adjustment in aggregate payments under the IPPS due
                to add-on payments for new medical services and technologies.
                Therefore, in accordance with section 503(d)(2) of Public Law 108-173,
                add-on payments for new medical services or technologies for FY 2005
                and subsequent years have not been subjected to budget neutrality.
                e. Evaluation of Eligibility Criteria for New Medical Service or
                Technology Applications
                 In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
                modified our regulations at Sec. 412.87 to codify our longstanding
                practice of how CMS evaluates the eligibility criteria for new medical
                service or technology add-on payment applications. That is, we first
                determine whether a medical service or technology meets the newness
                criterion, and only if so, do we then make a determination as to
                whether the technology meets the cost threshold and represents a
                substantial clinical improvement over existing medical services or
                technologies. We specified that all applicants for new technology add-
                on payments must have FDA approval or clearance by July 1 of the year
                prior to the beginning of the fiscal year for which the application is
                being considered. In the FY 2021 IPPS final rule, to more precisely
                describe the various types of FDA approvals, clearances and
                classifications that we consider under our new technology add-on
                payment policy, we finalized a technical clarification to the
                regulation to indicate that new technologies must receive FDA marketing
                authorization (such as pre-market approval (PMA); 510(k) clearance; the
                granting of a De Novo classification request, or approval of a New Drug
                Application (NDA)) by July 1 of the year prior to the beginning of the
                fiscal year for which the application is being considered. Consistent
                with our longstanding policy, we consider FDA marketing authorization
                as representing that a product has received FDA approval or clearance
                when considering eligibility for the new technology add-on payment
                under Sec. 412.87(e)(2) (85 FR 58742).
                 Additionally, in the FY 2021 IPPS final rule (85 FR 58739 through
                58742), we finalized our proposal to provide conditional approval for
                new technology add-on payment for a technology for which an application
                is submitted under the alternative pathway for certain antimicrobial
                products at Sec. 412.87(d) that does not receive FDA marketing
                authorization by the July 1 deadline specified in Sec. 412.87(e)(2),
                provided that the technology otherwise meets the applicable add-on
                payment criteria. Under this policy, cases involving eligible
                antimicrobial products would begin receiving the new technology add-on
                payment sooner, effective for discharges the quarter after the date of
                FDA marketing authorization provided
                [[Page 25207]]
                that the technology receives FDA marketing authorization by July 1 of
                the particular fiscal year for which the applicant applied for new
                technology add-on payments.
                f. Council on Technology and Innovation (CTI)
                 The Council on Technology and Innovation at CMS oversees the
                agency's cross-cutting priority on coordinating coverage, coding and
                payment processes for Medicare with respect to new technologies and
                procedures, including new drug therapies, as well as promoting the
                exchange of information on new technologies and medical services
                between CMS and other entities. The CTI, composed of senior CMS staff
                and clinicians, was established under section 942(a) of Public Law 108-
                173. The Council is co-chaired by the Director of the Center for
                Clinical Standards and Quality (CCSQ) and the Director of the Center
                for Medicare (CM), who is also designated as the CTI's Executive
                Coordinator.
                 The specific processes for coverage, coding, and payment are
                implemented by CM, CCSQ, and the local Medicare Administrative
                Contractors (MACs) (in the case of local coverage and payment
                decisions). The CTI supplements, rather than replaces, these processes
                by working to assure that all of these activities reflect the agency-
                wide priority to promote high-quality, innovative care. At the same
                time, the CTI also works to streamline, accelerate, and improve
                coordination of these processes to ensure that they remain up to date
                as new issues arise. To achieve its goals, the CTI works to streamline
                and create a more transparent coding and payment process, improve the
                quality of medical decisions, and speed patient access to effective new
                treatments. It is also dedicated to supporting better decisions by
                patients and doctors in using Medicare-covered services through the
                promotion of better evidence development, which is critical for
                improving the quality of care for Medicare beneficiaries.
                 To improve the understanding of CMS' processes for coverage,
                coding, and payment and how to access them, the CTI has developed an
                ``Innovator's Guide'' to these processes. The intent is to consolidate
                this information, much of which is already available in a variety of
                CMS documents and in various places on the CMS website, in a user
                friendly format. This guide was published in 2010 and is available on
                the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.
                 As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we
                invite any product developers or manufacturers of new medical services
                or technologies to contact the agency early in the process of product
                development if they have questions or concerns about the evidence that
                would be needed later in the development process for the agency's
                coverage decisions for Medicare.
                 The CTI aims to provide useful information on its activities and
                initiatives to stakeholders, including Medicare beneficiaries,
                advocates, medical product manufacturers, providers, and health policy
                experts. Stakeholders with further questions about Medicare's coverage,
                coding, and payment processes, or who want further guidance about how
                they can navigate these processes, can contact the CTI at
                [email protected].
                g. Application Information for New Medical Services or Technologies
                 Applicants for add-on payments for new medical services or
                technologies for FY 2023 must submit a formal request, including a full
                description of the clinical applications of the medical service or
                technology and the results of any clinical evaluations demonstrating
                that the new medical service or technology represents a substantial
                clinical improvement (unless the application is under one of the
                alternative pathways as previously described), along with a significant
                sample of data to demonstrate that the medical service or technology
                meets the high-cost threshold. Complete application information, along
                with final deadlines for submitting a full application, will be posted
                as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical
                services or technologies under review before the publication of the
                proposed rule for FY 2023, the CMS website also will post the tracking
                forms completed by each applicant. We note that the burden associated
                with this information collection requirement is the time and effort
                required to collect and submit the data in the formal request for add-
                on payments for new medical services and technologies to CMS. The
                aforementioned burden is subject to the PRA and approved under OMB
                control number 0938-1347.
                 As discussed previously, in the FY 2020 IPPS/LTCH PPS final rule,
                we adopted an alternative inpatient new technology add-on payment
                pathway for certain transformative new devices and for Qualified
                Infectious Disease Products, as set forth in the regulations at Sec.
                412.87(c) and (d). The change in burden associated with these changes
                to the new technology add-on payment application process were discussed
                in a revision of the information collection requirement (ICR) request
                currently approved under OMB control number 0938-1347. In accordance
                with the implementing regulations of the PRA, we detailed the revisions
                of the ICR and published the required 60-day notice on August 15, 2019
                (84 FR 41723) and 30-day notice on December 17, 2019 (84 FR 68936) to
                solicit public comments.
                2. Public Input Before Publication of a Notice of Proposed Rulemaking
                on Add-On Payments
                 Section 1886(d)(5)(K)(viii) of the Act, as amended by section
                503(b)(2) of Public Law 108-173, provides for a mechanism for public
                input before publication of a notice of proposed rulemaking regarding
                whether a medical service or technology represents a substantial
                clinical improvement or advancement. The process for evaluating new
                medical service and technology applications requires the Secretary to--
                 Provide, before publication of a proposed rule, for public
                input regarding whether a new service or technology represents an
                advance in medical technology that substantially improves the diagnosis
                or treatment of Medicare beneficiaries;
                 Make public and periodically update a list of the services
                and technologies for which applications for add-on payments are
                pending;
                 Accept comments, recommendations, and data from the public
                regarding whether a service or technology represents a substantial
                clinical improvement; and
                 Provide, before publication of a proposed rule, for a
                meeting at which organizations representing hospitals, physicians,
                manufacturers, and any other interested party may present comments,
                recommendations, and data regarding whether a new medical service or
                technology represents a substantial clinical improvement to the
                clinical staff of CMS.
                 In order to provide an opportunity for public input regarding add-
                on payments for new medical services and technologies for FY 2022 prior
                to publication of this FY 2022 IPPS/LTCH PPS proposed rule, we
                published a notice in the Federal Register on October 16, 2020 (85 FR
                65815), and held a virtual town hall meeting on December 15 and 16,
                2020. In the announcement notice for the meeting,
                [[Page 25208]]
                we stated that the opinions and presentations provided during the
                meeting would assist us in our evaluations of applications by allowing
                public discussion of the substantial clinical improvement criterion for
                the FY 2022 new medical service and technology add on payment
                applications before the publication of the FY 2022 IPPS/LTCH PPS
                proposed rule.
                 Approximately 330 individuals registered to attend the 2-day
                virtual town hall meeting. We posted the recordings of the 2-day
                virtual town hall on the CMS web page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech. We
                considered each applicant's presentation made at the town hall meeting,
                as well as written comments received by the December 28, 2020 deadline,
                in our evaluation of the new technology add on payment applications for
                FY 2022 in the development of this FY 2022 IPPS/LTCH PPS proposed rule.
                 In response to the published notice and the December 15-16, 2020
                New Technology Town Hall meeting, we received written comments
                regarding the applications for FY 2022 new technology add on payments.
                As explained earlier and in the Federal Register notice announcing the
                New Technology Town Hall meeting (85 FR 65815 through 65817), the
                purpose of the meeting was specifically to discuss the substantial
                clinical improvement criterion with regard to pending new technology
                add-on payment applications for FY 2022. Therefore, we are not
                summarizing those written comments in this proposed rule that are
                unrelated to the substantial clinical improvement criterion. In section
                II.H.5. of the preamble of this proposed rule, we are summarizing
                comments regarding individual applications, or, if applicable,
                indicating that there were no comments received in response to the New
                Technology Town Hall meeting notice or New Technology Town Hall
                meeting, at the end of each discussion of the individual applications.
                3. ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and
                Technologies
                 As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434),
                the ICD-10-PCS includes a new section containing the new Section ``X''
                codes, which began being used with discharges occurring on or after
                October 1, 2015. Decisions regarding changes to ICD-10-PCS Section
                ``X'' codes will be handled in the same manner as the decisions for all
                of the other ICD-10-PCS code changes. That is, proposals to create,
                delete, or revise Section ``X'' codes under the ICD-10-PCS structure
                will be referred to the ICD-10 Coordination and Maintenance Committee.
                In addition, several of the new medical services and technologies that
                have been, or may be, approved for new technology add-on payments may
                now, and in the future, be assigned a Section ``X'' code within the
                structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS
                website at: https://www.cms.gov/medicare/icd-10/2021-icd-10-pcs,
                including guidelines for ICD-10-PCS Section ``X'' codes. We encourage
                providers to view the material provided on ICD-10-PCS Section ``X''
                codes.
                4. Proposed FY 2022 Status of Technologies Approved for FY 2021 New
                Technology Add-On Payments
                 In this section of the proposed rule, we discuss the proposed FY
                2022 status of 23 technologies approved for FY 2021 new technology add-
                on payments, as set forth in the tables that follow. In general, we
                extend new technology add-on payments for an additional year only if
                the 3-year anniversary date of the product's entry onto the U.S. market
                occurs in the latter half of the upcoming fiscal year. We refer the
                reader to section II.F.6.b.(1). of the preamble of this proposed rule
                for discussion of CONTEPO, which we conditionally approved for FY 2021
                new technology add-on payments under the alternative pathway for
                certain antimicrobial products, subject to the technology receiving FDA
                marketing authorization by July 1, 2021. As of the time of the
                development of this proposed rule, CONTEPO has not yet received FDA
                marketing authorization.
                a. Proposed Continuation of New Technology Add-On Payments for FY 2022
                for Technologies Still Considered To Be New
                 In the table in this section of the proposed rule, we present our
                proposals to continue the new technology add-on payment for FY 2022 for
                those technologies that were approved for the new technology add-on
                payment for FY 2021 and which would still considered ``new'' for
                purposes of new technology add-on payments for FY 2022.
                 Our policy is that a medical service or technology may continue to
                be considered ``new'' for purposes of new technology add-on payments
                within 2 or 3 years after the point at which data begin to become
                available reflecting the inpatient hospital code assigned to the new
                service or technology. Our practice has been to begin and end new
                technology add-on payments on the basis of a fiscal year, and we have
                generally followed a guideline that uses a 6-month window before and
                after the start of the fiscal year to determine whether to extend the
                new technology add-on payment for an additional fiscal year. In
                general, we extend new technology add-on payments for an additional
                year only if the 3-year anniversary date of the product's entry onto
                the U.S. market occurs in the latter half of the fiscal year (70 FR
                47362).
                 The table in this section lists the technologies for which we are
                proposing to continue making new technology add-on payments for FY 2022
                because they would still be considered new for purposes of new
                technology add-on payments. This table also presents the newness start
                date, new technology add-on payment start date, relevant final rule
                citations from prior fiscal years, proposed maximum add-on payment
                amount, and coding assignments. We refer readers to the cited final
                rules in the following table for a complete discussion of the new
                technology add-on payment application, coding and payment amount for
                these technologies, including the applicable indications and discussion
                of the newness start date.
                BILLING CODE 4120-01-P
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                b. Proposal To Extend New Technology Add-On Payments
                 Section 1886(d)(5)(K)(ii)(II) of the Act provides for the
                collection of data with respect to the costs of a new medical service
                or technology described in subclause (I) for a period of not less than
                2 years and not more than 3 years beginning on the date on which an
                inpatient hospital code is issued with respect to the service or
                technology. As explained in the FY 2005 IPPS final rule (69 FR 49002),
                the intent of section 1886(d)(5)(K) of the Act and regulations under
                Sec. 412.87(b)(2) is to pay for new medical services and technologies
                for the first 2 to 3 years that a product comes on the market, during
                the period when the costs of the new technology are not yet fully
                reflected in the DRG weights. Generally, we use FDA approval (that is,
                marketing authorization) as the indicator of the time when a technology
                begins to become available on the market and data reflecting the costs
                of the technology begin to become available for recalibration of the
                DRGs. The costs of the new medical service or technology, once paid for
                by Medicare for this 2-year to 3-year period, are accounted for in the
                MedPAR data that are used to recalibrate the DRG weights on an annual
                basis. Therefore, we limit the add-on payment window for those
                technologies that have passed this 2- to 3-year timeframe.
                 As discussed in the FY 2006 IPPS final rule (70 FR 47349) and
                subsequent years, we do not believe that case volume is a relevant
                consideration for making the determination as to whether a product is
                ``new.'' Consistent with the statute, a technology no longer qualifies
                as ``new'' once it is more than 2 to 3 years old, irrespective of how
                frequently it has been used in the Medicare population. Therefore, if a
                product is more than 2 to 3 years old, we have historically considered
                its costs to be included in the MS-DRG relative weights whether its use
                in the Medicare population has been frequent or infrequent.
                 However, in light of the unique circumstances for FY 2022
                ratesetting, for which we are proposing to use the FY 2019 MedPAR
                claims data where we ordinarily would have used the FY 2020 MedPAR
                claims data for purposes of developing the FY 2022 relative weights,
                for the reasons discussed in section I.F. of the preamble of this
                proposed rule, we believe it may be appropriate to make a one-time
                exception to this long-standing policy for all technologies approved
                for new technology add-on payments for FY 2021, but for which the add-
                on payments would otherwise be discontinued beginning in FY 2022
                because the technologies would no longer be considered new.
                 As discussed in section I.F. of the preamble of this proposed rule,
                ordinarily, the best available MedPAR data for ratesetting would be the
                most recent MedPAR file that contains claims from discharges for the
                fiscal year that is 2 years prior to the fiscal year that is the
                subject of the rulemaking. For FY 2022 ratesetting, under ordinary
                circumstances, the best available data would be the FY 2020 MedPAR
                file. As discussed in section I.F. of the preamble of this proposed
                rule, the FY 2020 MedPAR claims file contains data significantly
                impacted by the COVID-19 PHE, primarily in that the utilization of
                inpatient services was generally markedly different for certain types
                of services in FY 2020 than would have been expected in the absence of
                the PHE. Accordingly, we question whether the FY 2020 MedPAR claims
                file is the best available data to use for the FY 2022 ratesetting.
                 In our discussion in section I.F. of the preamble of this proposed
                rule, we highlighted two factors we considered in assessing which data
                sources would represent the best available data to use in the FY 2022
                ratesetting. The first factor is whether the FY 2019 data, which is
                from before the COVID-19 PHE, or the FY 2020 data, which includes the
                COVID-19 PHE time period, is a better overall approximation of the FY
                2022 inpatient experience. After analyzing this issue, for the reasons
                discussed in section I.F. of the preamble of this proposed rule, we
                believe for purposes of this proposed rule that FY 2019 data are
                generally a better overall approximation of FY 2022. The second factor
                is to what extent the decision to use the FY 2019 or FY 2020 data
                differentially impacts the FY 2022 IPPS ratesetting. As discussed more
                fully in section I.F of the preamble of this proposed rule, after
                analyzing this issue, we determined that the decision does
                differentially impact the overall FY 2022 IPPS ratesetting. For
                example, we determined that the effect on the FY 2022 MS-DRG relative
                weights is more limited if the FY 2019-based weights are used rather
                than the FY 2020-based weights, should the FY 2022 inpatient experience
                not match the assumption used to calculate the MS-DRG relative weights.
                 Based on our analyses, we are proposing to use FY 2019 data for the
                FY 2022 ratesetting for circumstances
                [[Page 25212]]
                where the FY 2020 data is significantly impacted by the COVID-19 PHE.
                Because we believe the FY 2020 MedPAR claims data is significantly
                impacted by the COVID-19 PHE, we are proposing to use the FY 2019
                MedPAR claims data for purposes where we ordinarily would have used the
                FY 2020 MedPAR claims data, including for purposes of developing the FY
                2022 relative weights. We refer the reader to section I.F. of the
                preamble of this proposed rule for a further discussion on our analysis
                of the best available data for FY 2022 ratesetting.
                 As discussed previously, in general, we extend new technology add-
                on payments for an additional year only if the 3-year anniversary date
                of the product's entry onto the U.S. market occurs in the latter half
                of the upcoming fiscal year. Because we are proposing to use FY 2019
                MedPAR data instead of FY 2020 MedPAR data for the FY 2022 IPPS
                ratesetting, the costs for a new technology for which the 3-year
                anniversary date of the product's entry onto the U.S. market occurs
                prior to the latter half of the upcoming fiscal year (FY 2022) may not
                be fully reflected in the MedPAR data used to recalibrate the MS-DRG
                relative weights for FY 2022. Therefore, in light of our proposal to
                use FY 2019 data instead of FY 2020 data to develop the FY 2022
                relative weights, we believe it would be appropriate to allow for a
                one-year extension of new technology add-on payments for those
                technologies for which the new technology add-on payment would
                otherwise be discontinued beginning with FY 2022. Accordingly, we are
                proposing to use our authority under section 1886(d)(5)(I) of the Act
                to provide for a one-year extension of new technology add-on payments
                for FY 2022 for those technologies listed in the table that follows. We
                note that if we were to finalize our alternative approach of using the
                same FY 2020 data that we would ordinarily use for purposes of FY 2022
                ratesetting, including development of the FY 2022 relative weights, as
                discussed in section I.F. of the preamble of this proposed rule, we
                would also finalize to discontinue the new technology add-on payments
                for these expiring technologies beginning in FY 2022, consistent with
                our historic policies.
                 We note that this table also presents the newness start date, new
                technology add-on payment start date, relevant final rule citations
                from prior fiscal years, proposed maximum add-on payment amount, and
                coding assignments for these technologies. We refer readers to the
                final rules cited in the table for a complete discussion of the new
                technology add-on payment application, coding and payment amount for
                these technologies, including the applicable indications and discussion
                of the newness start date.
                 We are inviting public comment on our proposal to use our authority
                under section 1886(d)(5)(I) of the Act to provide for a 1-year
                extension of new technology add-on payments for FY 2022 for those
                technologies for which the new technology add-on payment would
                otherwise be discontinued beginning with FY 2022.
                 We finally note, with regard to ContaCT which is a technology sold
                on a subscription basis, we continue to welcome comments from the
                public as to the appropriate method to determine a cost per case for
                technologies sold on a subscription basis, including comments on
                whether the cost per case should be estimated based on subscriber
                hospital data as described previously, and if so, whether the cost
                analysis should be updated based on the most recent subscriber data for
                each year for which the technology may be eligible for the new
                technology add-on payment.
                [[Page 25213]]
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                BILLING CODE 4120-01-C
                5. FY 2022 Applications for New Technology Add-On Payments (Traditional
                Pathway)
                a. Aidoc Briefcase for PE
                 Aidoc Medical Ltd. (Aidoc) submitted an application for new
                technology add-on payments for Aidoc Briefcase for PE (``Briefcase for
                PE'') for FY 2022. According to the applicant, Briefcase for PE is an
                FDA cleared, artificial intelligence (AI)-based solution for triage and
                notification of suspected pulmonary embolism (PE) cases.
                 The applicant stated that the device assists hospitals and
                radiologists by flagging and communicating suspected positive findings
                of PE in computed tomography (CT) pulmonary angiography (CTPA)
                examinations, which prompts the radiologist to assess relevant Digital
                Imaging and Communications in Medicine (DICOM) imaging files, allowing
                suspect cases to receive attention sooner than otherwise would have
                occurred, which in turn improves clinical outcomes. According to the
                applicant, patients with PE or suspected PE typically present at
                hospital emergency departments (EDs). The applicant stated that for
                these patients, ED physicians complete a brief evaluation and order
                imaging, which typically includes CTPA. With Briefcase for PE, CTPA
                images are automatically forwarded to the applicant's cloud-based
                engine where they are analyzed by an AI algorithm. The applicant claims
                that when Briefcase for PE detects a suspected PE, the radiologist is
                alerted via the user interface of the Aidoc Worklist Application that
                is installed on the radiologist's desktop. The applicant asserted that
                the notification prompts the radiologist to review the CTPA images and
                communicate with the emergency room team currently caring for the
                patient so that the appropriate clinical action may be taken sooner
                than it would otherwise have occurred in the absence of the tool.
                 The applicant stated that acute PE is a severe manifestation of
                venous thromboembolism (VTE) and occurs when a blood clot (thrombus)
                forms in a vein and then dislodges and travels to the pulmonary
                arteries in the lungs. The applicant stated acute symptomatic PE can
                cause death within 1 hour of onset in up to 10 percent of cases \7\ and
                it is estimated to be the third largest cause of cardiovascular death
                after coronary artery disease and stroke.8 9 10 11 The
                applicant further noted that acute PE is a life-threatening medical
                emergency that demands urgent intervention and clinical studies have
                demonstrated a strong correlation between time to communication of PE
                findings, treatment, and clinical outcomes.12 13 14
                According to the applicant, in a typical workflow, a patient presenting
                to a hospital with signs or symptoms of PE would move through the
                system as follows: (1) Patient presents with suspected PE to the ED;
                (2) Patient receives contrast-enhanced CTPA imaging; (3) Technologist
                processes and reconstructs the CT images and manually routes them to
                the hospital picture archiving and communication system (PACS); (4) The
                exam enters a first-in-first-out (FIFO) reading queue, where it awaits
                radiological interpretation; (5) Radiologist reads the CT images and
                makes the diagnosis of PE; (6) The radiologist informs the referring
                physician of positive PE either verbally or through the radiologist
                report; (7) ED physician and/or on-call pulmonologist decide on the
                management strategy; (8) If appropriate, the patient proceeds to
                treatment.
                ---------------------------------------------------------------------------
                 \7\ Naess IA, Christiansen SC, Romundstad P, Cannegieter SC,
                Rosendaal FR, Hammerstr[oslash]m J. Incidence and mortality of
                venous thrombosis: A population-based study. J Thromb Haemost. 2007
                Apr;5(4):692-9. doi: 10.1111/j.1538-7836.2007.02450.x. PMID:
                17367492.
                 \8\ Giuntini C, Di Ricco G, Marini C, Melillo E, Palla A.
                Pulmonary embolism: Epidemiology. Chest. 1995 Jan;107(1 Suppl):3S-
                9S. doi: 10.1378/chest.107.1_supplement.3s. PMID: 7813326.
                 \9\ Becattini C, Agnelli G. Risk factors for adverse short-term
                outcome in patients with pulmonary embolism. Thromb Res. 2001 Sep
                15;103(6):V239-44. doi: 10.1016/s0049-3848(01)00291-2. PMID:
                11567661.
                 \10\ Goldhaber SZ, Visani L, De Rosa M. Acute pulmonary
                embolism: Clinical outcomes in the International Cooperative
                Pulmonary Embolism Registry (ICOPER). Lancet. 1999 Apr
                24;353(9162):1386-9. doi: 10.1016/s0140-6736(98)07534-5. PMID:
                10227218.
                 \11\ Klok FA, Mos IC, Huisman MV. Brain-type natriuretic peptide
                levels in the prediction of adverse outcome in patients with
                pulmonary embolism: A systematic review and meta-analysis. Am J
                Respir Crit Care Med. 2008 Aug 15;178(4):425-30. doi: 10.1164/
                rccm.200803-459OC. Epub 2008 Jun 12. PMID: 18556626.
                 \12\ Smith SB, Geske JB, Maguire JM, Zane NA, Carter RE,
                Morgenthaler TI. Early anticoagulation is associated with reduced
                mortality for acute pulmonary embolism. Chest. 2010 Jun;137(6):1382-
                90. doi: 10.1378/chest.09-0959. Epub 2010 Jan 15. PMID: 20081101;
                PMCID: PMC3021363.
                 \13\ Soh S, Kim JM, Park JH, Koh SO, Na S. Delayed
                anticoagulation is associated with poor outcomes in high-risk acute
                pulmonary embolism. J Crit Care. 2016 Apr;32:21-5. doi: 10.1016/
                j.jcrc.2015.11.024. Epub 2015 Dec 8. PMID: 26764578.
                 \14\ Wood KE. Major pulmonary embolism: Review of a
                pathophysiologic approach to the golden hour of hemodynamically
                significant pulmonary embolism. Chest. 2002 Mar;121(3):877-905.
                PMID: 11888976.
                ---------------------------------------------------------------------------
                 The applicant asserted that the FIFO workflow is the standard of
                care. The applicant stated that Briefcase for PE allows facilities to
                substantially shorten the period of time between when the patient
                receives CTPA imaging (Step 2) and when the radiologist informs the
                referring physician of positive PE (Step 5). The applicant stated that
                Briefcase for PE streamlines this workflow using AI to analyze CTPA
                images of the chest automatically and notifies the radiologist that a
                suspected PE has been identified, enabling the radiologist to review
                imaging and make diagnostic decisions faster by prioritizing these
                images for review in the queue.
                 With respect to the newness criterion, Briefcase for PE received
                FDA 510(k) clearance on April 15, 2019 to market the device under FDA
                510(k) number K190072. The FDA clearance for Briefcase for PE was based
                on substantial equivalence to the legally marketed predicate device,
                Briefcase for Intracranial Hemorrhage (ICH) (FDA 510(k) number
                K180647), as both of these devices use AI algorithms to analyze images
                and highlight cases for further action based on CT images. Briefcase
                for ICH received FDA 510(k) clearance on August 1, 2018. The predicate
                device for Briefcase for ICH is Viz.AI's ContaCT, which received De
                Novo premarket approval in February of 2018. The applicant asserted
                Briefcase for ICH is indicated for use in the analysis of non-enhanced
                head CT images, whereas Briefcase for PE is indicated for use in the
                analysis of non-enhanced CTPA images. According to the applicant, there
                are currently no ICD-10-PCS procedure codes to adequately describe
                Briefcase for PE. The applicant submitted a request for approval of a
                unique ICD-10-PCS procedure code to identify use of the technology
                beginning FY 2022.
                 Under the newness criterion, if a technology meets all three of the
                substantial similarity criteria, it would be considered substantially
                similar to an existing technology and would not be considered ``new''
                for purposes of new technology add-on payments.
                 With respect to the first criterion, whether a product uses the
                same or similar mechanism of action to achieve a therapeutic outcome,
                according to the applicant, Briefcase for PE is the only FDA-cleared
                technology that uses computer-aided triage and notification to rapidly
                detect PE and shorten time to notification of the radiologist. The
                applicant claimed that no other FDA approved or cleared technology uses
                the same mechanism of action for computer-aided triage and
                prioritization of PE.
                 With respect to the second criterion, whether a product is assigned
                to the same or a different MS-DRG, the applicant stated it expects that
                patients evaluated for PE or suspected PE using Briefcase for PE will
                be assigned to the
                [[Page 25218]]
                same DRGs as patients evaluated for PE or suspected PE under the
                current workflow or standard of care. The applicant estimates that
                under the MS-DRG grouper for FY 2021, Briefcase for PE could map to 279
                different MS-DRGs, with MS-DRGs 175 (Pulmonary embolism with major
                complication or comorbidity (MCC) or acute cor pulmonale) and 176
                (Pulmonary embolism without MCC) accounting for approximately 45
                percent of the estimated cases.
                 With respect to the third criterion, whether the new use of
                technology involves the treatment of the same or similar type of
                disease and the same or similar patient population when compared to an
                existing technology, the applicant did not directly respond to the
                criterion but reiterated that no other existing technology is
                comparable to Briefcase for PE and that Briefcase for PE is the only
                FDA-cleared technology that uses computer aided triage and notification
                to rapidly detect PE and shorten time to notification of the
                radiologist.
                 We have the following concerns regarding whether the technology
                meets the substantial similarity criteria and whether it should be
                considered new. We note that the applicant asserted that Briefcase for
                ICH, the predicate device for Briefcase for PE, is identical in all
                aspects and differs only with respect to the training of the algorithm
                on PE (that is, non-enhanced head CT) and ICH (that is, non-enhanced
                CTPA) images. We are unclear whether the training of the algorithim on
                PE and ICH images would distinguish the mechanism of action for
                Briefcase for PE from Briefcase for ICH, or its predicate device,
                ContaCT, and we invite comment on whether Briefcase for PE represents a
                new mechanism of action. We note that although the applicant did not
                directly state whether Briefcase for PE involves the treatment of the
                same or similar type of disease and the same or similar patient
                population, we believe that Briefcase for PE would be used for a
                different disease and patient population than Briefcase for ICH and
                ContaCT.
                 We continue to be interested in public comments regarding issues
                related to determining newness for technologies that use AI, an
                algorithm, or software, as discussed in the FY 2021 IPPS/LTCH PPS final
                rule (85 FR 58628). Specifically, we are interested in public comment
                on how these technologies, including devices classified as radiological
                computer aided triage and notification software and radiological
                computer-assisted diagnostic software, may be considered for the
                purpose of identifying a unique mechanism of action; how updates to AI,
                an algorithm or software would affect an already approved technology or
                a competing technology; whether software changes for an already
                approved technology could be considered a new mechanism of action, and
                whether an improved algorithm by competing technologies would represent
                a unique mechanism of action if the outcome is the same as an already
                approved AI new technology.
                 We invite public comments on whether Briefcase for PE meets the
                newness criterion.
                 With regard to the cost criterion, the applicant presented the
                following analysis. The applicant first identified the principal
                diagnoses associated with the PE-related MS-DRGs 175 (``Pulmonary
                embolism with MCC or acute cor pulmonale'') and 176 (``Pulmonary
                embolism without MCC''). The applicant then searched the FY 2019
                proposed rule MedPAR Limited Data Set (LDS) for claims where the
                principal diagnoses were listed in any position on an inpatient claim.
                The applicant mapped the 2,517 identified claims to the list of unique
                MS-DRGs corresponding to these claims and aggregated the claims by MS-
                DRG. Per the applicant, under the MS-DRG grouper for FY 2021, potential
                cases representing patients who may be eligible for treatment using
                Briefcase for PE map to 279 MS-DRGs, with MS-DRGs 175 and 176
                accounting for approximately 45 percent of estimated cases. The
                applicant also provided a table of the top 10 MS-DRGs, which represent
                approximately 69 percent of estimated cases.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.136
                 The applicant standardized the charges and applied the 2-year
                charge inflation factor used to adjust the outlier threshold
                determination, which the applicant stated was 10.22 percent. We note
                that the actual 2-year inflation factor in the FY 2021 IPPS/LTCH PPS
                final rule was 13.2 percent (85 FR 59039), which would have increased
                the inflated charges figure. The applicant did not remove charges for
                prior technology as the applicant maintained that no existing
                technology is comparable to Briefcase for PE. However, the applicant
                removed 31.9 percent of total accommodation charges, which the
                applicant maintained is consistent with their internal study which
                indicated that Briefcase for PE reduced the length of stay for PE-
                diagnosed patients.\15\ Per the applicant, the study demonstrated a
                mean length of stay of 8.77 and 5.97 days for pre-AI and post-AI time
                periods, respectively.\16\
                ---------------------------------------------------------------------------
                 \15\ Maya M. et al. Artificial Intelligence Software for
                Flagging Pulmonary Embolism on CTPA Associated with Reduced Length
                of Stay. Abstract draft of an internal study performed by the
                applicant (unpublished).
                 \16\ Ibid.
                ---------------------------------------------------------------------------
                 Next, the applicant added charges for the new technology. To
                calculate the charges for the new technology, the applicant multiplied
                the cases involving Briefcase for PE from each of its subscribing
                providers by a Medicare share of 52 percent to obtain the total
                estimated Medicare and non-Medicare cases. The applicant obtained the
                52 percent Medicare share figure from a
                [[Page 25219]]
                nationwide sample of inpatient claims provided by the Agency for
                Healthcare Research and Quality (AHRQ). Specifically, the applicant
                searched data from the Healthcare Cost and Utilization Project for
                discharges with the following codes: I2699, I2609, I2692, I2602, I2782,
                T790XXA, T800XXA, T791XXA, I2693, I2694, and I2601.\17\ The applicant
                found 189,575 discharges, of which 52 percent identified Medicare as
                the payer. The applicant divided the total cost of the technology by
                the estimated total number of cases for each customer to obtain a
                provider-specific cost per case, which it then averaged across all
                customers to obtain an overall average cost per case. Finally, the
                applicant divided the average cost per case by the national average CCR
                for the CT cost center of 0.034 from the FY 2021 IPPS/LTCH PPS final
                rule (85 FR 58601).
                ---------------------------------------------------------------------------
                 \17\ Healthcare Cost and Utilization Project. Free Health Care
                Statistics. https://hcupnet.ahrq.gov/#setup.
                ---------------------------------------------------------------------------
                 The applicant calculated a final inflated average case-weighted
                standardized charge per case of $87,483, which exceeded the average
                case-weighted threshold amount of $71,312. Because the final inflated
                average case-weighted standardized charge per case exceeded the average
                case-weighted threshold amount, the applicant maintained that Briefcase
                for PE meets the cost criterion.
                 We would like more information regarding the methodology by which
                the applicant selected the diagnosis codes associated with MS-DRGs 175
                and 176, as well as subanalyses that limit the cases to MS-DRGs 175 and
                176 and the top 10 MS-DRGs, which per the applicant represent 45
                percent of estimated cases and 69 percent of estimated cases,
                respectively. Additionally, the applicant appears to have used a single
                list price of Briefcase for PE per hospital with a cost per patient
                that can vary based on the volume of cases. We question whether the
                cost per patient varies based on the utilization of the technology by
                the hospitals. We are interested in more information about the
                applicant's cost per case calculation, including how the applicant
                selected the codes it used to search for discharges from the Healthcare
                Cost and Utilization Project, as well as the per unit cost of Briefcase
                for PE and how the total cost of the technology was calculated for each
                subscribing provider.
                 In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58630), we stated
                our understanding that there are unique circumstances to determining a
                cost per case for a technology that utilizes a subscription for its
                cost. We stated our intent to continue to consider the issues relating
                to the calculation of the cost per unit of technologies sold on a
                subscription basis as we gain more experience in this area. We continue
                to welcome comments from the public as to the appropriate method to
                determine a cost per case for such technologies, including comments on
                whether the cost per case should be estimated based on subscriber
                hospital data as described previously, and if so, whether the cost
                analysis should be updated based on the most recent subscriber data for
                each year for which the technology may be eligible for the new
                technology add-on payment. We also invite public comment on whether
                Briefcase for PE meets the cost criterion, particularly in light of the
                subscription model, for which the number of subscribers and the
                estimated cost per case based on that subscriber data may change over
                time.
                 With regard to the substantial clinical improvement criterion, the
                applicant claimed that Briefcase for PE represents an advance that
                substantially improves the ability to diagnose pulmonary embolism by
                pre-reading images of CTPAs, automatically identifying suspected PE in
                CTPA images, and notifying the radiologist before the radiologist would
                have opened the study in the standard of care, which the applicant
                claims is the FIFO workflow. The applicant also asserted that because
                of a reduction in time-to-exam-open, where Briefcase for PE notifies
                the radiologist to open and read CTPA studies that have a high
                probability of being positive for PE sooner than the radiologist would
                have under the FIFO workflow, the treating physician can initiate
                treatment sooner, which can reduce mortality and reduce length of stay
                related to PE.
                 The applicant provided data from an FDA pivotal study in support of
                its assertion that Briefcase for PE reduces time-to-exam-open compared
                to the standard of care and helps in prioritization of diagnosis.\18\
                For the FDA pivotal study, the applicant conducted a retrospective,
                blinded, multicenter, multinational study of the assessment of 184
                CTPAs from 3 clinical sites (2 US and 1 outside US) using Briefcase for
                PE. The primary endpoint was to evaluate the software's performance in
                identifying pulmonary embolism on an approximately equal number of
                positive and negative cases (images with PE versus without PE), with a
                performance goal of at least 80 percent sensitivity (true positive
                rate) and specificity (true negative rate). Per the applicant, both
                measures exceeded the performance goal, with 90.6 percent sensitivity
                (95 percent CI: 82.2 percent-95.9 percent) and 89.9 percent specificity
                (95 percent CI: 82.2 percent-95.1 percent).
                ---------------------------------------------------------------------------
                 \18\ Aidoc Briefcase for PE--Pivotal Study 1--FDA 510(k)--
                K190072. http://www.accessdata.fda.gov/cdrh_docs/pdf19/K190072.pdf.
                ---------------------------------------------------------------------------
                 According to the applicant, the secondary endpoint of the FDA
                pivotal study was to evaluate time-to-notification for true positive PE
                cases compared to the FIFO workflow. The study showed that time-to-
                notification with Briefcase for PE is 3.9 minutes (95 percent CI: 3.7-
                4.1). The applicant noted that, in contrast, the time-to-exam-open in
                the FIFO workflow was significantly longer at 64.1 minutes (95 percent
                CI 36.6-91.5). The applicant stated the mean difference of 60.2 minutes
                (95 percent CI 32.7-87.6) for these two metrics is statistically
                significant, and assuming the radiologist receives a notification on a
                true positive PE case and acts on it immediately, it can save an
                average of 60.2 minutes (95 percent CI 32.7-87.6) compared to the time-
                to exam-open in a FIFO reading queue. Based on this data, the applicant
                concluded Briefcase for PE substantially shortened the time to
                diagnosis for PE cases as compared with the FIFO workflow.
                 The applicant further claimed that clinical studies and other real-
                world data have demonstrated comparable performance characteristics and
                shown that the integration of the Briefcase for PE software into the
                radiology workflow markedly improves time to notification for PE
                patients across a variety of clinical settings, geographies, and
                facilities. The applicant submitted a retrospective, single-site study
                by Weikert T., et al., which evaluated Briefcase for PE performance on
                1,465 retrospective CTPA examinations from 2017 in an academic center
                outside the US.\19\ The sensitivity and specificity were measured to be
                92.7 percent (95 percent CI: 88.3-95.5 percent) and 95.5 percent (95
                percent CI: 94.2-96.6 percent), respectively. The researchers concluded
                that the system has high diagnostic performance for the automatic
                detection of PE on CTPA exams and as such, speeds up the diagnostic
                workup of critical cases.
                ---------------------------------------------------------------------------
                 \19\ Weikert T, Winkel DJ, Bremerich J, Stieltjes B, Parmar V,
                Sauter AW, Sommer G. Automated detection of pulmonary embolism in CT
                pulmonary angiograms using an AI-powered algorithm. Eur Radiol. 2020
                Jul 3. doi: 10.1007/s00330-020-06998-0. Epub ahead of print. PMID:
                32621243
                ---------------------------------------------------------------------------
                 The applicant stated that unpublished data maintained by Aidoc
                suggest that real-world performance of Briefcase for PE is consistent
                with what was found in
                [[Page 25220]]
                the FDA pivotal study.20 21 The applicant stated that across
                26 sites encompassing a variety of geographic locations across the
                United States, a total of 36,084 CTPA examinations were analyzed over a
                90-day period (July 13, 2020-October 11, 2020). Time-to-notification
                metrics were calculated for all 4,748 CTPAs analyzed by the software
                and identified as positive for PE. Time-to-notification was calculated
                as the time to get the DICOM exam, de-identify it, upload it to the
                cloud, analyze and send a notification back to the worklist
                application. The applicant claimed that the mean time-to-notification
                for PE was 7.0 minutes (median: 6.1/IQR: 4.8). According to the
                applicant, over 85 percent of CTPA examinations identified as positive
                for PE were notified in under 10 minutes. The applicant concluded that
                the study demonstrates the ability of Briefcase for PE to provide fast
                time-to-notification on positive PE cases and its generalizability
                across different centers and patient populations.
                ---------------------------------------------------------------------------
                 \20\ Avondo, J. Yalon R., Ashkenasi C. Time-to-notification
                Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
                study performed by the applicant (unpublished).
                 \21\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant submitted additional unpublished data from the 26
                sites spread across a variety of geographic locations of the United
                States aggregated over a different 90-day period (September 17, 2020 to
                December 17, 2020).\22\ Seven sites were excluded from the analysis due
                to having third-party integrations that prevented the ability to
                capture engagement metrics. Two engagement metrics were calculated: The
                open percentage and the time-to-open. The open percentage metric was
                calculated as the percentage of notifications that were presented to
                the radiologist and opened by at least one radiologist. The time-to-
                open metric was measured by calculating the time between the arrival of
                the Briefcase for PE notification and the time first opened by a
                radiologist. A total of 2,138 notifications for CTPA examinations found
                to be positive for PE by Briefcase for PE were analyzed. The open
                percentage was found to be 97 percent across all sites (min: 80
                percent, max: 100 percent), and the mean time-to-open was found to be
                2.13 minutes (median: 1.0/interquartile range: 2.0). The data provided
                by the applicant indicated over 90 percent of notifications were found
                to be opened in under 5 minutes. Based on this data, the study
                concluded that radiologists in the US readily engage with notifications
                for positive PE cases provided by Briefcase for PE and do so in a
                timely manner. The study asserted that engagement is an important
                metric to assess radiologist adoption of this technology, which is
                critical to its practical utility in shortening time to diagnosis and
                communication of PE to reduce the time to treatment and improve
                clinical outcomes.
                ---------------------------------------------------------------------------
                 \22\ Avondo, J. Yalon R., Ashkenasi C. Radiologist Engagement
                Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
                study performed by the applicant (unpublished).
                ---------------------------------------------------------------------------
                 The applicant also claimed that Briefcase for PE significantly
                improves clinical outcomes relative to the current standard of care
                using the FIFO workflow because the use of Briefcase for PE reduces
                time to diagnosis and treatment by notifying the radiologist to review
                the image for suspected PE faster in the workflow. The applicant
                claimed early diagnosis and treatment is important in acute PE where
                there exists a ``golden hour,'' during which a timely approach to
                diagnosis and therapy can affect outcomes by reducing mortality and
                reducing length of stay.\23\
                ---------------------------------------------------------------------------
                 \23\ The term ``golden hour'' references a critical period of
                time which may be longer or shorter than a literal hour.
                ---------------------------------------------------------------------------
                 The applicant provided two unpublished internal studies in support
                of the impact of Briefcase for PE on clinical outcomes. The applicant
                stated that in a single-site retrospective study, Maya M., et al. have
                shown a reduction in hospital length of stay for PE patients following
                the use of the Briefcase for PE system, compared to an equivalent time
                period prior to the use of the system.\24\ The applicant stated that
                Maya M., et al. compared mean length of stay for 366 patients with a
                positive PE diagnosis during 10-month periods before and after
                Briefcase for PE was implemented at Cedars-Sinai Medical Center in
                December 2018 (206 patients before the use of Briefcase for PE and 160
                patients after the AI intervention). 3,997 patient encounters that
                underwent CTPA imaging but that were not diagnosed with PE were split
                as 1,926 and 2,071 patient encounters for the pre/post-AI periods based
                on the admission dates. Hip fracture was chosen as a comparison group
                due to acuity, treatment-related factors, and similar length of stay to
                PE. 2,422 patient encounters for patients diagnosed with hip fractures,
                identified by ICD9 code 820 and 821, were split as 1,279 and 1,143
                patient encounters for the pre/post-AI periods based on the admission
                dates. According to the applicant, the pre- and post-implementation had
                similar seasonality and numbers of ``hospital-wide patient encounters''
                (103,626 vs 104,733 encounters). The applicant noted that for the PE
                diagnosed patients, a mean length of stay of 8.77 and 5.97 days was
                observed for the pre-AI and post-AI time periods, respectively. The
                applicant stated that the mean difference was 2.80 days (p-value
                0.05). Additionally, for the
                hospital wide patients, a mean length of stay of 5.78 and 5.96 days was
                observed for the pre-AI and post-AI time periods, respectively. The
                mean difference was -0.18 days (p-value 1.5
                hours of CTPA acquisition) in direct communication of acute PE
                diagnosis from radiologists to referring physicians was significantly
                correlated with a higher risk of delayed treatment initiation and death
                within 30 days. Another prospective, single-site study, Kline J., et
                al., concluded that patients with a delayed diagnosis had a higher rate
                of in-hospital adverse events (9 percent vs. 30 percent; p = 0.01). An
                additional retrospective, single-site study by Smith S., et al.
                observed an association between early administration of anticoagulation
                therapy and reduced mortality for patients with acute PE. Lastly, a
                retrospective, single-site study asserting a ``golden hour'' by Soh S.,
                et al. was submitted by the applicant to demonstrate an association
                between early initiation of anticoagulation therapy and in-hospital
                mortality in high-risk PE patients who needed ICU care. According to
                the applicant, Soh S., et al. concluded that their analysis showed that
                the cutoff point of anticoagulation initiation to achieve improved
                survival rates was 5.2 hours (that is, golden hour). The applicant
                stated that the study observed an association between early
                anticoagulation and reduced mortality for patients with acute PE.
                 In reviewing the information submitted by the applicant as part of
                its FY 2022 new technology add-on payment application for Briefcase for
                PE, we note that the clinical literature provided by the applicant only
                compares the technology to unassisted FIFO workflows and not against
                existing electronic (for example, EHR ``stat'' orders) or manual (for
                example, verbal communication to radiologist) forms of prioritization,
                or other types of existing risk stratification tools or features
                currently available in EHRs. Additionally, we note that some of the
                studies provided by the applicant that took place over many years may
                not have accounted for confounding variables (for example, improvements
                in care for patients with suspected PE) that may have occurred during
                the study period. Comparing to the FIFO workflow alone assumes that no
                other changes occurred before and after the adoption of the system and
                that the hospitals in question did not implement any other changes to
                their standard operating procedures to stratify suspected PE cases over
                the period of time many of the provided studies took place. We also
                note that the applicant has not provided data on potential outcome
                concerns associated with this type of clinical decision support tool
                (for example, treatment delays due to false negatives, false positives,
                or multiple workflow prioritization alerts presented to the physician
                at the same time). We invite public comment on whether these issues may
                affect the tool's ability to help diagnose a medical condition earlier
                in a patient population.
                 Lastly, we note that the applicant does not measure the effect of
                its technology on actual treatment outcomes, instead relying on the
                assumption that faster treatment results in better outcomes. Without
                measuring this impact on treatment outcomes, we are uncertain if the
                technology will lead to substantive clinical outcomes. Given that the
                applicant references a critical ``golden hour'' which may be as long as
                5.2 hours, the potential time savings resulting from the use of
                Briefcase for PE may be insubstantial in relation to the time within
                which outcomes are affected in the setting of PE.
                 We are inviting public comments on whether Briefcase for PE meets
                the substantial clinical improvement criterion.
                 We received a written public comment from the applicant in response
                to the New Technology Town Hall meeting regarding the application of
                Briefcase for PE for new technology add-on payments.
                 Comment: The applicant responded to questions received at the New
                Technology Town Hall Meeting. First the applicant was asked what the
                sensitivity and specificity of the standalone device is for identifying
                pulmonary embolism and how the sensitivity and specificity of the
                radiologist alone compare to the sensitivity and specificity of the
                radiologist when using the device. The applicant responded by
                reiterating the sensitivity and specificity data provided in the FDA
                pivotal study and restating that Briefcase for PE is a computer-aided
                triage and notification system that is not intended to aid in the
                diagnosis of PE but rather, Briefcase for PE identifies cases of
                suspected PE on CTPAs and, via triage and notification, prioritizes
                these cases for radiologist review.26 27 The applicant
                further restated that this triage and notification modifies the
                traditional radiology workflow in which images are reviewed on a FIFO
                basis to reduce the time-to-open-exam from over one hour to several
                minutes (standard of care vs. Briefcase for PE). The applicant restated
                that this reduction in time-to-open-exam has been demonstrated to
                improve patient outcomes, including hospital length of stay and post-
                discharge mortality. The applicant further noted that, because
                Briefcase for PE is a triage and notification system, no patient harm
                results from false positives or false negatives that may occur. The
                applicant explained that with respect to false positives, these
                suspected cases of PE will be triaged and the radiologist will be
                notified, prompting earlier review and diagnosis of the CTPA image by
                the radiologist. The applicant explained that for cases of PE that are
                missed by Briefcase for PE (that is, false negatives), the radiologist
                will review these CTPA images on a FIFO basis the same as today's
                standard of care and that triage and notification do not occur in the
                standard of care.
                ---------------------------------------------------------------------------
                 \26\ Aidoc Briefcase for PE--Pivotal Study 1--FDA 510(k)--
                K190072. http://www.accessdata.fda.gov/cdrh_docs/pdf19/K190072.pdf.
                 \27\ Weikert T, Winkel DJ, Bremerich J, et al. Automated
                detection of pulmonary embolism in CT pulmonary angiograms using an
                AI-powered algorithm. Eur Radiol. 2020;30(12):6545-6553.
                doi:10.1007/s00330-020-06998-0.
                ---------------------------------------------------------------------------
                 Second, the applicant was asked if Briefcase for PE decreased time
                outside of clinical trial protocols and how the applicant can be
                certain reducing time-to-notification affects the time period between
                when the CTPA is completed and the study is interpreted. In response,
                the applicant again reiterated data from the FDA pivotal study in
                restating that implementation of Briefcase for PE saves on average 60.2
                minutes relative to the standard of care FIFO clinical workflow and
                that data maintained by Aidoc demonstrate that real-world performance
                of Briefcase for PE is consistent with the results achieved in the FDA
                study. The
                [[Page 25222]]
                applicant also submitted data summarized previously indicating mean
                time-to-open, as measured by calculating the time between when a
                notification first became available in the application and the time of
                open, was 2.13 minutes (median: 1.0/IQR: 2.0). The applicant restated
                that in addition to measuring the mean time-to-open, the open rate, or
                the percentage of notifications opened, was measured for this same
                population and the open rate was found to be 97 percent (min: 80
                percent, max: 100 percent), with over 90 percent of notifications found
                to be opened in under 5 minutes.\28\
                ---------------------------------------------------------------------------
                 \28\ Avondo, J. Yalon R., Ashkenasi C. Radiologist Engagement
                Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
                study performed by the applicant (unpublished).
                ---------------------------------------------------------------------------
                 Also in response to this second question, the applicant reiterated
                data describing an independent analysis performed by Raskin, et al.,
                examining the impact of Briefcase for PE implementation on 30- and 120-
                day all-cause mortality for all patients age 18 years or older with a
                diagnosis of PE on CTPA and admitted to Sheba Medical Center in Tel
                Aviv, Israel. The applicant restated data described previously
                indicating that investigators found that the post- Briefcase cohort had
                significantly reduced 30- and 120-day all-cause mortality compared to
                the pre-Briefcase cohort--14.9 percent vs 11.0 percent and 26.1 percent
                vs 20.4 percent, respectively. The applicant stated these observed
                effects equate to a reduction ratio of 26.6 percent (p 31 32 and of those, at
                least 9 percent have atypical EGFR mutations like exon 20 ins.\33\ The
                applicant selected 0.93% (82.5% * 12.5% * 9%) of the cases identified
                based on the lung cancer diagnosis codes listed previously. The
                applicant stated this is the target population for amivantamab, which
                the applicant used for the cost analysis.
                ---------------------------------------------------------------------------
                 \30\ ``What is Lung Cancer?'' American Cancer Society. 1 October
                2019: https://www.cancer.org/content/cancer/en/cancer/lung- cancer/
                about/what-is.html.
                 \31\ Wee, P., & Wang, Z. (2017). Epidermal growth factor
                receptor cell proliferation signaling pathways. Cancers, 9(5), 52.
                 \32\ Pao, W., & Girard, N. (2011). New driver mutations in non-
                small-cell lung cancer. The Lancet Oncology, 12(2), 175-180.
                 \33\ Arcila, M. E., Nafa, K., Chaft, J. E., Rekhtman, N., Lau,
                C., Reva, B. A., and Ladanyi, M. (2013). EGFR exon 20 insertion
                mutations in lung adenocarcinomas: Prevalence, molecular
                heterogeneity, and clinicopathologic characteristics. Molecular
                Cancer Therapeutics, 12(2), 220-229.
                ---------------------------------------------------------------------------
                 The applicant then accounted for the circumstances where
                amivantamab would be administered during an inpatient stay. The
                applicant stated that amivantamab will typically be administered in the
                outpatient setting, and that it assumed that amivantamab would be
                administered during an inpatient stay, possibly for care unrelated to a
                patient's cancer treatment, when that stay coincided with the 2-week
                cycle during which a patient receiving amivantamab would undergo an
                infusion in the outpatient setting were it not for their inpatient
                admission. The applicant stated that, because it is very important that
                patients receive continuity of cancer care, it assumed that some
                patients would receive their amivantamab infusion during their hospital
                stay. To account for this scenario, the applicant calculated the
                average length of stay for all of the cases in its patient population,
                which it asserted was about 5.862 days. The applicant then divided the
                average length of stay for all of the cases by 14, as per the applicant
                amivantamab is administered on 28-day cycle, with a weekly
                administration for the first cycle, and an administration every 2 weeks
                thereafter.
                 The applicant stated that current clinical guidelines are expected
                to give medical professionals discretion to administer amivantamab
                during the hospitalization or pause the treatment cycle. To account for
                physician discretion, the applicant included only 50 percent of these
                cases in the final cost analysis.
                 The applicant identified 349 cases mapping to the following MS-
                DRGs. The applicant has not made a request for amivantamab to map to a
                new or different MS-DRG for FY 2022.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.140
                 The applicant assumed patients receiving amivantamab would receive
                one dose of the drug during their inpatient stay. Because amivantamab
                would be administered in addition to any other drugs the patient was
                receiving during their inpatient admission, the applicant did not
                remove costs associated with any previous technology. The applicant
                then standardized the charges using the FY 2019 IPPS/LTCH PPS final
                rule Impact file. Then the applicant applied the 2-year inflation
                factor of 13.2 percent (1.13218) from the FY 2021 IPPS/LTCH PPS final
                rule (85 FR 59039). The applicant then added charges for amivantamab,
                which the applicant determined using the inverse of the FY 2021 IPPS/
                LTCH PPS final rule pharmacy national average cost to charge ratio
                (CCR) of 0.187 (85 FR 58601).
                 Because the applicant calculated a final inflated average case-
                weighted standardized charge per case of $108,159, which exceeds the
                case weighted threshold of $64,736, the applicant maintains the
                technology meets the cost criterion.
                 Based on the information provided by the applicant, we have several
                concerns with regard to whether the technology meets the cost
                criterion. In its cost analysis, the applicant combined 234 cases from
                multiple MS-DRGs into one group with a case-weight of 67 percent of
                cases. We do not believe this is appropriate for the cost analysis. As
                reflected in Sec. 412.87(b)(3), where cases eligible for a particular
                technology may be assigned to multiple MS-DRGs, in performing the cost
                analysis, the applicant should compare the charges of the cases to a
                threshold amount that is the lesser of 75 percent of the standardized
                amount or 75 percent of one standard deviation beyond the case-weighted
                average of all MS-DRGs to which the cases map. In the event that a
                single MS-DRG has fewer than 11 cases, the applicant should impute a
                minimum case number of 11 rather than the actual value. In this way,
                the appropriate threshold and case weighted threshold value can be
                calculated.
                [[Page 25225]]
                 In its analysis, the applicant appears to take a sample of a larger
                case population based on clinical data. It is unclear whether the
                applicant is taking a simple random sample or a targeted sample of
                cases. We note that, if the applicant obtained a random sample, this
                sample may not be any more representative of the larger population of
                cases identified by the lung cancer diagnosis codes listed previously.
                If the applicant instead non-randomly sampled cases from the larger
                population, we would like to understand the process used by the
                applicant to identify this targeted sample. Under either approach, we
                would request information on how a sampling of cases from the greater
                population is more representative of potential amivantamab patients.
                 We are inviting public comments on whether amivantamab meets the
                cost criterion.
                 With respect to the substantial clinical improvement criterion, the
                applicant asserted that amivantamab represents a substantial clinical
                improvement over existing technologies. The applicant asserted several
                claims of substantial clinical improvement for amivantamab: (1)
                Amivantamab is anticipated to be the first therapy to treat the
                metastatic NSCLC with exon 20 insertion mutations for patients whose
                disease has progressed on or after platinum-based chemotherapy; (2) the
                objective response rate (ORR) was higher than what would be expected
                with chemotherapy or immunotherapy; (3) a clinical benefit rate higher
                than what would be expected with chemotherapy or immunotherapy; (4) a
                duration of response higher than what would be expected with
                chemotherapy or immunotherapy; (5) the median progression free survival
                was higher than what would be expected with chemotherapy or
                immunotherapy; and (6) the incidence and severity of diarrhea was lower
                than what would be expected with any oral EGFR inhibitor.
                 The applicant stated that patients with NSCLC and EGFR exon 20
                insertion mutations have a form of disease that is generally
                insensitive to available EGFR TKI treatments and, as a result, carries
                a worse prognosis compared to patients with more common EGFR
                mutations.\34\ Per the applicant, the current standard of care for the
                initial treatment of exon 20 insertion metastatic NSCLC is platinum-
                based chemotherapy; \35\ and, after a patient with EGFR exon 20
                insertion metastatic NSCLC disease progresses on or during platinum-
                based chemotherapy, there is no standard of care. The applicant stated
                there are currently no FDA-approved targeted therapies for patients
                with lung cancer who have EGFR exon 20 insertion mutations.\36\ The
                applicant cited an analysis of the Flatiron Health database, which
                includes electronic health data records from over 265 cancer clinics
                representing over 2 million active US cancer patients, that found
                prescribers use a wide variety of treatment strategies, all of which
                have an unclear role in the second-line treatment of exon 20 insertion
                mutated metastatic NSCLC or are known to be ineffective and/or have
                potential tolerability issues.\37\ Specifically, the analysis showed
                that in the second-line treatment of exon 20 insertion metastatic
                NSCLC, approximately 33 percent of patients received single-agent
                immunotherapy, 14.1 percent received an EGFR-targeting oral agent, 5.9
                percent received chemoimmunotherapy combination, 5.9 percent received
                chemotherapy with a VEGF inhibitor, 5.9 percent received a clinical
                study drug, and the remainder received a variety of single-agent
                chemotherapies or other regimens. The applicant stated this re-iterates
                the lack of an accepted standard of care for the second-line treatment
                of exon 20 insertion metastatic NSCLC and thus underscores the unmet
                need of these patients. According to the applicant, based on the
                Breakthrough Therapy designation for amivantamab, it is anticipated
                that amivantamab's first expected approval will be for the second-line
                treatment of exon 20 insertion metastatic NSCLC.
                ---------------------------------------------------------------------------
                 \34\ Vyse, S., and Huang, P. H. (2019). Targeting EGFR exon 20
                insertion mutations in non-small cell lung cancer. Signal
                Transduction and Targeted Therapy, 4(1), 1-10.
                 \35\ Chantharasamee, J., Poungvarin, N., Danchaivijitr, P., and
                Techawatanawanna, S. (2019). Clinical outcome of treatment of
                metastatic non-small cell lung cancer in patients harboring uncommon
                EGFR mutation. BMC Cancer, 19(1), 701.
                 \36\ Yasuda, H., Kobayashi, S., and Costa, D. B. (2012). EGFR
                exon 20 insertion mutations in non-small-cell lung cancer:
                Preclinical data and clinical implications. The Lancet Oncology,
                13(1), e23-e31.
                 \37\ Flatiron Health database, Second Line Treatment Regimens in
                Advanced NSCLC (January 2015-October 2019).
                ---------------------------------------------------------------------------
                 The applicant provided three references to support a finding of
                substantial clinical improvement for amivantamab as well as some
                supplementary information in the application itself. The first
                reference was a conference presentation given at the 2019 Annual
                Meeting of the Society for Clinical Oncology titled ``JNJ-61186372
                (JNJ-372), an EGFR-cMet bispecific antibody, in EGFR-driven advanced
                non-small cell lung cancer (NSCLC)'' by Haura et al. The second was a
                poster presented at the 2020 Annual Meeting of the American Society for
                Clinical Oncology titled ``Amivantamab (JNJ-61186372), an anti-EGFR-MET
                bispecific antibody, in patients with EGFR Exon 20 insertion
                (Exon20ins)-mutated non-small cell lung cancer (NSCLC)'' by Park et al.
                The third was a conference presentation given in January 2021 at the
                World Conference on Lung Cancer titled ``Amivantamab in Post-platinum
                EGFR Exon 20 Insertion Mutant Non-small Cell Lung Cancer'' by Sabari et
                al.
                 These three references all describe the ongoing Phase 1 trial
                titled ``A Phase 1, First-in-Human, Open-Label, Dose Escalation Study
                of JNJ-61186372, a Human Bispecific EGFR and cMet Antibody, in Subjects
                With Advanced Non-Small Cell Lung Cancer'' (https://clinicaltrials.gov/ct2/show/NCT02609776). This open label, multicenter, first-in-human
                study, also known as ``CHRYSALIS,'' consists of two parts.\38\ Part 1
                was a dose escalation study used to establish the recommended Phase 2
                dosing regimen.\39\ Part 2 was a dose expansion study to assess safety
                and efficacy at the recommended Phase 2 dosing regimen.\40\ The primary
                efficacy endpoint was the overall response rate per Response Evaluation
                Criteria in Solid Tumors v1.1.\41\ Key secondary endpoints included
                clinical benefit rate (CBR), duration of response (DOR), progression-
                free survival (PFS), and overall survival (OS).\42\
                ---------------------------------------------------------------------------
                 \38\ https://clinicaltrials.gov/ct2/show/study/NCT02609776
                https://clinicaltrials.gov/ct2/show/study/NCT02609776
                 \39\ Sabari JK, Shu CA, Park K, et al. Amivantamab in post-
                platinum EGFR exon 20 insertion mutant non-small cell lung cancer.
                Oral presentation presented at: International Association for the
                Study of Lung Cancer (IASLC) 2020 World Conference on Lung Cancer
                Singapore (WCLC 2020); January 28-31, 2021; Worldwide Virtual Event.
                 \40\ Ibid.
                 \41\ Ibid.
                 \42\ Ibid.
                ---------------------------------------------------------------------------
                 Key eligibility criteria for the post-platinum population of
                patients enrolled in the study included: Metastatic/unresectable NSCLC,
                EGFR exon 20 insertion mutation, and progression on platinum-based
                chemotherapy.\43\ Patients received the recommended Phase 2 dose of
                1050 mg (1400 mg for patients >=80 kg) amivantamab intravenously once
                weekly for the first cycle and biweekly thereafter.\44\ The safety
                population
                [[Page 25226]]
                (N=114) included all post-platinum exon 20 ins patients who received
                amivantamab at the recommended Phase 2 dose, and the response-evaluable
                population (n=81) included post-platinum exon 20 ins patients who had
                at least three disease assessments or had discontinued, progressed, or
                died prior to the third post-baseline assessment at the time of
                clinical cut-off.\45\
                ---------------------------------------------------------------------------
                 \43\ Ibid.
                 \44\ Ibid.
                 \45\ Ibid.
                ---------------------------------------------------------------------------
                 In the efficacy population, the median age was 62.\46\ In addition,
                59 percent of the patients were female, 49 percent of the patients were
                Asian, and 47 percent had a history of smoking.\47\ Median time from
                initial diagnosis was 17 months with a range of 1-130 months.\48\ All
                patients, by definition, had a prior history of platinum-based
                chemotherapy while 46 percent had prior immuno-oncology therapy and 25
                percent had a history of EGFR TKI treatment.\49\
                ---------------------------------------------------------------------------
                 \46\ Ibid.
                 \47\ Ibid.
                 \48\ Ibid.
                 \49\ Ibid.
                ---------------------------------------------------------------------------
                 In the safety population, 98 percent of patients experienced a
                treatment-related adverse event.\50\ Of these, 16 percent were Grade 3
                or higher, 9 percent were serious, 4 percent led to discontinuation, 13
                percent led to dose reduction, and 21 percent led to dose
                interruption.\51\ Of note, 2 percent discontinued due to rash and 10
                percent had treatment-related diarrhea with 8.5 percent at grade 1-2
                and 3.5 percent at grade 3.\52\
                ---------------------------------------------------------------------------
                 \50\ Ibid.
                 \51\ Ibid.
                 \52\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant stated that preliminary safety results from the
                CHRYSALIS trial presented at the 2020 ASCO meeting appear to
                demonstrate that amivantamab has a manageable safety profile, with 60%
                of adverse events at grade 1 to 2.\53\ Per the applicant, this appears
                to be an improvement relative to the types and frequency of adverse
                events reported for platinum based chemotherapies overall in advanced
                NSCLC, with over half of patients reporting adverse events of grade 3
                to 5, such as neutropenia, nausea, and vomiting.\54\ The applicant
                noted the best tolerated EGFR-targeting oral agent osimertinib was
                associated with a rate of discontinuation due to adverse events of 13
                percent in the phase 3 FLAURA study.\55\ In addition, the applicant
                noted osimertinib was associated with a rate of any grade diarrhea of
                58 percent with 2 percent of patients having grade 3 or higher in this
                study.\56\ In the same phase 3 FLAURA study, the applicant noted the
                comparator arm (gefitinib or erlotinib) was associated with a 57
                percent incidence of any grade diarrhea with 2 percent of patients
                experiencing grade 3 or higher.
                ---------------------------------------------------------------------------
                 \53\ 2020 ASCO Annual Meeting: Park, K, et al. J Clin Oncol
                38:2020 (suppl; abstr 9512).
                 \54\ Schiller, JH et al. (2002). Comparison of four chemotherapy
                regimens for advanced non-small-cell lung cancer. New England
                Journal of Medicine, 346(2), 92-98.
                 \55\ Ibid.
                 \56\ Ibid.
                ---------------------------------------------------------------------------
                 Regarding efficacy, in the Sabari et al reference, a blinded
                independent central review found an ORR in the efficacy population of
                40 percent (95 percent CI 29-51) and a median DOR of 11.1 months (95
                percent CI 6.9-not reached).\57\ Patients experienced a complete
                response in 4 percent of cases, partial response in 36 percent of
                cases, stable disease in 48 percent of cases, progressive disease in 10
                percent of cases, and one percent of patients was not evaluable.\58\
                Finally, the CBR (defined as complete response, partial response, or
                stable disease for at least two disease assessments) was 74 percent (95
                percent CI 63-83).\59\ The median patient follow-up in this most recent
                analysis was 9.7 months (range 1.1-29.3). Of note, 47 percent of
                patients remained on treatment at time of data cutoff and 63 percent
                had responses of at least six months.\60\ The median PFS was 8.3 months
                (95 percent CI 6.5-10.9), and the median overall survival was 22.8
                months (95 percent CI 14.6-not reached).\61\
                ---------------------------------------------------------------------------
                 \57\ Sabari JK, Shu CA, Park K, et al. Amivantamab in post-
                platinum EGFR exon 20 insertion mutant non-small cell lung cancer.
                Oral presentation presented at: International Association for the
                Study of Lung Cancer (IASLC) 2020 World Conference on Lung Cancer
                Singapore (WCLC 2020); January 28-31, 2021; Worldwide Virtual Event.
                 \58\ Ibid.
                 \59\ Ibid.
                 \60\ Ibid.
                 \61\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant stated that, while direct comparison between
                therapies cannot be definitively made in the absence of comparative
                trials, amivantamab results appear promising and numerically better
                than those expected with current therapies (chemotherapy,
                immunotherapy, chemoimmunotherapy combination, or oral EGFR tyrosine
                kinase inhibitors) based on available data. The applicant stated
                platinum-based chemotherapy has been associated with a median
                progression free survival of 5.1 to 6.0 months in patients with exon 20
                T790m mutations-the most common mutation observed following resistance
                to small molecule TKI inhibitors commonly used in advanced EGFR
                mutation positive NSCLC.\62\ The applicant stated that oral EGFR
                tyrosine kinase inhibitors (for example, erlotinib, gefitinib,
                afatinib, dacomitinib, osimertinib) and immunotherapies are also used
                to treat patients with exon 20 insertion metastatic NSCLC but generally
                have limited efficacy as exon 20 insertion mutations have been
                associated with resistance to EGFR tyrosine kinase inhibitors.\63\ The
                applicant stated most immunotherapy and chemoimmunotherapy studies have
                excluded patients with EGFR mutation because single-agent
                immunotherapies have very limited efficacy in patients with EGFR-
                mutated NSCLC.
                ---------------------------------------------------------------------------
                 \62\ Yoshida, T., Kuroda, H., Oya, Y., Shimizu, J., Horio, Y.,
                Sakao, Y., et al. . . . and Yatabe, Y. (2017). Clinical outcomes of
                platinum-based chemotherapy according to T790M mutation status in
                EGFR-positive non-small cell lung cancer patients after initial
                EGFR-TKI failure. Lung Cancer, 109, 89-91.
                 \63\ Vyse, S., & Huang, P. H. (2019). Targeting EGFR exon 20
                insertion mutations in non-small cell lung cancer. Signal
                Transduction and Targeted Therapy, 4(1), 1-10.
                ---------------------------------------------------------------------------
                 The applicant provided the following table 1, which outlines median
                progression free survival (mPFS) and response rate (ORR) data among
                patients with exon 20 insertion mutation for amivantamab and some of
                the currently existing therapies. The applicant noted this table is
                intended to provide general information about individual therapies and
                is not intended for making direct comparisons between therapies as
                differences between study populations, follow-up time, prior
                treatments, and other factors may exist.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.141
                [[Page 25227]]
                 Finally, the applicant cited an analysis presented at the 2020
                American Society of Clinical Oncology (ASCO) Annual Meeting, which
                found patients experienced a median ORR of 13% and PFS of 3.5 months
                when receiving a wide variety of different therapies, including
                immunotherapies, chemoimmunotherapies, EGFR-targeting TKIs, and other
                chemotherapy regimens as second-line treatment.\64\
                ---------------------------------------------------------------------------
                 \64\ Park, K. (2020, May). Amivantamab (JNJ-61186372), an anti-
                EGFR-MET bispecific antibody, in patients with EGFR Exon 20
                insertion (Exon20ins)-mutated non-small cell lung cancer (NSCLC).
                Poster presented at the 2020 Annual Meeting of the American Society
                of Clinical Oncology.
                ---------------------------------------------------------------------------
                 After review of the information provided by the applicant, we have
                the following concerns regarding whether the technology meets the
                substantial clinical improvement criterion. Currently, results provided
                by the applicant are based on an ongoing Phase 1 trial. We are
                concerned that these are potentially partial results, from which end
                conclusions may not be drawn, and also about the potential for
                overestimating treatment effects when trials stop early or report
                interim results. We further note that the only study cited by the
                application to establish substantial clinical improvement is a single-
                armed study assessing the safety and efficacy of amivantamab in the
                target population. As noted by the applicant, no formal comparisons to
                other therapies have been made. Without the ability to control for
                factors such as study design, patient characteristics, etc., we may be
                unable to determine whether any differences seen are the result of
                amivantamab's potentially superior efficacy or confounding variables.
                We also note that the single-arm study design results in an inability
                to distinguish between the effect of amivantamab treatment, a placebo
                effect, and the effect of natural course of the disease.
                 We are inviting public comments on whether amivantamab meets the
                substantial clinical improvement criterion.
                 We did not receive any written comments in response to the New
                Technology Town Hall meeting notice published in the Federal Register
                regarding the substantial clinical improvement criterion for
                amivantamab.
                c. Breyanzi[supreg] (lisocabtagene maraleucel)
                 Juno Therapeutics, a Bristol-Myers Squibb Company, submitted an
                application for new technology add-on payment for FY 2022 for
                Breyanzi[supreg]. Breyanzi[supreg] is a CD19-directed, autologous
                chimeric antigen receptor (CAR) T-cell immunotherapy that is comprised
                of individually formulated CD8 (killer) and CD4 (helper) CAR T-cells
                indicated for the treatment of adult patients with relapsed or
                refractory (r/r) large B-cell lymphoma after at least two prior
                therapies. We note that Juno Therapeutics previously submitted an
                application for new technology add-on payments for Breyanzi[supreg] for
                FY 2021, as summarized in the FY 2021 IPPS/LTCH PPS proposed rule,
                under the name lisocabtagene maraleucel (85 FR 32647-32652).
                 According to the National Comprehensive Cancer Network, Diffuse
                Large B-cell lymphoma (DLBCL) is the most common type of Non-Hodgkin's
                Lymphoma (NHL) in the U.S. and worldwide, accounting for nearly 30% of
                newly diagnosed cases of B-cell NHL in U.S.\65\ DLBCL is characterized
                by spreading of B-cells through the body that have either arrived de
                novo or by the transformation from indolent lymphoma.
                ---------------------------------------------------------------------------
                 \65\ Ferlay J, Colombet M, Soerjomataram, et al., Estimating the
                global cancer incidence and mortality in 2018: GLOBOCAN sources and
                methods, Int J Cancer. 144: 1941-1953 (Ferlay, 2019); NCCN Clinical
                Practice Guidelines in Oncology (NCCN Guidelines[supreg]) for B-Cell
                Lymphomas V. 5.2019. (copyright) National Comprehensive Cancer
                Network, Inc. 2019 (NCCN, 2019).
                ---------------------------------------------------------------------------
                 According to the applicant, the standard-of-care, first-line
                immune-chemotherapy for DLBCL includes regimens such as
                cyclophosphamide, doxorubicin, vincristine, and prednisone plus
                rituximab (R-CHOP).\66\ These regimens result in long-lasting remission
                in more than 50% of patients.\67\ However, approximately 10% to 15% of
                patients will have primary refractory disease (that is, nonresponse or
                relapse within 3 months of first-line therapy), and an additional 20%
                to 25% will relapse following an initial response to therapy.\68\
                Patients with relapses of aggressive B-cell lymphomas are believed to
                have a poor prognosis because of potential treatment resistance and
                rapid tumor growth, with only about 30% to 40% responding to salvage
                chemotherapy (for example, R-ICE, DHAP, or Gem-ox) followed by high-
                dose therapy and autologous stem cell transplantation for patients
                demonstrating chemotherapy-sensitive disease.69 70 Among
                patients eligible to undergo autologous stem cell transplantation
                (ASCT), only 50% will achieve a remission adequate to proceed to ASCT,
                and approximately 50% will relapse after transplantation.\71\ The
                applicant also noted that transplant eligibility is also restricted
                based on age and tolerance to high dose chemotherapy and thus excludes
                a moderate subset of patients with r/r DLBCL.
                ---------------------------------------------------------------------------
                 \66\ Coiffier, BBertrand et. al, Long-term outcome of patients
                in the LNH-98.5 trial, the first randomized study comparing
                rituximab-CHOP to standard CHOP chemotherapy in DLBCL patients: a
                study by Group d'Etudes des Lymphomes de l'Adulte, blood 2010 116:
                2040-2045. (Coiffier, 2010).
                 \67\ Ibid
                 \68\ Ibid
                 \69\ Crump M, Neelapu SS, Farooq U, et al., Outcomes in
                refractory diffuse large B-cell lymphoma: results from the
                international SCHOLAR-1 study, Blood. 2017; 130(16): 1800-1808
                (Crump, 2017).);
                 \70\ Cunningham D, Hawkes EA, Jack A, et al. Rituximab plus
                cyclophosphamide, doxorubicin, vincristine, and prednisolone in
                patients with newly diagnosed diffuse large B-cell non-Hodgkin
                lymphoma: a phase 3 comparison of dose intensification with 14-day
                versus 21-day cycles Lancet. 2013; 381: 1817-1826 (Cunningham,
                2013).
                 \71\ Ibid
                ---------------------------------------------------------------------------
                 Additionally, the applicant explained that the available therapies
                for 3L+ large B-cell lymphoma include the following:
                 CD19-directed genetically modified autologous CAR T-cell
                immunotherapy axicabtagene ciloleucel (YESCARTA[supreg]), approved in
                October 2017 for the treatment of adult patients with r/r large B-cell
                lymphoma after two or more lines of systemic therapy, including DLBCL
                not otherwise specified, primary mediastinal large B-cell lymphoma,
                high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma
                (FL).\72\
                ---------------------------------------------------------------------------
                 \72\ YESCARTA[supreg]'s approval was based on a single arm study
                (ZUMA-1) demonstrating an IRC-assessed ORR of 72%, CR of 51%, and an
                estimated median DOR of 9.2 months in 101 subjects included in the
                modified intent-to-treat (mITT population).
                ---------------------------------------------------------------------------
                 CAR T-cell therapy tisagenlecluecel (KYMRIAH[supreg]),
                approved in May 2018, for the treatment of adult patients with r/r
                large B-cell lymphoma after two or more lines of systemic therapy,
                including DLBCL not otherwise specified, high grade B-cell lymphoma,
                and DLBCL arising from FL.\73\
                ---------------------------------------------------------------------------
                 \73\ KYMRIAH[supreg]'s approval was based on a single-arm study
                (JULIET) demonstrating an ORR of 50% and a CR rate of 32% in 68
                efficacy-evaluable subjects. A median DOR was not reached with a
                median follow-up of 9.4 months.
                ---------------------------------------------------------------------------
                 Programmed death receptor-1 (PD-1)-blocking antibody
                (KEYTRUDA[supreg]), approved in 2018, for the treatment of adult and
                pediatric patients with refractory primary mediastinal B-cell lymphoma
                (PMBCL), or who have relapsed after two or more prior lines of
                therapy.\74\
                ---------------------------------------------------------------------------
                 \74\ KEYTRUDA is not recommended for treatment of patients with
                PMBCL who require urgent cytoreductive therapy. Keytruda USPI
                (2019).
                ---------------------------------------------------------------------------
                 CD79b-directed antibody-drug conjugate polatuzumab vedotin
                (POLIVY[supreg]), in combination with bendamustine and rituximab,
                approved in 2019, for the treatment of adult patients with r/r DLBCL,
                not otherwise specified, after at least two prior therapies.
                [[Page 25228]]
                 According to the applicant, despite the availability of these
                therapies, r/r large B-cell lymphoma remains a major cause of morbidity
                and mortality due to the aggressive disease course. The applicant noted
                that the safety profiles of these therapies exclude many r/r large B-
                cell lymphoma patients from being able to undergo treatment with these
                therapies.\75\
                ---------------------------------------------------------------------------
                 \75\ Smith SD, Reddy P, Sokolova A, et al., Eligibility for CAR
                T-cell therapy: An analysis of selection criteria and survival
                outcomes in chemorefractory DLBCL, Am. J. Hematol. 2019; E119: 1-4
                (Smith, 2019).
                ---------------------------------------------------------------------------
                 With respect to the newness criterion, the applicant submitted a
                BLA for Breyanzi[supreg] in October 2019, and was approved by FDA on
                February 5, 2021. Breyanzi[supreg] was granted Breakthrough Therapy
                Designation (BTD) on December 15, 2016 and Regenerative Medicine
                Advanced Therapy (RMAT) designation on October 20, 2017, for the
                treatment of patients with r/r aggressive large B-cell NHL, including
                DLBCL, not otherwise specified (DLBCL NOS; de novo or transformed from
                indolent lymphoma), primary mediastinal B-cell lymphoma (PMBCL), or
                follicular lymphoma Grade 3B (FL3B)). Breyanzi[supreg] is a CD19-
                directed genetically modified autologous T cell immunotherapy indicated
                for the 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) not otherwise specified
                (including DLBCL arising from indolent lymphoma), high-grade B-cell
                lymphoma, primary mediastinal large B-cell lymphoma, and follicular
                lymphoma grade 3B. Breyanzi[supreg] is not indicated for the treatment
                of patients with primary central nervous system lymphoma. We note that
                effective October 1, 2021 the following ICD-10-PCS codes may be used to
                uniquely describe procedures involving the infusion of
                Breyanzi[supreg]: XW033N7 (Introduction of lisocabtagene maraleucel
                immunotherapy into peripheral vein, percutaneous approach, new
                technology group 7) and XW043N7 (Introduction of lisocabtagene
                maraleucel immunotherapy into central vein, percutaneous approach, new
                technology group 7). The applicant also submitted a request for a new
                HCPCS code, which will uniquely describe procedures involving the use
                of Breyanzi[supreg]. The applicant noted in their application that
                Breyanzi[supreg] would likely map to the same MS-DRG as other CAR T-
                cell therapies, MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell
                Immunotherapy).
                 As previously discussed, if a technology meets all three of the
                substantial similarity criteria, it would be considered substantially
                similar to an existing technology and would not be considered ``new''
                for purposes of new technology add-on payments.
                 With regard to the first criterion, whether a product uses the same
                or a similar mechanism of action to achieve a therapeutic outcome, the
                applicant described two ways in which it believes the mechanism of
                action for Breyanzi[supreg] differs from previously approved therapies
                for DLBCL. First, the applicant described the therapy as being
                comprised of individually formulated cryopreserved patient-specific
                helper (CD4) and killer (CD8) CAR T-cells in suspension that are
                administered as a defined composition of CAR-positive viable T-cells
                (from individually formulated CD8 and CD4 components). The applicant
                stated that the therapy involves a different mechanism of action from
                other CAR-T cell therapies because the CD4 and CD8 T-cells are purified
                and cultured separately to maintain compositional control of each cell
                type. Furthermore, during culture, each cell type is separately
                modified to have the CAR on the cell surface, expanded and quantified,
                and frozen in two separate cell suspensions. The applicant then
                described how Breyanzi[supreg] is infused with the same target dose of
                CD4 and CD8 CAR T-cells for every patient. The applicant asserted that
                because Breyanzi[supreg] controls the same dosage for both CD4 and CD8,
                it differs from other CAR T-cell therapies for DLBCL and could
                potentially provide for higher safety and efficacy; the applicant
                stated that CAR T-cell therapies that do not control for CD8 CAR T-cell
                dosage have demonstrated higher rates of severe and life-threatening
                toxicities, such as cytokine release syndrome (CRS) and neurotoxicity
                (NT).
                 The second feature the applicant described as distinguishing
                Breyanzi[supreg]'s mechanism of action from existing CD19-directed CAR
                T-cell therapies was the presence of an EGFRt cell surface tag. The
                applicant explained that the EGFRt cell surface tag could
                hypothetically be targeted for CAR T-cell clearance by separately
                administering cetuximab, a monoclonal antibody. According to the
                applicant, if the patient was separately administered cetuximab, the
                presence of the EGFRt cell surface tag within Breyanzi[supreg] would
                allow cetuximba to bind to the CAR T-cells and clear the cells from the
                patient. The applicant highlighted studies that showed that persistent
                functional CD19-directed CAR T-cells in patients caused sustained
                depletion of a patient's normal B-cells that expressed CD19, resulting
                in hypogammaglobulinemia and an increased risk of life-threatening or
                chronic infections.\76\ The applicant further explained that such
                prolonged low levels of normal B-cells could place a patient at risk of
                life-threatening or chronic infections. According to the applicant, the
                ability to deplete CAR T-cells, via the administration of cetuximab,
                when a patient achieves a long-term remission could hypothetically
                allow recovery of normal B-cells and potentially reduce the risk of
                life-threatening or chronic infections. The applicant noted that
                experiments in a laboratory setting showed that targeting EGFRt with
                the monoclonal antibody cetuximab eliminated CAR T-cells expressing the
                EGFRt marker, which resulted in long-term reversal of B-cell aplasia in
                mice.\77\ However, the applicant noted that this mechanism of CAR T-
                cell clearance, via administration of cetuximab and EGFRt cell surface
                tags/markers, has not been tested in humans, including patients treated
                with Breyanzi[supreg].
                ---------------------------------------------------------------------------
                 \76\ Kalos M, Levine BL, Porter DL, et al., T Cells with
                Chimeric Antigen Receptors Have Potent Antitumor Effects and Can
                Establish Memory in Patients with Advanced Leukemia, Sci Transl Med.
                2011; 3(95): 1-21 (Kalos, 2011).
                 \77\ Paszkiewicz PJ, Frable SP, Srivastava S, et al., Targeted
                antibody-mediated depletion of murine CD19 CAR T cells permanently
                reverses B cell aplasia, J Clin Invest. 2016; 126(11): 4262-4272
                (Paszkiewicz, 2016).
                ---------------------------------------------------------------------------
                 With respect to the second criterion, whether a product is assigned
                to the same or a different MS-DRG, the applicant acknowledged that the
                ICD-10-PCS procedure codes used to uniquely identify procedures
                involving the administration of Breyanzi[supreg] XW033N7 (Introduction
                of lisocabtagene maraleucel Immunotherapy into peripheral vein,
                percutaneous approach, new technology group 7) and XW043N7
                (Introduction of lisocabtagene maraleucel Immunotherapy into central
                vein, percutaneous approach, new technology group 7) are assigned to
                MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy). The
                applicant has not made a request for the technology to map to a new or
                different MS-DRG for FY 2022.
                 With respect to the third criterion, whether the new use of the
                technology involves the treatment of the same or similar type of
                disease and the same or similar patient population, according to the
                applicant, Breyanzi[supreg] fills an unmet need in the treatment of
                large B-cell lymphoma because Breyanzi[supreg] would be indicated as a
                third-line treatment option for patients with r/r DLBCL, who cannot be
                treated with existing CAR T-
                [[Page 25229]]
                cell therapies. The applicant asserted that Breyanzi[supreg] would be
                able to treat these patients that present with uncommon subtypes of
                DLBCL including, PMBCL, FL3B, and DLBCL transformed from indolent
                lymphoma from other follicular lymphoma, elderly patients (>= 65 years
                old), patients with secondary CNS involvement by lymphoma, and those
                with moderate renal or cardiac comorbidities. The applicant asserted
                that these patient populations were excluded from registrational trials
                for YESCARTA[supreg] and KYMRIAH[supreg], and therefore represent an
                unmet patient need.
                 Regarding newness, we are concerned whether a differing production
                and/or dosage represents a different mechanism of action as compared to
                previously FDA-approved CAR T-cell therapies. We are also concerned
                about whether the existence of an EGFRt cell surface tag equates to a
                new mechanism of action given that in order to activate this cell
                surface tag, an additional medication, cetuximab, which targets the CAR
                T-cells for clearance, would be needed. We also express concern that,
                based on our understanding, the presence of the EGFRt cell surface tag
                is a potential way to treat an adverse event of the Breyanzi[supreg]
                therapy and is not critical to the way the drug treats the underlying
                disease. We note that the applicant referenced that while this EGFRt
                cell surface tag is included within the Breyanzi[supreg] compound, it
                remains dormant without activation by cetuximab. Finally, the applicant
                noted that Breyanzi[supreg] has been shown safe and effective for
                patient populations excluded from registrational trials for
                YESCARTA[supreg] and KYMRIAH[supreg], including patients with uncommon
                subtypes of large B-cell lymphoma, including PMBCL, FL3B, and DLBCL
                transformed from indolent lymphoma other than FL, elderly patients (>=
                65 years old), patients with secondary CNS involvement by lymphoma and
                those with moderate renal or cardiac comorbidities.\78\ We note that
                the FDA label for YESCARTA[supreg] and KYMRIAH[supreg] does not appear
                to specifically exclude these patient populations or NHL subtypes. As
                such, it is unclear whether Breyanzi[supreg] would in fact treat a
                patient population different from other CAR T-cell therapies that treat
                patients with DLBCL.
                ---------------------------------------------------------------------------
                 \78\ Lisocabtagene maraleucel Biologics License Application
                (BLA).
                ---------------------------------------------------------------------------
                 We are inviting public comments on whether Breyanzi[supreg] is
                substantially similar to other technologies and whether
                Breyanzi[supreg] meets the newness criterion.
                 With regard to the cost criterion, the applicant searched the FY
                2019 MedPAR correction notice (December 1, 2020) data file to identify
                potential cases representing patients who may be eligible for treatment
                using Breyanzi[supreg]. The applicant identified claims that reported
                an ICD-10-CM diagnosis code of: C83.30 (DLBCL, unspecified site);
                C83.31 (DLBCL, lymph nodes of head, face and neck); C83.32 (DLBCL,
                intrathoracic lymph nodes); C83.33 (DLBCL, intra-abdominal lymph
                nodes); C83.34 (DLBCL, lymph nodes of axilla and upper limb); C83.35
                (DLBCL, lymph nodes of inquinal region and lower limb); C83.36 (DLBCL,
                intrapelvic lymph nodes); C83.37 (DLBCL, spleen); or C83.38 (DLBCL,
                lymph nodes of multiple sites) in one of the first five diagnosis code
                positions on the claim. The applicant excluded claims if they had one
                or more diagnoses from the list below because these conditions would
                preclude use of Breyanzi[supreg].
                BILLING CODE 4120-01-P
                [GRAPHIC] [TIFF OMITTED] TP10MY21.142
                [[Page 25230]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.143
                [[Page 25231]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.144
                BILLING CODE 4120-01-C
                 However, the applicant noted that the aforementioned C83.XX ICD-10-
                CM codes do not differentiate r/r patients from the broader DLBCL
                population. A clinical literature search completed by the applicant
                found that the r/r population makes up one-fourth of the DLBCL
                population, but since r/r patients typically have higher inpatient
                costs the applicant selected 19.36 percent of the cases with the
                highest total charges for their cost analysis. Applying the previously
                mentioned parameters, the applicant found a total of 991 cases mapped
                to 12 MS-DRGs.
                 The applicant stated that the use of Breyanzi[supreg]'s therapy
                would replace chemotherapy or other drug therapies, including other CAR
                T-cell therapies. Because of this, the applicant stated they removed
                all charges in the drug cost center since it was not possible to
                differentiate between different drugs on inpatient claims. The
                standardized charges per case were then calculated using the 2019 IPPS/
                LTCH PPS final rule Impact file and the 2-year inflation factor of 13.2
                percent (1.3218) was applied. Finally, to determine the charges for
                Breyanzi[supreg], the applicant used the inverse of a simulated
                alternative cost-to-charge ratio (CCR) specifically for CAR T-CELL
                therapies to account for CAR T-cell therapies' higher costs compared to
                other drugs. To determine this alternative CCR for CAR T-cell
                therapies, the applicant referred to the FY 2021 IPPS final rule AOR/
                BOR file and calculated an alternative markup percentage by dividing
                the AOR drug charges within MS-DRG 018 by the number of cases to
                determine a per case drug charge. The applicant then divided the drug
                charges per case by $373,000, the acquisition cost of YESCARTA and
                KYMRIAH, the CAR T-cell products used in those claims, to arrive at a
                CCR of 0.295. The applicant noted that the cost of Breyanzi[supreg] had
                not yet been determined at the time of application. However, for the
                purposes of its cost analysis, the applicant assumed the per-patient
                cost to the hospital will be $373,000. Based on the FY 2021 IPPS/LTCH
                PPS final rule correction notice data file thresholds for FY 2022, the
                applicant calculated a final inflated average case-weighted
                standardized charge per case of $1,377,616 which exceeded the MS-DRG
                018 average case-weighted threshold of $1,251,127 by $126,489.
                Therefore, the applicant stated that Breyanzi[supreg] met the cost
                criterion.
                 As noted in previous discussions, the submitted costs for CAR T-
                cell therapies vary widely due to differences in provider billing and
                charging practices for this therapy. Therefore, with regard to the use
                of this data for purposes of calculating a CAR T-cell CCR, we are
                uncertain how representative this data is for use in the applicant's
                cost analyses given this potential for variability.
                 We continue to be interested in public comments regarding the
                eligibility of CAR T-cell technologies for new technology add-on
                payments when assigned to MS-DRG 018. As we have noted in prior
                rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
                FR 58603 through 58608), if a new MS-DRG were to be created, then
                consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
                longer be a need for a new technology add-on payment under section
                1886(d)(5)(K)(ii)(III) of the Act. We welcome comment on this issue.
                [[Page 25232]]
                 We invite public comment on whether Breyanzi[supreg] meets the cost
                criterion.
                 With respect to the substantial clinical improvement criterion, the
                applicant asserted that Breyanzi[supreg] represents a substantial
                clinical improvement over existing technologies because: (1) The
                totality of the circumstances regarding Breyanzi[supreg]'s clinical
                efficacy, safety, and data make clear that Breyanzi[supreg]
                substantially improves, relative to services or technologies previously
                available, the treatment of Medicare beneficiaries with R/R NHL; (2)
                Breyanzi[supreg] offers a treatment option for a patient population
                unresponsive to, or ineligible for, currently available treatments; (3)
                Breyanzi[supreg] has, overall, an improved safety profile compared to
                YESCARTA and KYMRIAH; (4) Breyanzi[supreg] has a comparable or superior
                effectiveness compared to existing therapies; and (5)
                Breyanzi[supreg]'s patient population in its registrational study more
                accurately reflects real-world NHL patients compared to the studies of
                currently available CAR T-cell therapies.
                 The applicant asserts that the totality of the clinical efficacy
                and safety data from the TRANSCEND NHL 001 trial, which is a
                prospective, single arm, multicenter study of Breyanzi[supreg] in
                patients with r/r aggressive B-cell NHL, and the supportive safety data
                from the Breyanzi[supreg] clinical studies included in their Biologics
                License Application (BLA) submission demonstrate that Breyanzi[supreg]
                has equal or better efficacy and a better safety profile in a broad R/R
                patient population that better approximates the real world large B-cell
                lymphoma patient population--a population that the applicant asserted
                includes NHL subtypes not studied or approved for treatment with
                current approved or conditionally approved agents.
                 The applicant shared the results of the Phase I TRANSCEND NHL 001
                trial, which was a prospective, single arm, multicenter study of
                lisocabtagene maraleucel in patients with relapsed/refractory
                aggressive B-cell NHL. The applicant noted that TRANSCEND NHL 001
                included subjects with the average age of 63 years with 111 subjects
                (41%) over 65 years of age and 27 (10%) subjects older than 75 years of
                age. These patients also failed previous therapies. Of the total number
                of subjects studied (efficacy: n=256; safety: n=269), 137 subjects
                (51%) had DLBCL, 60 (22%) had DLBCL transformed from FL, 18 (7%) had
                DLBCL transformed other indolent lymphomas, 36 patients (13%) had high
                grade lymphoma, 15 (6%) had PMBCL and 3 (1%) had FL3B.\79\
                Additionally, the applicant explained that TRANSCEND NHL 001 was more
                inclusive, compared to the registrational trials for KYMRIAH[supreg]
                and YESCARTA[supreg], of Medicare aged patients with comorbidities and
                NHL disease subtypes seen in the real world presentation of the
                disease. To support this, the applicant referenced that within this
                study, between 40% to 50% of subjects studied had cardiac ejection
                fraction, 3% had secondary CNS lymphoma, 51 patients (19%) had a
                creatinine clearance between 30-60 mL/min and 39 patients (14.6%) had
                grade >= 3 cytopenias. Furthermore, the applicant noted that 51
                patients (19%) had decreased renal function and 13 patients (4.9%) had
                decreased cardiac function. The applicant stated that the TRANSCEND NHL
                001 study showcased that the patient population treated during the
                study better reflected the real world large B-cell lymphoma patient
                population, a population that the applicant asserted included NHL
                subtypes not studied or approved for treatment with currently approved
                or conditionally approved agents, while providing similar safety and
                efficacy. The applicant contended that these high-unmet need large B-
                cell lymphoma subsets included patients with DLBCL transformed from
                rare indolent lymphomas other than FL, patients with FL3B, patients 65
                years of age and older, as well as patients with moderate comorbidities
                of renal and cardiac insufficiency.
                ---------------------------------------------------------------------------
                 \79\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant further explained that Breyanzi[supreg] provided
                improved effectiveness as compared to existing therapies. Patients with
                aggressive large B-cell NHL who have failed at least 2 prior therapies
                or SCT are treated with combinations of agents or monotherapy based on
                institutional preferences, but there is no standard of care for salvage
                therapies beyond first treatment therapy.\80\ The applicant noted that
                commonly used salvage therapies (non-CAR T-cell therapies) for
                relapsed, large B-cell lymphoma demonstrated objective response rates
                (ORRs) in the range of 12% to 46% and complete response (CR) rates of
                6% to 38%. Among the patients who did achieve a response, the median
                duration of response (DOR) ranges from approximately 6 to 17 months and
                median overall survival was generally less than 12
                months.81 82 83 84 85 86 87 Comparatively, TRANSCEND NHL
                001, which provided subjects with Breyanzi[supreg], met its primary
                endpoint of Independent Review Committee (IRC)-assessed ORR in adult
                patients with r/r large lymphoma after at least 2 prior therapies, as
                reported by the applicant. In the 256 efficacy evaluable patients, the
                ORR was 73% (95% confidence interval (CI): 67.0% to 78.3%), and the CR
                rate was 53% (95% CI: 46.6% to 59.2%). With a median follow-up of 10.8
                months, the median DOR per IRC assessment was 13.3 months and the
                median DOR for CR was not reached. By comparison, the applicant
                summarized that YESCARTA[supreg], as demonstrated in the Phase I-II
                ZUMA-1 study (see the FY 2019 IPPS/LTCH PPS final rule 83 FR 41295 for
                a description of this study), had an ORR of 72.0% (95% confidence
                interval (CI: 62.0% to 81.0%)). Also, according to the applicant,
                KYMRIAH[supreg], as demonstrated by the Phase II JULIET study (see the
                FY 2019 IPPS/LTCH PPS final rule 83 FR 41293 for a description of this
                study), had an ORR of 50.0% (95% confidence interval (CI: 38.0% to
                62.0%)). The applicant contended that the results for Breyanzi[supreg]
                (ORR of 73% (95% confidence interval (CI): 67.0% to 78.3%), and the CR
                rate of 53% (95% CI: 46.6% to 59.2%) were observed across all subgroups
                tested, including
                [[Page 25233]]
                elderly subjects, those with high burden disease or high baseline
                inflammatory biomarkers, those requiring anti-lymphoma therapy for
                disease control, as well as rare patient populations with a high unmet
                medical need (for example, PMBCL, DLBCL transformed from indolent
                lymphoma other than FL, and FL3B). The applicant contended that this
                data supports that Breyanzi[supreg] demonstrates comparable or superior
                effectiveness compared to existing therapies for patients with r/r
                large B-cell NHL.88 89
                ---------------------------------------------------------------------------
                 \80\ National Comprehensive CancerNetwork Treatment of Cancer:
                Guidelines, 2019. NCCN, 2019.
                 \81\ Czuczman MS, Davies A, Linton KM, et al., A Phase 2/3
                Multicenter, Randomized Study Comparing the Efficacy and Safety of
                Lenalidomide Versus Investigator's Choice in Relapsed/Refractory
                DLBCL, Blood. 2014; 124: 628 (Czuczman, 2014).
                 \82\ Jacobsen ED, Sharman JP, Oki Y, et al., Brentuximab vedotin
                demonstrates objective responses in a phase 2 study of relapsed/
                refractory DLBCL with variable CD30 expression, Blood. 2015; 125(9):
                1394-1402 (Jacobsen, 2015).
                 \83\ Nagle SJ, Woo K, Schuster SJ, et al., Outcomes of patients
                with relapsed/refractory diffuse large B-cell lymphoma with
                progression of lymphoma after autologous stem cell transplantation
                in the rituximab era, Am. J. Hematol. 2013; 88: 890-894 (Nagle,
                2013).
                 \84\ Pettengell R, Coiffier B, Narayanan G, et al., Pixantrone
                dimaleate versus other chemotherapeutic agents as a single-agent
                salvage treatment in patients with relapsed or refractory aggressive
                non-Hodgkin lymphoma: a phase 3, multicenter, open-label, randomised
                trial, Lancet Oncol. 2012; 13: 696-706 (Pettengell, 2012).
                 \85\ Rigacci L, Puccini B, Cortelazzo S, et al., Bendamustine
                with or without rituximab for the treatment of heavily pretreated
                non-Hodgkin's lymphoma patients, Ann Hematol. 2012; 91: 1013-1022
                (Rigacci, 2012).
                 \86\ Van Den Neste E, Schmitz N, Mounier N, et al., Outcome of
                patients with relapsed diffuse large B-cell lymphoma who fail
                second-line salvage regimens in the International CORAL study, Bone
                Marrow Transplantation. 2016; 51: 51-57 (Van Den Neste, 2016).
                 \87\ Wang M, Fowler N, Wagner-Bartak N, et al., Oral
                lenalidomide with rituximab in relapsed or refractory diffuse large
                cell, follicular and transformed lymphoma: a phase II clinical
                trial, Leukemia. 2013; 27: 1902-1909 (Wang, 2013).
                 \88\ YESCARTA[supreg] United States Prescribing Information USPI
                (2019).
                 \89\ KYMRIAH[supreg] United States Prescribing Information USPI
                (2018).
                ---------------------------------------------------------------------------
                 Furthermore, the applicant stated that Breyanzi[supreg] had an
                improved safety profile in comparison to YESCARTA[supreg] and
                KYMRIAH[supreg]. The applicant stated that both of these FDA-approved
                CAR T-cell therapies had higher rates of toxicity as compared to
                Breyanzi[supreg]. In the TRANSCEND NHL 001 registrational study
                (n=268), 42% and 2% of subjects developed all-grade and Grade > 3 CRS,
                respectively, and 30% and 10% developed all-grade and Grade > 3 NT. The
                applicant compared these results to the results of the JULIET study as
                found in KYMRIAH's[supreg] prescribing information and summarized that
                KYMRIAH[supreg] had higher rates of all-grade and Grade > 3 CRS (74%
                and 23%, respectively) and all-grade and Grade > 3 NT (58% and 18%,
                respectively). The applicant provided the same comparison of the
                toxicity results of Breyanzi[supreg] to the results showcased in the
                ZUMA-1 study featuring YESCARTA[supreg] as found in YESCARTA[supreg]'s
                prescribing information and summarized that YESCARTA[supreg] had higher
                rates of all-grade and Grade > 3 CRS (94% and 13%, respectively) and
                all-grade and Grade > 3 NT (87% and 31%, respectively).90 91
                ---------------------------------------------------------------------------
                 \90\ YESCARTA[supreg] USPI (2019).
                 \91\ KYMRIAH[supreg] USPI (2018).
                ---------------------------------------------------------------------------
                 After reviewing the information submitted by the applicant as part
                of its FY 2022 new technology add-on payment application, we are
                concerned that there are no published studies directly comparing
                Breyanzi[supreg] and the two currently available CAR T-cell therapies
                for r/r DLBCL, YESCARTA[supreg] and KYMRIAH[supreg]. Additionally, we
                are concerned with the lack of long-term data supporting the
                effectiveness and efficacy of Breyanzi[supreg] and whether the lack of
                long-term data may limit the generalizability of the findings from the
                TRANSCEND NHL 001 study to the general Medicare population. While there
                have been no direct comparison studies of Breyanzi[supreg],
                YESCARTA[supreg] and KYMRIAH[supreg], the applicant does provide a
                comparison of the ORR, CR, PR and DOR across all three CAR T-cell
                therapies. While we note that Breyanzi[supreg] does appear to provide
                an improved ORR, CR, PR, and DOR compared to the other FDA-approved CAR
                T-cell therapies based on the data presented by the applicant, we
                further note that these differences appear to be small in magnitude,
                between 1-2% for the ORR, CR, and PR. Without a direct comparison of
                outcomes between these therapies, we are concerned as to whether these
                differences translate to clinically meaningful differences or
                improvements. Breyanzi[supreg] appears to demonstrate similar patient
                outcomes to that of YESCARTA[supreg] and we question whether the
                TRANSCEND NHL 001 study is evidence that Breyanzi[supreg] is a more
                effective therapy to treat DLBCL over existing CAR T-cell therapies.
                Additionally, as previously discussed, the applicant noted that
                Breyanzi[supreg] has been shown safe and effective for patient
                populations excluded from registrational trials for YESCARTA[supreg]
                and KYMRIAH[supreg]. However, it is unclear whether this suggests that
                Breyanzi[supreg] is a treatment option for patients who cannot be
                treated with these existing CAR T-cell therapies, given that the FDA
                label for YESCARTA[supreg] and KYMRIAH[supreg] appears to not
                specifically exclude these patient populations. Finally, we are
                concerned that the use of the EGFRt cell surface tag was not activated
                in patients receiving Breyanzi[supreg] to study the impact of clearing
                these CAR T-cells after remission and that this feature has not yet
                been tested on humans or in conjunction with patients treated with
                Breyanzi[supreg]. We express concern regarding the safety and efficacy
                of this feature given its lack of testing.
                 We are inviting public comments on whether Breyanzi[supreg] meets
                the substantial clinical improvement criterion.
                 We did not receive any written comments in response to the New
                Technology Town Hall meeting notice published in the Federal Register
                regarding the substantial clinical improvement criterion for
                Breyanzi[supreg] or at the New Technology Town Hall meeting.
                d. Ciltacabtagene Autoleucel
                 Janssen Biotech, Inc., submitted an application for new technology
                add-on payments for ciltacabtagene autoleucel for FY 2022.
                Ciltacabtagene autoleucel is an autologous chimeric-antigen receptor
                (CAR) T-cell therapy directed against B cell maturation antigen (BCMA)
                for the treatment of patients with multiple myeloma.
                 Ciltacabtagene autoleucel refers to both JNJ-4528, an
                investigational BCMA-directed CAR T-cell therapy for previously treated
                patients with multiple myeloma, and LCAR-B38M, the investigational
                product (ciltacabtagene autoleucel) being studied in China. Both JNJ-
                4528 and LACAR-B38M are representative of the same CAR T-cell therapy,
                ciltacabtagene autoleucel. Ciltacabtagene autoleucel has not yet
                received FDA approval.
                 Multiple myeloma (MM) is typically characterized by the neoplastic
                proliferation of plasma cells producing a monoclonal immunoglobulin.
                The plasma cells proliferate in the bone marrow and can result in
                extensive skeletal destruction with osteolytic lesions, osteopenia,
                and/or pathologic fractures. The diagnosis of MM is often suspected
                because of one (or more) of the following clinical presentations:
                 Bone pain with lytic lesions discovered on routine
                skeletal films or other imaging modalities.
                 An increased total serum protein concentration and/or the
                presence of a monoclonal protein in the urine or serum.
                 Systemic signs or symptoms suggestive of malignancy, such
                as unexplained anemia.
                 Hypercalcemia, which is either symptomatic or discovered
                incidentally.
                 Acute renal failure with a bland urinalysis or rarely
                nephrotic syndrome due to concurrent immunoglobulin light chain (AL)
                amyloidosis.
                 It is important to distinguish MM both from other causes of the
                clinical presentations mentioned previously and from other plasma cell
                dyscrasias for the purposes of prognosis and treatment.\92\ Data from
                the US Surveillance, Epidemiology, and End Results (SEER) registry
                estimate 32,000 new cases of MM and 13,000 deaths from MM annually in
                the U.S. This correlates with an annual incidence of approximately 7
                per 100,000 men and women per year. MM is largely a disease of older
                adults. The median age at diagnosis is 65 to 74 years. MM is also
                slightly more frequent in men than in women (approximately 1.4:1). MM
                is associated with substantial morbidity and mortality \93\
                [[Page 25234]]
                and approximately 25% of patients have a median survival of 2 years or
                less.\94\
                ---------------------------------------------------------------------------
                 \92\ Laubauch, J.P. (2021). Multiple myeloma: Clinical features,
                laboratory manifestations, and diagnosis. UptoDate. Available from
                https://www.uptodate.com/contents/multiple-myeloma-clinical-
                features-laboratory-manifestations-
                anddiagnosis?search=multiple%20myeloma&source=search_result&selectedT
                itle=1~150& usage_type=default&display_rank=1.
                 \93\ Cowan AJ, Allen C, Barac A, Basaleem H, Bensenor I, Curado
                MP, Foreman K, Gupta R, Harvey J, Hosgood HD, Jakovljevic M, Khader
                Y, Linn S, Lad D, Mantovani L, Nong VM, Mokdad A, Naghavi M, Postma
                M, Roshandel G, Shackelford K, Sisay M, Nguyen CT, Tran TT, Xuan BT,
                Ukwaja KN, Vollset SE, Weiderpass E, Libby EN, Fitzmaurice C. Global
                Burden of Multiple Myeloma: A Systematic Analysis for the Global
                Burden of Disease Study 2016. JAMA Oncol. 2018 Sep 1;4(9):1221-1227.
                 \94\ Biran N, Jagannath S, Chari A. Risk stratification in
                multiple myeloma, part 1: characterization of high-risk disease.
                Clin Adv Hematol Oncol. 2013 Aug;11(8):489-503.
                ---------------------------------------------------------------------------
                 According to the applicant, introduction of new treatment options
                in the last 2 decades has extended the median survival of multiple
                myeloma patients. The applicant asserted that the introduction of
                proteasome inhibitors (PI) (e.g., bortezomib, carfilzomib, and
                ixazomib), histone deacetylase inhibitors (e.g., panobinostat,
                vorinostat), immunomodulatory agents (IMiD) (e.g., thalidomide,
                lenalidomide, and pomalidomide), monoclonal antibodies (daratumumab and
                elotuzumab), and stem cell transplantation, have allowed numerous
                therapeutic options for patients with multiple myeloma (Rajkumar 2020).
                According to the applicant, the National Comprehensive Cancer Network
                (NCCN) recommended treatment regimen for first-line therapy of multiple
                myeloma is Bortezomib (a proteosome inhibitor (PI)), lenalidomide (an
                immunomodulatory agent (IMiD)) and dexamethasone.\95\ The strategy of
                triplet therapies for patients with newly diagnosed multiple myeloma,
                followed by high-dose chemotherapy and autologous stem-cell
                transplantation for eligible patients, and subsequently consolidation
                and maintenance therapy, is the current treatment roadmap for
                patients.\96\ However, despite these treatments, according to the
                applicant, most patients will relapse after first-line treatment and
                require further treatment \97\ with only 50% survival of relapsed
                patients after 5 years.98 99 As multiple myeloma progresses,
                each subsequent line of treatment is associated with shorter
                progression free survival (PFS) and decreased rate, depth, and
                durability of response and worsening of quality of life.\100\ In
                addition, cumulative and long-term toxicities are often associated with
                long-term therapy (Ludwig, 2018). Thus, according to the applicant,
                there remains an ongoing need for additional therapeutic approaches
                when the disease is resistant to available therapy.
                ---------------------------------------------------------------------------
                 \95\ National Comprehensive Cancer Network (NCCN) NCCN clinical
                practice guidelines in oncology. Multiple Myeloma. Version 2. 2021-
                September 9, 2020.
                 \96\ Branagan A, Lei M, Lou U, Raje N. Current Treatment
                Strategies for Multiple Myeloma. JCO Oncol Pract. 2020 Jan;16(1):5-
                14.
                 \97\ Sonneveld P, Broij lA. Treatment of relapsed and refractory
                multiple myeloma. Haematologica. 2016;101(4):396-406.
                 \98\ SEER database 2020; https://seer.cancer.gov/statfacts/html/mulmy.html.
                 \99\ GLOBOCAN database 2018; https://gco.iarc.fr/today/data/factsheets/populations/900-world-fact-sheets.pdf.
                 \100\ Yong K, Delforge M, Driessen C, Fink L, Flinois A,
                Gonzalez-McQuire S, Safaei R, Karlin L, Mateos MV, Raab MS, Schoen
                P, Cavo M. Multiple myeloma: patient outcomes in real-world
                practice. Br J Haematol. 2016 Oct;175(2):252-264.
                ---------------------------------------------------------------------------
                 The applicant asserts that relapsed and refractory multiple myeloma
                (RRMM) constitutes a specific unmet medical need. According to the
                applicant, patients with r/r disease are defined as those who, having
                achieved a minor response or better, relapse and then progress while on
                therapy, or experience progression within 60 days of their last
                therapy.\101\ The introduction of a new class of agents, CD38-targeting
                monoclonal antibodies (CD38 MoABs), daratumumab and isatuximab, have
                improved options in r/r patients.\102\ The applicant asserts that given
                these advances, guideline recommendations following first-line therapy
                are varied, with treatment options including combinations of novel
                agents with existing standard of care regimens, and triplet and
                quadruplet regimens, creating a complex treatment landscape.\103\
                According to the applicant, while triplet regimens should be used as
                the standard therapy for patients with multiple myeloma, elderly or
                frail patients may be treated with double regimens.104 95
                The applicant further states that for patients with RRMM who have
                received at least 3 prior lines of therapy including a PI, an IMiD and
                an anti-CD38, there does not exist a standard or consensus for
                treatment at this time, and often, supportive care/palliative care is
                the only option.\105\
                ---------------------------------------------------------------------------
                 \101\ Castelli R, Orofino N, Losurdo A, Gualtierotti R, Cugno M.
                Choosing treatment options for patients with relapsed/refractory
                multiple myeloma. Expert Rev Anticancer Ther. 2014 Feb;14(2):199-
                215.
                 \102\ Van de Donk NWCJ, Richardson PG, Malavasi F. CD38
                antibodies in multiple myeloma: back to the future. Blood. 2018 Jan
                4;131(1):13-29.
                 \103\ National Comprehensive Cancer Network (NCCN) NCCN clinical
                practice guidelines in oncology. Multiple Myeloma. Version 2. 2021--
                September 9, 2020.
                 \104\ Ibid.
                 \105\ Maples KT, Joseph NS, Harvey RD. Current developments in
                the combination therapy of relapsed/refractory multiple myeloma.
                Expert Rev Anticancer Ther. 2020 Sep 24.
                ---------------------------------------------------------------------------
                 According to the applicant, multiple myeloma remains incurable and
                most patients eventually relapse, even with the advent of new
                treatments.\106\ The applicant further states that novel, innovative
                therapies are needed to improve long-term survival and outcomes. The
                applicant asserts that CAR T-cell-based therapies offer potential
                advantages over current therapeutic strategies. According to the
                applicant, while other therapies require long-term repetitive
                administration generally until progression of disease, CAR T-cell
                therapy is a single infusion treatment due to live T-cell expansion in
                the patient and long-term disease response. The applicant asserts that
                ciltacabtagene autoleucel is an autologous CAR T-cell therapy directed
                against B cell maturation antigen (BCMA) for the treatment of patients
                with multiple myeloma. The applicant states that BCMA, a protein that
                is highly expressed on myeloma cells \107\ and is a member of the tumor
                necrosis factor (TNF) receptor family, plays a central role in
                regulating B-cell maturation and differentiation into plasma
                cells.\108\ BCMA is selectively expressed on a subset of B cells
                (plasma cell neoplasms including myeloma cells) and is more stably
                expressed specifically on the B cell lineage, compared with key plasma
                cell marker CD138 which is also expressed on normal fibroblasts and
                epithelial cells.109 110 111 These expression
                characteristics, per the applicant, make BCMA an ideal therapeutic
                target for the treatment of multiple myeloma.112 113
                Ciltacabtagene autoleucel, according to the applicant, is a unique,
                structurally differentiated BCMA-targeting chimeric antigen receptor
                with two distinct BCMA-binding domains that can identify and eliminate
                myeloma cells.
                ---------------------------------------------------------------------------
                 \106\ Rajkumar SV, Kumar S. Multiple myeloma current treatment
                algorithms. Blood Cancer J. 2020 Sep 28;10(9):94.
                 \107\ Cho SF, Anderson KC, Tai YT. Targeting B Cell Maturation
                Antigen (BCMA) in Multiple Myeloma: Potential Uses of BCMA-Based
                Immunotherapy. Front Immunol. 2018 Aug 10;9:1821.
                 \108\ Ibid.
                 \109\ Ibid.
                 \110\ Tai YT, Anderson KC. Targeting B-cell maturation antigen
                in multiple myeloma. Immunotherapy. 2015;7(11):1187-99.
                 \111\ Palaiologou M, Delladetsima I, Tiniakos D. CD138
                (syndecan-1) expression in health and disease. Histol Histopathol.
                2014 Feb;29(2):177-89.
                 \112\ Ibid.
                 \113\ Frigyesi I, Adolfsson J, Ali M, Christophersen MK,
                Johnsson E, Turesson I, Gullberg U, Hansson M, Nilsson B. Robust
                isolation of malignant plasma cells in multiple myeloma. Blood. 2014
                Feb 27;123(9):1336-40.
                ---------------------------------------------------------------------------
                 The applicant asserts that CAR T-cell technology is a form of
                immunotherapy and is a ``living drug'' that utilizes specially altered
                T cells, part of the immune system, to fight cancer. A
                [[Page 25235]]
                sample of the patient's T cells are collected from the blood, then
                modified in a laboratory setting to express a chimeric antigen receptor
                (CAR).\114\ Chimeric antigen receptors are specifically designed
                receptor proteins that are made up of three distinct features: (1) A
                target recognition domain (typically derived from a single domain of an
                antibody) that sits on the cell's exterior, (2) a co-stimulatory domain
                on the cell's interior that boosts activation, enhances survival and
                expansion of the modified cells, and (3) an interior stimulatory domain
                that supports activation and target killing.\115\ The binding domain
                expressed on the surface of T cells gives them the new ability to
                target a specific protein. When the target is recognized, the
                intracellular portions of the receptor send signals within the T cells
                to destroy the target cells. These engineered CAR T-cells are reinfused
                back into the same patient which enables these specialized T cells to
                latch onto the target antigen and abolish the tumor cells.
                ---------------------------------------------------------------------------
                 \114\ June CH, Sadelain M. Chimeric Antigen Receptor Therapy. N
                Engl J Med. 2018 Jul 5;379(1):64-73.
                 \115\ Sadelain M. Chimeric antigen receptors: driving immunology
                towards synthetic biology. Curr Opin Immunol. 2016 Aug;41:68-76.
                ---------------------------------------------------------------------------
                 According to the applicant, ciltacabtagene autoleucel is a CAR T-
                cell immunotherapy designed to recognize myeloma cells and target their
                destruction. Ciltacabtagene autoleucel's CAR T-cell technology consists
                of harvesting the patient's own T cells, programming them to express a
                chimeric antigen receptor that identifies BCMA, a protein highly
                expressed on the surface of malignant multiple myeloma B-lineage cells,
                and reinfusing these modified cells back into the patient where they
                bind to and eliminate myeloma tumor cells. The applicant asserts that,
                unlike the chimeric antigen receptor design of currently approved CAR
                T-cell immunotherapies, which are composed of a single-domain antibody
                (sdAbs), ciltacabtagene autoleucel is composed of two antibody binding
                domains that allow for high recognition of human BCMA (CD269) and
                elimination of BCMA expressing myeloma cells. The two distinct BCMA-
                binding domains, according to the applicant, confer avidity and
                distinguish ciltacabtagene autoleucel from other BCMA-targeting
                products. The BCMA binding domains are linked to the receptor's
                interior costimulatory (4-1BB) and signaling (CD3[zeta]) domains
                through a transmembrane linker (CD8a). These intracellular domains are
                critical components for T cell growth and anti-tumor activity \116\ in
                the body once CAR T-cells are bound to a BCMA target on multiple
                myeloma cells.
                ---------------------------------------------------------------------------
                 \116\ Maher J, Brentjens RJ, Gunset G, Rivi[egrave]re I,
                Sadelain M. Human T-lymphocyte cytotoxicity and proliferation
                directed by a single chimeric TCRzeta/CD28 receptor.
                ---------------------------------------------------------------------------
                 With respect to the newness criterion, according to the applicant,
                ciltacabtagene autoleucel was granted Breakthrough Therapy designation
                in December 2019 for the treatment of patients with RRMM who have
                previously received a PI, an IMiD, and an anti-CD38 antibody. In
                December 2020, the applicant submitted a Biologic License Application
                (BLA) with the FDA but at the time of the development of this proposed
                rule, it has not yet received FDA approval. The applicant stated that
                procedures involving the administration of ciltacabtagene autoleucel
                can be reported using the following ICD-10-PCS procedure codes: XW033C3
                (Introduction of engineered autologous chimeric antigen receptor t-cell
                immunotherapy into peripheral vein, percutaneous approach, new
                technology group 3); and XW043C3 (Introduction of engineered autologous
                chimeric antigen receptor t-cell immunotherapy into central vein,
                percutaneous approach, new technology group 3). The applicant noted
                that there are currently no ICD-10-PCS codes that uniquely identify
                procedures involving the use of ciltacabtagene autoleucel. The
                applicant submitted a request for unique ICD-10-PCS codes to describe
                the administration of ciltacabtagene autoleucel beginning in FY 2022.
                The applicant also noted that they will submit a request for a
                Healthcare Common Procedure Coding System (HCPCS) code specific to the
                administration of ciltacabtagene autoleucel once the product is
                eligible for such a code.
                 As previously stated, if a technology meets all three of the
                substantial similarity criteria as previously described, it would be
                considered substantially similar to an existing technology and
                therefore would not be considered ``new'' for purposes of new
                technology add-on payments.
                 With respect to whether a product uses the same or a similar
                mechanism of action when compared to an existing technology to achieve
                a therapeutic outcome, the applicant asserts that ciltacabtagene
                autoleucel has a unique mechanism of action because it has two distinct
                binding domains that confer avidity to the BCMA antigen, a 4-1BB
                costimulatory domain and a CD3z signaling domain, whereas other CAR T-
                cell products have only one target binding domain. However, we note
                that idecabtagnene vicleucel, another CAR T-cell therapy for which an
                application for new technology add-on payments was submitted for FY
                2022, as discussed later in this section, appears to have a mechanism
                of action that is similar to that of ciltabatagene: A chimeric antigen
                receptor (CAR)-positive T cell therapy targeting B-cell maturation
                antigen (BCMA), which is expressed on the surface of normal and
                malignant plasma cells. The idecabtagene vicleucel CAR construct
                includes an anti-BCMA scFv-targeting domain for antigen specificity, a
                transmembrane domain, a CD3-zeta T cell activation domain, and a 4-1BB
                costimulatory domain. Antigen-specific activation of idecabtagene
                vicleucel results in CAR-positive T cell proliferation, cytokine
                secretion, and subsequent cytolytic killing of BCMA-expressing cells.
                 The applicant also asserts that its mechanism of action differs
                from Blenrep's mechanism of action. Blenrep is a BCMA-targeting agent
                indicated in the treatment of RRMM. According to the applicant, Blenrep
                belongs to the class of antibody-drug conjugates, which are therapies
                that are essentially composed of a monoclonal antibody linked to a
                toxic drug. Once the antibody portion of Blenrep recognizes BCMA on
                multiple myeloma cells, the toxin is released into cells, resulting in
                cell death. Therefore, according to the applicant, ciltacbtagene
                autoleucel's mechanism of action differs from Blenrep's. Additionally,
                the applicant states that there is currently no commercially available
                CAR T-cell product that binds to the BCMA antigen. Lastly, the
                applicant provided a list of other currently available treatments for
                multiple myeloma and a description of their mechanisms of action (Table
                1).
                [[Page 25236]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.145
                 With regard to whether a product is assigned to the same DRG when
                compared to an existing technology, the applicant expects that cases
                involving the administration of ciltacabtagene autoleucel will be
                assigned to the same MS-DRG, MS-DRG 018 (Chimeric Antigen Receptor
                (CAR) T-cell Immunotherapy), as other CAR T-cell therapies.
                ---------------------------------------------------------------------------
                 \117\ Cook G, et al. Crit Rev Oncol Hematol. 2018;121:74-89.
                 \118\ Nejadmoghaddam MR, et al. Avicennna J Med Biotechnol.
                2019;11(1):3-23.
                 \119\ Pufall MA. Adv Exp Med Biol. 2015;872:315-33.
                 \120\ Siddik ZH. The Cancer Handbook. New York: John Wiley &
                Sons, Ltd; 2002.
                 \121\ Podar K, et al. Expert Opin Pharmacother. 2020
                Mar;21(4):399-408.
                ---------------------------------------------------------------------------
                 With regard to whether the new use of the technology involves the
                treatment of the same or similar type of disease and the same or
                similar patient population when compared to an existing technology, the
                applicant asserts that ciltacabtagene autoleucel is indicated for a
                broader population than other available therapies, specifically
                multiple myeloma patients having received three prior therapies.
                 In summary, the applicant asserts that ciltacabtagene autoleucel
                meets the newness criterion and is not substantially similar to other
                available therapies because it has a unique mechanism of action with
                two distinct binding domains that confer avidity to the BCMA antigen,
                and because it treats a different patient population, RRMM patients who
                received three prior therapies. However, we note that ciltacabtagene
                autoleucel may have a similar mechanism of action to that of
                idecabtagene vicleucel, for which we received an application for new
                technology add-on payments for FY 2022 for the treatment of adult
                patients with relapsed or refractory multiple myeloma after four or
                more prior lines of therapy, including an immunomodulatory agent, a
                proteasome inhibitor, and an anti-CD38 monoclonal antibody. Per the new
                technology add-on payment application for idecabtagene vicleucel, the
                technology's mechanism of action is described as targeting B-cell
                maturation antigen (BCMA), which is expressed on the surface of normal
                and malignant plasma cells. The chimeric antigen receptor (CAR)
                construct includes an anti-BCMA scFv-targeting domain for antigen
                specificity, a transmembrane domain, a CD3-zeta T cell activation
                domain, and a 4-1BB costimulatory domain. Antigen-specific activation
                of idecabtagene vicleucel results in CAR-positive T cell proliferation,
                cytokine secretion, and subsequent cytolytic killing of BCMA-expressing
                cells. Because of the potential similarity with the BCMA antigen and
                other actions, we believe that the mechanism of action for
                ciltacabtagene autoleucel may be the same or similar to that of
                idecabtagene vicleucel.
                 We believe that ciltacabtagene autoleucel may not treat the same or
                similar patient population as currently existing treatments. However,
                we believe that ciltacabtagene autoleucel and idecabtagene vicleucel
                may treat the same or similar disease (RRMM) in the same or similar
                patient population (patients who have previously received a proteasome
                inhibitor (PI), and immunomodulatory agent (IMiD) and an anti-CD38
                antibody). Accordingly, as it appears that ciltacabtagene autoleucel
                and idecabtagene vicleucel are purposed to achieve the same therapeutic
                outcome using the same or similar mechanism of action and would be
                assigned to the same MS-DRG, we believe that these technologies may be
                substantially similar to each other such that they should be considered
                as a single application for purposes of new technology add-on payments.
                We are interested in information on how these two technologies may
                differ from each other with respect to the substantial similarity
                criteria and newness criterion, to inform our analysis of whether
                idecabtagene vicleucel and ciltacabtagne autoleucel are substantially
                similar to each other and therefore should be considered as a single
                application for purposes of new technology add-on payments.
                 We are inviting public comment on whether ciltacabtagene autoleucel
                meets the newness criterion, including whether ciltacabtagene
                autoleucel is substantially similar to idecabtagene vicleucel and
                whether these technologies should be evaluated as a single technology
                for purposes of new technology add-on payments.
                [[Page 25237]]
                 With regard to the cost criterion, the applicant searched the FY
                2019 MedPAR correction notice (December 1, 2020) file to identify
                potential cases representing patients who may be eligible for treatment
                using Ciltacabtagene autoleucel. In its analysis, the applicant
                identified a primary cohort to assess whether this therapy met the cost
                criterion. The following ICD-10-CM diagnosis codes were used to
                identify claims involving multiple myeloma procedures.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.146
                 The applicant chose to limit its analysis to MS-DRG 016 (Autologous
                Bone Marrow Transplant W CC/MCC or T-Cell Immunotherapy) because
                patients receiving autologous bone marrow transplant (BMT) are
                generally patients with relapsed or refractory multiple myeloma and are
                most similar to patients who would be eligible to receive CAR T-cell
                therapy. The claim search conducted by the applicant resulted in 1,215
                claims mapped to MS-DRG 016 using the FY 2019 MedPAR. The applicant
                determined an average unstandardized case weighted charge per case of
                $1,237,393. The applicant used the New Technology Threshold for FY 2022
                from the FY 2021 IPPS/LTCH PPS final rule for MS-DRG 018. The applicant
                removed all charges in the drug cost center for the prior technology
                because, according to the applicant, it is not possible to
                differentiate between different drugs on inpatient claims. The
                applicant added that this is likely an overestimate of the charges that
                would be replaced by the use of ciltacabtagene autoleucel. The
                applicant then standardized the charges using the FY 2019 final rule
                impact file. Next, the applicant applied the 2-year inflation factor
                used in the FY 2021 IPPS/LTCH PPS final rule to calculate outlier
                threshold charges (1.13218). To calculate the charges for the new
                technology, the applicant used the inverse of a simulated alternative
                cost-to-charge ratio (CCR) specifically for CAR T cell therapies to
                account for CAR T-cell therapies' higher costs compared to other drugs
                and the potential for hospitals' charging practices to differ for these
                drugs. To determine this alternative CCR for CAR T-cell therapies, the
                applicant referred to the FY 2021 IPPS final rule AOR/BOR file and
                calculated an alternative markup percentage by dividing the AOR drug
                charges within MS-DRG 018 by the number of cases to determine a per
                case drug charge. The applicant then divided the drug charges per case
                by $373,000, the acquisition cost of YESCARTA and KYMRIAH, the CAR T-
                cell products used in those claims, to arrive at a CCR of 0.295. The
                applicant calculated a final inflated average case-weighted
                standardized charge per case of $1,646,522, which it stated exceeded
                the average case-weighted threshold amount of $1,251,126. The applicant
                stated that because the final inflated average case-weighted
                standardized charge per case exceeded the average case-weighted
                threshold amount, the therapy meets the cost criterion.
                 As noted in previous discussions, the submitted costs for CAR T-
                cell therapies vary widely due to differences in provider billing and
                charging practices for this therapy. Therefore, with regard to the use
                of this data for purposes of calculating a CAR T-cell CCR, we are
                uncertain how representative this data is for use in the applicant's
                cost analyses given this potential for variability.
                 We continue to be interested in public comments regarding the
                eligibility of CAR T-cell technologies for new technology add-on
                payments when assigned to MS-DRG 018. As we have noted in prior
                rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
                FR 58603 through 58608), if a new MS-DRG were to be created, then
                consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
                longer be a need for a new technology add-on payment under section
                1886(d)(5)(K)(ii)(III) of the Act.
                 We invite public comment on whether ciltacabtagene autoleucel meets
                the cost criterion.
                 With regard to the substantial clinical improvement criterion, the
                applicant asserted that it believes that ciltacabtagene autoleucel
                represents a substantial clinical improvement over existing
                technologies because it: (1) Offers a treatment for a patient
                population with limited options and continued disease progression,
                despite having been treated with multiple prior therapies; and (2)
                provides a significantly improved clinical outcome relative to other
                therapies, either approved or still under FDA review, used in the
                relapsed and refractory multiple myeloma setting. With regard to the
                applicant's assertion that ciltacabtagene autoleucel offers a treatment
                for a patient population with limited options and continued disease
                progression, despite having been treated with multiple prior therapies,
                the applicant cited results from the CARTITUDE-1 STUDY, a Phase 1b/2,
                open-label, multicenter, multi-national (including US) study to
                evaluate the safety and efficacy of ciltacabtagene autoleucel in adult
                patients who have RRMM who have previously received a PI, an IMiD, and
                an anti-CD38 antibody. The applicant asserts that ciltacabtagene
                autoleucel was granted Breakthrough Therapy designation for patients
                who have RRMM who have previously received a PI, an IMiD, and an anti-
                CD38 antibody, based on data from the Phase1b/2 CARTITUDE-1 study. One
                hundred thirteen patients were enrolled in the study. Sixteen patients
                discontinued the study, including 9 patients who died due to
                progressive disease. Ninety-seven patients received ciltacabtagene
                autoleucel. The Phase 1b portion of the study included 29 of the 97
                patients.
                 Two patients died during the study: one due to CRS and one due to
                acute myeloid leukemia (not treatment-related). Twenty-four of the
                remaining patients were ongoing in the Phase 1b dose confirmation
                period, with an additional 59 patients ongoing in the Phase 2 portion.
                The primary objective of the Phase 1b portion of the trial was to
                confirm the safety of the selected dose based on the data from the
                ongoing Phase 1 trial in China (Legend-2), as discussed later in this
                section. The primary objective of the Phase 2 portion of the trial is
                to evaluate the efficacy of ciltacabtagene autoleucel.
                 The applicant asserts that at median follow-up of 12.4 months,
                ciltacabtagene autoleucel led to a 97% overall response rate (ORR) in
                all 97 study patients who
                [[Page 25238]]
                received ciltacabtagene autoleucel.\122\ The applicant asserts that
                this unprecedented overall response rate of (97%), represents early,
                deep, and durable responses in all patients, minimal residual disease
                negativity (meaning minimal residual cancer cells after treatment to
                the -nth degree) in the majority of patients who achieved a complete
                response (CR) and a very manageable toxicity profile. The applicant
                provided a comparison of the ORR in phase 1 studies for other therapies
                used to treat RRMM and noted the following: idecabtagene vicleucel ORR
                73%,\123\ daratumumab ORR 31%,\124\ Selinexor ORR 26% \125\ and Blenrep
                ORR 31%.\126\
                ---------------------------------------------------------------------------
                 \122\ Madduri D et. al. CARTITUDE-1: Phase 1b/2 Study of
                Ciltacabtagene Autoleucel, a B-Cell Maturation Antigen-Directed
                Chimeric Antigen Receptor T-Cell Therapy, in Relapsed/Refractory
                Multiple Myeloma
                 \123\ Munshi et al. ASCO 2020
                 \124\ Usmari et al. Blood 2016, 128(1), 37-44.
                 \125\ Chari A et al N Engl J Med 22019, 38 2(8);727-738
                 \126\ DREAMM2 Lonai S et al Lancet 2019.
                ---------------------------------------------------------------------------
                 The applicant further asserts that ciltacabtagene autoleucel led to
                early and deep clinical responses in the phase1b/2 portion of the
                CARTITUDE-1 study at median follow up of 12.4 months. Results of
                CARTITUDE-1 showed a 97% overall response rate (ORR) with 67% of
                patients attaining a stringent complete response (sCR) and 93% of
                patients attaining a very good partial response (VGPR) or better after
                receiving a low dose (median of 0.72 million CAR T-cells per kilogram)
                of ciltacabtagene autoleucel within approximately a year. ORR and depth
                of response were independent of BCMA expression on myeloma cells at
                baseline. The median time to first response was one month (range, 0.9-
                8.5).\127\
                ---------------------------------------------------------------------------
                 \127\ Berdeja JG, Madduri D, Usmani SZ, Singh I, Zudaire E, Yeh
                TM, Allred AJ, Olyslager Y, Banerjee A, Goldberg JD, Schecter S,
                Geng D, Wu X, Carrasco-Alfonso M, Rizvi S, Fan F, Jakubowiak AJ,
                Jagannath S. Update of CARTITUDE-1: A phase Ib/II study of JNJ-4528,
                a B-cell maturation antigen (BCMA)-directed CAR-T cell therapy, in
                relapsed/refractory multiple myeloma. Journal of Clinical Oncology.
                2020 38:15_suppl, 8505-8505.
                ---------------------------------------------------------------------------
                 The applicant also asserted that most patients attained a status of
                minimal residual disease (MRD)-negativity by the time they were
                evaluable for a complete response (CR). Of evaluable patients, 93.0%
                achieved MRD 10-5 negativity. Fifty-eight percent of
                patients were both MRD negative and in sCR at MRD detection level of
                10-5. Median time to MRD 10-5 negativity: 1 month
                (0.8-7.7). Among patients with 6 months individual follow-up, most had
                ciltacabtagene autoleucel CAR+ T-cells below the level of
                quantification (2 cells/[mu]L) in peripheral blood.
                 In addition, progression-free survival (PFS) at 12 months was 77%
                (95% CI; 66.0-84.37).\128\ The applicant believes this represents a
                substantial clinical improvement when compared to existing technologies
                that treat RRMM. The applicant further asserts that nearly all of the
                individuals participating in the study (22 of the 29 patients) were
                alive and continued showing no signs of disease progression after a
                period of 9 months. Median PFS was not reached. At median follow-up of
                12.4 months, there were 14 deaths during the Phase 1b/2 study: One due
                to cytokine release syndrome (CRS) and hemophagocytic
                lymphohistiocytosis (HLH), one due to neurotoxicity, and 12 due to
                other causes.\98\ The applicant asserts that the CRS was manageable in
                most patients. CRS was the most common adverse event (AE) (94.8%)
                observed in the CARTITUDE-1 study. The median time to onset of CRS was
                7 days (range 1-12 days) post ciltacabtagene autoleucel infusion. The
                median duration of CRS was 4 days. Eighty-seven patients (94.6%)
                experienced Grade 1-2 CRS and 5 patients (5% experienced grade 3 or
                greater CRS)122.
                ---------------------------------------------------------------------------
                 \128\ Ibid.
                ---------------------------------------------------------------------------
                 The applicant noted that neurotoxicity with immune effector cell-
                associated neurotoxicity syndrome (ICANS) was infrequently observed in
                the context of CRS and was generally low grade. Neurotoxicity with
                ICANS was observed in 20 patients (20.6%) including 10 patients (10.3%)
                with Grade 3 or above toxicity.122
                 The LEGEND-2 study \129\ is an ongoing Phase 1, single-arm, open-
                label, multicenter, first-in-human trial to determine the safety and
                efficacy of ciltacabtagene autoleucel (LCAR-B38M in China) in the
                treatment of patients with relapsed or refractory multiple myeloma.
                Enrollment in this investigator-initiated study (study proposed,
                initiated, and conducted by an investigator that is funded by industry)
                completed in November 2017; a total of 74 patients with RRMM have been
                treated with ciltacabtagene autoleucel CAR T-cell therapy. The clinical
                cutoff for the analysis of these 74 patients was February 6, 2018 with
                updated survival and efficacy data as of November 26, 2019 (which
                represents 2 years of follow-up from the date of the last subject's
                infusion). Seventeen patients (17/57-29%) died during the study and
                follow up period (19 months) mostly due to progressive disease. None
                were related to cytokine release syndrome or neurotoxicity, the two
                most common adverse events associated with CAR T-cell therapy. At data
                cutoff, 57 patients had received LCAR-B38M CAR T-cells.
                ---------------------------------------------------------------------------
                 \129\ Zhao et al. Journal of Hematology and Oncology. (2018)
                11:141.
                ---------------------------------------------------------------------------
                 The applicant further asserts that outcomes from the LEGEND-2 study
                show that cilltacabtagene autoleucel provides a significantly improved
                clinical outcome relative to other therapies, either approved or still
                under FDA review, used in the RRMM setting. At cutoff, the median
                follow-up was 19 months [17-22]. The overall survival (OS) rate at 18
                months was 68% with a median duration of response (mDOR) of 22 months.
                Of MRD-negative patients with CR, 91% were still alive at data cut,
                with a 27 month mDOR. The median time to first response was 1.1 months.
                There was no relationship between best response and baseline BCMA
                expression level or weight-adjusted CAR T-cells infused.\105\
                 The applicant asserts that of patients in the LEGEND-2 study with
                CR, 39 of 42 were minimal residual disease negative (MRD-neg) and
                remained RRMM progression-free. The median PFS rate for all treated
                patients was 20 months; median PFS for MRD-neg patients with CR was 28
                months. At 18 months, the PFS rate was 50% for all patients and 71% for
                MRD-neg patients with CR. Seventeen patients died during the study and
                the follow-up period. The causes of death included progressive disease
                (PD; n=11), disease relapse, PD with lung infection, suicide after PD,
                esophageal carcinoma, infection, pulmonary embolism and acute coronary
                syndrome (n=1 each). Of these, 4 did not achieve partial response (PR)
                or better; and 1 was not evaluable.
                 From the LEGEND-2 study, the median time to onset of CRS was 9 days
                (range, 1-19) with a median duration of 9 days (range, 3-57); all but 1
                CRS events resolved. Tocilizumab (46%), oxygen (35%), vasopressor
                (11%), and intubation (1 patient) were used to treat CRS. Neurotoxicity
                with grade 1 aphasia, agitation and seizure-like activity was observed
                in 1 patient in the LEGEND-2 study. The applicant believes that since
                ciltacabtagene autoleucel displayed a manageable CRS safety profile
                that it represents a substantial clinical improvement over existing
                therapies.
                 After reviewing the information submitted by the applicant as part
                of its FY 2022 new technology add-on payment application for
                ciltacabtagene autoleucel, we note that there are no head-to-head
                comparisons of ciltacabtagene autoleucel and other CAR T-cell therapies
                and BCMA-targeted
                [[Page 25239]]
                therapies. We also note that the applicant chose to use ORR data as a
                measure of substantial clinical improvement rather than the available,
                and more clinically relevant, OS data.
                 We are inviting public comment on whether ciltacabtagene autolecuel
                meets the substantial clinical improvement criterion.
                 We did not receive any written comments in response to the New
                Technology Town Hall meeting notice published in the Federal Register
                regarding the substantial clinical improvement criterion for
                ciltacabtagene autoleucel.
                e. COSELA (trilaciclib)
                 G1 Therapeutics submitted an application for new technology add-on
                payments for Trilaciclib for FY 2022. COSELA (trilaciclib) is indicated
                to decrease the incidence of chemotherapy-induced myelosuppression in
                adult patients when administered prior to a platinum/etoposide-
                containing regimen or topotecan-containing regimen for extensive-stage
                small cell lung cancer (ES-SCLC).\130\
                ---------------------------------------------------------------------------
                 \130\ G1 Therapeutics Inc., Rev. 2/2021, COSELA prescribing
                information: https://www.g1therapeutics.com/cosela/pi/
                #:~:text=COSELA%20is%20indicated%20to%20decrease,cancer%20(ES%2DSCLC)
                .&text=The%20recommended%20dose%20of%20COSELA%20is%20240%20mg%2Fm2%20
                per%20dose.
                ---------------------------------------------------------------------------
                 According to the applicant, Trilaciclib is a first-in-class
                myelopreservation therapy that has the potential to mitigate
                chemotherapy-induced myelosuppression (CIM). Trilaciclib is a
                selective, transient inhibitor of cyclin dependent kinases 4 and 6
                (CDK4/6) with potential antineoplastic and chemoprotective activities.
                CDK4 and CDK6 are key regulators of the G1 cell-cycle checkpoint and
                play important roles in cell proliferation and associated biological
                processes. One of the most common pathways dysregulated in cancer is
                the cyclin D-cyclin-dependent kinase four or six (CDK4/6)-
                retinoblastoma (RB) pathway. Trilaciclib arrests hematopoietic stem and
                progenitor (HSPCs) bone marrow cells in the G1 phase of the cell cycle
                during chemotherapy exposure, protecting them from chemotherapy-induced
                damage.
                 According to the applicant, the defining characteristic of cancer
                is uncontrolled cellular proliferation, a phenomenon that requires
                tumor cells to avoid or disable normal, physiologic cell-cycle
                regulation. While there are both CDK 4/6 independent and dependent
                cells, HSPCs and immune cells are CDK 4/6 dependent whereas SCLC cells
                are CDK 4/6 independent. According to the applicant, the transient
                arrest of HSPCs and lymphocytes by trilaciclib during the
                administration of chemotherapy is thought to have a number of
                beneficial effects, including a reduction in chemotherapy-induced
                myelosuppression and preservation of immune function, as well as an
                enhanced immune response.131 132 133 Specifically, SCLC
                cells replicate independently of CDK 4/6 and therefore these cells are
                damaged by chemotherapy. Because HSPCs and lymphocytes are CDK 4/6
                dependent, trilaciclib's mechanism of action is believed to preserve
                these cells by temporarily arresting their proliferation during
                chemotherapy. In this way, trilaciclib reduces chemotherapy-induced
                myelosuppression in patients with extensive-stage small-cell lung
                cancer (ES-SCLC).\134\ The applicant also asserted that in preclinical
                models, CDK4/6 inhibition by trilaciclib also alters the tumor immune
                microenvironment through transient inhibition of the immune cells known
                as lymphocytes that are also dependent on CDK4/6 activity for
                proliferation.\135\
                ---------------------------------------------------------------------------
                 \131\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
                decreases myelosuppression in extensive-stage small cell lung cancer
                (ES-SCLC) patients receiving first-line chemotherapy plus
                atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD: https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
                 \132\ Weiss JM, Csoszi T, Maglakelidze M, et al.
                Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
                with small-cell lung cancer receiving first-line chemotherapy: a
                phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
                1621.
                 \133\ Hart LL, Andric ZG, Hussein MA, et al. Effect of
                trilaciclib, a CDK 4/6 inhibitor, on myelosuppression in patients
                with previously treated extensive-stage small cell lung cancer
                receiving topotecan. J Clin Oncol. 2019;37(15_suppl): Abstract 8505:
                https://www.g8501therapeutics.com/file.cfm/8534/docs/tr-G8501T8528-8503%8520ASCO%202019%202020Oral%202020Presentation%20060119-20060111.pdf.
                 \134\ Donjerkovic D, Scott DW. Regulation of the G1 phase of the
                mammalian cell cycle. Cell Res. 2000;10(1):1-16.
                 \135\ Lai AY, Sorrentino JA, Dragnev KH, et al. CDK4/6
                inhibition enhances antitumor efficacy of chemotherapy and immune
                checkpoint inhibitor combinations in preclinical models and enhances
                T-cell activation in patients with SCLC receiving chemotherapy. J
                Immunother Cancer. 2020;0:e000847. doi:10.1136/jitc-2020-000847.
                ---------------------------------------------------------------------------
                 According to the applicant, chemotherapy remains the cornerstone of
                treatment for extensive stage small cell lung cancer (ES-SCLC). The
                applicant asserted that almost all of the ~18,600 ES-SCLC patients
                diagnosed each year are treated with platinum/etoposide-containing or
                topotecan-containing chemotherapy regimens. Chemotherapy drugs target
                cells at different phases of the cell cycle. According to the
                applicant, systemic chemotherapy, alone or in combination with immune
                checkpoint inhibitors, is the standard of care for patients with
                advanced SCLC. Additionally, per the applicant, rescue interventions,
                including growth factors and blood transfusions, are commonly routine
                therapies for SCLC. The applicant also indicated that granulocyte
                colony-stimulating factors (G-CSFs) only address neutropenia, while
                erythropoiesis stimulating agent (ESAs) and red blood cell (RBC)
                transfusions only address anemia, and there is no available treatment
                that broadly mitigates myelosuppressive effects and their corresponding
                impact on patient well-being before chemotherapy damage occurs.
                 COSELA (trilaciclib) received FDA's New Drug Application approval
                on February 12, 2021. COSELA is for intravenous use only. The
                recommended dose of COSELA is 240 mg/m2 as a 30-minute intravenous
                infusion completed within four hours prior to the start of chemotherapy
                on each day chemotherapy is administered.\136\ The applicant also
                stated that in 2019, trilaciclib was granted Breakthrough Therapy
                Designation for the mitigation of clinically significant chemotherapy-
                induced myelosuppression in adult patients with SCLC. The applicant
                submitted a request for a new ICD-10-PCS code as the applicant states
                that there are no existing ICD-10-PCS codes that uniquely identify the
                administration of trilaciclib.
                ---------------------------------------------------------------------------
                 \136\ G1 Therapeutics Inc., Rev. 2/2021, COSELA prescribing
                information: https://www.g1therapeutics.com/cosela/pi/
                #:~:text=COSELA%20is%20indicated%20to%20decrease,cancer%20(ES%2DSCLC)
                .&text=The%20recommended%20dose%20of%20COSELA%20is%20240%20mg%2Fm2%20
                per%20dose.
                ---------------------------------------------------------------------------
                 As previously discussed, if a technology meets all three of the
                substantial similarity criteria, it would be considered substantially
                similar to an existing technology and, therefore, would not be
                considered ``new'' for purposes of new technology add-on payments.
                 With respect to the first criterion, whether a product uses the
                same or a similar mechanism of action to achieve a therapeutic outcome,
                the applicant asserted that trilaciclib, also referred to as G1T28, has
                a unique mechanism of action as a small molecule, competitive inhibitor
                of CDK4/6, with potential antineoplastic and chemoprotective
                activities. The applicant stated that upon administration, trilaciclib
                binds to and inhibits the activity of CDK4/6, thereby blocking the
                phosphorylation of
                [[Page 25240]]
                the retinoblastoma protein (Rb) in early G1. This prevents G1/S phase
                transition, causing cell cycle arrest in the G1 phase and induced
                apoptosis, which inhibits the proliferation of CDK4/6-overexpressing
                tumor cells. In patients with CDK4/6-independent tumor cells, G1T28 may
                protect against multi-lineage chemotherapy-induced myelosuppression
                (CIM) by transiently and reversibly inducing G1 cell cycle arrest in
                hematopoietic stem and progenitor cells (HSPCs) and preventing
                transition to the S phase. Per the applicant, this protects all
                hematopoietic lineages, including red blood cells, platelets,
                neutrophils and lymphocytes, from the DNA-damaging effects of certain
                chemotherapeutics and preserves the function of the bone marrow and the
                immune system.
                 The applicant stated that the cell cycle consists of four distinct
                phases, Gap 1 phase (G1), S phase, Gap 2 (G2)
                post-synthesis phase, and the M phase.\137\ Regulation of this process
                is maintained by a series of highly conserved proteins referred to as
                cyclins, and their catalytic binding partners, CDKs. The CDKs are a
                family of enzymes that control several cellular processes in mammalian
                cells, including the modulation of the cell cycle via binding to
                cyclins A-E, which results in the activation of transcription factors
                that regulate the cellular transition from G1 (growth phase) to S (DNA
                replication) and G2 (growth phase) to M (mitosis).\138\
                ---------------------------------------------------------------------------
                 \137\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
                Trilaciclib reduces the need for growth factors and red blood cell
                transfusions to manage chemotherapy-induced myelosuppression. Poster
                presented at: IASLC: 2020 North America Conference on Lung Cancer;
                October 16-17, 2020; Virtual congress.
                 \138\ Asghar U, Witkiewicz AK, Turner NC, Knudsen ES. The
                history and future of targeting cyclin-dependent kinases in cancer
                therapy. Nat Rev Drug Discov. 2015;14(2):130-146.
                ---------------------------------------------------------------------------
                 According to the applicant, the G1-to-S checkpoint is a critical
                restriction point in the process of cell division. Cells are maintained
                in a quiescent state until the proper signal is achieved for reentry
                into the cell cycle. Throughout G1, expression of the D-type cyclins
                (D1, D2, D3) increases until active complexes with CDK4/6 are formed.
                Active CDK4/6 complexes partially phosphorylate RB, which allows
                partial depression of the transcription factor E2F. This induces
                additional transcript production of cyclin E1, which binds CDK2 to form
                active complexes that result in the hyperphosphorylation of RB and
                drives the cells through late G1 into S phase. Inhibition of cyclin D-
                CDK4/6 by the tumor suppressor CDKN2A leads to a G1 arrest and cell-
                cycle progression is halted.\139\
                ---------------------------------------------------------------------------
                 \139\ Donjerkovic D, Scott DW. Regulation of the G1 phase of the
                mammalian cell cycle. Cell Res. 2000;10(1):1-16.
                ---------------------------------------------------------------------------
                 With respect to the second criterion, whether a product is assigned
                to the same or a different MS-DRG, the applicant asserted that
                trilaciclib will be assigned the same MS-DRG as existing technologies.
                The applicant did not explicitly state to which MS-DRG(s) trilaciclib
                would be assigned, but included MS-DRGs 180 (Respiratory Neoplasms with
                MCC), 181 (Respiratory Neoplasms with CC), and 182 (Respiratory
                Neoplasms without CC/MCC) in its cost analysis.
                 With respect to the third criterion, whether the new use of the
                technology involves the treatment of the same or similar type of
                disease and the same or similar patient population when compared to an
                existing technology, the applicant stated that trilaciclib is the only
                proactive (preventive) multilineage (erythrocytes, leukocytes, and
                thrombocytes, neutrophils and lymphocytes) therapy given as a 30-minute
                infusion administered prior to chemotherapy on each day of
                chemotherapy. Due to its mechanism of action, trilaciclib's benefit is
                coupled to its administration schedule (that is, trilaciclib must be
                administered prior to chemotherapy to ensure G1 arrest of HSPCs when
                those cells are exposed to cytotoxic chemotherapy). According to the
                applicant, this therapeutic paradigm contrasts with standard available
                treatment options and interventions that are administered after
                chemotherapy to reactively reduce or treat chemotherapy side effects.
                The applicant asserted that typical supportive care rescue
                interventions such as growth factors (G-CSFs, ESAs) and red blood cell
                (RBC) transfusions are used after chemotherapy causes damage to stem
                cells. Current supportive care therapies are used reactively to treat
                single cell lineage specific (leukocytes and erythrocytes)
                complications,\140\ such as neutropenia and anemia. Additionally, the
                applicant indicated that growth factor and RBC transfusion use are
                known to carry a number of risks and cause complications and adverse
                events.
                ---------------------------------------------------------------------------
                 \140\ National Comprehensive Cancer Network. NCCN Clinical
                Practice Guidelines in Oncology. Hematopoietic Growth Factors.
                Version 1.2020. 27 January. 2020.
                ---------------------------------------------------------------------------
                 We note that the information provided by the applicant in response
                to whether trilaciclib treats the same or similar type of disease or
                the same or similar patient population, appears to only speak to the
                first criterion and whether trilaciclib has a mechanism of action that
                is different than existing technologies; however, we believe
                trilaciclib appears to treat the same patient population and disease as
                existing therapies. We are inviting public comments on whether
                trilaciclib is substantially similar to an existing technology and
                whether it meets the newness criterion.
                 With respect to the cost criterion, the applicant conducted the
                following analysis to demonstrate that trilaciclib meets the cost
                criterion. In identifying the cost of trilaciclib, the applicant stated
                that dosing is based on body surface area, 240 mg/m\2\ with an average
                of two vials (300mg each) per patient per dose. To identify cases that
                may be eligible for the use of trilaciclib, the applicant searched the
                FY 2019 MedPAR LDS file for claims reporting an ICD-10-PCS code of
                category C34 through C34.92 (Malignant neoplasm related to the
                bronchus, lobe, or lung) as noted in the following table.
                [[Page 25241]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.147
                [GRAPHIC] [TIFF OMITTED] TP10MY21.148
                 According to the applicant, based on the advice of clinical
                experts, it limited case selection criteria to claims that included one
                of MS-DRGs 180, 181, or 182. The applicant then randomly selected 15%
                of the claims from the sample to account for the fact that SCLC
                comprises 15% of lung cancer cases.\141\ Based on the FY 2019 MedPAR
                LDS file, the applicant identified 3,500 cases. The applicant noted
                that 2,346 cases mapped to MS-DRG 180; 1,085 cases
                [[Page 25242]]
                mapped to MS-DRG 181; and 69 cases mapped to MS-DRG 182.
                ---------------------------------------------------------------------------
                 \141\ Govindan R, et al. J Clin Oncol. 2006;24:4539-44. Byers
                LA, Rudin CM. Cancer. 2015;121:664-72.
                ---------------------------------------------------------------------------
                 Using these 3,500 cases, the applicant then calculated the
                unstandardized average charges per case for each MS-DRG. Because the
                use of trilaciclib results in approximately half of patients no longer
                needing drugs used to counter the effects of chemotherapy during the
                inpatient stay, the applicant removed 50% of the drug charges for the
                technology being replaced.
                 The applicant then standardized the charges using the 2019 IPPS/
                LTCH PPS final rule impact file and inflated the charges by 1.13218 or
                13.2 percent, the same inflation factor used by CMS to update the
                outlier threshold in the FY 2021 IPPS/LTCH PPS final rule. The
                applicant then added the charges for trilaciclib by converting the
                costs to a charge by dividing the cost by the national average cost-to-
                charge ratio of 0.187 for pharmacy from the FY 2021 IPPS/LTCH PPS final
                rule.
                 Using the data file thresholds associated with the FY 2021 IPPS/
                LTCH PPS final rule correction notice, the average case-weighted
                threshold amount was $57,031. In the applicant's analysis, the final
                inflated average case-weighted standardized charge per case was
                $95,701. Because the final inflated average case-weighted standardized
                charge per case exceeds the average case-weighted threshold amount, the
                applicant maintained that the technology meets the cost criterion.
                 With respect to the cost criterion, we note that in listing the
                codes it used to identify cases that may be eligible for the use of
                trilaciclib, the applicant provided several ICD-10 codes that lack four
                digits and thus, are considered invalid. We would be interested in
                understanding the basis for the applicant's choice of codes. We also
                note that in its analysis, the applicant randomly selected 15% of the
                claims from the sample to account for the fact that SCLC comprises 15%
                of lung cancer cases. In so doing, the applicant is making the
                assumption that SCLC cases are randomly distributed amongst all cases
                from which the applicant sampled. By randomly sampling the population,
                the applicant is selecting a subsample that is ideally similar to the
                population with less variance. It may be the case that SCLC cases are
                systematically different from other cases in the population. If this is
                true, then a random sample may not be appropriate. Accordingly, we
                question the appropriateness of the sampling used and whether it
                accurately represents cases that would use the technology.
                 Finally, with respect to pricing, it appears that the applicant's
                final inflated average case-weighted standardized charge per case
                reflects pricing prior to the availability of more current total
                wholesale acquisition cost. We therefore request that the applicant
                update its cost analysis to reflect the final inflated average case
                weighted standardized charge per case based on this more current
                information. We are inviting public comment on whether trilaciclib
                meets the cost criterion.
                 With respect to the substantial clinical improvement criterion, the
                applicant asserted that trilaciclib represents a substantial clinical
                improvement over existing technologies because it offers a treatment
                option for patients unresponsive to or ineligible for currently
                available treatments and improves clinical outcomes for a patient
                population as compared to currently available treatments. The applicant
                stated that chemotherapy-induced myelosuppression (CIM) is typically
                managed with treatment dose delays and reductions due to the slow
                recovery of bone marrow after a course of chemotherapy.\142\ The
                applicant also stated that CIM is managed with rescue interventions
                including hematopoietic growth factors (G-CSFs and ESAs) and by RBC and
                platelet transfusions.143 144 Per the applicant, despite the
                availability and use of these treatment options, CIM continues to be of
                clinical significance and remains a central concern in the delivery of
                chemotherapy.145 146 The applicant further stated that
                myelosuppression results in dose reductions, dose delays, and/or dose
                discontinuations, affecting the dose intensity and intended antitumor
                efficacy of chemotherapy.\147\ Per the applicant, the supportive care
                interventions for treatment of myelosuppression are suboptimal and are
                often administered reactively, do not protect the bone marrow from
                chemotherapy-induced cytotoxic effects, are specific to single
                hematopoietic lineages, and impart their own risks for adverse
                reactions.\148\ The applicant concluded by stating that new approaches
                that proactively prevent chemotherapy-induced damage and its associated
                consequences, whilst not decreasing the efficacy of chemotherapy, are
                urgently needed to improve care of patients with ES-SCLC.\149\
                ---------------------------------------------------------------------------
                 \142\ Crawford J, Dale DC, Lyman GH. Chemotherapy-induced
                neutropenia: Risks, consequences, and new directions for its
                management. Cancer. 2004;100(2):228.
                 \143\ Kurtin S. Myeloid Toxicity of Cancer Treatment. J Adv
                Pract Oncol 2012;3:209-24.
                 \144\ Asghar U, Witkiewicz AK, Turner NC, Knudsen ES. The
                history and future of targeting cyclin-dependent kinases in cancer
                therapy. Nat Rev Drug Discov. 2015;14(2):130-46.
                 \145\ Crawford J, Dale DC, Lyman GH. Chemotherapy-induced
                neutropenia: Risks, consequences, and new directions for its
                management. Cancer. 2004;100(2):228.
                 \146\ Lyman GH. Chemotherapy dose intensity and quality cancer
                care. Oncology (Williston Park). 2006;20(14 Suppl 9):16-25.
                 \147\ Smith RE. Trends in recommendations for myelosuppressive
                chemotherapy for the treatment of solid tumors. J Natl Compr Canc
                Netw. 2006;4(7):649-58.
                 \148\ Bisi JE, Sorrentino JA, Roberts PJ, Tavares FX, Strum JC.
                Preclinical characterization of G1T28: a novel CDK4/6 inhibitor for
                reduction of chemotherapy-induced myelosuppression. Mol Cancer Ther.
                2016;15(5):783-93.
                 \149\ Nurgali K, Jagoe T, Raquel Abalo R. Editorial: Adverse
                Effects of Cancer Chemotherapy: Anything New to Improve Tolerance
                and Reduce Sequelae? Front Pharmacol. 2018;9:245.
                ---------------------------------------------------------------------------
                 In regard to the claim that the use of trilaciclib significantly
                improves clinical outcomes for a patient population as compared to
                currently available treatments, the applicant stated that the
                administration of trilaciclib prior to chemotherapy in patients with
                SCLC prevented chemotherapy-induced neutropenia, reduced chemotherapy-
                induced anemia, reduced CIM or sepsis-related hospitalizations, and has
                the potential to improve the management and quality of life of patients
                receiving myelosuppressive chemotherapy as compared to placebo.\150\
                ---------------------------------------------------------------------------
                 \150\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
                Trilaciclib reduces the need for growth factors and red blood cell
                transfusions to manage chemotherapy-induced myelosuppression. Poster
                presented at: IASLC: 2020 North America Conference on Lung Cancer;
                October 16-17, 2020; Virtual congress.
                ---------------------------------------------------------------------------
                 The applicant presented eight claims in support of the assertion
                that trilaciclib represents substantial clinical improvement over
                existing technologies in the mitigation of clinically significant
                chemotherapy-induced myelosupression in adult patients with SCLC.
                 In its first and second claims, the applicant asserted that
                trilaciclib reduces the mean duration of severe G4 neutropenia in cycle
                1 of chemotherapy and reduces the proportion of patients experiencing
                severe G4 neutropenia in comparison to placebo. The applicant submitted
                three sources in support of these claims. First, the applicant
                submitted a poster presentation from Daniel, et. al., describing a
                global, randomized, double-blind, placebo-controlled, multicenter,
                phase 2 study that assessed the potential of trilaciclib to reduce the
                incidence and consequences of chemotherapy-induced myelosuppression in
                patients with newly diagnosed ES-SCLC treated with etoposide,
                carboplatin, and atezolizumab. One hundred seven eligible patients were
                randomized to
                [[Page 25243]]
                receive trilaciclib (n = 53) or placebo (n = 54). The primary endpoints
                were mean duration of severe neutropenia (SN) in cycle 1 and percent of
                patients with grade 4 SN. Results summarized mean duration of SN in
                cycle 1 as 0 days with trilaciclib and 4 days with placebo, and percent
                of patients with grade 4 SN as 1.9% vs 49.1%, respectively.\151\
                ---------------------------------------------------------------------------
                 \151\ Daniel D, Kuchava V, Bondarenko I et al. Trilaciclib
                Decreases Myelosuppression in Extensive-Stage Small Cell Lung Cancer
                (ES-SCLC) Patients Receiving First-Line Chemotherapy Plus
                Atezolizumab [Poster Presentation]. European Society of Medical
                Oncology (ESMO). October, 2019; Barcelona, Spain.
                ---------------------------------------------------------------------------
                 Second, the applicant submitted an article by Weiss, et. al.,
                summarizing a phase II randomized, double-blind placebo-controlled
                study of the safety, efficacy and pharmacokinetics (PK) of trilaciclib
                in combination with etoposide/carboplatin (E/P) therapy for treatment-
                naive extensive-stage small-cell lung cancer patients. Thirty-nine
                patients were included in the trilaciclib group versus 38 in the
                placebo group. The applicant stated that treatment with trilaciclib
                resulted in a reduced mean duration of severe G4 neutropenia in cycle 1
                (0 days versus 3 days in placebo) and reduced proportion of patients
                experiencing severe G4 neutropenia for trilaciclib (5% versus
                43%).\152\
                ---------------------------------------------------------------------------
                 \152\ Weiss JM, Csoszi T, Maglakelidze M et al.
                Myelopreservation with the CDK4/6 inhibitor Trilaciclib in Patients
                with Small-Cell Lung Cancer Receiving First-Line Chemotherapy: A
                Phase Ib/Randomized Phase II Trial. Ann Oncol. 2019 ;30(10):1613-
                1621.
                ---------------------------------------------------------------------------
                 Third, the applicant submitted a presentation from Hart, et. al.,
                describing a randomized, double-blind, placebo-controlled, phase 2
                study to compare the results of 32 patients receiving Trilaciclib
                versus 28 receiving placebo in patients being treated with topotecan
                for previously treated ES-SCLC. Primary endpoints were mean duration of
                SN in cycle 1 and the percentage of patients with SN. Results
                demonstrated that the mean duration of severe G4 neutropenia in cycle 1
                was reported at 2 days for trilaciclib versus eight days for placebo.
                The proportion of patients experiencing severe G4 neutropenia was
                reported at 41% for trilaciclib versus 76% for placebo.\153\
                ---------------------------------------------------------------------------
                 \153\ Hart LL, Andric ZG, Hussein MA et al. Effect of
                Trilaciclib, a CDK4/6 Inhibitor, on Myelosuppression in Patients
                with Previously Treated Extensive-Stage Small Cell Lung Cancer [Oral
                Presentation]. Presented at: American Society of Clinical Oncology
                (ASCO). June 2019; Chicago, US.
                ---------------------------------------------------------------------------
                 In the third claim, the applicant asserted that trilaciclib reduces
                the proportion of patients experiencing febrile neutropenia treatment
                emergent adverse events (TEAE) in comparison to placebo. In the fourth
                claim, the applicant asserted that trilaciclib decreases the rate of
                therapeutic intervention with G-CSF in comparison to placebo, noting
                that growth factors are known to carry a number of risks, cause
                complications and adverse events. In the fifth claim, the applicant
                asserted that trilaciclib reduces the proportion of patients
                experiencing grade 3/4 anemia in comparison to placebo. In the sixth
                claim, the applicant asserted that trilaciclib decreases the rate of
                therapeutic intervention with red blood cell transfusions in comparison
                to placebo. To support these claims, the applicant submitted a 2020
                poster presentation from Weiss, et. al., describing a pooled analysis
                across three RCTs that compared the proportion of ES-SCLC patients
                experiencing febrile neutropenia between trilaciclib and placebo. The
                trilaciclib group included 122 patients and the placebo group included
                118 patients. The presentation reflected the following results: The
                proportion of patients experiencing febrile neutropenia for trilaciclib
                was 3% versus placebo at 9%; the rate of therapeutic intervention with
                G-CSF for trilaciclib at 29% versus 56% for placebo; the proportion of
                patients experiencing grade 3/4 anemia for trilaciclib at 20% versus
                32% for placebo; and the rate of therapeutic intervention with red
                blood cell transfusions for trilaciclib at 15% versus 26% for
                placebo.\154\
                ---------------------------------------------------------------------------
                 \154\ Weiss J, Goldschmidt J, Andric Z et al. Myelopreservation
                and Reduced Use of Supportive Care with Trilaciclib in Patients with
                Small Cell Lung Cancer [Poster Presentation]. Presented at: American
                Society of Clinical Oncology (ASCO). May 2020.
                ---------------------------------------------------------------------------
                 In the seventh claim, the applicant asserted that trilaciclib
                delays time to deterioration in symptoms and functioning domains of
                patient-reported quality of life measures on Functional Assessment of
                Cancer Therapy (FACT) scores. The applicant submitted a 2019
                presentation from Weiss, et. al., describing a pooled analysis across
                three RCTs. The applicant stated that trilaciclib delays time to
                confirmed deterioration in a variety of symptoms and functioning
                domains compared to placebo, for example: median of 4.7 months delay to
                deterioration for fatigue; median of 3.5 months delay for anemia; and
                median of 4 months delay for functional well-being.\155\
                ---------------------------------------------------------------------------
                 \155\ Weiss J, Skaltsa K, Gwaltney C, et al: Results from three
                phase 2 randomized, double-blind, placebo-controlled small cell lung
                cancer trials. 2019 Multinational Association of Supportive Care in
                Cancer/International Society of Oral Oncology International
                Symposium on Supportive Care in Cancer. Abstract eP723. Presented
                June 21, 2019.
                ---------------------------------------------------------------------------
                 In the eighth claim, the applicant asserted that trilaciclib
                decreases the number of hospitalizations due to myelosuppression or
                sepsis. The applicant submitted a conference agenda referring to an
                oral presentation by Ferrarotto, et. al., at the North America
                Conference on Lung Cancer, October 16, 2020. The applicant stated that
                hospitalizations due to myelosuppression or sepsis occurred in
                significantly fewer patients and significantly less often among
                patients receiving trilaciclib prior to chemotherapy versus placebo
                though we were unable to locate support for this claim in the
                conference agenda submitted with the application.\156\
                ---------------------------------------------------------------------------
                 \156\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
                Trilaciclib reduces the need for growth factors and red blood cell
                transfusions to manage chemotherapy-induced myelosuppression. [Oral
                Presentation]. Presented at: North America Conference on Lung
                Cancer, October 2020. https://naclc2020.iaslc.org/program-at-a-glance/.
                ---------------------------------------------------------------------------
                 With respect to the substantial clinical improvement criterion, we
                note that the data submitted by the applicant included one published
                peer reviewed article from Weiss, et. al.,\157\ abstracts from Daniel,
                et. al.,\158\ and Hart, et. al.,\159\ and references to trials
                exploring broader cohorts of small cell lung cancer, breast cancer and
                colon cancer patients. In addition, as summarized previously, we note
                that most of the studies submitted by the applicant had sample sizes
                fewer than 100 participants which may limit generalizability of the
                studies. With respect to the Weiss, et. al., study, we note that
                trilaciclib was compared with placebo at a significance level of two-
                sided [alpha] = 0.2 which is much lower than the typical cutoff of 0.05
                and may have increased the risk of false positives and interfered with
                the ability to draw conclusions that are based on statistical methods.
                We also note the lack of any statistical correction for multiple
                comparisons. We note that
                [[Page 25244]]
                in sources provided by the applicant, mean duration of severe
                neutropenia was assessed in day increments.160 161 162 163
                However, it is not clear that zero days would indicate that those
                patients experienced no severe neutropenia. Specifically, we question
                whether mean hours in severe neutropenia was evaluated or whether, in
                addition to the groupings by days, one day or less would be an
                appropriate value for inclusion. Finally, while the applicant referred
                to decreases in the number of hospitalizations, we note that the source
                provided was limited to a conference agenda that only linked to an
                abstract pertaining to reductions in utilization of supportive care
                interventions but did not reflect hospitalization rates.\164\
                ---------------------------------------------------------------------------
                 \157\ Weiss JM, Csoszi T, Maglakelidze M, et al.
                Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
                with small-cell lung cancer receiving first-line chemotherapy: A
                phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
                1621.
                 \158\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
                decreases myelosuppression in extensive-stage small cell lung cancer
                (ES-SCLC) patients receiving first-line chemotherapy plus
                atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD. https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
                 \159\ Hart LL, Andric ZG, Hussein MA, et al. Effect of
                trilaciclib, a CDK \4/6\ inhibitor, on myelosuppression in patients
                with previously treated extensive-stage small cell lung cancer
                receiving topotecan. J Clin Oncol. 2019;37(15_suppl): Abstract 8505:
                https://www.g8501therapeutics.com/file.cfm/8534/docs/tr-G8501T8528-8503%8520ASCO%202019%202020Oral%202020Presentation%20060119-20060111.pdf.
                 \160\ Weiss JM, Csoszi T, Maglakelidze M, et al.
                Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
                with small-cell lung cancer receiving first-line chemotherapy: A
                phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
                1621.
                 \161\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
                decreases myelosuppression in extensive-stage small cell lung cancer
                (ES-SCLC) patients receiving first-line chemotherapy plus
                atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD: https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
                 \162\ Hart LL, Andric ZG, Hussein MA et al. Effect of
                Trilaciclib, a CDK4/6 Inhibitor, on Myelosuppression in Patients
                with Previously Treated Extensive-Stage Small Cell Lung Cancer [Oral
                Presentation]. Presented at: American Society of Clinical Oncology
                (ASCO). June 2019; Chicago, US.
                 \163\ Weiss J, Goldschmidt J, Andric Z et al. Myelopreservation
                and Reduced Use of Supportive Care with Trilaciclib in Patients with
                Small Cell Lung Cancer [Poster Presentation]. Presented at: American
                Society of Clinical Oncology (ASCO). May 2020.
                 \164\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
                Trilaciclib reduces the need for growth factors and red blood cell
                transfusions to manage chemotherapy-induced myelosuppression. [Oral
                Presentation]. Presented at: North America Conference on Lung
                Cancer, October 2020. https://naclc2020.iaslc.org/program-at-a-glance/.
                ---------------------------------------------------------------------------
                 We invite public comments as to whether trilaciclib meets the
                substantial clinical improvement criterion.
                 We did not receive any written comments in response to the New
                Technology Town Hall meeting notice published in the Federal Register
                regarding the substantial clinical improvement criterion for
                trilaciclib.
                f. Ellipsys[supreg] Vascular Access System
                 Avenu Medical, Inc. submitted an application for new technology
                add-on payments for the Ellipsys[supreg] Vascular Access System
                (``Ellipsys'') for FY 2022. Ellipsys is a device that enables
                percutaneous creation of an arteriovenous fistula (AVF), which is used
                to access the bloodstream for hemodialysis for the treatment of end-
                stage renal disease (ESRD). According to the applicant, to create the
                fistula, a physician inserts a crossing needle through the perforating
                vein and into the proximal radial artery in the forearm. A specialized
                catheter is then used to bring the artery and vein together. The two
                vessels are ``welded'' together with thermal resistance energy,
                creating an anastomosis. According to the applicant, the only means of
                creating an AVF was through open surgery before the approval of
                Ellipsys, and percutaneous AVF (pAVF) offers a number of advantages
                over surgical AVF (sAVF).
                 With respect to the newness criterion, the applicant for Ellipsys
                received 510(k) clearance from the FDA on August 9, 2019, with an
                indication for the creation of a proximal radial artery to perforating
                vein anastomosis via a retrograde venous access approach in patients
                with a minimum vessel diameter of 2.0mm and less than 1.5mm of
                separation between the artery and vein at the fistula creation site who
                have chronic kidney disease requiring dialysis.\165\ The subject of
                this 510(k) clearance was an update to the Instructions for Use (IFU)
                to allow an additional procedural step for balloon dilation of the
                anastomosis junction at the radial artery and adjacent outflow vein of
                the AVF immediately after creation with the Ellipsys catheter. Per the
                applicant, the device was immediately available on the market. The
                applicant further stated that the device was originally approved under
                a De Novo clearance on June 22, 2018. Ellipsys also received two
                additional 510(k) clearances dated January 25, 2019 (minor change in
                the packaging of components) and October 5, 2018 (minor technological
                differences in the power control unit and minor enhancements to the
                catheter design) but the applicant states they are not regarded as
                material for this application. The FDA has classified Ellipsys as a
                Class II device under the generic name percutaneous catheter for
                creation of an arteriovenous fistula for hemodialysis access. The
                applicant stated that currently, two ICD-10-PCS codes identify
                procedures using Ellipsys: 031B3ZF (Bypass right radial artery to lower
                arm vein, percutaneous approach); and 031C3ZF (Bypass left radial
                artery to lower arm vein, percutaneous approach). However, since these
                codes also identify the WavelinQTM EndoAVF System
                (``WavelinQ''), another percutaneous fistula device, Avenu Medical
                submitted a code request for a unique ICD-10-PCS code to distinctly
                identify Ellipsys beginning in FY 2022. The applicant stated this
                technology was first assigned HCPCS code C9754 on January 1, 2019,
                which was then replaced by HCPCS code G2170 on July 1, 2020. Per the
                applicant, WavelinQ was assigned HCPCS codes (C9755 replaced by G2171)
                with the same timing, and the codes for the 2 pAVF technologies are
                differentiated by the use of thermal resistance energy for Ellipsys and
                the use of radiofrequency energy for WavelinQ.
                ---------------------------------------------------------------------------
                 \165\ U.S. Food and Drug Administration (FDA). Center for
                Devices and Radiological Health. 510(k) Summary No. K1191114. 2019.
                Retrieved from: https://www.accessdata.fda.gov/cdrh_docs/pdf19/K191114.pdf.
                ---------------------------------------------------------------------------
                 The applicant stated that hemodialysis access for the treatment of
                ESRD can be provided by catheter, graft, or AVF, of which AVF is
                generally preferred for patients whose vascular anatomy and condition
                permit it. Per the applicant, the only method for creating an AVF was
                through an open surgical approach until the introduction of Ellipsys
                and WavelinQ, two devices that use a percutaneous approach.
                 As discussed earlier, if a technology meets all three of the
                substantial similarity criteria, it would be considered substantially
                similar to an existing technology and would not be considered ``new''
                for purposes of new technology add-on payments.
                 With regard to the first criterion, whether a product uses the same
                or similar mechanism of action to achieve a therapeutic outcome, the
                applicant asserted that Ellipsys uses a new mechanism of action
                compared to its initial clearance. Per the applicant, the current
                device included an additional step in the IFU, creating a different
                procedure profile and a different mechanism of action. The applicant
                states that the addition of this step, a balloon angioplasty performed
                within the same operative session as the creation of the pAVF, instead
                of days or weeks later, typically contributes to decreased time to
                maturation, improved initial flow, and helps avoid early thrombosis of
                the newly-created access, in addition to decreasing the number of
                secondary procedures required for maturation and maintenance. According
                to the applicant, the explicit inclusion of the step in the IFU, where
                it was not previously explicitly included, represents a new mechanism
                of action.
                 With respect to the second criterion, whether a product is assigned
                to the same or different MS-DRG, the applicant generally stated that
                Ellipsys is assigned to the same MS-DRGs as existing technologies.
                According to information provided by the applicant,
                [[Page 25245]]
                these MS-DRGs appear to be MS-DRGs 264, 356, 357, 358, 628, 629, 630,
                673, 674, 675, 907, 908, 909, 981, 982, and 983. With respect to the
                third criterion, whether the new use of the technology involves the
                treatment of the same or similar type of disease and the same or
                similar patient population, the applicant generally stated that
                Ellipsys will be used to treat the same or similar type of disease and
                the same or similar patient population as the current standard-of-care
                treatments.
                 In summary, the applicant believes that Ellipsys is not
                substantially similar to other currently available therapies and/or
                technologies because it uses a new mechanism of action and that
                therefore, the technology meets the ``newness'' criterion. However, we
                believe that the mechanism of action for Ellipsys may be the same or
                similar to the original version of the Ellipsys system, which received
                FDA approval on June 22, 2018. Though the current IFU includes an
                additional procedure as part of the index procedure, it is not clear
                that this step of balloon angioplasty done concurrently changes the
                mechanism of action of the Ellipsys system. Per the FDA's 510(k)
                summary, compared to the predicate device, there were no changes to the
                device or the manner in which it creates a percutaneous anastomosis,
                and other than the additional procedural step of balloon dilation, all
                characteristics remain unchanged.\166\ In addition, clinicians were not
                precluded from performing this step before the change in the IFU, and
                in fact, balloon dilation was already performed during the index
                procedure in some cases.\167\ Though the applicant maintains that
                performing this additional step in all cases, as opposed to some, leads
                to superior clinical outcomes, we are unclear if this has any bearing
                on newness for this technology or if it represents a change in the
                mechanism of action of this device. We note that if the current device
                is substantially similar to the original version of Ellipsys, we
                believe the newness period for this technology would begin on June 22,
                2018 with the De Novo approval date and, therefore, because the 3-year
                anniversary date of the technology's entry onto the U.S. market (June
                22, 2021) would occur in FY 2021, the technology would no longer be
                considered new and would not be eligible for new technology add-on
                payments for FY 2022. We welcome public comments on whether the change
                in the Ellipsys IFU represents a change to the device's mechanism of
                action.
                ---------------------------------------------------------------------------
                 \166\ U.S. Food and Drug Administration (FDA). Center for
                Devices and Radiological Health. 510(k) Summary No. K1191114. 2019.
                Retrieved from: https://www.accessdata.fda.gov/cdrh_docs/pdf19/K191114.pdf.
                 \167\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
                Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
                Creation for Hemodialysis Access,'' Journal of Vascular and
                Interventional Radiology 2018; 29: 149-158.
                ---------------------------------------------------------------------------
                 We also note that differences in mechanism of action between
                Ellipsys and WavelinQ were not included. We note that CMS stated in the
                FY 2021 IPPS/LTCH PPS final rule (85 FR 58702) that WavelinQ uses a
                unique mechanism of action that differed from that of other
                commercially available devices.
                 We are inviting public comments on whether Ellipsys is
                substantially similar to other currently available therapies and/or
                technologies and whether this technology meets the newness criterion.
                 With regard to the cost criterion, the applicant conducted the
                following analysis to demonstrate that the technology meets the cost
                criterion.
                 The applicant searched the FY 2019 MedPAR claims data file with the
                FY 2019 IPPS/LTCH PPS final rule correction notice IPPS Impact File to
                identify potential cases representing patients who may be eligible for
                treatment using the Ellipsys. The applicant stated that currently,
                there are two ICD-10-PCS procedure codes that describe percutaneous AVF
                in the radial artery: 031B3ZF (Bypass right radial artery to lower arm
                vein, percutaneous approach) and 031C3ZF (Bypass left radial artery to
                lower arm vein, percutaneous approach). The applicant stated that these
                codes are not specific to percutaneous AVF formation using thermal
                energy. We note that the applicant submitted a request for approval for
                a unique ICD-10-PCS code for the use of the Ellipsys beginning FY 2022.
                The applicant stated that if the procedure were reported with the
                previously mentioned procedure codes, Ellipsys would be mapped to the
                following MS-DRGs:
                [GRAPHIC] [TIFF OMITTED] TP10MY21.149
                 The applicant added that ICD-10 codes 031B3ZF and 031C3ZF were new
                effective October 1, 2019 and therefore do not appear in the 2019
                claims data. According to the applicant, the most common MS-DRGs for
                patients admitted with chronic kidney disease and who received an open
                procedure for creation of an AVF are shown below.
                [[Page 25246]]
                [GRAPHIC] [TIFF OMITTED] TP10MY21.150
                 The applicant has not made a request for Ellipsys to be mapped to a
                new MS-DRG for FY 2022.
                 The applicant stated that claims which had a diagnosis code for
                Chronic Kidney Disease (CKD) stage IV, CKD stage V, or ESRD and which
                included an open bypass of the subclavian artery to upper arm vein or
                the radial artery to lower arm vein during the same stage were included
                in the cost analysis. The applicant stated they used the following ICD-
                10 codes in their analysis to identify claims.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.151
                 Cases mapping to the top five MS-DRGs by volume were selected,
                which resulted in 689 cases or 79% of case volume.
                 The applicant determined an average unstandardized case weighted
                charge per case of $91,190.
                 The applicant did not remove charges for prior technology because
                the cases identified included an open procedure that is not performed
                using a specific device. However, the applicant stated that all charges
                for the operating room (OR) were removed as the procedures involving
                the technology would not always be performed in an OR. The applicant
                stated that departmental charges were standardized using the factors
                from the standardization file released with the FY 2021 final rule. The
                applicant then standardized the charges using the FY 2019 Final Rule
                with Correction Notice Impact File. Next, the applicant applied the 2-
                year inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
                calculate outlier threshold charges (1.13218). To calculate the charges
                for the technology, the applicant used the national average CCR for the
                Supplies and Equipment cost center of 0.297 from the FY 2021 IPPS/LTCH
                PPS final rule. The applicant added charges for other items and
                services related to the technology; half of the average departmental
                charges for the OR removed in a prior step were added back to the per
                case charge, by MS-DRG, as procedures using the technology would
                sometimes be performed in an OR. The applicant calculated a final
                inflated average case-weighted standardized charge per case of
                $119,158, which exceeded the average case-weighted threshold amount of
                $91,190 by $27,967. The applicant stated that because the final
                inflated average case-weighted standardized charge per case exceeded
                the average case-weighted threshold amount, the therapy meets the cost
                criterion.
                 We note that the applicant used claims with open subclavian artery
                bypass to upper arm vein, in addition to radial lower arm fistulas, as
                a proxy for Ellipsys cases. The applicant stated that Ellipsys may
                provide an alternative to these cases in some instances where AVF
                placement in the radial arteries is possible but the surgeons are
                unfamiliar with the procedure. However, we question if these are the
                most appropriate proxy, as Ellipsys should not replace radiocephalic
                fistulas, per standard guidelines that recommend wrist fistulas first;
                and it would be more likely that surgeons would use Ellipsys over upper
                arm fistulas than a subclavian fistula, which is used rarely in
                standard practice.
                 We are inviting public comments on whether the Ellipsys[supreg]
                Vascular Access System meets the cost criterion.
                 With respect to the substantial clinical improvement criterion, the
                applicant asserted that the Ellipsys[supreg] Vascular Access System
                represents a substantial clinical improvement over existing
                technologies. Broadly, the applicant outlined three comparators with
                respect to which it asserted Ellipsys provides a substantial clinical
                improvement: (1) Percutaneous AVF with the WavelinQTM (4F)
                EndoAVF System; (2) percutaneous AVF (pAVF) with the prior version of
                Ellipsys; and (3) surgical AVF (sAVF).
                 With respect to the first comparison, Ellipsys as compared to
                WavelinQ, the applicant stated that Ellipsys has improved outcomes
                including technical success and cumulative patency. The applicant cited
                the following to support superiority of Ellipsys over WavelinQ: (1)
                Higher fraction of cases with clinically functional AVFs; (2) speedier
                maturation; (3) more durable AVFs; and (4) smaller failure rate.
                According to the applicant, no head-to-head clinical trial is
                available, but they provided one retrospective study that provides a
                direct comparison between the two pAVF systems to support their claims.
                 Shahverdyan et al. performed a retrospective review of 100 patients
                undergoing percutaneous fistula creation at a single site in Germany
                between December 2017 and December 2019 to compare outcomes with pAVF
                [[Page 25247]]
                creation using the Ellipsys and WavelinQ systems.\168\ In this single-
                operator, comparative case series, 65 Ellipsys procedures and 35
                WavelinQ procedures were completed, following a procedure sequence
                algorithm for selecting the type of vascular access. Per the study,
                wrist sAVF was the first choice as per standard practice guidelines,
                followed by proximal forearm pAVF, resulting in 100 pAVFs using
                Ellipsys (n=65) and WavelinQ (n=35). Demographics for the study
                patients included 69 percent male and median age of 64.1 years. There
                were no significant differences between WavelinQ and Ellipsys patients
                in age, Body Mass Index (BMI), Chronic Kidney Disease (CKD) status, AVF
                history, or presence of diabetes, though the WavelinQ group had a
                higher proportion of males. The primary endpoints were technical
                success, time to maturation, functional patency, and time to first
                clinical use, and median follow-up was 186.5 days. The study reported
                technical success, defined as post-procedure ultrasound examination
                demonstrating a patent anastomosis and fistula flow, with Ellipsys at
                100 percent vs. 97 percent with WavelinQ (p=0.35). Interventions were
                performed in approximately 27 percent of cases for both technologies,
                and the number of interventions per patient-year was 0.96 vs. 0.46,
                respectively.
                ---------------------------------------------------------------------------
                 \168\ Shahverdyan et al., ``Comparison of Outcomes of
                Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
                WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
                2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
                ---------------------------------------------------------------------------
                 Per the applicant, the study demonstrated a higher fraction of
                cases with clinically functional AVFs using Ellipsys, as fistula
                maturation at four weeks was 68.3 percent with Ellipsys vs. 54.3
                percent with WavelinQ (p=0.1709), and at the end of the study period,
                83.3% and 71.4% respectively. In addition, the applicant stated that
                successful dialysis access was achieved in 79.5 percent of Ellipsys
                cases vs. 60.9 percent for WavelinQ cases among patients on dialysis
                (p=0.0711). The applicant also stated that the study demonstrated that
                Ellipsys results in speedier maturation with Ellipsys demonstrating a
                median time to cannulation of 60 days vs. 90 days with WavelinQ
                (p=0.3676). Next, the applicant stated that use of Ellipsys
                demonstrated more durable AVFs, with a secondary patency rate (the time
                from fistula creation to fistula abandonment, including any
                interventions) at 12 months of 82 percent as compared to 60 percent
                with WavelinQ, and a functional patency rate of 100% vs 85.7%,
                respectively. We note that primary patency (the time from fistula
                creation to the first intervention) between groups was not
                significantly different. Lastly, access failure occurred in 15.4
                percent of Ellipsys patients vs 37.1 percent of WavelinQ patients
                (p=0.0137), which demonstrated that use of Ellipsys results in a
                smaller failure rate, according to the applicant.
                 With regard to the second comparison, Ellipsys compared to the
                previous version of the technology, the applicant states that since the
                IFU dated 8/9/19 now states that balloon angioplasty should be
                performed at the time of the creation procedure, they believe that
                Ellipsys should be considered a different device. Per the applicant,
                this subtle difference is of key clinical importance to successful use
                of Ellipsys, as this method decreases the time to two-needle
                cannulation (2NC) and also improves initial flow, resolving vascular
                spasm at the time of the procedure and reducing early thrombosis. The
                applicant further states that performing balloon angioplasty 100
                percent of the time also decreases the number of secondary procedures.
                To support these claims, the applicant compared results from the
                Ellipsys pivotal trial that used the earlier IFU, in which angioplasty
                was performed simultaneously on 19% of patients, with the Ellipsys
                post-market registry that implemented the change and performed the
                additional step on 100% of patients.
                 Ellipsys's pivotal trial was a prospective, single-arm, non-
                inferiority study of 107 patients at five sites to compare Ellipsys
                with a 90-day performance goal based on a meta-analysis of surgical
                results from the literature.\169\ Inclusion criteria included vascular
                anatomy specific to the indications for Ellipsys, age between 18 and 80
                years old, and CKD stage IV or V. Exclusion criteria included recent
                surgery or major illness within 6 weeks, acute or active infection, and
                use of immunosuppressive medication. Of 261 patients evaluated, a total
                of 117 met inclusion and exclusion criteria, with 28 percent excluded
                due to unsuitable anatomy. 107 were included in the intent to treat
                (ITT) population after each study site completed 2 proctored
                procedures. Demographics included 73 percent male, mean patient age of
                56.7 years, and mean BMI of 31.2 percent. All patients in the ITT
                population received a pAVF with Ellipsys between the proximal radial
                artery and perforating vein, followed by separate maturation
                procedures. The primary efficacy endpoint of the study was maturation
                success, defined as brachial artery flow volume greater than or equal
                to 500ml/min and target vein diameter greater than or equal to 4mm in
                more than 49 percent of patients at 90 days. This performance goal was
                obtained from a meta-analysis of 8 studies of open sAVF, where the
                weighted least squares mean success rate was 62 percent, and the lower
                bound from a 2-sided 95 percent lower confidence interval was 49
                percent. The primary safety endpoint was the absence of device-related
                complications at 90 days. Access failure occurred in 4/107, with a
                technical success rate of 95 percent. The primary endpoint was met by
                86 percent at 90 days (the 97.5 percent lower confidence interval was
                77.9 percent), exceeding the 49 percent performance goal (p 66.2 (34-345 days). Per the authors, spasm of the perforating
                vein was easily treated with vasodilators and balloon dilation as a
                matter of routine care. Nineteen percent of patients (20/107) received
                balloon dilation during the index procedure, and second stage
                maturation procedures included 113 balloon dilations in 77 patients. A
                total of 205 maturation procedures were performed on 99 patients at a
                mean of 35.1 days. An additional 66 maintenance procedures were
                performed in 35 patients at a mean of 17 days, for a total of 271
                secondary procedures during the 12 months of the study (2.7 per patient
                year).
                ---------------------------------------------------------------------------
                 \169\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
                Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
                Creation for Hemodialysis Access,'' Journal of Vascular and
                Interventional Radiology 2018; 29: 149-158.et al.,
                ---------------------------------------------------------------------------
                 The Ellipsys post-market registry by Hull et al. was a prospective
                single-operator study of 60 patients receiving a pAVF with Ellipsys at
                a single outpatient US site in an attempt to understand patient
                selection, maturation, and cannulation with pAVFs.\170\ Patient
                demographics included 57 percent male, mean age of 64, and mean BMI of
                30.7. 123 patients with ESRD stages IV and V were evaluated by
                ultrasound to determine suitability for AVF. Ninety-two percent were
                eligible for sAVF and 61 percent
                [[Page 25248]]
                were eligible for pAVF. Of the 95 patients who received an AVF, 63
                percent (60) received pAVF and 37 percent (35) received sAVF. All 60
                pAVF patients underwent pAVF creation under ultrasound guidance,
                followed by balloon dilation, as compared to the pivotal trial where
                only 19 percent had balloon dilation as part of the index procedure.
                After 4 weeks, maturation and suitability for dialysis were assessed.
                The fistulas were considered suitable when palpable on examination and
                the target vein had 500ml/min flow volume and 5mm diameter. Fifty-two
                additional maturation procedures, including balloon dilation in 62
                percent, were performed in 40 of 60 patients to achieve adequate flow
                volume and diameter in the target vein. Physiologic maturation was
                achieved in 93 percent (56 of 60 patients) with a mean time of 40.4
                days 4.3, and of the remaining 4 patients, one thrombosed
                and three died prior to maturation. In the 54 patients requiring
                dialysis, 87 percent achieved 2NC at a mean of 76.8 days. Six month
                cumulative patency and functional patency were both 94 percent. 70
                maintenance procedures were performed in 63 percent. Only 2 patients
                achieved 2NC without an additional procedure. The authors noted that
                this study is limited by a modest sample size and single-site study
                with surgeons experienced in pAVF creation, and that results were not
                compared to surgery.
                ---------------------------------------------------------------------------
                 \170\ Hull JE, Deitrick J, Groome K, ``Maturation for
                Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
                Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
                1381. (Published on-line August 13, 2020.)
                ---------------------------------------------------------------------------
                 According to the applicant, the post-market registry demonstrated
                the significant clinical differences between performing balloon
                angioplasty as part of the index procedure 19 percent of the time (as
                seen in the pivotal trial) compared to 100 percent of the time. The
                results showed that the average time to 2NC decreased from 100 days to
                70 days. The study also compared initial AVF flow between the studies,
                which increased to 649 ml/min from 330.4 ml/min, attributed to the
                reduction in instances of venospasm due to balloon dilation.\171\
                According to the study investigators, this decrease in venospasm and
                higher flow led to a reduction in early thrombosis from 11 percent to 2
                percent. Lastly, the applicant compared the number of secondary
                procedures between the two studies with the following table:
                ---------------------------------------------------------------------------
                 \171\ Hull JE, Deitrick J, Groome K, ``Maturation for
                Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
                Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
                1381. (Published on-line August 13, 2020.)
                [GRAPHIC] [TIFF OMITTED] TP10MY21.152
                 Per the applicant, despite the higher standard for maturation in
                the second study (5mm target vein diameter vs 4mm in the pivotal
                study), the number of maturation procedures decreased, while
                maintenance procedures increased. Overall, secondary procedures
                decreased with the new protocol, as described in the table submitted by
                the applicant.
                 With respect to the third comparison, Ellipsys as compared to sAVF,
                the applicant stated that Ellipsys creates a side-to-side fistula with
                a percutaneous approach while sAVFs for the most part create end-to-
                side fistulas. According to the applicant, in patients that have
                suitable anatomy for pAVF creation, this method of fistula creation
                contributes to improved outcomes in five ways: (1) Higher fraction of
                cases with clinically functional AVFs; (2) decreased time to two-needle
                cannulation; (3) more durable AVFs; (4) decreased need for secondary
                interventions; and (5) patient satisfaction with Ellipsys AVFs.
                According to the applicant, no head-to-head studies or randomized
                trials between Ellipsys and sAVFs are available, and instead, results
                of key variables of interest were compared using studies with
                comparable results for sAVFs from published literature. The applicant
                provided 2 prospective single-arm studies and 5 retrospective studies,
                including the studies previously discussed, to support these claims.
                They also submitted data from one unpublished study. Aside from the
                Ellipsys pivotal trial, the Ellipsys post-market registry, and the
                comparison study with WavelinQ already summarized, the remaining
                studies are summarized below.
                 The 2-year results of the pivotal trial were analyzed
                retrospectively by Beathard.\172\ 105 patients with 2 year follow-up
                data were included, and of these, 103 had functioning fistulas and all
                were receiving dialysis except 3. Cumulative patency at 18 and 24
                months was 92.8 percent and 91.6 percent, respectively. Patient
                experience with pAVF was assessed among those who had received a
                previous access procedure (\1/3\). When compared to their previous
                procedure, patients rated Ellipsys as the same in 68 percent, better or
                much better in 29 percent, and worse in 3 percent. Patients mentioned
                difficulty with cannulation due to unfamiliarity of dialysis staff with
                pAVF, but commented on the lack of surgical scar and short recovery
                time. Among all patients who responded, 93 percent rated their access
                as very good or excellent.
                ---------------------------------------------------------------------------
                 \172\ Beathard et al., ``Two-year cumulative patency of
                endovascular AVF'' JVA 2020; 21: 350-356.
                ---------------------------------------------------------------------------
                 A retrospective review of 34 patients who received pAVF between May
                2017 and November 2018 at a clinic in France was submitted.\173\
                Patients included had ESRD, were not candidates for wrist fistulas, and
                met the anatomic criteria for use of Ellipsys. Demographics included
                patients that were 58 percent male, 65 percent Caucasian and 35 percent
                African, and a mean age of 62 years old. After fistula creation with
                Ellipsys, all anastomoses received balloon dilation. Twenty-four of 34
                patients had successful 2NC within 6 weeks. Forty-four percent of
                patients did not require secondary interventions, and 12 percent
                required additional dilation within 4 weeks to improve maturation. Two
                patients converted to a surgical fistula due to cannulation
                difficulties. No patients developed steal syndrome or aneurysmal
                changes in the one year follow-up period. Study authors noted that one
                benefit of pAVF over sAVF is the potential for multiple outflow
                cannulation veins, as compared to a sAVF in the same location, where
                the median cubital vein is ligated to augment flow into a single
                vessel.
                ---------------------------------------------------------------------------
                 \173\ Hebibi et al, ``Clinical hemodialysis experience with
                percutaneous arteriovenous fistulas created using the
                Ellipsys[supreg] vascular access system,'' Hemodialysis
                International 2019; 23(2): 168-172.
                ---------------------------------------------------------------------------
                 Another study provided was a retrospective cohort study of 232
                [[Page 25249]]
                consecutive patients who underwent pAVF creation with Ellipsys at a
                single center in France.\174\ An Ellipsys pAVF was the second choice
                after a radiocephalic surgical wrist fistula. Patients were 63 percent
                male, with a mean age of 64 years old (25-92). Balloon angioplasty was
                considered part of the index procedure and performed in all cases.
                Technical success was achieved in 99 percent. At 1 year, the primary
                patency rate was 54 percent and the secondary patency rate was 96
                percent with a mean follow up of 252 days. The most frequent
                intervention (35 percent of patients) was additional balloon
                angioplasty. Eleven percent of patients underwent procedures for
                superficialization of deep veins. Average maturation time by clinical
                or ultrasound criteria was 4 weeks, and successful cannulation was
                established in less than 2 weeks in 10 percent of patients. No
                significant adverse events related to the procedures occurred. Three
                patients (1 percent) required later conversion to sAVF, two due to
                occlusion of the anastomosis and one due to rupture of the perforator
                during an angioplasty procedure and pseudoaneurysm. The authors
                conclude that pAVFs have reduced need for reinterventions and result in
                a moderate-flow fistula with shared venous drainage. They further state
                that minimally invasive AVF creation with the low risk of complications
                seen using Ellipsys can be particularly beneficial in older patients,
                especially since the lower flow fistula as compared to brachial artery
                inflow AVFs decreases the risk of cardiac issues. They conclude that
                large-scale randomized studies are needed to confirm their findings.
                ---------------------------------------------------------------------------
                 \174\ Mallios et al., ``Mid-term results of percutaneous
                arteriovenous fistula creation with Ellipsys vascular access system,
                technical recommendations and an algorithm for maintenance,''
                Journal of Vascular Surgery 2020; 72(6): 2097-2106. (Published on-
                line April 7, 2020.).
                ---------------------------------------------------------------------------
                 In another study, a case series of 14 patients who achieved early
                cannulation with an Ellipsys pAVF underwent retrospective review at an
                outpatient department in Europe.\175\ In these patients, cannulation
                within 14 days post creation was performed using plastic cannulas in
                order to avoid catheter insertion or replacement for dialysis. The
                procedure was successful in all except one case. Primary patency at 12
                months was 66 percent and cumulative patency was 100 percent, with the
                authors concluding that this success suggests that pAVF could serve as
                an alternative to catheter for immediate dialysis.
                ---------------------------------------------------------------------------
                 \175\ Mallios et al., ``Early cannulation of percutaneously
                created AVFs'', Journal of Vascular Access 2020; 21(6): 997-1002.
                (Published on-line December 19, 2019.)
                ---------------------------------------------------------------------------
                 The applicant also submitted preliminary unpublished results from a
                3-year follow up of 99 of the pivotal trial patients, stating that
                while Ellipsys AVFs required more maturation procedures, in the 2 years
                following creation they required fewer maintenance procedures as
                compared to results for sAVF reported in the literature, with an
                average of 0.83 vs. 3.41, respectively. Additionally, they stated that
                at every follow-up period, Ellipsys showed improved cumulative patency
                over sAVF results from the literature, with rates of 90 percent vs 46
                percent at 36 months.
                 The applicant summarized results from all of the studies to support
                each claim of Ellipsys's superiority over sAVF by comparing to
                historical controls in the literature. For the claim of more clinically
                functional AVFs, the applicant summarized results from 4 studies,
                demonstrating 2NC in 88 percent at one year and 95 percent at 2 years,
                87 percent with an average follow up of 282 days, and 82 percent within
                6 weeks.176 177 178 179 This was compared to a value of 53.4
                percent successful cannulation for sAVF from a study that looked at the
                effect of age over 65 on clinical outcomes for radiocephalic and
                brachiocephalic AVF.\180\ For the claim of decreased time to 2NC, the
                applicant summarized the results from 5 studies, demonstrating a mean
                time to 2NC for Ellipsys of 100.2 days, 65.5 45.7 days, a
                range of 10 days to 6 weeks, 4 weeks, and 60
                days.181 182 183 184 185 This was compared to a mean of 136
                days for sAVFs, taken from the United States Renal Data System.\186\
                For the claim of more durable AVFs, the applicant summarized results
                from 5 studies demonstrating Ellipsys's cumulative patency at 12
                months, ranging from 82 percent to 100 percent, and 91.6 percent at 24
                months.187 188 189 190 The applicant compared these results
                to a patency rate of 65 percent for sAVFs found in the USRDS
                database.\191\ The applicant further stated that preliminary results
                from the pivotal trial 3 year follow-up reinforce this claim, as they
                found that the cumulative patency using Ellipsys was 90 percent at 36
                months, compared to a historical value of 46 percent for sAVFs. For the
                claim of decreased secondary interventions (including maturation and
                maintenance procedures), the applicant summarized outcomes from 3
                studies demonstrating 0.96 secondary interventions per patient year in
                the study by Shahverdyan et al.; 2.63 interventions per year in the
                pivotal trial; and an average of 0.83 maintenance inventions per
                patient in the 2 years following creation in the preliminary results of
                the 3 year follow-up by Hull et al. The applicant stated that a
                comparable value for sAVFs is
                [[Page 25250]]
                3.41 over 2 years.\192\ Finally, for the claim of patient satisfaction,
                the applicant cited results of the patient survey performed by Beathard
                et al., stating that the survey indicated a high level of satisfaction
                with Ellipsys, with 93 percent rating their access as very good or
                excellent, and 95 percent rating their lack of pain as very good or
                excellent. Additionally, patients noted the lack of scar, short
                recovery time, and ease of use with Ellipsys.\193\
                ---------------------------------------------------------------------------
                 \176\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
                Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
                Creation for Hemodialysis Access,'' Journal of Vascular and
                Interventional Radiology 2018; 29: 149-158.
                 \177\ Beathard GA, et al., ``Two-year cumulative patency of
                endovascular arteriovenous fistula,'' Journal of Vascular Access
                2020; 21: 350-356.
                 \178\ Hull JE, Deitrick J, Groome K, ``Maturation for
                Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
                Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
                1381. (Published on-line August 13, 2020.)
                 \179\ Hebibi H, et al., ``Clinical hemodialysis experience with
                percutaneous arteriovenous fistulas created using the
                Ellipsys[supreg] vascular access system,'' Hemodialysis
                International 2019; 23(2): 16 8-172.
                 \180\ Weale A, et al., ``Radiocephalic and Brachiocephalic
                Arteriovenous Fistula Outcomes in the Elderly,'' Journal of Vascular
                Surgery 2008; 47(1): 144-150.
                 \181\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
                Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
                Creation for Hemodialysis Access,'' Journal of Vascular and
                Interventional Radiology 2018; 29: 149-158.
                 \182\ Hull JE, Deitrick J, Groome K, ``Maturation for
                Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
                Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
                1381. (Published on-line August 13, 2020.)
                 \183\ Hebibi H, et al., ``Clinical hemodialysis experience with
                percutaneous arteriovenous fistulas created using the
                Ellipsys[supreg] vascular access system,'' Hemodialysis
                International 2019; 23(2): 168-172.
                 \184\ Mallios A, Bourquelot P, Franco G, et al., ``Mid-term
                results of percutaneous arteriovenous fistula creation with Ellipsys
                vascular access system, technical recommendations and an algorithm
                for maintenance,'' Journal of Vascular Surgery 2020; 72(6): 2097-
                2106. (Published on-line April 7, 2020.)
                 \185\ Shahverdyan R, et al., ``Comparison of Outcomes of
                Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
                WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
                2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
                 \186\ United States Renal Data System. 2016 USRDS Annual Data
                Report: Epidemiology of kidney disease in the United States.
                National Institutes of Health, National Institute of Diabetes and
                Digestive and Kidney Diseases, Bethesda, MD, 2016.
                 \187\ Beathard GA, et al., ``Two-year cumulative patency of
                endovascular arteriovenous fistula,'' Journal of Vascular Access
                2020; 21: 350-356.
                 \188\ Mallios A, Bourquelot P, Franco G, et al., ``Mid-term
                results of percutaneous arteriovenous fistula creation with Ellipsys
                vascular access system, technical recommendations and an algorithm
                for maintenance,'' Journal of Vascular Surgery 2020; 72(6): 2097-
                2106. (Published on-line April 7, 2020.)
                 \189\ Shahverdyan R, et al., ``Comparison of Outcomes of
                Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
                WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
                2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
                 \190\ Mallios A, et al., ``Early cannulation of percutaneously
                created arteriovenous hemodialysis fistulae,'' Journal of Vascular
                Access 2020; 21(6): 997-1002. (Published on-line December 19, 2019.)
                 \191\ Al-Jaishi, Ahmed A., et al. ``Patency rates of the
                arteriovenous fistula for hemodialysis: a systematic review and
                meta-analysis.'' American Journal of Kidney Diseases (2014) 63(3):
                464-47.
                 \192\ Lee T, et al., ``Long-Term Outcomes of Arteriovenous
                Fistulas with Unassisted versus Assisted Maturation: A Retrospective
                National Hemodialysis Cohort Study,'' Journal on American Nephrology
                2019; 30(11):2209-2218.
                 \193\ Beathard GA, et al., ``Two-year cumulative patency of
                endovascular arteriovenous fistula,'' Journal of Vascular Access
                2020; 21: 350-356.
                ---------------------------------------------------------------------------
                 We note that only one of the studies submitted by the applicant in
                support of a finding of substantial clinical improvement for Ellipsys
                has a comparator arm (retrospective comparison), and none were created
                with a methodology to demonstrate superiority. In addition, some
                studies may be limited by potential bias due to single operator and/or
                single site design, and comparisons to sAVF were made using various
                historical controls from different studies with no statistical
                analyses, making it difficult to account for confounding variables. We
                further note that the studies used physiologic endpoints as a surrogate
                outcome for fistula maturity instead of a clinically functional fistula
                as determined by successful 2-needle cannulation. Of interest, a number
                of the studies submitted concluded that there is a further need for
                head-to-head, larger scale, or longer trials to confirm claims of
                superiority of pAVF over surgical AVF and other pAVF devices. We note
                that the applicant provided one retrospective study with a small sample
                size to support the claim of superiority of Ellipsys over WavelinQ.
                Though this study by Shahverdyan et al. demonstrated numerically better
                outcomes for multiple endpoints with Ellipsys, we note that outcomes
                did not reach statistical significance for primary patency, technical
                success, maturation rates, time to cannulation, or fistula success, and
                we note the potential for bias with the single operator/single site
                study design.
                 We note that the decreased interventions and time to 2NC using
                Ellipsys were reported from studies performed outside of the US, where
                practice patterns are different. Per the Hull et al. study, practice in
                the US is to direct flow into a single upper arm vein to meet
                established guidelines for fistula flow diameter depth and length,
                whereas in the European studies, multiple outflow veins were
                accepted.\194\ The authors further state that allowing multiple outflow
                veins decreases the number of secondary maturation procedures used to
                direct flow, but requires advanced cannulation techniques, ultrasound
                guidance, and plastic access cannulas that are not available in the US.
                These techniques and the use of plastic cannulas also allow for early
                cannulation of the fistula in European studies. For these reasons, we
                question whether the European results are generalizable to the US
                population.
                ---------------------------------------------------------------------------
                 \194\ Hull et al., ``Maturation for Hemodialysis in the Ellipsys
                EndoAVF Post-Market Registry,'' Journal of Vascular and
                Interventional Radiology 2020; 31(9): 1373-1381. (Published on-line
                August 13, 2020.)
                ---------------------------------------------------------------------------
                 When comparing the new protocol for Ellipsys (always performing
                balloon angioplasty) to the De Novo protocol (sometimes performing
                balloon angioplasty), Ellipsys demonstrated a reduced number of
                maturation procedures and faster time to cannulation; however, more
                maintenance procedures were required than the De Novo protocol. In
                addition, the investigators did not account for potential confounding
                variables between the different studies, which could have affected
                outcomes in order to compare the two studies used to claim superiority.
                We further note that previously, balloon angioplasty was nearly always
                performed, whether as part of the index procedure, as a maturation
                procedure, or as a maintenance procedure, and it continued to be a
                necessary secondary intervention after adoption of the new procedural
                step.
                 We are inviting public comments on whether the Ellipsys[supreg]
                Vascular Access System demonstrates improvement over each of the three
                comparators and meets the substantial clinical improvement criterion.
                 We received public comments in response to the New Technology Town
                Hall meeting regarding the application of the Ellipsys[supreg] Vascular
                Access System for new technology add-on payments.
                 Comment: The applicant submitted a public comment providing an
                additional study and addressing questions posed at the town hall
                meeting. The study provided is a single-center retrospective comparison
                article in press of Ellipsys and sAVF by Harika et al. 107 patients who
                received pAVF with Ellipsys at this center between May 2017 and May
                2018 were compared to an equal number of consecutive patients who
                received a surgical fistula in the same time period. Patients with
                grafts or lower extremity fistulae were excluded and baseline
                characteristics and demographics were comparable between groups. All
                pAVFs were created by a single surgeon, while the sAVFs were created by
                4 surgeons. Primary outcomes were primary and secondary patency rates,
                as well as maturation as determined by AVF utilization, or >4mm
                diameter and >500ml/lt flow for pre-dialysis patients. Secondary
                outcomes assessed secondary interventions and rate of complications.
                Per the applicant, at 6 weeks, pAVF maturation rates were higher
                compared to the sAVF arm (65 percent vs 50 percent, p=0.01). In
                addition, primary patency in the sAVF group was higher than pAVF at 12
                months (86 percent vs 61 percent, phttps://wearesrna.org/living-with-myelitis/disease-information/neuromyelitis-optica-spectrum-disorder/diagnosis/#nmosd. Accessed August 19, 2020.
                 \206\ Etemadifar M, Nasr Z, Khalili B, Taherioun M, Vosoughi R.
                Epidemiology of Neuromyelitis Optica in the World: A Systematic
                Review and Meta-analysis. Mult Scler Int. 2015;2015:174720.
                doi:10.1155/2015/174720.
                 \207\ Simon KC, Schmidt H, Loud S, Ascherio A. Risk Factors For
                Multiple Sclerosis, Neuromyelitis Optica And Transverse Myelitis.
                Mult Scler. 2015;21(6):703-709. doi:10.1177/1352458514551780.
                 \208\ Wingerchuk DM, Lennon VA, Lucchinetti CF, et al. The
                spectrum of neuromyelitis optica. Lancet Neurol. 2007;6(9)805-815.
                doi:10.1016/s1474-4422(07)70216-8.
                 \209\ Siegel Rare Neuroimmune Association. Neuromyelitis Optica
                Spectrum Disorder (NMOSD). https://wearesrna.org/living-with-myelitis/disease-information/neuromyelitis-optica-spectrum-disorder/diagnosis/#nmosd. Accessed August 19, 2020.
                 \210\ National Organization for Rare Disorders (NORD[supreg]).
                Neuromyelitis Optica Spectrum Disorder. https://rarediseases.org/rare-diseases/neuromyelitis-optica/. Accessed August 19, 2020.
                 \211\ Wingerchuk DM. Diagnosis and Treatment of Neuromyelitis
                Optica. Neurologist 2007;13(1)2-11. doi:10.1097/
                01.nrl.0000250927.21903.f8.
                 \212\ Wingerchuk DM, Lennon VA, Lucchinetti CF, et al. The
                spectrum of neuromyelitis optica. Lancet Neurol. 2007;6(9)805-815.
                doi:10.1016/s1474-4422(07)70216-8.
                 \213\ Jarius S, Ruprecht K, Wildemann B, et al. Contrasting
                disease patterns in seropositive and seronegative neuromyelitis
                optica: A multicentre study of 175 patients. J. Neuroinflammation
                2012;9(1) doi:10.1186/1742-2094-9-14.
                ---------------------------------------------------------------------------
                 According to the applicant, the negative impact of NMOSD on patient
                quality of life (QoL) is predominantly a result of physical disability,
                pain, vision impairment, and bowel and bladder dysfunction.\214\
                Disease-induced disability and symptoms have a considerable impact on
                patients' ability to work and thrive in social activities and personal
                relationships.\215\ The applicant added that the loss of motor and
                sensory function leads to approximately 50% of patients requiring a
                wheelchair \216\ and 62% of patients becoming functionally blind \217\
                within 5 years of diagnosis.\218\ Therefore, according to the
                applicant, it is critical that treatments that consistently and
                effectively reduce the risk of relapse are initiated rapidly in
                patients diagnosed with NMOSD.
                ---------------------------------------------------------------------------
                 \214\ Beekman J, Keisler A, Pedraza O, et al. Neuromyelitis
                optica spectrum disorder. Neurol.-Neuroimmunol. Neuroinflammation
                2019;6(4)e580. doi:10.1212/nxi.0000000000000580.
                 \215\ Ibid.
                 \216\ Kessler RA, Mealy MA, Levy M. Treatment of Neuromyelitis
                Optica Spectrum Disorder: Acute, Preventive, and Symptomatic. Curr.
                Treat. Options Neurol. 2015;18(1) doi:10.1007/s11940-015-0387-9.
                 \217\ Wingerchuk DM, Hogancamp WF, O'Brien PC, et al. The
                clinical course of neuromyelitis optica (Devic's syndrome).
                Neurology 2012;53(5)1107-1107. doi:10.1212/wnl.53.5.1107.
                 \218\ Wingerchuk DM, Weinshenker BG. Neuromyelitis optica:
                Clinical predictors of a relapsing course and survival. Neurology
                2012;60(5)848-853. doi:10.1212/01.wnl.0000049912.02954.2c.
                ---------------------------------------------------------------------------
                 With respect to the newness criterion, ENSPRYNG received FDA BLA
                approval on August 14, 2020. The applicant added that ENSPRYNG was
                granted Fast Track designation \219\ and Breakthrough Therapy
                designation \220\ by the FDA. The applicant stated that ENSPRYNG was
                not commercially available until August 24, 2020 because the applicant
                had to wait for final approval for printing and labeling as well as
                customs and importation. The recommended loading dosage of ENSPRYNG for
                the first three administrations is 120 mg by subcutaneous injection at
                Weeks 0, 2, and 4, followed by a maintenance dosage of 120 mg every
                four weeks. The applicant submitted a request for an ICD-10-PCS code to
                uniquely identify the administration of ENSPRYNG beginning FY 2022.
                ---------------------------------------------------------------------------
                 \219\ US Department of Health and Human Services. FDA Approves
                Treatment for Rare Disease Affecting Optic Nerves, Spinal Cord.
                https://www.fda.gov/news-events/press-announcements/fda-approves-treatment-rare-disease-affecting-optic-nerves-spinal-cord. Accessed
                September 10, 2020.
                 \220\ Genentech, USA Inc. FDA Approves Genentech's Enspryng for
                Neuromyelitis Optica Spectrum Disorder. https://www.gene.com/media/press-releases/14873/2020-08-14/fda-approves-genentechs-enspryng-for-neu. Accessed September 10, 2020.
                ---------------------------------------------------------------------------
                 As discussed earlier, if a technology meets all three of the
                substantial similarity criteria, it would be considered substantially
                similar to an existing technology and would not be considered ``new''
                for purposed of new technology add-on payments. The applicant stated
                that there are limited treatment guidelines available for NMOSD with
                the most recent US guidelines published in 2012. These US NMOSD
                treatment guidelines exclusively recommend off-label drugs:
                Azathioprine, with or without prednisone; mycophenolate mofetil, with
                or without prednisone; rituximab; or prednisone alone.\221\ The
                applicant stated that there are presently two other FDA-approved
                therapies for patients with AQP4-IgG positive NMOSD: SOLIRIS
                (eculizumab),\222\ which was approved in 2019, and UPLIZNA
                (inebilizumab-cdon), which was approved in 2020.\223\
                ---------------------------------------------------------------------------
                 \221\ Kimbrough DJ, Fujihara K, Jacob A, et al. Treatment of
                Neuromyelitis Optica: Review And Recommendations. Mult Scler Relat
                Disord. 2012;1(4):180-187. doi:10.1016/j.msard.2012.06.002.
                 \222\ SOLIRIS (eculizumab) [prescribing information]. Boston,
                MA: Alexion Pharmaceuticals, Inc.; 2019.
                 \223\ UPLIZNA (inebilizumab) [prescribing information].
                Gaithersburg, MD: Viela Bio, Inc.; 2020.
                ---------------------------------------------------------------------------
                 With regard to the first criterion, whether a product uses the same
                or similar mechanism of action to achieve a therapeutic outcome, the
                application stated that ENSPRYNG is an interleukin-6 (IL-6) receptor
                antagonist indicated for the treatment of NMOSD in adult patients who
                are AQP4-IgG positive.\224\ According to the applicant, ENSPRYNG
                targets soluble and membrane-bound IL-6 receptors to inhibit IL-6
                signaling and subsequently disrupt downstream inflammatory
                [[Page 25253]]
                effects that contribute to the pathophysiology of NMOSD; \225\ ENSPRYNG
                dissociates from the IL-6 receptor at an acidic pH within endosomes and
                is recycled to circulation, prolonging the plasma half-life of the
                drug.\226\
                ---------------------------------------------------------------------------
                 \224\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                 \225\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \226\ Igawa T, Ishii S, Tachibana T, et al. Antibody Recycling
                By Engineered Ph-Dependent Antigen Binding Improves The Duration of
                Antigen Neutralization. Nat Biotechnol. 2010;28(11):1203-1207.
                doi:10.1038/nbt.1691. Heo Y. Satralizumab: First Approval. Drugs
                2020;80(14)1477-1482. doi:10.1007/s40265-020-01380-2.
                ---------------------------------------------------------------------------
                 The applicant next identified other drugs used to treat NMOSD and
                their corresponding mechanisms of action. According to the applicant,
                these current treatments include: SOLIRIS, for which a precise
                mechanism of action is unknown but is presumed to involve inhibition of
                AQP4-IgG-induced terminal complement C5b-9 deposition; \227\ UPLIZNA,
                for which a precise mechanism of action is unknown but is presumed to
                involve binding to CD19, a surface antigen present on pre-B and mature
                B cells; \228\ azathioprine, for which a precise mechanism of action is
                unknown; \229\ Rituxan, which targets CD20 antigen on B cells and leads
                to profound B cell depletion, principally over an antibody-dependent
                cell cytotoxicity mechanism; \230\ mycophenolate mofetil, which is an
                immunosuppressive and an inhibitor of inosine monophosphate
                dehydrogenase and therefore of the guanosine nucleotide synthesis
                pathway upon which T and B cells depend; \231\ and prednisone, which is
                a synthetic adrenocortical steroid drug with predominately
                corticosteroid properties.\232\ The applicant concluded that none of
                these current drugs are characterized by their binding and blocking of
                soluble and membrane-bound IL-6 receptors to inhibit IL-6 signaling.
                Therefore, the applicant believes ENSPRYNG has a unique and distinct
                mechanism of action.
                ---------------------------------------------------------------------------
                 \227\ SOLIRIS (eculizumab) [prescribing information]. Boston,
                MA: Alexion Pharmaceuticals, Inc.; 2019.
                 \228\ UPLIZNA (inebilizumab) [prescribing information].
                Gaithersburg, MD: Viela Bio, Inc.; 2020.
                 \229\ IMURAN (azathioprine) [prescribing information]. Roswell,
                GA: Sebela Pharmaceuticals Inc.; 2018.
                 \230\ RITUXAN (rituximab) [prescribing information]. South San
                Francisco, CA: Genentech, Inc.; 2019.
                 \231\ Allison AC, Eugui EM. Mycophenolate Mofetil And Its
                Mechanisms of Action. Immunopharmacology 2000;47(2-3)85-118.
                doi:10.1016/s0162-3109(00)00188-0.
                 \232\ RAYOS (prednisone) [prescribing information]. Lake Forest,
                IL: Horizon Therapeutics USA, Inc.; 2019.
                ---------------------------------------------------------------------------
                 With respect to the second criterion, whether a product is assigned
                to the same or different MS-DRG, the applicant acknowledged that
                ENSPRYNG may be assigned to the same MS-DRG when compared to existing
                technology. Per the applicant, cases representing patients who may be
                eligible for treatment with ENSPRYNG map to MS-DRGs 058, 059, and 060.
                With respect to the third criterion, whether the new use of the
                technology involves the treatment of the same or similar type of
                disease and the same or similar patient population, the applicant
                stated that the use of ENSPRYNG may not involve the treatment of the
                same or similar patient population when compared with an existing
                technology because: (1) Current technologies such as SOLIRIS may be
                contraindicated in patients with unresolved serious Neisseria
                meningitidis infections; and (2) SOLIRIS and UPLIZNA are administered
                as IV infusions which not all patients may be willing to receive.
                 In summary, the applicant asserts ENSPRYNG meets the newness
                criterion because it is the only treatment for NMOSD that works
                specifically by suppressing IL-6 signaling, and because it may not
                involve the treatment of the same or similar patient population as
                existing technology. We note that the applicant states that the use of
                ENSPRYNG may not involve treatment of the same or similar patient
                population when compared to SOLIRIS with regard to the treatment of
                patients with unresolved serious Neisseria meningitidis infection and
                with regard to the treatment of patients unwilling to receive an IV
                infusion. However, we question if UPLIZNA may also be a treatment
                option for patients with meningococcal disease. We further question
                whether patients who are unwilling to receive an IV infusion would
                constitute a new patient population for NMOSD. We invite public comment
                on whether ENSPRYNG involves the treatment of the same or similar
                patient population when compared to existing technologies.
                 We are inviting public comments on whether ENSPRYNG is
                substantially similar to other technologies and whether ENSPRYNG meets
                the newness criterion. With regard to the cost criterion, the applicant
                provided two cost analyses, with the first being an update of the
                analysis used in FY 2021 by the applicant for SOLIRIS, which is also
                indicated for NMOSD, and the second which is specific to ENSPRYNG.
                 Under the first analysis, the applicant searched the FY 2019 MedPAR
                database for cases reporting ICD-10-CM code G36.0 in the primary and/or
                admitting position, which resulted in 583 cases. The applicant imputed
                one case where an MS-DRG had a case volume lower than 11, resulting in
                556 cases mapping to 30 MS-DRGs. The applicant stated that it
                restricted the analysis to MS-DRGs 058, 059, and 060, which accounted
                for 92.1% of all cases identified. The applicant also excluded cases
                that were not included in the FY 2021 Proposed Rule Impact File from
                this analysis, resulting in a final case count of 466 cases mapping to
                three MS-DRGs. Using a CCR of 0.343 (national other services average
                CCR), the applicant then removed all charges in the drug cost center,
                all charges in the blood cost center, and an additional $12,000 of cost
                for plasma exchange procedural costs for cases with non-zero charges in
                the blood cost center, for charges for related and prior technologies.
                The applicant applied an inflation factor of 13.1%, which per the
                applicant is the outlier charge inflation factor used in the FY 2021
                IPPS/LTCH PPS final rule, to update the standardized charges from FY
                2019 to FY 2021. We note that the applicant appears to have used the FY
                2021 IPPS/LTCH PPS proposed rule inflation factor rather than the 2-
                year inflation factor from the FY 2021 IPPS/LTCH PPS final rule of 13.2
                percent (85 FR 59038), which would have increased the inflated charges.
                Finally, the applicant added charges for the technology by multiplying
                the cost of ENSPRYNG, based on an average of 1.22 doses per patient, by
                the inverse of the national average drug CCR of 0.187 from the FY 2021
                IPPS/LTCH PPS final rule (85 FR 58601). The applicant calculated a
                final inflated average case-weighted standardized charge per case of
                $150,154, which exceeds the case-weighted threshold of $47,813.
                 For the second analysis, the applicant used the same sample of
                cases (466) from the first analysis, as identified in the FY 2019
                MedPAR database with the ICD-10-CM code G36.0 and with the same sample
                restrictions. In this analysis, the applicant did not remove charges
                for related or prior technologies because, per the applicant, ENSPRYNG
                is anticipated to neither replace plasma exchange nor be used as a
                monotherapy in all patients. The applicant standardized and inflated
                the charges, as well as added charges for ENSPRYNG using the same
                methodology as the first analysis, described previously. The applicant
                calculated a final inflated
                [[Page 25254]]
                average case-weighted standardized charge per case of $175,021, which
                exceeded the case-weighted threshold of $47,813. The applicant asserted
                that ENSPRYNG meets the cost criterion based on these analyses.
                 Based on the information provided by the applicant, it is uncertain
                to us why the national other services average CCR was used to inflate
                costs to charges in the first analysis when the applicant indicated
                that it removed charges from the drugs cost center and blood cost
                center. We are seeking public comment on whether this or another CCR,
                such as a CCR for drugs or blood and blood products, would be more
                appropriate. Furthermore, in the event that a MS-DRG has fewer than 11
                cases, the applicant should impute a minimum case number of 11. We are
                inviting public comments on whether ENSPRYNG meets the cost criterion,
                including whether the use of another CCR would substantially alter the
                results of the applicant's analysis.
                 With regard to the substantial clinical improvement criterion, the
                applicant asserts that ENSPRYNG represents a substantial clinical
                improvement in the following ways: (1) It significantly improves
                clinical outcomes relative to services or technologies previously
                available for the treatment of NMOSD in adult patients who are AQP4-IgG
                positive; (2) these improvements are not accompanied by serious safety
                concerns; (3) ENSPRYNG is the only FDA-approved treatment for NMOSD
                that is subcutaneously administered; \233\ and (4) the totality of
                circumstances demonstrates ENSPRYNG, relative to technologies
                previously available, substantially improves the treatment of Medicare
                beneficiaries. The applicant submitted two recent studies to support
                their claims of substantial clinical improvement over existing
                technologies.
                ---------------------------------------------------------------------------
                 \233\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                ---------------------------------------------------------------------------
                 The SAkuraStar (NCT02073279) \234\ study was a Phase 3, double-
                blind, placebo-controlled, parallel-group trial at 44 investigational
                sites in 13 countries to assess the safety and efficacy of ENSPRYNG
                monotherapy in patients with NMOSD. 95 (57%) of 168 screened
                participants aged 18-74 years with AQP4-IgG positive or negative NMOSD
                met the inclusion criteria and were randomly assigned (2:1) to
                treatment with ENSPRYNG 120mg (n=63) or visually matched placebo
                (n=32). Inclusion criteria included participants who had experienced at
                least one documented NMOSD attack or relapse in the previous 12 months
                and had a score of 6.5 or less on the Expanded Disability Status Scale,
                while exclusion criteria included clinical relapse 30 days or fewer
                before baseline. The primary endpoint was time to the first protocol-
                defined relapse, based on the intention-to-treat (ITT) population
                (AQP4-IgG positive and negative) (n=95), and analyzed with
                stratification for two randomization factors (previous therapy for
                prevention of attacks and nature of the most recent attack). Treatment
                in both arms was given subcutaneously at weeks 0, 2, 4, and every 4
                weeks thereafter. The double-blind phase was due to last until 44
                protocol-defined relapses occurred or 1.5 years after random assignment
                of the last patient enrolled, whichever occurred first. Participants
                could enter an open-label phase after the occurrence of a protocol-
                defined relapse or at the end of the double-blind phase. Protocol-
                defined relapses occurred in 19 (30%) patients receiving satralizumab
                and 16 (50%) receiving placebo (hazard ratio 0.45, 95% CI 0.23-0.89;
                p=0.018). 473.9 adverse events per 100 patient-years occurred in the
                satralizumab group and 495.2 per 100 patient-years in the placebo
                group. The authors noted that the incidence of serious adverse events
                and adverse events leading to withdrawal was similar between groups.
                ---------------------------------------------------------------------------
                 \234\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
                Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
                Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
                Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
                doi:10.1016/S1474-4422(20)30078-8.
                ---------------------------------------------------------------------------
                 According to the applicant, this study demonstrated that the time
                to the first relapse was significantly longer in ENSPRYNG-treated
                patients compared with patients who received a placebo (risk reduction,
                55%; hazard ratio, 0.45 (95% CI 0.23, 0.89); p = 0.0184). In the AQP4-
                IgG positive population, there was a 74% risk reduction and a hazard
                ratio of 0.26 (95% CI 0.11, 0.63; p = 0.0014). The results in the
                subgroup of AQP4-IgG negative patients were not statistically
                significant.235 236 The annualized relapse rate for AQP4-IgG
                positive patients was 0.1 (95% CI, 0.05-0.2) in the ENSPRYNG group and
                0.5 (95% CI, 0.3-0.9) in the placebo group.\237\ The proportion of
                relapse-free AQP4-IgG positive patients at week 96 was 77% in the
                ENSPRYNG group and 41% in the placebo group.\238\ According to the
                applicant, the study concluded that ENSPRYNG monotherapy reduced the
                rate of NMOSD relapse compared with placebo in the overall trial
                population and had a favorable safety profile.
                ---------------------------------------------------------------------------
                 \235\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020. Traboulsee A, et al.
                Efficacy of satralizumab monotherapy in prespecified subgroups of
                SAkuraStar, a phase 3 study in patients with neuromyelitis optica
                spectrum disorder. Oral Presentation at: Annual Americas Committee
                for Treatment and Research in Multiple Sclerosis (ACTRIMS) Forum;
                West Palm Beach, FL, USA; February 27-29, 2020.
                 \236\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020. Traboulsee A, et al.
                Efficacy of satralizumab monotherapy in prespecified subgroups of
                SAkuraStar, a phase 3 study in patients with neuromyelitis optica
                spectrum disorder. Oral Presentation at: Annual Americas Committee
                for Treatment and Research in Multiple Sclerosis (ACTRIMS) Forum;
                West Palm Beach, FL, USA; February 27-29, 2020.
                 \237\ Traboulsee A, et al. Efficacy of satralizumab monotherapy
                in prespecified subgroups of SAkuraStar, a phase 3 study in patients
                with neuromyelitis optica spectrum disorder. Oral Presentation at:
                Annual Americas Committee for Treatment and Research in Multiple
                Sclerosis (ACTRIMS) Forum; West Palm Beach, FL, USA; February 27-29,
                2020.
                 \238\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
                Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
                Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
                Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
                doi:10.1016/S1474-4422(20)30078-8.
                ---------------------------------------------------------------------------
                 In the second Phase 3, randomized, double-blind, placebo controlled
                study submitted by the applicant, the SAkuraSky (NCT02028884) \239\
                trial, 83 patients with NMOSD who were seropositive or seronegative for
                AQP4-IgG were randomly assigned (1:1) to receive either 120 mg of
                satralizumab (n=41) or placebo (n=42) administered subcutaneously at
                weeks 0, 2, and 4 and every 4 weeks thereafter, in addition to stable
                IST. The primary end point was the first protocol-defined relapse in a
                time-to-event analysis. Key secondary end points were the change from
                baseline to week 24 in the visual-analogue scale (VAS) pain score
                (range, 0 to 100, with higher scores indicating more pain) and the
                Functional Assessment of Chronic Illness Therapy-Fatigue (FACIT-F)
                score (range, 0 to 52, with lower scores indicating more fatigue).
                Safety was also assessed.
                ---------------------------------------------------------------------------
                 \239\ US Department of Health and Human Services. Active Study
                 Neuromyelitis Optica Spectrum Disorder. https://clinicaltrials.gov/ct2/results?cond=&term=NCT02028884&cntry=&state=&city=&dist=. Accessed
                August 14, 2020.
                ---------------------------------------------------------------------------
                 The results of the SAkuraSky trial demonstrated that the median
                treatment duration with satralizumab in the double-blind period was
                107.4 weeks. Relapse occurred in 8 patients (20%) receiving
                satralizumab and in 18 (43%) receiving placebo (hazard ratio, 0.38; 95%
                confidence interval [CI], 0.16 to 0.88). Multiple imputations for
                censored data (including patients who discontinued the trial, received
                rescue therapy, had a change in baseline treatment, or were continuing
                in the
                [[Page 25255]]
                trial at the data-cutoff date) resulted in hazard ratios ranging from
                0.34 to 0.44 (with corresponding P values of 0.01 to 0.04). Among the
                55 AQP4-IgG-seropositive patients, relapse occurred in 11% of those in
                the satralizumab group and in 43% of those in the placebo group (hazard
                ratio, 0.21; 95% CI, 0.06 to 0.75); among 28 AQP4-IgG-seronegative
                patients, relapse occurred in 36% and 43%, respectively (hazard ratio,
                0.66; 95% CI, 0.20 to 2.24). The between-group difference in the change
                in the mean VAS pain score was 4.08 (95% CI, -8.44 to 16.61); the
                between-group difference in the change in the mean FACIT-F score was -
                3.10 (95% CI, -8.38 to 2.18). The rates of serious adverse events and
                infections did not differ between groups.
                 In support of the applicant's claim that ENSPRYNG significantly
                improves clinical outcomes relative to services or technologies
                previously available for the treatment of NMOSD in adult patients who
                are AQP4-IgG positive, the applicant stated that patients treated with
                ENSPRYNG plus IST exhibited a significantly longer time to first
                relapse when compared to placebo. This also included a risk reduction
                of 62% in patients treated with ENSPRYNG plus IST when compared with
                patients who received a placebo plus IST and a 79% risk reduction in
                the AQP4-IgG positive population. Results in the AQP4-IgG negative
                patient subgroup were not statistically significant.\240\ The
                proportion of relapse free AQP4-IgG positive patients at week 96 was
                92% in ENSPRYNG plus IST group and 53% in the placebo plus IST
                group.\241\
                ---------------------------------------------------------------------------
                 \240\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                 \241\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                ---------------------------------------------------------------------------
                 According to the applicant's second claim, substantial improvements
                in clinical efficacy are not accompanied by serious concerns. In the
                SAkuraSky trial, 90% of patients in the ENSPRYNG plus IST group had at
                least one adverse event compared to 95% in the placebo plus IST
                group.\242\ The safety profile of ENSPRYNG in the OST period was
                consistent with the double-blind period. There were no deaths or
                anaphylactic reactions, rates of AEs and serious AEs did not increase
                with longer exposure to ENSPRYNG; and the most frequently reported AEs
                in the OST period were consistent with the double-blind period.\243\
                ---------------------------------------------------------------------------
                 \242\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \243\ Greenberg B, Seze JD, Fox E. et al. Safety of satralizumab
                in neuromyelitis optica spectrum disorder (NMOSD): Results from the
                open-label extension periods of SAkuraSky and SAkuraStar
                Presentation at: Americas Committee for treatment and research in
                Multiple Sclerosis (ACTRIMS); September 2020; Virtual.
                ---------------------------------------------------------------------------
                 The applicant's third claim concerns the flexibility provided to
                patients by the option to self-administer ENSPRYNG. According to the
                applicant, ENSPRYNG is the only FDA-approved treatment for NMOSD that
                is administered subcutaneously.\244\ Once treatment is initiated during
                inpatient hospital admission, upon discharge and having received
                adequate training on how to perform the injection, an adult patient/
                caregiver may administer all subsequent doses of ENSPRYNG at home if
                the treating physician determines that it is appropriate and the adult
                patient/caregiver can perform the injection technique. According to the
                applicant, self-administration provides the patient the option to
                continue the therapy initiated in the hospital while in the convenience
                of their own home, with reduced disruption to daily life. The applicant
                states that additionally, the option to self-administer provides
                flexibility to patients, as they can bring their medication with them
                while traveling without having to worry if there is an infusion site
                nearby. The applicant claims this may potentially reduce the rate of
                hospital readmissions.
                ---------------------------------------------------------------------------
                 \244\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                ---------------------------------------------------------------------------
                 In their fourth claim, the applicant states the totality of
                circumstances otherwise demonstrate that ENSPRYNG, relative to
                technologies previously available, substantially improves the treatment
                of Medicare beneficiaries. The applicant asserts that a cross trial
                comparison between ENSPRYNG and SOLIRIS (approved for new technology
                add-on payment in FY 2021) cannot be made due to differences in trial
                design and study population. However, the applicant noted the following
                distinctions between ENSPRYNG and SOLIRIS and their clinical trials.
                Per the applicant, the first distinction is that in the registrational
                study for SOLIRIS, a higher proportion of patients receiving SOLIRIS
                than those receiving a placebo discontinued their participation in the
                clinical trial (17% vs 6%).\245\ During the double-blind period of
                SAkuraSky trial, however, a total of three patients (7%) in the
                ENSPRYNG group and 10 patients (24%) in the placebo group discontinued
                the trial agent.\246\ The applicant states that discontinuation of
                SOLIRIS may be associated with relapse and hospitalization. The second
                distinction made by the applicant is that the prescribing information
                for ENSPRYNG \247\ does not bear a black-box warning, in contrast to
                that of SOLIRIS.\248\ The third distinction is that patients must be
                vaccinated against Neisseria meningitidis before receiving SOLIRIS
                \249\ and no such requirement applies to ENSPRYNG.\250\ The fourth and
                final distinction made by the applicant highlights duration of
                treatment. In the SAkuraSky trial, the mean period of treatment in the
                double-blind period was 94.172.6 weeks in the ENSPRYNG
                group and 66.061.4 weeks in the placebo group.\251\
                However, the median trial durations were shorter in the SOLIRIS trial,
                at 90.93 and 43.14 weeks (minimum-maximum, 6.4-211.1 and 8.0-208.6) for
                the SOLIRIS and placebo groups, respectively.\252\
                ---------------------------------------------------------------------------
                 \245\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
                Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
                Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
                 \246\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \247\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                 \248\ SOLIRIS (eculizumab) [prescribing information]. Boston,
                MA: Alexion Pharmaceuticals, Inc.; 2019.
                 \249\ SOLIRIS (eculizumab) [prescribing information]. Boston,
                MA: Alexion Pharmaceuticals, Inc.; 2019.
                 \250\ ENSPRYNG (satralizumab) [prescribing information]. South
                San Francisco, CA: Genentech USA, Inc.; 2020.
                 \251\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \252\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
                Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
                Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
                ---------------------------------------------------------------------------
                 In connection with the applicant's fourth claim to support
                substantial clinical improvement, the applicant stated that both the
                SAkuraStar \253\ and SAkuraSky \254\ clinical trials included
                comparator arms. In SAkuraStar, an exclusion criterion was IST use,
                whereas in SAkuraSky, patients were permitted to continue baseline
                treatment with a stable dose of the IST agents in addition to the trial
                drug. This allowed the efficacy of ENSPRYNG to be assessed both in
                patients who were
                [[Page 25256]]
                receiving one of the IST agents for their NMOSD and in the others who
                were receiving nothing at all. The applicant stated that in contrast,
                SOLIRIS was tested only in a single Phase 3 clinical trial where the
                primary end point was the first adjudicated relapse in the population
                of patients taking stable-dose IST and either SOLIRIS or placebo; the
                efficacy of SOLIRIS monotherapy was a sub analysis,\255\ and UPLIZNA
                was tested only in a single Phase 3 clinical trial as a monotherapy
                with only a 28-week randomized, controlled period.\256\ According to
                the applicant, ENSPRYNG has received approval by regulatory authorities
                in Japan,\257\ Canada, and Switzerland \258\ for the treatment of both
                adults and adolescents (12-17 years of age) with NMOSD. The applicant
                asserts that patients in the ENSPRYNG clinical trials likely are
                representative of Medicare patients despite their mean ages (45.3 years
                for the ENSPRYNG arm of SAkuraStar \259\ and 40.8 years for the
                ENSPRYNG arm of SAkuraSky \260\) being less than 65, as NMOSD is so
                severe that patients may qualify for disability accompanied by Medicare
                benefits regardless of their age.\261\ The applicant explained that a
                severe onset attack causing increased disability is reported to occur
                in 45% of patients with NMOSD \262\ and that 52.4% of US-based NMOSD
                patients report severe problems with mobility,\263\ which is consistent
                with definitions of disability used by the Social Security
                Administration (SSA).\264\ Per the applicant, SSA maintains a list of
                impairments considered severe enough to prevent gainful activity.
                Though NMOSD is not listed, multiple sclerosis (MS) is,\265\ and the
                two conditions are frequently confused due to similarities between
                clinical presentations.\266\ According to the applicant, the SSA is
                open to allowing people to qualify for disability by showing their
                condition is as severe as one that is on the list.\267\
                ---------------------------------------------------------------------------
                 \253\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
                Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
                Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
                Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
                doi:10.1016/S1474-4422(20)30078-8.
                 \254\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019; 381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \255\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
                Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
                Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
                 \256\ Cree BAC, Bennett JL, Kim HJ, et al. Inebilizumab for the
                treatment of neuromyelitis optica spectrum disorder (N-MOmentum): a
                double-blind, randomised placebo-controlled phase 2/3 trial. Lancet
                2019;394(10206)1352-1363. doi:10.1016/s0140-6736(19)31817-3.
                 \257\ F. Hoffmann-La Roche Ltd. Roche's ENSPRYNG (satralizumab)
                Approved In Japan For Adults And Children With Neuromyelitis Optica
                Spectrum Disorder. https://www.roche.com/media/releases/med-cor-2020-06-29.htm. Accessed August 14, 2020.
                 \258\ Heo Y. Satralizumab: First Approval. Drugs
                2020;80(14)1477-1482. doi:10.1007/s40265-020-01380-2.
                 \259\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
                Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
                Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
                Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
                doi:10.1016/S1474-4422(20)30078-8.
                 \260\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
                Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
                Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
                 \261\ Social Security Administration. Medicare Information.
                https://www.ssa.gov/disabilityresearch/wi/medicare.htm. Accessed
                September 10, 2020.
                 \262\ Kim S, Mealy MA, Levy M, et al. Racial differences in
                neuromyelitis optica spectrum disorder. Neurology 2018;91(22)e2089-
                e2099. doi:10.1212/wnl.0000000000006574.
                 \263\ Mealy MA, Boscoe A, Caro J, et al. Assessment of Patients
                with Neuromyelitis Optica Spectrum Disorder Using the EQ-5D. Int. J.
                MS Care 2018; 21(3)129-134. doi:10.7224/1537-2073.2017-076.
                 \264\ Social Security Administration. How You Qualify. https://www.ssa.gov/benefits/disability/qualify.html. Accessed October 2,
                2020.
                 \265\ Social Security Administration. Disability Evaluation
                Under Social Security. https://www.ssa.gov/disability/professionals/bluebook/11.00-Neurological-Adult.htm#11_09. Accessed September 10,
                2020.
                 \266\ Etemadifar M, Nasr Z, Khalili B, Taherioun M, Vosoughi R.
                Epidemiology of Neuromyelitis Optica In The World: A Systematic
                Review And Meta-Analysis. Mult Scler Int. 2015;2015:174720.
                doi:10.1155/2015/174720.
                 \267\ Social Security Administration. How You Qualify. https://www.ssa.gov/benefits/disability/qualify.html. Accessed October 2,
                2020.
                ---------------------------------------------------------------------------
                 After reviewing the information submitted by the applicant as part
                of its FY 2022 new technology add-on payment application for ENSPRYNG,
                we note that while the applicant provided data comparing ENSPRYNG to
                placebo with or without IST, the applicant did not provide data to
                demonstrate improved outcomes over existing FDA approved treatments for
                NMOSD. While the applicant states reasons why a comparison could not be
                made, additional information would help inform our assessment of
                whether ENSPRYNG demonstrates a significant clinical improvement over
                existing technologies for outcomes such as time to first relapse and
                annual relapse rate. In addition, while we understand that there may be
                potential benefits related to the self-administrative delivery of
                ENSPRYNG, we question if the benefits are related only to the
                outpatient administration of the medication and whether they would
                demonstrate improved clinical outcomes that represent a substantial
                clinical improvement in the inpatient setting. We are inviting public
                comments on whether ENSPRYNG meets the substantial clinical improvement
                criterion.
                 We did not receive any written comments in response to the New
                Technology Town Hall meeting notice published in the Federal Register
                regarding the substantial clinical improvement criterion for ENSPRYNG.
                h. ABECMA[supreg] (idecabtagene vicleucel)
                 Celgene Corporation, a wholly owned subsidiary of Bristol-Myers
                Squibb (BMS), submitted an application for new technology add-on
                payment for idecabtagene vicleucel for FY 2022. Idecabtagene viclecuel
                is a, B-cell maturation antigen (BCMA)-directed genetically modified
                autologous chimeric antigen receptor (CAR) T-cell immunotherapy for the
                treatment of adult patients with relapsed or refractory (RR) multiple
                myeloma (MM) (RRMM) who have received at least four prior therapies
                including an immunomodulatory agent (IMiD), a proteasome inhibitor
                (PI), and an anti-CD38 antibody (for example, triple-class-exposed).
                Idecabtagene vicleucel is expected to be a 5th line plus (5L+)
                treatment.
                 Multiple myeloma (MM) is typically characterized by the neoplastic
                proliferation of plasma cells producing a monoclonal immunoglobulin.
                The plasma cells proliferate in the bone marrow and can result in
                extensive skeletal destruction with osteolytic lesions, osteopenia,
                and/or pathologic fractures. The diagnosis of MM is often suspected
                because of one (or more) of the following clinical presentations:
                 Bone pain with lytic lesions discovered on routine skeletal
                films or other imaging modalities
                 An increased total serum protein concentration and/or the
                presence of a monoclonal protein in the urine or serum
                 Systemic signs or symptoms suggestive of malignancy, such as
                unexplained anemia
                 Hypercalcemia, which is either symptomatic or discovered
                incidentally
                 Acute renal failure with a bland urinalysis or rarely
                nephrotic syndrome due to concurrent immunoglobulin light chain (AL)
                amyloidosis
                 It is important to distinguish MM both from other causes of these
                clinical presentations and from other plasma cell dyscrasias for the
                purposes of prognosis and treatment.\268\ Data from the U.S.
                Surveillance, Epidemiology, and End Results (SEER) registry estimate
                32,000 new cases of MM and
                [[Page 25257]]
                13,000 deaths from MM annually in the U.S. This correlates with an
                annual incidence of approximately 7 per 100,000 men and women per year.
                MM is largely a disease of older adults. The median age at diagnosis is
                65 to 74 years. MM is also slightly more frequent in men than in women
                (approximately 1.4:1). MM is associated with substantial morbidity and
                mortality \269\ and approximately 25% of patients have a median
                survival of 2 years or less.\270\ With respect to the newness
                criterion, idecabtagene vicleucel received FDA approval on March 26,
                2021, and has marketing authorization under the name of Abecma[supreg]
                and is indicated for the treatment of adult patients with relapsed or
                refractory multiple myeloma after four or more prior lines of therapy,
                including an immunomodulatory agent, a proteasome inhibitor, and an
                anti-CD38 monoclonal antibody. A single dose of idecabtagene vicleucel
                contains a cell suspension of 300 to 460 x 106 CAR T-cells.
                ---------------------------------------------------------------------------
                 \268\ Laubauch, J.P. (2021). Multiple myeloma: Clinical
                features, laboratory manifestations, and diagnosis. UptoDate.
                Available from https://www.uptodate.com/contents/multiple-myeloma-clinical-features-laboratory-manifestations-and-diagnosis?search=multiple%20myeloma&;source=search_result&selectedTit
                le=1~150&usage_type=default&display_rank=1.
                 \269\ R?owan AJ, Allen C, Barac A, et al. Global Burden of
                Multiple Myeloma: A Systematic Analysis for the Global Burden of
                Disease Study 2016. JAMA Oncol. 2018;4(9):1221-1227. doi:10.1001/
                jamaoncol.2018.2128.
                 \270\ Biran, N., Jagannath, S., Risk Stratification in Multiple
                Myeloma, Part 1: Characterization of High-Risk Disease 2013.
                Clinical Adv in Hematology & Oncology 11(8); 489-503.
                ---------------------------------------------------------------------------
                 The applicant submitted a request for unique ICD-10-PCS codes that
                describe the administration of idecabtagene vicleducel at the September
                2020 Coordination and Maintenance Committee meeting. The following
                codes were approved to describe procedures involving the administration
                of idecabtagene vicleucel: XW033L7 (Introduction of idecabtagene
                vicleucel immunotherapy into peripheral vein, percutaneous approach,
                new technology group 7) and XW043L7 (Introduction of idecabtagene
                vicleucel immunotherapy into central vein, percutaneous approach, new
                technology group 7). These codes will be effective starting October 1,
                2021.
                 As previously stated, if a technology meets all three of the
                substantial similarity criteria as previously described, it would be
                considered substantially similar to an existing technology and
                therefore would not be considered ``new'' for purposes of new
                technology add-on payments.
                 With respect to whether a product uses the same or a similar
                mechanism of action when compared to an existing technology to achieve
                a therapeutic outcome, the applicant asserts that idecabtagene
                viceleucel does not use the same or similar mechanism of action as
                other therapies approved to treat 4L+ RRMM or CAR T-cell therapies
                approved to treat different diseases. According to the applicant, with
                regard to its mechanism of action, idecabtagene viceleucel is a
                chimeric antigen receptor (CAR)-positive T cell therapy targeting B-
                cell maturation antigen (BCMA), which is expressed on the surface of
                normal and malignant plasma cells. The CAR construct includes an anti-
                BCMA scFv-targeting domain for antigen specificity, a transmembrane
                domain, a CD3-zeta T cell activation domain, and a 4-1BB costimulatory
                domain. Antigen-specific activation of idecabtagene viceleucel results
                in CAR-positive T cell proliferation, cytokine secretion, and
                subsequent cytolytic killing of BCMA-expressing cells.
                 According to the applicant, with respect to the non-CAR T-cell
                therapies to treat 4L+ RRMM, specifically Xpovio[supreg], Blenrep, and
                chemotherapy, idecabtagene vicleucel's mechanism of action is different
                because it is a CAR T-cell therapy. The applicant states that the
                mechanism of action for Xpovio[supreg] is reversible inhibition of
                nuclear export of tumor suppressor proteins (TSPs), growth regulators,
                and mRNAs of oncogenic proteins by blocking exportin 1 (XPO1). XPO1
                inhibition by Xpovio[supreg] leads to accumulation of TSPs in the
                nucleus, reductions in several oncoproteins, such as c-myc (a ``master
                regulator'' which controls many aspects of cellular growth regulation
                and cellular metabolism) and cyclin D1, cell cycle arrest, and
                apoptosis of cancer cells. The applicant states that Blenrep's
                mechanism of action is cell destruction via microtubule inhibition,
                where the microtubule inhibitor is conjugated to a BCMA-specific
                antibody (antibody-drug conjugate). The applicant further states that
                the mechanism of action for chemotherapy regimens generally is
                disruption of normal processes required for cell survival, such as
                deoxyribonucleic acid (DNA) replication and protein synthesis or
                degradation.
                 With respect to the mechanism of action of other currently FDA
                approved CAR T-cell therapies, according to the applicant, there are no
                other FDA approved CAR T-cell therapies that are indicated for
                treatment of RRMM with the same or similar mechanism of action as
                idecabtagene vicleucel. The applicant stated that CAR T-cell therapies
                employ a unique mechanism of action which modifies the patient's own T-
                cell to express a chimeric antigen receptor (CAR) that programs T-cells
                to destroy cells that express a specific target. In the case of
                idecabtagene vicleucel, this target is BCMA, which is a protein that is
                highly expressed on the surface of MM cells making it an ideal target
                for the treatment of MM. The applicant asserts that the key feature
                that distinguishes idecabtagene vicleucel from CD-19 directed CAR T-
                cell therapies is the BCMA targeting domain. According to the
                applicant, idecabtagene vicleucel's BCMA targeting domain means that
                idecabtagene vicleucel has a completely different mechanism of action
                from other currently FDA approved CAR T-cell therapies. In its
                application, the applicant asserted that since there are currently no
                FDA approved anti-BCMA CAR T-cell therapies, if approved, idecabtagene
                vicleucel is the first CAR T-cell therapy approved for the treatment of
                RRMM and the only approved CAR T-cell therapy with a BCMA targeting
                domain which makes it unique as compared to other currently approved
                FDA therapies used to treat RRMM.
                 With regard to whether a product is assigned to the same DRG when
                compared to an existing technology, the applicant stated that it
                expects that cases involving the administration idecabtagene vicleucel
                will be assigned to the same MS-DRG, MS-DRG 018 (Chimeric Antigen
                Receptor (CAR) T-cell Immunotherapy), as other CAR T-cell therapies.
                 With regard to whether the new use of the technology involves the
                treatment of the same or similar type of disease and the same or
                similar patient population when compared to an existing technology, the
                applicant asserted that, if FDA approved, idecabtagene vicleucel will
                be the first and only anti-BCMA CAR T-cell therapy available to treat
                RRMM. The applicant further asserted that idecabtagene vicleucel would
                be indicated for a broader population than other currently FDA-approved
                available therapies, specifically multiple myeloma patients having
                received four prior therapies.
                 In summary, according to the applicant, because idecabtagene
                vicleucel has a unique mechanism of action when compared to other
                currently FDA approved treatments for RRMM, and does not involve the
                treatment of the same or similar type of disease (RRMM) or the same or
                similar patient population (triple-class-exposed adult patients with
                RRMM), the technology is not substantially similar to an existing
                technology and therefore meets the newness criterion. However, we
                question whether idecabtagnene vicleucel's mechanism of action may be
                similar to that of ciltacabtagene autoleucel, another CAR T-cell
                therapy for which an application for new technology add-on payments was
                [[Page 25258]]
                submitted for FY 2022 as discussed previously. Both idecabtagene
                vicleucel and ciltacabtagene autoleucel seem to be intended for similar
                patient populations; multiple myeloma patients with three or more prior
                therapies, and would involve the treatment of the same conditions;
                adult patients with relapsed or refractory multiple myeloma. We are
                interested in information on how these two technologies may differ from
                each other with respect to the substantial similarity criteria and
                newness criterion, to inform our analysis of whether idecabtagene
                vicleucel and ciltacabtagne autoleucel, if approved by July 1, 2021,
                are substantially similar to each other and therefore should be
                considered as a single application for purposes of new technology add-
                on payments.
                 We are inviting public comments on whether idecabtagene vicleucel
                is substantially similar to an existing technology and whether it meets
                the newness criterion.
                 With regard to the cost criterion, the applicant searched the FY
                2019 MedPAR correction notice (December 1, 2020) file to identify
                potential cases representing patients who may be eligible for treatment
                using idecabtagene vicleucel. In its analysis, the applicant identified
                a primary cohort to assess whether this therapy met the cost criterion.
                The following ICD-10-CM diagnosis codes were used to identify claims
                involving multiple myeloma procedures.
                [GRAPHIC] [TIFF OMITTED] TP10MY21.153
                 The applicant chose to limit its analysis to MS-DRG 016 (Autologous
                Bone Marrow Transplant W CC/MCC or T-Cell Immunotherapy, MS-DRG 840
                (Lymphoma & Non-Acute Leukemia W MCC) and MS-DRG 841 (Lymphoma & Non-
                Acute Leukemia W CC). The claim search conducted by the applicant
                resulted in 1,955 claims mapped to MS-DRG 016, MS-DRG 840 and MS-DRG
                841 using the FY 2019 MedPAR. The applicant determined an average
                unstandardized case weighted charge per case of $1,237,393. The
                applicant used the MS-DRG-018 New Technology Threshold for FY 2022 from
                the FY 2021 IPPS/LTCH PPS final rule.
                 The applicant removed all charges in the drug cost center for the
                prior technology because, according to the applicant, it is not
                possible to differentiate between different drugs on inpatient claims.
                The applicant added that this is likely an overestimate of the charges
                that would be replaced by the use of idecabtagene vicleucel. The
                applicant the